Key Decisions

May 2012 – Not Conduct Protected By The Anti-SLAPP Statute

(filed under: | May 16, 2012)

An Attorney’s Failure To Pay A Court Reporter’s Fees Is Not Conduct Protected By The Anti-SLAPP Statute Even If The Attorney Has Complained That The Fees Were Excessive

Personal Court Reporters, Inc. v. Rand
(Cal. Ct. of App., 2d Dist.), filed April 20, 2012 

KEY FACTS

Personal Court Reporters, Inc. is a court reporting service. It sued attorneys Gary Rand and Suzanne Rand-Lewis and their law firm Rand & Rand-Lewis for failing to pay for court reporting services of $32,323.45.

Rand and Rand-Lewis filed an Anti-SLAPP motion under California Code of Civil Procedure section 425.16, seeking to have the complaint stricken and dismissed. In making the motion, they asserted that the action was prohibited because it was in retaliation for their having exercised their right to speak and petition for the redress of grievances. Their basic position was that they were attorneys who, through their respective professional law corporations, represented clients in prior lawsuits and who, on behalf of their clients, protested that Personal Court Reporters’ court reporting fees were “illegal, excessive, and unnecessary.” Rand and Rand-Lewis asserted that in retaliation for those protests, Personal Court Reporters sued them in their individual capacities and under the nonexistent “DBA Rand & Rand-Lewis.”

The trial court denied the motion.

HOLDING & REASONING

The Court of Appeal affirmed and imposed sanctions against Rand, Rand-Lewis, and their attorney Timothy Rand-Lewis, for having brought a frivolous appeal.

The court explained that a SLAPP suit — a strategic lawsuit against public participation — seeks to chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances and that the Legislature enacted Section 425.16 to provide a procedural remedy to dispose of such lawsuits.

There is a two-prong test. The moving party must first establish that the lawsuit arose from its exercise of protected rights. If it does so, then the opposing party must show that it can establish the moving party’s liability.

The court first turned to the question of whether Personal Court Reporters’ lawsuit arose out of protected conduct. It held: “Notwithstanding that the complaint was filed after court reporting services were provided in the underlying cases, we conclude the acts alleged in the complaint did not arise from the underlying lawsuits for purposes of the anti-SLAPP statute.”

The mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute. Moreover, the fact that a cause of action arguably may have been “triggered” by protected activity does not mean that it is one arising from that protected activity. In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant’s protected free speech or petitioning activity.

The court concluded that notwithstanding Personal Court Reporters’ allegations regarding arguably protected activity (protesting that certain court reporting fees in underlying cases were illegal, excessive, and unnecessary), those allegations were only incidental to the causes of action for breach of contract and common counts, which were based essentially on nonprotected activity — the nonpayment of overdue invoices. The references to arguably protected activity were only incidental to a cause of action based essentially on nonprotected activity.

Because the action was not based on protected activity, there was no need for the court to consider if Personal Court Reporters could make a prima facia case.

After ruling that Rand and Rand-Lewis were not entitled to relief, the court sanctioned them for having brought a frivolous appeal.

It said:

Notwithstanding defendants’ argument to the contrary, this case is a simple contract dispute. Plaintiff alleges that defendants have failed to pay for court reporting services rendered. We have determined that defendants’ attempt to transform a collections case into an action that chills their constitutional rights is meritless.

Then, it noted that this particular appeal was not the first time Rand, while represented by Timothy Rand-Lewis, had appealed an order denying an Anti-SLAPP motion that was based on essentially the same arguments, and lost.

In the case of California Back Specialists Medical Group v. Rand, 160 Cal.App.4th 1032 (2008), California Back Specialists Medical Group (“CBSMG”) sued Rand for failing to honor its medical liens in connection with his representation of clients in a personal injury action. Rand filed a special motion to strike in which he claimed he orally notified CBSMG that he would not honor the liens because he questioned the reasonableness and necessity of the medical care and resulting bills. Based on this, Rand argued that he was being sued as a result of protected conduct. The trial court denied Rand’s motion and found it frivolous, and the Court of Appeal affirmed.

In view of the fact that Rand should have known that the appeal was frivolous, the court assessed sanctions, saying:

Where, as here, a party appeals and merely repeats an argument that was soundly rejected by another appellate panel, we have little difficulty concluding that the party lacked good faith in pursuing the appeal. Defendants’ conduct is especially egregious because they failed to bring the prior case to our attention and did not address its holding after plaintiff cited it in its brief.

ANALYSIS

Law develops only through the advocacy of novel and sometimes creative theories. Many rules we now consider fundamental aspects of California law became cornerstones of California jurisprudence only because attorneys made (what were once considered) creative arguments. However, there are limits to such creativity, and as the court itself noted: “[W]here a party bases an appeal on an argument that has been rejected and sanctioned in another trial court and affirmed on appeal, the principle of ‘once burned, twice shy’ applies.”