New State Law Tries to Take Punch Out of SLAPP Suits

All it took was one phone call to get Annette C. Baecker in trouble.

A few years ago, developer Sherman Whitmore planned to give $150,000 to the nonprofit Mountain Restoration Trust to mitigate any negative effects from his 129 proposed luxury homes in the mountains above Burbank. Then, Baecker called the trust to express her opposition to the project and Whitmore’s donation plan.

The phone call dragged her into a lengthy lawsuit brought by Whitmore, who alleged that Baecker had illegally tried to block the project by interfering with a private contract between Whitmore and the trust.

After lots of legal wrangling, Whitmore lost his lawsuit in 1991, and his development hasn’t been built. In the meantime, however, “it was an emotionally and financially draining experience for the Baeckers,” said their attorney, Barry A. Fisher. Baecker’s legal bills were $18,000 and a defense fund was formed to help pay her tab.

Fisher said the legal battle “was deeply disturbing to the family” and contributed to the Baecker family’s decision to leave California for Oregon.

What Annette Baecker suffered is called a SLAPP--a so-called strategic lawsuit against public participation.

For several years now, real estate developers, along with public agencies, schoolteachers and even city council members have been suing community activists over proposed building moratoriums, ballot initiatives, charges of incompetence, recall petitions and even unfriendly letters to the editor.

The charges brought against individuals and groups may include defamation of character, nuisance, interference with economic advantage, malicious prosecution, abuse of the legal process and even emotional distress.

Until recently, the claims against community activists have only been limited by the creativity and chutzpah of plaintiffs such as developers and their lawyers. But now, the trend may be reversing itself.

Effective this January, a new state law goes into effect to help protect individuals and homeowner groups and other community associations in their efforts to exercise their First Amendment right of free speech and petition rights in connection with a public issue. Most SLAPP suits are also being thrown out of court or resulting in SLAPP-backs brought by activists who feel they’ve been maliciously prosecuted and wrongly stymied in their attempts to speak out.

California is one of a handful of states to pass legislation curtailing SLAPPs. Senate Bill 1264, introduced by state Sen. Bill Lockyer (D-Hayward) and signed by Gov. Pete Wilson, provides, among other things, that very early in the course of a lawsuit involving an issue of free speech or petition rights, a plaintiff must show a probability that the lawsuit will succeed. Since most SLAPP suits fall down in the face of First Amendment rights, this new provision in the law will allow judges to summarily dismiss a SLAPP before it has the chance to tie up a defendant in too much litigation.

Lockyer’s bill also provides protection to directors and officers of community groups and homeowner associations.

Residents, such as Baecker, who try to stymie new construction projects have until now found themselves particularly vulnerable as a small but active group of developers have opted for conflict over compromise. Developers have also discovered that even the threat of a lawsuit can succeed in quieting homeowner protests.

The Westlake North Homeowners Assn. at one point put up its community center as collateral as part of a $123,000 settlement it faced in a case with Lang Ranch. The homeowners had sued to block the Lang Ranch’s mixed-use project, saying that they believed it didn’t have a proper environmental impact report. Attorneys for the homeowners lost the first round of the case and the court fined the group $123,000, but the homeowners were ultimately vindicated on appeal.

A group of homeowners who filed suit against the Burbank-Glendale-Pasadena Airport Authority to limit airport noise and expansion plans got tied up in a very lengthy dispute when airport officials countered by filing a notice of lis pendens on their homes. Homes, such as one owned by Margie Gee in Burbank, were tied up in the litigation, making it more complicated for residents to sell or refinance their property until the lis pendens was removed several years later. “I try and be careful with what I say now,” longtime activist Gee said. “The little guy has a hard time fighting.” Developers and the legal system, she said, “bleed you to death.”

Hundreds, perhaps thousands of SLAPPs are filed every year, said Penelope Canan and George W. Pring, two University of Denver law professors whose researchers came up with the term SLAPP. The average SLAPP asks for about $9 million in damages and lasts about three years before getting resolved. While most plaintiffs in a SLAPP lawsuit eventually lose, they often succeed in getting their opponents to recoil in the face of costly litigation.

Not everybody is convinced California’s new law will completely solve the problem. Activists preferred the original language of SB 1264, which allowed plaintiffs to continue with a lawsuit only if they could exhibit early a “substantial probability” of winning. The bill was watered down to fend off opposition by trial lawyers and the governor, who worried about denying developers and other potential plaintiffs a chance to have their day in court against defendants whose complaints they say have been too intrusive.

Many activists complain that the new law doesn’t go far enough, because it isn’t just SLAPPs that silence community activists. Sometimes all it takes is a threat. Protecting against this sort of so-called chilling effect is very tough to do, however.

Mark Goldowitz, director of the First Amendment Project and California Anti-SLAPP Project in Oakland, would have liked more protection for activists, but, he said, “aggressive enforcement of the new law will significantly reduce the incidence of new SLAPP suits.”

Successful SLAPP-backs are also putting a crimp on SLAPPs, Goldowitz said. One jury recently awarded a Bay Area environmentalist more than $200,000 in his SLAPP-back suit against the West Contra County Sanitary District. The environmentalist was sued for $42 million in 1988 after he publicly complained to stop construction of a garbage-burning plant.

A group of family farmers also won a whopping $13 million in their SLAPP-back against an agribusiness corporation that had sued the farmers for libel.

It was a sweet victory for the farmers--but it took about 10 years for the litigation to make its way through the courts.