The defendants in an alleged SLAPP suit are entitled to attorneys fees even if the plaintiffs drop the case before the SLAPP motion to strike is heard, the Second District Court of Appeal has ruled.
The appellate panel overturned the ruling of Los Angeles Superior Court Judge Carolyn B. Kuhl, saying that Kuhl's ruling "constitutes a nullification of an important part of California's anti-SLAPP legislation" because it denies the defendants monetary relief and relieves the plaintiffs of punishment.
The term "SLAPP" suit — the acronym stands for "strategic lawsuits against public participation" — is often used by citizen activists to refer to punitive lawsuits filed by developers and others to discourage citizen activism. (For background, see CP&DR, November 1990.) The law permits a special motion to strike a cause of action that is found by the court to be a SLAPP suit.
Though many SLAPP suits have emerged from a land use context, this one did not. Master Hong Alternative Healing — a health-care facility operated by Hong Liu — had been sued by Stefan Ashkenazy, who had alleged that Liu's provision of health care services to him had resulted in personal injuries. Subsequently, Liu filed a third-party cross-complaint against Deborah Moore, who had worked as a processor of medical bills by the medical doctor with whom Liu had shared office space, as well as several other parties.
While working for the other doctor, Moore reported to government agencies that Liu was engaged in irregular Medicare billing practices, falsifying and destroying patients' medical records, and holding himself out as a medical doctor even though he had no license. In the Ashkenazy case, Liu's cross-complaint against Moore alleged causes of action for breach of fiduciary duty, intentional and negligent interference with prospective economic advantage, indemnity, apportionment of fault, and asked for declaratory relief. Moore filed a motion to strike the complaint under Code of Civil Procedure §425.16, the anti-SLAPP law.
Rather than opposing Moore's motion to strike, Liu asked for — and received — a dismissal of his complaint against Moore only. No hearing on the motion to strike was ever held. Subsequently, Moore sought attorney's fees from Liu under the SLAPP law, but this request was denied by Judge Kuhl, who reasoned that because there had never been a hearing on the motion to strike, Moore could not be considered the prevailing party.
On appeal, the Second District panel ruled that Judge Kuhl was wrong to permit dismissal of the underlying claim against Moore rather than conduct a hearing on the motion to strike. "We hold that a defendant who is voluntarily dismissed, with or without prejudice, after she files a section 425.16 motion to strike, is nevertheless entitled to have the merits of such motion heard as a predicate to a determination of the defendant's motion for attorney's fees and costs." To require the anti-SLAPP defendant to go through other channels to seek attorney's fees "would prolong both the defendant's predicament and the plaintiff's outrageous behavior."
The appellate court also concluded that Moore is not necessarily entitled to attorneys fees for her anti-SLAPP litigation — including her successful appeal to the appellate court. The reason, the court concluded, was the same as above: Because no hearing had been conducted on the motion to strike, she could not yet be considered a prevailing party. The case was remanded to the Superior Court and a hearing on the motion to strike will probably be conducted.
The Case:
Moore v. Liu, No. B116425, 99 Daily Journal D.A.R. 1059, 99 C.D.O.S. 871 (filed January 29, 1999).
The Lawyers:
For Deborah Moore: Mark Allen Kleiman, (310) 393-1771.
No lawyer appeared for Hong Liu.
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