Noerr-Pennington Sham Exception Did Not Need to be Hurdled By City, Resulting in Affirmance of $226,928 Fee Award.
The Sixth District in Vargas v. City of Salinas, Case No. H035207 (6th Dist. Nov. 18, 2011) (certified for publication), a case that had gone up to the California Supreme Court and back through the lower courts, affirmed a $226,928 attorney’s fees award and $2,495.84 costs award in favor of the City of Salinas after it won a SLAPP motion in plaintiffs’ suit for misuse of public funds in supporting a utility tax.
Plaintiffs’ multiple challenges to the fee/costs award were rejected on appeal.
Plaintiffs were not successful parties for purposes of a private attorney general statute. Although they did win some arguments in the supreme court case, plaintiffs lost the war and did not “catalyze” any change in governmental conduct. “This is not success,” said the appellate court, relying on Ebbetts Pass Forest Watch v. Dept. of Forestry & Fire Protection, 187 Cal.App.4th 376, 387-388 (2010).
SLAPP law did apply to plaintiffs’ suit against the City, based on the supreme court’s reasoning in Vargas I (Vargas v. City of Salinas, 46 Cal.4th 1, 17 (2009).)
The main issue was whether suits against governmental entities are entitled to special protection such that such defendants cannot be awarded mandatory SLAPP fees unless they fit into the Noerr-Pennington “sham” exception. Because the SLAPP fee-shifting provision did not impose a civil liability for filing a suit, it did not implicate this exception.
The second primary contention was that, Noerr-Pennington aside, there were constitutional infirmities unless the “sham” exception reasoning was applicable. Not so, agreeing with the analysis in Schroeder v. Irvine City Council, 97 Cal.App.4th 174, 196 (2002). “Section 425.16, subdivision (c) is no broader than necessary to advance these significant governmental interests. Requiring a finding that the suit was objectively baseless or improperly motivated before a prevailing government defendant could recover its attorney fees would reduce the law’s effectiveness in protecting the interests identified. It would add a burden to the prevailing government defendant and wholly prevent reimbursement in meritless cases that may not descend to the level of frivolousness. And given the difficulty that often arises in drawing a line between the merely meritless and the actually frivolous [citation omitted] such a requirement would add a degree of uncertainty to the attorney fee analysis. All of this would dilute the effectiveness of section 425.16, subdivision (c) as a disincentive to filing a SLAPP, the threat of which could inhibit public discourse.” (Slip Opn., p. 17.)