Opinion
D072562
04-26-2018
SAN DIEGANS FOR OPEN GOVERNMENT, Cross-defendant and Appellant, v. PUBLIC FACILITIES FINANCING AUTHORITY OF THE CITY OF SAN DIEGO et al., Cross-complainants and Respondents.
Briggs Law, Cory J. Briggs and Anthony N. Kim for Cross-defendant and Appellant. Mara W. Elliott, City Attorney, George F. Schaefer, Assistant City Attorney and Meghan Ashley Wharton, Deputy City Attorney, for Cross-complainants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2017-0004058-CU-MC-CTL) APPEAL from an order of the Superior Court of San Diego County, Gregory W. Pollack, Judge. Affirmed. Briggs Law, Cory J. Briggs and Anthony N. Kim for Cross-defendant and Appellant. Mara W. Elliott, City Attorney, George F. Schaefer, Assistant City Attorney and Meghan Ashley Wharton, Deputy City Attorney, for Cross-complainants and Respondents.
I.
INTRODUCTION
San Diegans for Open Government (SANDOG) appeals the trial court's denial of its special motion to strike (Code of Civ. Proc., § 425.16). On appeal, SANDOG claims that the trial court erred in denying the motion on the ground that a cross-complaint filed by the Public Facilities Financing Authority of the City of San Diego (PFFA) and the City of San Diego (the City) (collectively "respondents") did not arise from SANDOG's petitioning activity. Specifically, SANDOG maintains that respondents' cross-complaint arose from SANDOG's filing of the complaint in this action.
Unless otherwise specified, all subsequent statutory references are to the Code of Civil Procedure.
A special motion to strike pursuant to section 425.16 is also commonly referred to as an antiSLAPP motion. "SLAPP" stands for Strategic Lawsuit Against Public Participation. (See Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.)
We conclude that the trial court properly determined that respondents' cross-complaint did not arise from SANDOG's filing of the complaint. The cross-complaint, which alleges a single cause of action for declaratory relief, arose from the underlying controversy between the parties rather than from SANDOG's filing of the complaint. Under these circumstances, California law is clear that the City's complaint is not subject to a special motion to strike. (See City of Cotati v. Cashman (2002) 29 Cal.4th 69, 80 (City of Cotati) [concluding that city's action was not subject to a special motion to strike because "the actual controversy giving rise to both actions — the fundamental basis of each request for declaratory relief — was the same underlying controversy"].) Accordingly, we affirm the court's order denying SANDOG's anti-SLAPP motion.
II.
FACTUAL AND PROCEDURAL BACKGROUND
A. SANDOG's complaint
In February 2017, SANDOG filed a "Reverse-Validation Complaint for Declaratory and Injunctive Relief" against respondents, among others. In its complaint, SANDOG challenged certain actions that respondents took related to the construction of a parking facility in Balboa Park (the Project). SANDOG alleged that the City adopted a resolution authorizing the City to enter into a cooperation agreement with an entity called the Plaza De Panama Committee related to the Project (the PdP Agreement). SANDOG also alleged that the City adopted an ordinance, and the PFFA adopted a resolution, both of which approved the issuance of certain lease revenue bonds related to the financing of the project (the Bond Approvals).
SANDOG stated that it brought the action pursuant to section 860 et seq. (governing validation actions) and section 1060 et seq. (governing declaratory relief actions).
We refer to the City's resolution authorizing the cooperation agreement as "the PdP Agreement Approval" and to the City's ordinance and the PFFA's resolution authorizing the lease revenue bonds as "the Bond Approvals." While in its complaint SANDOG referred to all three actions collectively as the Bond Approvals, for purposes of clarity, we refer to all three actions collectively as "the Project."
Within a single cause of action captioned as "[The Project's] Non-Compliance with All Applicable Laws," SANDOG maintained that the Project violated five different laws, including (1) section 90.1 of the San Diego City Charter, (2) Government Code section 4526, (3) "the legal prohibition against gifts of public funds," (4) the "city's competitive-bidding requirements," and (5) section 225 of the San Diego City Charter.
SANDOG requested that the trial court declare the Project null and void and that the court enjoin respondents from "taking any of the action contemplated by the [Project]." B. Respondents' cross-complaint
Respondents filed a cross-complaint against SANDOG in March 2017. In their cross-complaint, respondents alleged that the Bond Approvals were "in conformity with the requirements of applicable provisions of all laws." Respondents further alleged that SANDOG "has alleged that the . . . Bond Approvals do not comply with the applicable laws, including section 90.1 of the San Diego City Charter."
In a single cause of action for declaratory relief, respondents alleged the existence of a controversy between SANDOG and respondents concerning the legality of the Bond Approvals. Respondents sought a declaration that the Bond Approvals "do not violate section 90.1 [of the San Diego City Charter]," and that the Bond Approvals were lawful and "in conformity with the requirements of applicable provisions of all laws and enactments at any time in force or controlling upon such proceedings, whether imposed by law, constitution, statute, charter or ordinance, and whether federal, state or municipal." C. SANDOG's special motion to strike
Respondents' cross-complaint did not contain any allegations related to the PdP Agreement Approval.
The following month, SANDOG filed a special motion to strike respondents' cross-complaint. In its motion, SANDOG maintained that respondents' cross-complaint arose from SANDOG's protected activity in filing the complaint. In support of this contention, SANDOG argued, "The sole cause of action stated in the Cross-Complaint references and rephrases the Complaint's allegations; these alone give rise to the controversy upon which [respondents] base their single cause of action." SANDOG also argued that respondents' discovery responses demonstrated that the cross-complaint arose from SANDOG's filing of the complaint because "[i]n 10 pages of verified discovery responses, [respondents] do not cite a single fact or circumstance that exists separately from the filing of this lawsuit." D. Respondents' opposition
SANDOG filed copies of the relevant discovery responses with its anti-SLAPP motion, together with a supporting declaration from its counsel.
Respondents filed an opposition in which they claimed that their cross-complaint did not arise from SANDOG's complaint. Respondents maintained that the cross- complaint was based on respondents' need to obtain a timely determination as to the legality of the Bond Approvals, and was not based on SANDOG's petitioning activity in filing the complaint. In support of this contention, respondents argued that the "Cross-Complaint does not seek a declaration with regard to any specific conduct that [SANDOG] has or intends to engage in . . . ." Respondents argued in the alternative that SANDOG's special motion to strike should be denied because respondents had demonstrated a probability of prevailing on their claim for declaratory relief. E. The trial court's ruling
Respondents also claimed that the cross-complaint was exempt from the anti-SLAPP statute because it was within the scope of the public interest exemption to the anti-SLAPP statute contained in section 425.17, subdivision (b). Section 425.17, subdivision (b) provides:
"Section 425.16 does not apply to any action brought solely in the public interest or on behalf of the general public if all of the following conditions exist:
"(1) The plaintiff does not seek any relief greater than or different from the relief sought for the general public or a class of which the plaintiff is a member. A claim for attorney's fees, costs, or penalties does not constitute greater or different relief for purposes of this subdivision.
"(2) The action, if successful, would enforce an important right affecting the public interest, and would confer a significant benefit, whether pecuniary or nonpecuniary, on the general public or a large class of persons.
"(3) Private enforcement is necessary and places a disproportionate financial burden on the plaintiff in relation to the plaintiff's stake in the matter."
In support of their opposition, respondents lodged portions of the PdP Agreement Approval and the PdP Agreement, together with a supporting declaration from counsel.
After further briefing, and a hearing, the trial court denied the motion, reasoning in relevant part:
"That [respondents'] subjective motivation to bring its cross-complaint against SDOG might have been to retaliate against SDOG for its bringing its reverse validation action is irrelevant, i.e., a bad intent does not make an otherwise valid complaint subject to the anti-SLAPP statute. City of Cotati[, supra, 29 Cal.4th at p.] 78 ('But City's subjective intent, as discussed, is not relevant under the anti-SLAPP statute. As a corollary, a claim filed in response to, or in retaliation for, threatened or actual litigation is not subject to the anti-SLAPP statute simply because it may be viewed as an oppressive litigation tactic.'). If bad intent on the part of the party filing a cross-complaint makes the cross-complaint a SLAPP suit, almost any cross-complaint could be subject to an anti-SLAPP attack. City of Cotati[, at p. 77 ('To construe "arising from" in section 425.16, subdivision (b)(1) as meaning "in response to," as Owners have urged, would in effect render all cross-actions potential SLAPP's. We presume the Legislature did not intend such an absurd result.).
"In [City of Cotati], supra, [29 Cal.4th] at p. 77, the California Supreme Court observed that '[t]he anti-SLAPP statute cannot be read to mean that "any claim asserted in an action which arguably was filed in retaliation for the exercise of speech or petition rights falls under section 425.16, whether or not the claim is based on conduct in exercise of those rights' . . . California courts rightly have rejected the notion "that a lawsuit is adequately shown to be one 'arising from' an act in furtherance of the rights of petition or free speech as long as suit was brought after the defendant engaged in such an act, whether or not the purported basis for the suit is that act itself." ' In other words, while SDOG's filing of its reverse [validation] action, itself, is protected activity, such does not make the City's cross-complaint, even if retaliatory, a SLAPP suit if the cross-complaint seeks legitimate declaratory relief. Here, the need for a declaration of rights cannot be seriously questioned by SDOG,
which, itself, has brought such an action seeking a declaration of rights on the very same issues."F. The appeal
The trial court did not rule on respondents' contention that SANDOG's complaint should be denied on the ground that the public interest exemption (§ 425.17, subd. (b)) applied to respondents' cross-complaint.
The trial court's order denying SANDOG's motion to strike is appealable. (§§ 425.16, subd. (i), 904.1, subd. (a)(13).) SANDOG timely appealed the order.
We observe that, if the trial court had denied SANDOG's motion on the ground that the public interest exemption (§ 425.17, subd. (b)) to the anti-SLAPP statute applied, the order would not have been appealable under the interlocutory appeal provisions of the anti-SLAPP statute. (§ 425.17, subd. (e).) In so stating, we express no opinion on the merits of respondents' public interest exemption argument.
III.
DISCUSSION
Respondents' cross-complaint does not arise from SANDOG's petitioning activity
SANDOG claims that the trial court erred in denying its anti-SLAPP motion (§ 425.16). Specifically, SANDOG claims that the trial court erred in concluding that respondents' cross-complaint does not arise from SANDOG's petitioning activity. A. Governing law
1. The anti-SLAPP statute
Section 425.16, subdivision (b)(1) provides: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim."
2. The two-step process for resolving an anti-SLAPP motion
"Resolution of an anti-SLAPP motion 'requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken "in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue," as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.' [Citation.]" (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733, italics added.)
3. The "arising from" requirement
In Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, (Park) the California Supreme Court summarized the "arising from" requirement in section 425.16, subdivision (b) as follows:
"A claim arises from protected activity when that activity underlies or forms the basis for the claim. [Citations.] Critically, 'the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech.' [Citations.] '[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute.' ([citation]; see City of Cotati, [supra, 29 Cal.4th] at p. 78 [suit may be in 'response to or in retaliation for' protected activity without
necessarily arising from it].) Instead, the focus is on determining what 'the defendant's activity [is] that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.' [Citation.] 'The only means specified in section 425.16 by which a moving defendant can satisfy the ["arising from"] requirement is to demonstrate that the defendant's conduct by which plaintiff claims to have been injured falls within one of the four categories described in subdivision (e). . . ." [Citation.] In short, in ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by defendant supply those elements and consequently form the basis for liability." (Park, supra, at pp. 1062-1063.)
The Park court noted that, in City of Cotati, the Supreme Court held that a party's action does not arise from protected activity merely because it is filed "because of protected activity." (Park, supra, 2 Cal.5th at p. 1064, citing City of Cotati.) The Park court explained:
"Thus, for example, in City of Cotati [supra, 29 Cal.4th 69], the plaintiff city filed a state suit seeking a declaratory judgment that its rent control ordinance was constitutional. The suit followed in time the defendant owners' federal suit seeking declaratory relief invalidating the same ordinance. In the state action, the defendants filed an anti-SLAPP motion alleging the suit arose from their protected activity of filing the federal suit. The motion, we explained, should have been denied because the federal suit formed no part of the basis for the state claim. The city's potential entitlement to a declaratory judgment instead arose from the parties' underlying dispute over whether the ordinance was constitutional, a dispute that existed prior to and independent of any declaratory relief action by the owners. (Id. at p. 80.)" (Park, supra, 2 Cal.5th at p. 1063.)
The Park court also observed that, in City of Cotati, the fact that the defendant owners' prior action provided evidence of the controversy supporting the city's declaratory relief claim, did not demonstrate that the declaratory relief claim arose from the prior action. (Park, supra, 2 Cal.5th at p. 1064.) That is because, as the Park court explained, a "claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted." (Id. at p. 1060.) B. Application
SANDOG contends that its "filing of a lawsuit is the sole act underlying the Cross-Complaint." We disagree. Just as in City of Cotati, while SANDOG's filing of its complaint may have been the reason that respondents filed their cross-complaint, this does not establish that respondents' cross-complaint arises from the complaint. (City of Cotati, supra, 29 Cal.4th at p. 78 ["that a cause of action arguably may have been triggered by protected activity does not entail that it is one arising from such"].) On the contrary, it is clear that the cross-complaint arises from the underlying dispute between the parties concerning the legality of the Bond Approvals. Respondents' cross-complaint contains a single cause of action for declaratory relief in which respondents seek a declaration that the Bond Approvals were lawful. The cross-complaint states in relevant part:
"Cross-Complainants seek a declaration for themselves and all interested parties that the proceedings by and for the Cross-Complainants and the . . . Bond Approvals contemplated and authorized by Cross-Complainants were and are in conformity with the requirements of applicable provisions of all laws and enactments at any time in force or controlling upon such proceedings, whether imposed by law, constitution, statute, charter or ordinance, and whether federal, state or municipal."
SANDOG acknowledges that "the Cross-Complaint merely alleges the opposite of [SANDOG's] Complaint: that the Bond Approvals comply with all applicable law." That is a crucial point. While the cross-complaint arises from the same underlying controversy as the complaint, the cross-complaint does not arise from the complaint. (See City of Cotati, supra, 29 Cal.4th at p. 80 [noting that the distinction between a "court action on the one hand and the controversy underlying that action," is "not an ephemeral or merely formalistic one"].) As in City of Cotati, "the actual controversy giving rise to both actions—the fundamental basis of each request for declaratory relief—was the same underlying controversy." (Ibid.) The cross-complaint here contains no allegations supporting a request for declaratory relief based on SANDOG having engaged in the protected activity of filing its complaint seeking declaratory relief. Thus, as in City of Cotati, respondents' declaratory relief claim does not arise from SANDOG's suit. (Ibid.)
SANDOG's contention that it is clear that the "Cross-complaint arose solely from the Complaint," given that respondents' cross-complaint and discovery responses refer to SANDOG's complaint, is, at best, unpersuasive. Virtually any cross-complaint will necessarily refer to the complaint to which it is, in effect, responding. That does not mean that the cross-complaint arises from the complaint within the meaning of the anti-SLAPP statute. (See City of Cotati, supra, 29 Cal.4th at p. 77 ["To construe 'arising from' in section 425.16, subdivision (b)(1) as meaning 'in response to,' as Owners have urged, would in effect render all cross-actions potential SLAPP's"].) Respondents' references to SANDOG's complaint in the cross-complaint simply "supply evidence of the parties' disagreement." (Park, supra, 2 Cal.5th at p. 1064.)
For example, respondents' cross-complaint alleges, "SDOG has alleged that the . . . Bond Approvals do not comply with the applicable laws . . . ." In addition, respondents allege in the cross-complaint that an "actual controversy" exists between the parties because "SDOG alleges that the . . . Bond Approvals are invalid and unlawful," and respondents "allege that the . . . Bond Approvals are valid and lawful and comply with all applicable laws. . . ." However, in no portion of the cross-complaint do respondents seek to hold SANDOG liable for SANDOG's filing of the complaint. Similarly, the fact that respondents refer to SANDOG's complaint in their discovery responses does not establish that the cross-complaint arose from the complaint. As with the cross-complaint itself, respondents' discovery responses referenced the complaint merely to demonstrate the existence of the underlying controversy between the parties.
For example, in a discovery response pertaining to the cross-complaints' allegation of the existence of a controversy between the parties concerning the legality of the Bond Approvals, respondents referred to allegations in SANDOG's complaint that the approvals were unlawful.
In sum, no portion of either the cross-complaint or respondents' discovery responses indicates that SANDOG's actions supply the elements for respondents' declaratory relief claim. Under these circumstances, it is clear that the cross-complaint does not arise from SANDOG's protected activity. (See Park, supra, 29 Cal.4th at pp. 1062-1063 [whether a claim arises from the defendant's protected activity turns on an analysis of the elements of the claim and "what actions by defendant supply those elements and consequently form the basis for liability"].)
Finally, SANDOG's attempts to distinguish City of Cotati are entirely unpersuasive. SANDOG notes that respondents seek an award of costs from SANDOG, which, according to SANDOG, "evidences that [the cross-complaint] 'arises from' [SANDOG's] exercise of its petitioning right." To begin with, the City of Cotati court did not discuss whether the plaintiff in that case sought costs from the defendant. Thus, the City of Cotati court had no occasion to discuss the issue. With respect to the merits of the contention, since costs are "normally viewed as an incident of a judgment," (Bean v. Pacific Coast Elevator Corporation (2015) 234 Cal.App.4th 1423, 1430 (italics omitted)), rather than a substantive basis for a judgment (ibid.), it is hard to understand how a request for costs could ever be based on a party's having engaged in protected activity under the anti-SLAPP statute. In any event, there is nothing in respondents' cross-complaint that suggests that respondents' request for costs was premised on SANDOG's filing of its complaint. We therefore reject SANDOG's contention that the fact that respondents requested an award of costs from SANDOG demonstrates that respondents' cross-complaint arose from SANDOG's protected activity.
SANDOG also contends that City of Cotati is distinguishable because in that case, "the city's state court complaint, at least in part, arose from the city's desire for a more favorable forum," while in this case "both the Complaint and the Cross-Complaint were filed in state court." This argument fails because, as the City of Cotati court itself made clear, a party's "subjective intent [in filing an action] . . . is not relevant under the anti-SLAPP statute." (City of Cotati, supra, 29 Cal.4th at p. 78.) In any event, even assuming that a party's subjective intent in filing an action were relevant, the record suggests that respondents filed the cross-complaint in this action for tactical reasons, just as was true of the city in City of Cotati. Specifically, respondents argued in the trial court, and reiterate in this court, that they filed the cross-complaint in an attempt to obtain a "speedy resolution," of a single issue—the legality of the Bond Approvals. In support of this contention, respondents noted that their cross-complaint, unlike SANDOG's complaint, did not seek any relief with respect to the PdP Agreement Approval. Thus, SANDOG's attempt to distinguish City of Cotati on this basis fails both legally and factually.
Accordingly, we conclude that respondents' cross-complaint does not arise from SANDOG's petitioning activity and that the trial court therefore properly denied SANDOG's anti-SLAPP motion.
In light of our affirmance of the trial court's order on this ground, we need not consider respondents' contention that we "should affirm the trial court's denial of SDOG's anti-SLAPP motion on the grounds that the public interest exception [(§ 425.17, subd. (b)] applies to the Cross-Complaint." We also need not consider respondents' contention that we may affirm the trial court's order on the ground that respondents demonstrated a probability of prevailing on the merits of their declaratory relief claim.
IV.
DISPOSITION
The trial court's order denying SANDOG's anti-SLAPP motion is affirmed. SANDOG is to bear costs on appeal.
On March 26, 2018, this court informed the parties we were considering sanctions for delay against Appellant, San Diegans for Open Government and its counsel. Counsel responded by way of letter brief dated April 5, 2018. Having considered the letter brief and argument on the issue, we conclude sanctions are not warranted in this case. --------
BENKE, Acting P. J. WE CONCUR: NARES, J. GUERRERO, J.
As discussed in part II.E, post, the trial court did not rule on respondents' claim that SANDOG's motion should be denied on this ground.