The Particular Issue Was The Impact Of The SLAPP Stay During An Appeal, But Fee Issues Are Implicated In The Mix—But Of Course.
Although not directly involving a fees issue, Oakland Bulk and Oversized Terminal, LLC v. City of Oakland, Case No. A157330 (1st Dist., Div. 2 Sept. 17, 2020) (published) is a very illuminating decision by an appeals court which has taken particular interest in the abuses it has seen by litigants appealing a SLAPP motion denial so as to automatically stay subsequent proceedings for many years. Justice Richman was the author of this decision, and he is no novice in this substantive area.
What happened procedurally was that plaintiff filed a 3 count contractual and 7 count tort complaint against the City of Oakland (City), which in turn filed a demurrer and filed a SLAPP motion directed to only parts of the complaint. The lower court overruled most of the demurrer but sustained some of it in part with leave to amend. The SLAPP motion was denied without prejudice to see what happened once the amended complaint was filed. City appealed the SLAPP denial, which did stay the action although it was clear that a major portion of the overruled (and possibly amended) claims were going to proceed.
On appeal, City requested that the appellate court rule on the merits of its SLAPP motion—and it obliged. It found that the motion did not succeed on the merits. However, that was hardly the end of the 1/2 DCA’s opinion; that is where the poignant part began, because Justice Richman earlier had talked about SLAPP appeal impacts in Grewal v. Jammu, 191 Cal.App.4th 977 (2001).
After discussing some of the general implications resulting from an automatic stay of a SLAPP motion denial, the panel zeroed in how it impacted the particular facts where the case was going to proceed anyway based on the demurrer ruling (and likely after complaint amendments)—pure and simple, delay and an expenditure of more fees on appeal by both sides.
Now we go to the parts of the opinion relating to fee issues.
At oral argument, the appellate court asked for the City’s motive in appealing a SLAPP denial which did not dispose of the entire case. The answer: it might get potential mandatory SLAPP fees if it succeeded on even limited claims/allegations. That did not resonate, so we quote the response by Justice Richman and his colleagues:
“In other words, this appeal, with its attendant delay and the generation of thousands and thousands of dollars of attorney fees, was justified by the City’s possible claim to attorney fees. We have two comments. First, we know of no law that says an amended complaint somehow causes a defendant to lose its right to attorney fees if a SLAPP motion is successful. To the contrary, there is law that holds fees can be awarded in such circumstance. (See Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation (2019) 33 Cal.App.5th 38 [action allowed to proceed following third amended complaint; attorney fees for partially successful SLAPP motions affirmed].) Second, assuming the City were to be successful, just how much does the City expect to be awarded for the successful striking of two lines in a 63-page complaint? We said it in Grewal, supra, 191 Cal.App.4th 977, and we’ll say it again: ‘something is wrong with this picture.’ And we end with the observation that perhaps the time has come for the Supreme Court to revisit the issue of an automatic stay, at least in the situation where it is indisputable that the action will proceed.” (Slip Op., pp. 36-37.)
But there is more. The California Supreme Court’s Baral decision allows SLAPP striking of allegations within a particular claim. The First District panel observed that there was some disagreement on the breadth of Baral in this respect, not to mention the panel’s puzzlement of the amount of mandatory fees which should be awarded where only some allegations of a claim were SLAPPed. We bloggers will indicate that appellate courts have generally required some apportionment or remanded for reduced fees when there was only successful “allegation piercing,” a topic which will be subject of a future post by co-contributor Mike.
BLOG COMMENT—We noticed that Ben Shatz and his appellate crew at Manatt, Phelps represented the prevailing plaintiff/respondent side. Congratulations, Ben (and others).
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