It's Time to Exempt No-contest Clause Enforcement Proceedings from the Reach of the Anti-slapp Statute

• Publication year: 2016
• Author: By Douglas E. Lawson, Esq., and Eunice Y. Lim, Esq.

IT'S TIME TO EXEMPT NO-CONTEST CLAUSE ENFORCEMENT PROCEEDINGS FROM THE REACH OF THE ANTI-SLAPP STATUTE

By Douglas E. Lawson, Esq.,^* and Eunice Y. Lim, Esq.^{* 1}

I. INTRODUCTION

Consider the following scenario: A beneficiary has filed a will contest alleging undue influence and lack of capacity. The will contains a no-contest clause. The proposed executor files a petition to disinherit the beneficiary because, the proposed executor claims, the beneficiary lacked probable cause to bring the contest. The beneficiary responds to the petition to disinherit by filing a special motion to strike under California's anti-SLAPP statute. Given the definition of a strategic lawsuit against public participation ("SLAPP"), the petition to disinherit will almost certainly be deemed a SLAPP.

As explained in detail below, the proposed executor faces the unenviable task of demonstrating that the beneficiary lacked probable cause when he or she filed the contest. Depending on the timing of the petition to disinherit, the proposed executor may be forced to make this showing without being allowed to take any discovery. Should the proposed executor lose the motion to strike his pleading, the question of disinheritance will be determined in favor of the beneficiary. There will never be a disinheritance, no matter how weak the beneficiary's claims turn out to be. Further, irrespective of who wins, appellate rights are immediate: the parties could face a possible appeal ? and corresponding delay ? before any discovery occurs on the contest.

This situation applies not only to executors, but to any party to a will or trust contest who seeks to disinherit a beneficiary for filing a direct contest without probable cause. The authors believe that disinheriting petitions should be exempted from the anti-SLAPP statute because applying the anti-SLAPP statute in this context:

• Fails to further the legislative purpose of the anti-SLAPP statute;
• Thwarts the purpose of no-contest clauses;
• Undermines legislative efforts to reduce excessive pre-contest litigation, which is why the Legislature abolished Probate Code section 21320 "safe harbor" procedures; and
• Creates perverse incentives for the contesting beneficiary to file an anti-SLAPP motion because it will procedurally disadvantage the disinheriting petitioner.

Because the California Supreme Court has granted great deference to the Legislature's instruction to construe the anti-SLAPP statute broadly, courts will not exempt actions from the anti-SLAPP statute absent direct instructions from the Legislature. Accordingly, the authors believe that legislative action is necessary to prevent the inequities that result from applying the anti-SLAPP statute to no-contest clause enforcement proceedings.

II. CALIFORNIA'S ANTI-SLAPP STATUTE

A. Periodic Revisions are Necessary To Ensure the Statute Serves its Purpose 1. Legislators Intended the Statute To Restore Fairness Between Adversaries in Litigation and To Reduce Excessive, Unnecessary, and Expensive Litigation

When legislators enacted California's anti-SLAPP statute ? Code of Civil Procedure section 425.16 (hereinafter, "Section 425.16" or the "anti-SLAPP statute") ? they did so with worthy intentions. Deep-pocketed individuals and entities had been suppressing constitutionally-protected speech and petitioning activities by filing meritless lawsuits as strategic maneuvers, expecting that the substantial cost of a legal defense would force their critics to abandon their criticism or adversarial actions. For example, a large corporation might have sued a small newspaper for libel, hoping that the publication would choose to withdraw and discredit its story rather than face the expense of defending a lawsuit and risking bankruptcy. Such suits frequently accomplished their goal of intimidating critics into silence, despite a lack of legal merit, because "the little guy" often could not afford to stay in the fight long enough for the court to make a determination on the merits.

In 1992, the California Legislature enacted Section 425.16 with the intent to put an end to such lawsuits, which by then had earned the name "Strategic Lawsuits Against Public Participation," or "SLAPPs."² The language of the statute's preamble states:

The Legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process . . . . ³

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When applicable, the anti-SLAPP statute allows the party facing a SLAPP to respond with a "special motion to strike," which, if successful, results in the dismissal of the SLAPP. In this way, the Legislature sought to combat SLAPPs by providing "David" parties with a procedural tool to fight back early and effectively, before deep-pocketed "Goliath" opponents could use the litigation to drain their resources and intimidate them into abandoning their constitutionally protected opposition or criticism. Thus, the Legislature sought to restore a measure of fairness to litigation between parties of disparate economic circumstances, and to promote and protect the rights of free speech and petition by removing the deterrent effect SLAPPs otherwise would have on critics' willingness to speak out against well-funded adversaries.

Critics question whether the anti-SLAPP statute accomplishes its objective of reducing costly litigation. Since there are strategic benefits to filing an anti-SLAPP motion in certain contexts and thousands of anti-SLAPP suits have been filed in California⁴ since the statute became effective on January 1, 1993,⁵ some question if the statute has increased litigation. However, the anti-SLAPP statute has, in large part, had its intended effect: deep-pocketed parties are no longer able to blithely use litigation as a means to beat less affluent opponents into submission without consequence.

2. The Scope of a SLAPP: The Anti-SLAPP Statute Was Purposely Crafted To Be Construed Broadly

A SLAPP is a malicious or frivolous cause of action where the alleged harm arises from the valid exercise of First Amendment rights, specifically the right to petition the courts or the right of free speech. As previously noted, the archetypical SLAPP is a meritless action brought by a deep-pocketed litigant to deter less-affluent parties from exercising their political or legal rights or to punish them for doing so.⁶

A SLAPP typically arises in the context of civil tort claims such as libel, defamation, nuisance, or interference with prospective economic advantage. However, the language of California's anti-SLAPP statute permits a party to bring a special motion to strike any cause of action "arising from" the exercise of free speech or the right to petition:

A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim. ⁷

Crucially, Section 425.16 was amended in 1997 to explicitly declare that the statute "shall be construed broadly."⁸ The Legislature enacted this new language in response to concerns that courts were applying the statute too narrowly.⁹ Courts have since relied on this language to apply the statute in ways that a plain reading of its language might not otherwise allow.

For example, even though the statute appears to require that the exercise of rights forming the basis for the SLAPP suit be "in connection with a public issue," and courts initially required SLAPP defendants to demonstrate this element for the statute to apply,¹⁰ court decisions following the 1997 amendment have questioned, weakened, and even eliminated this requirement in certain circumstances. In Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106 ("Briggs"), the California Supreme Court expressly relied on the Legislature's instruction to construe the statute broadly in holding that "a defendant moving to strike a cause of action arising from a statement made before, or in connection with an issue under consideration by, a legally authorized official proceeding need not separately demonstrate that the statement concerned an issue of public significance."¹¹ Subsequent court decisions in other contexts have also relied on the language from the 1997 amendment in applying a similarly low threshold for the "public issue" requirement.¹²

California courts have repeatedly acknowledged the purposefully expansive application of the anti-SLAPP statute mandated by the Legislature's instruction to construe the statute broadly. The California Supreme Court has taken the position that "[n]othing in the [anti-SLAPP] statute itself categorically excludes any particular type of action from its operation"¹³ and there is "no reason to suppose the Legislature failed to consider the need for reasonable limitations on the use of special motions to strike."¹⁴ Accordingly, in the absence of specific direction from the Legislature to limit the application of the anti-SLAPP statute, the California Supreme Court will apply Section 425.16 to any action that "arises from" any act in furtherance of free speech or the right to petition.

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However, not all courts that discuss the expansive application of the anti-SLAPP statute approve of this broad application.¹⁵ As early as 1999, Justice Baxter expressed his concern in a dissenting opinion regarding the application of the anti-SLAPP statute:

The majority's holding expands the definition of a SLAPP suit to include a

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