Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism
Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism
Opinion
*639 Code of Civil Procedure section 425.16 ( § 425.16 ), California's so-called anti-SLAPP (strategic lawsuit against public participation) statute, is intended to resolve quickly and relatively inexpensively meritless lawsuits that threaten free speech on matters of public interest. When it applies, section 425.16 permits a defendant to file a special motion to strike a cause of action (sometimes referred to as an anti-SLAPP motion) "within 60 days of the service of the complaint or, in the court's discretion, at any later time upon terms it deems proper." ( § 425.16, subd. (f).) Here, defendants filed the special motion within 60 days of the third amended complaint, but not within 60 days of any earlier complaint. The third amended complaint contains some of the same causes of action as earlier complaints. We granted review to decide whether a special motion to strike an amended complaint may seek dismissal of causes of action that had been included in the earlier complaints.
Because the anti-SLAPP statute is designed to resolve these lawsuits early, but not to permit the abuse that delayed motions to strike might entail, *640 we conclude, as did the Court of Appeal, that, subject to the trial court's discretion under section 425.16, subdivision (f), to permit late filing, *410 a defendant must move to strike a cause of action within 60 days of service of the earliest complaint that contains that cause of action.
I. PROCEDURAL HISTORY
We take this procedural history primarily from the Court of Appeal's opinion. (
Newport Harbor Ventures
,
LLC v
.
Morris Cerullo World Evangelism
(2016)
Plaintiffs Newport Harbor Ventures, LLC, and Vertical Media Group, Inc., sued defendants Morris Cerullo World Evangelism and Roger Artz for damages based on events involving a ground sublease of real property in Newport Beach. Among other allegations, plaintiffs alleged that defendants fraudulently settled an unlawful detainer action involving the property. The first and subsequent complaints alleged multiple causes of action, including breach of written contract and breach of the implied covenant of good faith. Plaintiffs eventually filed a third amended complaint. That complaint also alleged that defendants fraudulently settled the unlawful detainer action. It contained the causes of **652 action for breach of written contract and breach of the implied covenant of good faith contained in the original complaint and added, for the first time, causes of action for quantum meruit and promissory estoppel.
Within 60 days of the filing of the third amended complaint, defendants moved to strike that complaint under section 425.16. They argued that settlement of the unlawful detainer action was an act arising from the right to petition and therefore is protected under the anti-SLAPP statute. Plaintiffs argued the motion was untimely because it was not brought within 60 days of any earlier complaint. The trial court agreed and denied the motion as untimely. It explained that "[t]he case has been pending for over two years. The court notes that the Complaint and every pleading filed by Plaintiffs thereafter, all referenced the Settlement Agreement at the heart of Defendants' argument. Defendants demurred to every pleading filed by Plaintiffs. They filed a Motion to Strike the Complaint and the Second Amended Complaint. The court has also heard and ruled on Defendants' Motion for Judgment on the Pleadings and Motion for Summary Judgment. Substantial discovery has already taken place. The court has granted several discovery motions filed by Plaintiffs. The purpose of the anti-SLAPP statute is to dismiss meritless lawsuits designed to chill free speech rights at the earliest stage of the case. That purpose no longer applies at this late stage in the litigation."
*641
Defendants appealed the denial order. ( § 425.16, subd. (i).) The Court of Appeal affirmed. It held that "a defendant must file an anti-SLAPP motion within 60 days of service of the first complaint (or cross-complaint, as the case may be) that pleads a cause of action coming within section 425.16 [, subdivision] (b)(1) unless the trial court, in its discretion and upon terms it deems proper, permits the motion to be filed at a later time ( § 425.16 [, subd.] (f) ). An amended complaint reopens the time to file an anti-SLAPP motion without court permission only if the amended complaint pleads new causes of action that could not have been the target of a prior anti-SLAPP motion, or adds new allegations that make previously pleaded causes of action subject to an anti-SLAPP motion." (
Newport Harbor
,
supra
, 6 Cal.App.5th at p. 1219,
The court also concluded that defendants' motion was timely as to the two new causes of action pleaded for the first time in the third amended complaint. "To conclude
*411
otherwise," it explained, "would allow [plaintiffs] to circumvent the purpose of the anti-SLAPP statute by holding back those two causes of action from earlier complaints." (
Newport Harbor
,
supra
, 6 Cal.App.5th at p. 1220,
We granted defendants' petition for review. Later, we issued an order limiting review to the issue concerning the proper interpretation of section 425.16, subdivision (f). ( Cal. Rules of Court, rule 8.516(a)(1).)
II. DISCUSSION
A. Suspension of Corporate Status.
A corporation may not prosecute or defend an action while its corporate status is suspended for failure to pay taxes. (
Bourhis v
.
Lord
(2013)
*642 B. The Proper Interpretation of Code of Civil Procedure section 425.16, subdivision (f).
" Section 425.16 provides, inter alia, that '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 or California Constitution
**653
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.' (
Id
., subd. (b)(1).) 'As used in this section, "act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue" includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law....' (
Id
., subd. (e).)" (
Equilon Enterprises v
.
Consumer Cause
,
Inc
. (2002)
Section 425.16"provides a procedure for weeding out, at an early stage,
meritless
claims arising from protected activity." (
Baral v
.
Schnitt
(2016)
The parties seem to agree that defendants' action in settling the unlawful detainer action was an act "in furtherance of [their] right of petition or free speech" ( § 425.16, subd. (b)(1) ), and thus constitutes protected activity under section 425.16. (See
Newport Harbor
,
supra
, 6 Cal.App.5th at p. 1211,
*643
In
Lam
,
supra
,
"[T]he purpose of the anti-SLAPP suit law would be readily circumventable if a defendant's only opportunity to strike meritless SLAPP claims were in an attack on the original complaint. Causes of action subject to a special motion to strike could be held back from an original complaint.... [¶] In context, the 'special' anti-SLAPP suit motion is directed at a particular document, namely 'the complaint.' It would make no sense to read 'complaint' to refer to an earlier complaint that contained no anti-free-speech claims, but not allow such a motion for a later complaint that had been amended to contain some. After all, the whole purpose of the statute is to provide a mechanism for the
early
termination of claims that are improperly aimed at the exercise of free speech or the right of petition." (
Lam
,
supra
, 91 Cal.App.4th at pp. 840-841,
A similar, but slightly different, issue arose in
Yu v
.
Signet Bank/Virginia
(2002)
Under
Lam
and
Yu
, an anti-SLAPP motion may be brought after an amended complaint, at least as to new claims not previously made. The Court of Appeal in this case agreed with those cases to that extent. (
Newport Harbor
,
supra
, 6 Cal.App.5th at p. 1220,
Without specifically citing
Yu
,
supra
,
The Court of Appeal in this case agreed with
Hewlett-Packard Co
.
v
.
Oracle Corp
.,
supra
,
**655
*645
We agree with the Court of Appeal. Section 425.16 provides a means for the prompt and relatively inexpensive resolution of lawsuits that threaten free speech. But it also "present[s] the possibility for abuse of the anti-SLAPP statute." (
Platypus Wear
,
Inc
.
v
.
Goldberg
(2008)
"All discovery proceedings in the action shall be stayed upon the filing of a notice of motion made pursuant to this
*414
section. The stay of discovery shall remain in effect until notice of entry of the order ruling on the motion." ( § 425.16, subd. (g).) "An order granting or denying a special motion to strike shall be appealable under [Code of Civil Procedure s]ection 904.1." (
Id
., subd. (i).) An appeal under this provision "automatically stays all further trial court proceedings on the merits upon the causes of action affected by the motion." (
Varian Medical Systems
,
Inc
.
v
.
Delfino
,
supra
, 35 Cal.4th at p. 186,
In this case, as the trial court noted when it exercised its discretion to deny a late filing, much litigation, including discovery, had already been conducted for two years before the anti-SLAPP motion brought it to a halt. It is far too late for the anti-SLAPP statute to fulfill its purpose of resolving the case promptly and inexpensively. "An anti-SLAPP motion is not a vehicle for a defendant to obtain a dismissal of claims in the middle of litigation; it is a procedural device to prevent costly, unmeritorious litigation at the initiation of the lawsuit." (
San Diegans for Open Government v
.
Har Construction
,
Inc
. (2015)
Defendants argue that, because filing an anti-SLAPP motion stays discovery proceedings, and an appeal from the denial of the motion stays all further trial court proceedings on the merits of the causes of action affected by the motion, permitting defendants to challenge only new causes of action in an amended complaint cannot further judicial efficiency. We disagree. Perfect *646 efficiency may be unobtainable. But limiting an anti-SLAPP motion to new causes of action can make the process more efficient. Claims unaffected by the anti-SLAPP motion might be able to go forward. Moreover, a rule limiting the anti-SLAPP motion to new causes of action can streamline the resolution of the motion and any ensuing appeal by limiting the number of issues to be resolved. The plaintiff also has control over what to allege in an amended complaint. An amended complaint might not add new causes of action subject to an anti-SLAPP motion, in which case no anti-SLAPP motion at all would be permitted.
For these reasons, we agree with the Court of Appeal's interpretation of section 425.16, subdivision (f). Specifically, we agree with the summary of its holding quoted in part I.,
ante
, of this opinion. (
Newport Harbor
,
supra
, 6 Cal.App.5th at p. 1219,
*415
Defendants argue that this conclusion requires overruling
Baral v
.
Schnitt
,
supra
,
**656
against a so-called 'mixed cause of action' that combines allegations of activity protected by the statute with allegations of unprotected activity." (
Id
. at p. 381,
III. CONCLUSION
We affirm the judgment of the Court of Appeal. We also disapprove
Yu v
.
Signet Bank/Virginia
,
supra
,
WE CONCUR:
CANTIL-SAKAUYE, C.J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
RAYE, J. *
Administrative Presiding Justice of the Court of Appeal, Third Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Reference
- Full Case Name
- NEWPORT HARBOR VENTURES, LLC, Et Al., Plaintiffs and Respondents, v. MORRIS CERULLO WORLD EVANGELISM Et Al., Defendants and Appellants.
- Cited By
- 76 cases
- Status
- Published