Supreme Court of California Rules That Trial Court Lacking Subject Matter Jurisdiction May Properly Grant Anti-SLAPP Motion on That Basis, and Award Attorney’s Fees

In Barry v. The State Bar of California (No. S214058 – 1/5/2017), the California Supreme Court affirmed the trial court’s grant of the State Bar of California’s (“State Bar”) underlying anti-SLAPP motion (Code of Civil Procedure §425.16) on the grounds that plaintiff Patricia Barry (“Barry”), an attorney, had failed to show a probability of prevailing because, among other reasons, the court lacked subject matter jurisdiction over Barry’s claims. The Court confirmed that the absence of subject matter jurisdiction did not prevent a trial court from basing a decision to grant an anti-SLAPP motion on that ground, or to award the prevailing defendant its attorney’s fees.

The State Bar commenced disciplinary proceedings against Barry. Barry eventually agreed to stipulate that she had committed certain violations of the Rules of Professional Conduct and agreed to the State Bar’s recommended discipline, including an actual sixty day suspension from practice. Later, however, Barry filed a petition for writ of mandate with the Supreme Court alleging that her stipulation was false and she had entered into it only due to financial hardship. The Court denied the petition and affirmed the recommended discipline. Barry then filed suit in Superior Court against the State Bar for, among other things, discrimination and retaliation. The State Bar filed a demurrer and anti-SLAPP motion, the latter of which was granted by the trial court, in part, because it concluded that it lacked subject matter jurisdiction over Barry’s claims as they involved attorney disciplinary matters which were the exclusive purview of the Supreme Court. The trial court thereafter granted the State Bar’s motion for attorney’s fees under the anti-SLAPP statute.

On appeal, Barry argued that because it lacked subject matter jurisdiction, the trial court also lacked jurisdiction to adjudicate both the anti-SLAPP motion and the State Bar’s successful motion for attorney’s fees. The Court of Appeal agreed and reversed, citing to an earlier Supreme Court decision, Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180 (Varian Medical), referencing that Barry’s claim had been dismissed “on the merits.” The State Bar then sought review by the Supreme Court.

The Court criticized the appellate court’s reliance on Varian Medical, holding that it did not support the proposition that the anti-SLAPP statute required a trial court to make a determination of a plaintiff’s claims on the merits. The Court found that the merits are not the only basis for a failure of a plaintiff to establish the probability of prevailing, referencing prior decisions based on the statute of limitations, a non-merits based defense, as examples of this approach which supported its view that the lack of subject matter jurisdiction would also establish such lack of probability of prevailing. The Court explained that an anti-SLAPP motion “may instead involve a determination that the plaintiff has no probability of prevailing because the court lacks the power to entertain the claim in the first place.” Thus, in this case, it concluded, “A plaintiff cannot prevail on her claim unless the court has the power to grant the remedy she seeks.”

The Court went on to reject as meritless other arguments advanced by Barry in support of the Court of Appeal’s decision, including reliance on various Ninth Circuit cases which held that a court that lacks subject matter jurisdiction over federal civil rights claims also lacks the power to award attorney’s fees under the relevant federal fee-shifting statute. The Court found that other Circuits and the Ninth Circuit have reached contrary conclusions, including one of the cases Barry cited. Barry also argued unsuccessfully that a decision predicated on a lack of subject matter jurisdiction could not support an award of attorney’s fees because a defendant in such a case could not be deemed to have “prevailed” on the merits under the meaning of the anti-SLAPP statute. The Court explained that C.C.P. section 425.16(c) entitles a defendant to an award of attorney’s fees for prevailing “on [the] special motion to strike,” not for prevailing on the merits. Finally, Barry argued that the State Bar’s jurisdictional challenge should have been brought solely in connection with its demurrer, rather than in an anti-SLAPP motion. The Court summarily rejected that argument, reasoning that a challenge to a court’s subject matter jurisdiction could be raised in a variety of ways, including a motion to strike, and that there was no “rigid rule” requiring that a court consider a jurisdictional challenge in a demurrer, before or in lieu of considering such a challenge in an anti-SLAPP motion. The Court noted that such a rule would inherently defeat the central purpose of the anti-SLAPP statute – ending “SLAPP” lawsuits “early and without cost to the SLAPP target” (citing Varian Medical).

The Barry case is an important development in the body of recent anti-SLAPP law in California. Despite a number of appellate court opinions which appear critical, if not hostile, to the frequent use of anti-SLAPP motions by defendants in civil cases, the Supreme Court’s unanimous decision confirms the Court’s support of the statute and its central purpose – providing defendants in appropriate cases a relatively speedy and cost-effective means of challenging a plaintiff’s claim without the time and expense of extensive discovery. It emphasized that once the first prong of the statute is satisfied (i.e., cause of action arising from protected activities in connection with a public issue), the second prong (i.e., plaintiff’s probability of prevailing on the claim) may be resolved based on a non-merits based defense, which we would argue could include lack of standing, absence of legal duty, the statute of limitations or the lack of subject matter jurisdiction, any one of which would, in turn, support an award of attorney’s fees to the successful defendant.

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January 10, 2017