Tuesday, April 2, 2013
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C.A. Upholds Fee Award Based on Politician’s Frivolous Motion
By KENNETH OFGANG, Staff Writer
An Englishman who filed an anti-SLAPP motion in defense of a defamation action by political rivals, even though he was not named as a defendant, was properly sanctioned for a frivolous motion, the First District Court of Appeal has ruled.
Justice Sandra Margulies, in an unpublished opinion for Div. One Friday, rejected former South Tyneside Councilor Ahmed Khan’s argument that he had standing to appear and file the motion because he was an unnamed “target” of the lawsuit.
The unusual litigation was filed in April 2009 by Iain Malcolm, David Potts, Anne Walsh, and Rick O’Farrell, against unknown Doe defendants. The complaint alleged that the defendants had defamed the plaintiffs and invaded their privacy in numerous blog posts published under false names, including “Mr. Monkey.”
Malcolm is the Labour Party leader on the council, which has a huge Labour majority. Potts is a former Conservative leader, now affiliated with the UK Independence Party; Walsh is a Labour councilor; and O’Farrell was a business development official for the borough. The plaintiffs alleged that California had jurisdiction because the websites on which the defamatory statements appeared were hosted on servers located here.
Discovery Initiated
The plaintiffs initiated discovery in order to ascertain the true identities of the defendants. Twitter, Inc.; Google, Inc.; and other Internet companies were served with subpoenas.
The Twitter subpoena asked for documents relating to Khan, then an independent councilor and acerbic critic of the plaintiffs. Khan lost his seat to a Labour candidate last year.
British columnists criticized the lawsuit, saying it was improperly financed with public moneys. Those sources claimed that nearly $400,000 was spent on discovery, which the plaintiffs denied, telling the BBC three years ago that less than $125,000 had been spent.
In July 2011, Khan filed his motion to strike under Code of Civil Procedure Sec. 425.16. Khan acknowledged that he was not a named party, but argued that the attempt to discover his activities by subpoenaing the records of a third party gave him standing.
The plaintiffs responded that a nonparty has no standing under the anti-SLAPP law, and that even if Khan had standing, the motion should be denied because Khan was unlikely to prevail on the merits.
Attorney Fees
A San Mateo Superior Court judge—who awarded the plaintiffs $64,000 in attorney fees—denied the motion on the ground that Khan, as a nonparty, could not show that the suit arose from his exercise of free speech or petition rights, and thus did not meet the threshold requirement for bringing an anti-SLAPP motion.
Margulies agreed, calling Khan’s “target” theory “unnecessary, unworkable, and potentially prejudicial to the plaintiffs.”
She explained:
“The filing of a special motion to strike automatically stays discovery in the action….It would be unfair to allow a potential defendant to cut off the plaintiffs’ right to investigate whether that defendant is in fact responsible for defamatory statements. If such a nonparty’s motion was granted, plaintiffs’ right to proceed against other Doe defendants, or even conduct further discovery to learn their identities, would be put in jeopardy despite the possibility someone other than Khan authored one or more of the statements in issue.”
Margulies noted that Khan offered no explanation as to why he could not wait to be named as defendant before filing an anti-SLAPP motion, and did not deny in his papers that he was “Mr. Monkey,” although he has made such denials to British reporters.
The justice cited Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1375.
Insurance Case
That case arose out of a lawsuit challenging legislation that would have allowed vehicle insurers to give discounts based on the number of years the policyholder was insured by that company. The Court of Appeal said the law was invalid because it conflicted with the 1988 auto insurance initiative, Proposition 103.
The moving nonparty, Mercury Insurance Group, claimed its rights were implicated because the complaint portrayed it as the force behind the legislation. The Court of Appeal said the motion was frivolous because Mercury was not a party and because it “could not reasonably believe” that the “public interest” exception to the anti-SLAPP statute did not apply.
Khan argued that Garamendi was distinguishable because the moving party in that case was not a target of the underlying lawsuit.
Margulies, however, said the grounds for Khan’s motion were even “shakier” than Mercury’s, because Mercury had been allowed to intervene in order to make the motion, while Khan did not move to intervene.
“Khan decided to proceed with his motion despite a statute that clearly did not authorize it, and an appellate precedent finding a similar motion frivolous,” the justice wrote. “By persisting in his motion, he delayed plaintiffs in their prosecution of the action and caused them to incur unnecessary fees. “
The case is Malcolm v. Doe I, A134367.
Copyright 2013, Metropolitan News Company