City Slapped Down on anti-SLAPP Claim

by Best Best & Krieger LLP

Details of a Potential NFL Deal for Carson Not of Public Interest, Court Says

In a decision that illustrates government entities’ limits of the anti-SLAPP process, an appellate court rejected the City of Carson’s use of the statute in defending against a broken contract claim. Carson hoped to lure an NFL franchise (or two) to town by developing a sports and entertainment complex, including a football stadium. To that end, the City entered into an exclusive agency agreement with Richard Rand and his Rand Resources to negotiate with the NFL for the franchise designation and stadium development. The relationship between the City and the mayor eventually soured, however, over an unrelated dispute.

Rand later alleged in a state court lawsuit against the City that the City violated the agreement and allowed Leonard Bloom and his company to begin to act as its agent and representative in negotiating with the NFL. The City and Bloom responded by filing an anti-SLAAP motion, asserting their communications regarding the proposed development of the NFL fell within the “public interest” portion of the statute.

The Legislature enacted the anti-SLAPP statute (CCP §425.16) in the 1990’s to provide an expedited pre-trial process to eliminate unmeritorious civil actions filed primarily to chill the exercise of political rights, such as the rights to free speech and to petition the government in connection with a public issue. Under this law, a defendant may move to have an action dismissed upon showing that the plaintiff’s cause of action arises from an act by the defendant in furtherance of the defendant’s right of petition or free speech in connection with a public issue. If established, the plaintiff must then demonstrate a likelihood of prevailing on the claim. Government entities soon deployed the anti-SLAPP process to ward off unmeritorious lawsuits challenging governmental decisions and actions, and the courts found that they were “persons” under the law and that government entities have “speech interests” as “governmental speakers.”

The trial court granted the anti-SLAPP motion and dismissed most of Rand’s lawsuit. He appealed. In a decision in Rand Resources v. City of Carson et al.on May 31, the Court of Appeal reversed the trial court’s order dismissing the various causes of action in Rand’s lawsuit. The court focused its analysis on what constitutes “an issue of public interest” under the statute. Critically, the court noted that, while the development of an NFL-worthy stadium and obtaining a team franchise for the City was a matter of “substantial public interest,” Rand’s lawsuit was predicated on commercial conduct, and in particular, who would represent the City in those negotiations. The court concluded that the identity of the City’s representative was not a matter of “public interest,” which must “go beyond the parochial particulars of the given parties.”

This decision demonstrates the limits of the anti-SLAPP process when deployed by a government entity. That is to say, not every act of a government entity is a matter of “public interest” under the statute, as that would sweep in a wide array of actions and decisions not comprehended by the law. As the appellate court observed, “[t]he part is not synonymous with the greater whole.” Thus, while there is great deal of fanfare and public interest in attracting an NFL franchise and developing an NFL stadium, the nitty gritty aspects of the deal are hardly what attracts and holds public interest.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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