United States: California Supreme Court 2019 Round-Up

Overview

The California Supreme Court Round-Up previews upcoming cases and summarizes select opinions issued by the Court. This edition includes opinions handed down from January through November 2019, organized by subject. Each entry contains a description of the case, as well as a substantive analysis of the Court's decision.

Civil Cases Decided

SLAPP & Anti-SLAPP Litigation

1. Sweetwater Union High School Dist. v. Gilbane Building Co., S233526 (4th App. Dist., 245 Cal.App.4th 19). This case presents the following issues: (1) Is testimony given in a criminal case by persons who are not parties in a subsequent civil action admissible in that action to oppose a special motion to strike? (2) Is such testimony subject to the conditions in Evidence Code section 1290 et seq. for receiving former testimony in evidence?

Decided February 28, 2019 (6 Cal.5th 931). Corrigan, J., for a unanimous Court. The Court affirmed and held that statements on plea forms and in grand jury testimony transcripts are admissible in anti-SLAPP proceedings if it is "reasonably possible" that the evidence contained therein will be admissible at trial. Defendants secured building contracts for facilities improvements for Sweetwater Union High School District. A criminal indictment was then handed down relating to the awarding of the contracts. The District sued to void the contracts, alleging a bribery scheme, and relying in part on Defendants' guilty and no contest pleas, and on grand jury testimony. Defendants brought a motion to strike under Code of Civil Procedure section 425.16 (the SLAPP Act) on the grounds that the District was trying to interfere with their constitutionally protected free speech rights. In turn, the District filed an anti-SLAPP motion under the SLAPP Act. Defendants argued that the content of the plea forms and the grand jury testimony transcripts were hearsay and therefore inadmissible. The Court of Appeal held that because the plea forms were signed under penalty of perjury, they were admissible as declarations in pretrial anti-SLAPP proceedings under Code of Civil Procedure section 2015.5. The Court of Appeal further held that the grand jury testimony was admissible under the same exemption because "the transcriptions are of the same nature as a declaration in that the testimony [transcribed] is given under penalty of perjury." The Supreme Court affirmed, holding that excluding such testimony—which is "at least as reliable as an affidavit or declaration"—would contravene the purposes of the SLAPP Act. The Court explained that because discovery is stayed during SLAPP proceedings, normal evidentiary hurdles should be lessened. Defendants also objected to the substance of the evidence, arguing that it should have been admissible at trial to be used in the anti-SLAPP proceeding. The Court disagreed, holding that such evidence may be considered in anti-SLAPP proceedings "if it is reasonably possible" that the evidence will be admissible at trial.

2. FilmOn.com v. DoubleVerify, Inc., S244157 (2d App. Dist., 13 Cal.App.5th 707). This case presents the following issue: In determining whether challenged activity furthers the exercise of constitutional free speech rights on a matter of public interest within the meaning of Civil Code section 425.16, should a court take into consideration the commercial nature of that speech, including the identity of the speaker, the identity of the audience, and the intended purpose of the speech?

Decided May 6, 2019 (7 Cal.5th 133). Cuéllar, J., for a unanimous Court. The Court reversed and held that the context of speech is relevant to whether the speech furthers the exercise of constitutional free speech rights on matters of public interest under a catchall provision of Code of Civil Procedure Section 425.16, subdivision (e)(4) (the SLAPP Act). FilmOn.com, a business that distributes internet entertainment programming, sued DoubleVerify, a business that provides online tracking, verification, and brand-safety services to internet advertisers, alleging that DoubleVerify disparaged FilmOn in confidential reports to DoubleVerify's customers by falsely classifying FilmOn websites as containing adult content and copyrighted material. In response, DoubleVerify filed an anti-SLAPP motion based on a catchall provision of the SLAPP Act, which protects "conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest." The trial court granted the motion, and the Court of Appeal affirmed on the grounds that DoubleVerify's reports "concerned issues of interest to the public," including knowing which internet content is inappropriate for children or copyrighted, irrespective of the context in which DoubleVerify made the statements. The Supreme Court reversed, holding that the context of the speech is relevant to whether a "functional relationship exists between the speech and the public conversation about some matter of public interest" under the catchall provision. The Court explained that "DoubleVerify's reports—generated for profit, exchanged confidentially, without being part of any attempt to participate in a larger public discussion—do not qualify for anti-SLAPP protection under the catchall provision, even where the topic discussed is, broadly speaking, one of public interest." The Court was careful to note that commercial speech is not categorically excluded from anti-SLAPP protection, but in this case DoubleVerify's reports were "too tenuously tethered to the issues of public interest they implicate, and too remotely connected to the public conversation about those issues, to merit protection under the catchall provision." In so holding, the Court approved of Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, reasoning that "it is not enough that the statement refer to a subject of widespread public interest; the statement must in some manner itself contribute to the public debate."

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