A developer's lawsuit that claimed the San Diego Unified Port District and one of its commissioners conspired to kill the developer's proposed waterfront project has been thrown out as a strategic lawsuit against public participation (SLAPP). The Fourth District Court of Appeal upheld a trial court, which found that a Tuchscher Development Enterprises (TDE) lawsuit against the port district and Commissioner David Malcolm was a SLAPP. The unanimous three-judge appellate panel also affirmed the trial court's award of attorneys' fees to the Port District, and the appellate court awarded attorneys' fees for the appeal portion of the case. In 1998, Tuchscher entered into an exclusive negotiating agreement with the City of Chula Vista for development of bayfront property known as Crystal Bay. Tuchscher then obtained an option to purchase the land from the primary owner, Chula Vista Capital. However, the purchase option expired in February 2000, and the negotiating agreement expired three months later. Tuchscher then filed its lawsuit against the Port District, Malcolm, the city and developer Lennar Corporation. Tuchscher alleged the defendants induced breach of contract, interfered with Tuchscher's "prospective economic advantage" and violated the unfair competition law. The gist of the lawsuit was that the Port District and Malcolm conspired with Lennar to disrupt the city's negotiations with Tuchscher. The defendants argued that their actions fell within the anti-SLAPP statute (Code of Civil Procedure § 425.16) because their alleged oral and written statements regarding Crystal Bay were part of a governmental review of a development project, and because the issue was of public interest. The anti-SLAPP law is intended to block lawsuits that chill the exercise of free speech in matters of public interest. San Diego County Superior Court Judge William Nevitt Jr. ruled for the defendants and blocked the suit from going forward. Tuchscher appealed, arguing that the anti-SLAPP law did not apply because there was no "public issue" and because no formal public process had begun. And even if the anti-SLAPP law applied, Tuchscher contended that it had presented enough evidence for the lawsuit to go to trial. The anti-SLAPP statute requires the court to undertake a two-step process, the Fourth District explained. First, the defendant must show that the challenged action arose from protected activity. If the defendant makes that showing, the plaintiff must demonstrate a probability of prevailing at trial for the case to continue. Both the trial court and the Fourth District ruled that the defendants showed that their activities were protected under the anti-SLAPP law and that Tuchscher failed to make its case. The Fourth District ruled that "the prospect of commercial and residential development of a substantial parcel of bayfront property, with its potential environmental impacts, is plainly a matter of public interest." The court rejected Tuchscher's argument that if it there was a public issue, it did not involve the Port District and Malcolm and the argument that Tuchscher's motivation for the suit was not to chill free speech. The court called the arguments irrelevant. As for Tuchscher making its case, the Fourth District ruled that the developer provided little admissible evidence. A declaration by Tuchscher President and Chief Executive Officer William Tuchscher detailed the alleged behind-the-scenes activities of Malcolm, Port District officials, city officials and Lennar. And Tuchscher argued that these activities were intended to discourage further negotiations between the city and Tuchscher, and between the Crystal Bay landowner (CVC) and Tuchscher. These activities constituted a breach of contract and interference with Tuchscher's prospective economic gain, the developer argued. But the court called William Tuchscher's declaration hearsay, and "argumentative, speculative and impermissible opinions." "[T]he record is absent of any admissible, direct evidence or evidence from which we may infer respondents' actions induced a breach or disruption," Justice Terry O'Rourke wrote for the court. Besides, O'Rourke continued, "such talks do not by themselves establish the city improperly negotiated with Malcolm or Lennar, abandoned the negotiating agreement, or otherwise refused to meet and confer or negotiate in good faith with TDE." Even if the Port District and Malcolm helped draft an agreement between CVC and Lennar, the activity would not necessarily be illegal, the court ruled. "Although the point is obvious, Malcolm, the Port District, Lennar and CVC were not parties to the negotiating agreement and thus they were not bound by any contractual obligation or duty to refrain from taking steps — either among themselves or with the city — to push their own development ideas for Crystal Bay," O'Rourke wrote. "Absent any contractual obligation to avoid discussing the issues with the city, respondents' conduct does not amount to a breach of contract or other independently wrongful act sufficient to support the plaintiffs' interference with economic advantage claim." The Fourth District further ruled that the trial court correctly ignored new evidence that Tuchscher presented when requesting reconsideration. The new evidence was that Malcolm and the Port District argued in an unrelated lawsuit that the district had jurisdiction only over tidelands, submerged lands in San Diego Bay, Lindbergh Field airport, and some limited annexations. If that were the case, the Port District and Malcolm would not have jurisdiction over the proposed Chula Vista development. Tuchscher argued that the doctrine of judicial estoppel prevented the Port District and Malcolm from having it both ways. The appellate court, though, ruled that the doctrine did not apply because the court in the other case rejected the description of limited jurisdiction and because the Port District and Malcolm gained nothing from that ruling. Plus, the court ruled, Tuchscher did not explain how the Port District's jurisdiction was relevant to its case. The Case: Tuchscher Development Enterprises, Inc., v. San Diego Unified Port District, No. D038811, 03 C.D.O.S. 2244, 2003 DJDAR 2827. Filed March 12, 2003. The Lawyers: For Tuchscher: Joel Pressman, Kolodny & Pressman, (858) 453-0309. For the Port District: David Noonan, Post, Kirby, Noonan & Sweat, (619) 231-8666.