Opinion
No. C 04-1687 SBA, Docket Nos. 40, 60.
July 28, 2004
This matter comes before the Court on the Special Motion to Strike Complaint Pursuant to California Code of Civil Procedure § 425.16 (the "anti-SLAPP Motion") filed by Defendants Ironport Systems, Inc. and SpamCop.net, Inc. ("SpamCop") [Docket No. 40] and the Motion to Strike the Reply Brief Filed by Defendant Allegedly in Support of Its Special Motion to Strike Plaintiff's Complaint filed by Optinrealbig.com, LLC ("Optin") [Docket No. 60]. Having read and considered the arguments presented by the parties in their moving papers and at the July 13, 2004 hearing, the Court hereby DENIES WITHOUT PREJUDICE SpamCop's anti-SLAPP Motion and DENIES Optin's Motion to Strike.
BACKGROUND
Optin filed its original complaint in this district on April 29, 2004. It then filed a motion for a temporary restraining order, which pursuant to this Court's direction, it converted to a motion for a preliminary injunction. The preliminary injunction motion was filed on May 12, 2004 and was heard on May 19, 2004. The Court issued an order denying the preliminary injunction on June 25, 2004. Between May 19, 2004 and June 25, 2004, SpamCop did not answer Optin's complaint; it filed the anti-SLAPP Motion. Optin did not file a timely opposition. Instead, two days after any opposition would have been due, Optin filed a First Amended Complaint (the "FAC"). Only after SpamCop filed its reply to the anti-SLAPP Motion did Optin indicate to the Court its position regarding the pending motion; it filed a motion to strike the reply, arguing that its FAC mooted the anti-SLAPP Motion.
SLAPP stands for Strategic Lawsuit Against Public Participation and is codified as Cal.C.C.P. § 425.16.
The Court's Standing Orders provide that the Court may grant any motion in which a timely opposition is not filed. At the July 13, 2004 hearing, the Court expressed concern that counsel for Optin had engaged in gamesmanship and reminded all counsel that this Court will not tolerate gamesmanship. Counsel for Option adequately explained to the Court that it was unaware of the Court's Standing Order and satisfied the Court's concerns. The Court trusts that the parties are now well aware of the Court's Standing Orders; that they will abide them; and that all will conduct themselves in a professional manner.
DISCUSSION
The Court must determine whether the FAC mooted the anti-SLAPP Motion because a plaintiff's ability to amend a complaint as of right trumps a defendant's anti-SLAPP Motion, even where the filing of the amended complaint may circumvent the SLAPP statute. For the reasons set forth, infra, the Court finds that it does.
A. Anti-SLAPP Statute
California's anti-SLAPP (Strategic Lawsuit Against Public Participation) statute provides a mechanism for a defendant to strike civil actions brought primarily to chill the exercise of free speech. Metabolife Int'l, Inc. v. Wornick, 213 F.Supp.2d 1220, 1221 (S.D.Cal. 2002) (citing Cal.Civ.Proc. Code § 425.16(b)(1)). "The California Legislature passed the statute recognizing the public interest to encourage continued participation in matters of public significance . . . and finding that this participation should not be chilled through abuse of the judicial process." Id. (citations omitted). Under the anti-SLAPP statute, where an action arises from any act in furtherance of a person's right to petition or to free speech, the action is subject to a special motion to strike unless the plaintiff can demonstrate a probability of prevailing. Batzel v. Smith, 333 F.3d 1018, 1024 (9th Cir. 2003).
If a defendant prevails on a special motion to strike, he "shall" be entitled to recover his attorney's fees and costs. Cal. Civ. Pro. 425.16(b)(1). In order to prevail on an anti-SLAPP motion, the defendant is required to make a prima facie showing that the plaintiff's suit arises from an act by the defendant made in connection with a public issue in furtherance of the defendant's right to free speech under the United States or California Constitution. United States ex rel. Newsham v. Lockheed Missiles Space Co., 190 F.3d 963, 971 (9th Cir. 1999). See also Cal Civ. Proc. Code § 425.16(e) (defining "act in furtherance of a person's right of . . . free speech."). The burden then shifts to the plaintiff to establish a reasonable probability that the plaintiff will prevail on his or her defamation claim. Lockheed, 190 F.3d at 971. "The plaintiff must demonstrate that the complaint is legally sufficient and supported by a prima facie showing of facts to sustain a favorable judgment if the evidence submitted by plaintiff is credited. Batzel, 333 F.3d at 1024 (citations omitted). As with a motion for summary judgment, the evidence the plaintiff submits in support of its claims must be admissible evidence. Kyle v. Carmon, 71 Cal.App.4th 901, 907 (1999). If the court denies an anti-SLAPP motion to strike, the parties continue with discovery.Batzel, 333 F.3d at 1024. Once the plaintiff's case has survived the motion, the anti-SLAPP statute no longer applies and the parties proceed to litigate the merits of the action. Id.
B. Whether the FAC Renders SpamCop's Anti-SLAPP Motion Moot
Generally, a FAC renders the original complaint moot. Fed.R.Civ.P. 15(a). The parties must proceed on the FAC, not the original complaint. Optin argues that because it filed the FAC as of right, the FAC rendered SpamCop's anti-SLAPP Motion moot. SpamCop argues that allowing Optin to wriggle out of the anti-SLAPP Motion flies in the face of established anti-SLAPP policy and precedent and that the original complaint, application for the TRO, and the subsequent preliminary injunction motion were all attempts to chill SpamCop's exercise of free speech.
To illustrate SpamCop's point, in Liu v. Moore, 69 Cal.App.4th 745, 750 (1999) the court held that where a plaintiff voluntarily dismissed a defendant while the defendant's anti-SLAPP Motion was pending, even if the voluntary dismissal was a matter of right, the defendant could nevertheless have the motion heard. Denying consideration of the anti-SLAPP Motion:
constitutes a nullification of an important part of California's anti-SLAPP legislation. If indeed respondents' cross-complaint against appellant is a SLAPP suit, then the court's decision to not hear the merits of appellant's motion to strike deprives appellant of the monetary relief which the Legislature intended to give her, while at the same time it relieves respondents of the punishment which section 425.16 imposes on persons who use the courts to chill others' exercise of their constitutional rights.Id. Liu, however, is distinguishable from the facts at hand.Liu involved a voluntary dismissal, not an amended complaint. The voluntary dismissal signaled the plaintiff's desire to cease litigation. Here, Optin has indicated its intent to continue to prosecute its case by filing the FAC.
In certain circumstances, some courts have found that the filing of an anti-SLAPP motion created an implied stay of the proceedings. In Roberts v. Los Angeles County Bar Assn., 105 Cal.App.4th 604 (2003), the plaintiff filed a FAC and the defendant filed an anti-SLAPP motion. The trial court denied the motion and plaintiff then filed a second amended complaint, which was not a matter of right. Id. at 611. The Roberts court held that once the trial court had made a determination as to the anti-SLAPP motion with respect to the FAC, the FAC became the complaint the appellate court was required to consider in the anti-SLAPP appeal. Id. It was the operative complaint because "an implied stay in the proceedings where the plaintiff files an amended complaint prior to the defendant's appeal of the denial of a SLAPP motion to strike is necessary so that a plaintiff cannot deprive a defendant of the right to the appellate review granted by the Legislature so that the appellate court can determine if the defendant had made a prima facie showing." Id. at 613. In contrast to Roberts, however, here Optin filed the FAC as a matter of right and this Court had not yet ruled on the anti-SLAPP motion.
At the time of the hearing, only one court, in an unpublished case, had reviewed the question of whether an anti-SLAPP motion is rendered moot by a FAC. In Prospect Health Source medical Group, Inc. v. Dallazadeh, 2004 WL 909443 (Cal.App. 2d. April 29, 2004), the appellate court held that it would be procedurally inappropriate to reach the merits of an anti-SLAPP motion as it pertains to the original complaint rather than the FAC. Id. at *3.
Since then, the Ninth Circuit has weighed in on the issue:Verizon Delaware, Inc. v. Covad Communications Co., 2004 WL 1662195 (9th Cir. July 27, 2004). Though the decision has not yet been published, it is persuasive. In it, the Ninth Circuit reasoned that in cases where a plaintiff amends his complaint as of right pursuant to FedR.Civ.P. 15(a), "granting a defendant's anti-SLAPP motion to strike a plaintiff's initial complaint without granting the plaintiff leave to amend would directly collide with Fed.R.Civ.P. 15(a)'s policy favoring liberal amendment." Id. at *10.
SpamCop argues that such reasoning gives rise to an injustice. An unscrupulous plaintiff could file a complaint that violates the SLAPP statute, drive up litigation costs with a motion for a temporary restraining order or preliminary injunction, and then after it has succeeded in harassing a defendant, it could amend its complaint as of right and circumvent the anti-SLAPP statute's purpose — to prevent such lawsuits. Though it makes no determination as to whether this is what has occurred in the case at hand, in general the Court shares SpamCop's concern. The Legislature, however, was well aware of the right to amend a complaint in state court proceedings (which parallels the right in federal proceedings) and had it intended to deprive a plaintiff of the one-time unilateral right to amend, it would have done so explicitly. See, Prospect Health, WL 909443 at *4. Even if the SLAPP statute explicitly deprived a plaintiff of such a right in state court proceedings, however, the Erie doctrine would have prohibited this Court from depriving Optin of its right in federal court. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78 (1938) (federal procedural laws govern all proceedings in the adjudication of an action in federal court).
Moreover, the Court observes that an aggrieved defendant's hands are not completely tied. A party may amend its complaint once as a matter of course at any time before a responsive pleading, such as an answer, is served. Fed.R.Civ.Pro. 15(a);Outdoor Sys., Inc. v. City of Mesa, 997 F.2d 604, 613 (9th Cir. 1993). A defendant may remove a plaintiff's right simply by filing an answer. Thus, if a defendant seeks to bring an anti-SLAPP motion to strike early in the proceedings, then the defendant should file an answer to the original complaint.
This balance, between a plaintiff's right to amend a complaint, and a defendant's ability to circumscribe that right through an answer reflects the balance the Federal Rules of Civil Procedure have struck to ensure due process to all the parties. "The Federal Rules of Civil Procedure are designed to further the due process of law that the Constitution guarantees. . . . [The rules] shall be construed and administered to secure the just, speedy, and inexpensive determination of every action." Nelson v. Adams USA, Inc., 529 U.S. 460, 466 (2000) (internal quotations and citations omitted). The Court will not disturb that balance.
C. Optin's Motion to Strike SpamCop's Reply
As the above discussion demonstrates, the issue of whether a FAC moots an anti-SLAPP motion is both straight forward and complicated. It is straight forward because the Federal Rules of Civil Procedure clearly provide a plaintiff the ability to amend a complaint as of right as long as no answer has been filed. It is complicated because such a right seems to theoretically give plaintiffs a loophole that allows them to harass defendants and circumvent the anti-SLAPP statute. The Court has reviewed the case law both from the Ninth Circuit, and its sister courts in districts that have similar types of SLAPP statutes. Until the Ninth Circuit's July 27, 2004 in Verizon, it found no case clearly on point. Thus, given the purpose and policy behind the SLAPP statute, it was not patently obvious that a FAC mooted SpamCop's anti-SLAPP Motion. It was an issue that required briefing, oral argument, and a supplemental presentation of cases. Accordingly, SpamCop's reply in support of its motion was appropriate and the Court DENIES Optin's motion to strike it.
CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED THAT SpamCop's Motion to Strike Optin's complaint is DENIED WITHOUT PREJUDICE. If SpamCop wishes to bring an anti-SLAPP motion against Optin, it must bring one against the FAC, not the original complaint.
IT IS FURTHER ORDERED THAT Optin's Motion to Strike SpamCop's Reply Brief Filed by Defendant Allegedly in Support of Its Special Motion to the Motion to Strike Plaintiff's Complaint is DENIED.
IT IS SO ORDERED.