July 9, 2015 | Law360

Recent Decisions Hold Anti-SLAPP Acts Inapplicable in Federal Court; Increase Likelihood of Supreme Court Review

7 min

This article was republished in Law360 on July 10, 2015.

Two recent decisions issued within days of each other have each held that the state anti-SLAPP act under review is inapplicable in federal court. These decisions call into question the continued applicability of such acts in federal court and increase the likelihood that the U.S. Supreme Court will eventually settle the issue. The two rulings, which address the Washington and Minnesota anti-SLAPP statutes, come on the heels of the recent decision of the U.S. Court of Appeals for the District of Columbia Circuit in Abbas v. Foreign Policy Group LLC. In Abbas, the D.C. Circuit created a circuit split when it became the first federal appeals court to rule that a local anti-SLAPP Act did not apply in federal court because the statute conflicted with the Federal Rules of Civil Procedure. Because a majority of states have enacted anti-SLAPP statutes, the rulings have broad implications for the manner in which cases involving political speech, public advocacy, and other exercises of rights of speech and press are litigated.

Anti-SLAPP Acts and the D.C. Circuit's Decision in Abbas

Many states have passed anti-SLAPP acts in an attempt to curb strategic lawsuits against public participation (SLAPPs). A SLAPP suit is one in which a plaintiff seeks to silence or punish its opponent, who is often speaking out against the plaintiff or is on the opposing side of a public debate. In filing a SLAPP lawsuit, the plaintiff does not necessarily seek to prevail on the merits, but rather seeks to chill and silence its opponent through litigation.

Although anti-SLAPP acts vary from state to state, many acts provide a mechanism for early dismissal of defamation or other tort claims on the merits, even where there are factual disputes at issue. For example, the three statutes discussed here—the Washington, Minnesota, and District of Columbia anti-SLAPP acts—all generally provide that, if the defendant makes a showing at the outset of the case that it was engaged in protected speech or activity under the statute, the trial court is required to dismiss the suit unless the plaintiff can show a likelihood that it will prevail on the claim. The vehicle for this early disposition is often called a "special motion to dismiss" or "special motion to strike." Other key features of anti-SLAPP acts generally include the dismissal of such claims with prejudice, the stay of discovery or the allowance of only limited discovery while the anti-SLAPP motion is pending, the expedited consideration of anti-SLAPP motions, and an award of attorneys' fees to the defendant who is the subject of a "SLAPP" lawsuit.

Until this year, the federal appeals courts which considered the issue held that the anti-SLAPP acts did not conflict with the Federal Rules of Civil Procedure, particularly the motion to dismiss and summary judgment procedures. On April 24, 2015, the D.C. Circuit ruled that the District of Columbia's Anti-SLAPP Act cannot apply in federal court because the Act's special motion to dismiss provision conflicts with those rules. The D.C. Circuit specifically held that the Federal Rules of Civil Procedure exclusively "establish the standards for granting pre-trial judgment to defendants in cases in federal court" and the anti-SLAPP Act dictated a pre-trial procedure that conflicted with those rules. The Abbas decision created a circuit split with the First and Ninth Circuits.

The Seventh Circuit's Intercon Decision

At the time of the Abbas ruling, a similar appeal was pending before the U.S. Court of Appeals for the Seventh Circuit in the case of Intercon Solutions, Inc. v. Basel Action Network, et al. In that case, the U.S. District Court for the Northern District of Illinois, examining the Washington state anti-SLAPP statute, similarly held that the law did not apply in federal court because it conflicted with the Federal Rules of Civil Procedure.

The defendants in the Intercon case appealed the district court's denial of their anti-SLAPP motion to the Seventh Circuit. In the interim, the Supreme Court of Washington sitting en banc held in Davis v. Cox that the Washington anti-SLAPP Act's special motion to strike procedure was unconstitutional because it violated the Washington constitution's right to trial by jury. According to the court, this is because the act "requires the trial judge to weigh the evidence and dismiss a claim unless it makes a factual finding that the plaintiff has established by clear and convincing evidence a probability of prevailing at trial." The court concluded that this procedure "invades the jury's essential role of deciding debatable questions of fact" and is, therefore, unconstitutional.

Given that the Davis ruling invalidated the very procedure upon which defendants relied in Intercon, defendants alerted the Seventh Circuit to the Davis opinion and conceded that their appeal was moot. Nevertheless, on June 29, 2015, the Seventh Circuit issued an opinion examining the issue and affirming the district court.

Writing for the court, Judge Frank H. Easterbrook noted that the appeal involved "an important and debatable issue that is open in the Seventh Circuit." The court affirmed the district court's denial of defendants' special motion to strike under the Washington anti-SLAPP Act, albeit on the holding of Davis rather than on the reasoning of the district court. Although the Seventh Circuit did not conclude that the anti-SLAPP act conflicted with the Federal Rules of Civil Procedure, the court left that question open for another day. In so doing, however, the Court reiterated that "[f]ederal rules prevail in federal court" and suggested that, had the Davis court held that the Washington anti-SLAPP act could be "disentangled" into its procedural and substantive parts, the Seventh Circuit might have found the state procedures inapplicable in federal court. The Seventh Circuit's ruling confirms the court's view that this is an important issue it will likely take up squarely in the future.

The U.S. District Court for the District of Minnesota's Unity Healthcare Decision

Just days before the Seventh Circuit's decision in Intercon, the U.S. District Court for the District of Minnesota also held a state's anti-SLAPP act inapplicable in federal court in Unity Healthcare, Inc. v. County of Hennepin. Examining Minnesota's anti-SLAPP statute and noting that the Eighth Circuit had not yet weighed in on the issue, the court held that the statute "collides head-on" with the Federal Rules of Civil Procedure's summary judgment rule. As a result, the state anti-SLAPP act cannot be applied in federal court. The court noted that the Minnesota act "turns judges into pre-trial factfinders who must decide factual disputes by assessing credibility and weighing evidence . . . without drawing inferences in favor of the nonmoving party." This, the court said, is "anathema" to the federal summary judgment procedures, which prohibit such pre-trial fact finding. In short, the court held that, because the federal rules and the state anti-SLAPP act could not "be brought into harmony," the state law could not apply in federal court.

Should the defendants appeal the district court's ruling in Unity Healthcare, the Eighth Circuit may add its view to the current circuit split.

Practical Effect

These rulings reflect a further division among federal courts and a potential shift as to the availability of anti-SLAPP defenses in certain cases. Of course, practitioners litigating the Washington, Minnesota, and District of Columbia anti-SLAPP motions procedures should be familiar with how the rulings may be binding on them. Given the recent case law, however, practitioners in other jurisdictions on either side of an anti-SLAPP motion should be aware of the arguments being raised.

In federal court, plaintiffs can avoid an anti-SLAPP motion by filing suit in federal courts that follow Abbas or its reasoning. For plaintiffs filing in a federal circuit in which the matter has not yet been decided or which has already held that a state anti-SLAPP statute is applicable in federal court, plaintiffs may nonetheless consider arguing for the reasoning set forth in Abbas, Unity Healthcare, and the district court's opinion in Intercon. Other federal district court decisions provide support for the argument.

Defendants are presented with perhaps an even more immediate and difficult decision: defendants sued in state court with viable anti-SLAPP motions must decide in short order whether to keep the case in state court to invoke the statutes' protections or remove to federal court and potentially lose their ability to seek relief under the anti-SLAPP statutes. Defendants with viable grounds to remove to federal court should consider this issue when deciding whether to remove.

In state court, litigants on both sides of an anti-SLAPP motion should be aware of the Supreme Court of Washington's ruling in Davis holding the anti-SLAPP special motion procedure unconstitutional and inapplicable even in state court. In the wake of the Davis ruling, other state and federal courts may be urged to examine (or reexamine) the issue of whether a state anti-SLAPP act violates a state right to a trial by jury or the Seventh Amendment to the U.S. Constitution.

Ultimately, practitioners on either side of the debate should closely monitor their respective federal circuits and the U.S. Supreme Court for additional decisions on these questions.