Fourth District, Division Two Adopts Discretionary Factor Test Set Forth In Mann.
Patent litigation, which is likely a battle for well-heeled litigants, frequently spawns satellite litigation after someone prevails in federal court. That is exactly what happened in the next case, where the predominant victor then sued for abuse of process and malicious prosecution. The loser “SLAPPed” the abuse of process claim, but did not escape on the malicious prosecution claim. The SLAPP partial victor (the federal court loser) moved for an award of mandatory attorney’s fees under Code of Civil Procedure section 425.16(c). The trial judge awarded the partially successful SLAPP litigant $1,500 in fees, a mere one-tenth of the $10,230 in requested fees. Although appealing both the denial of the malicious prosecution unsuccessful SLAPP and the abuse of process fee award, the Fourth District, Division Two—in a 3-0 decision by Justice Miller—affirmed both orders. The panel did not find the fee award was too paltry.
In Tamarack Scientific Co., Inc. v. Ultratech, Inc., Case No. E042626 (4th Dist., Div. 2 July 11, 2008) (unpublished), the appellate panel found there was no abuse of discretion in the one-tenth fee recovery awarded by the trial judge. In so doing, the Tamarack Scientific court adopted the SLAPP fee award test enunciated in Mann v. Quality Old Time Service, Inc., 139 Cal.App.4th 328, 344-345 (2006), a test specially formulated for defendants who are only partially successful in SLAPP motion outcomes.
Mann decided that a partially successful SLAPP defendant should not be entitled to obtain a fee recovery as a matter of right. Instead, a partially successful plaintiff should not be required to bear the entire cost of anti-SLAPP litigation where defendant scored a minor victory and the thrust of plaintiff’s complaint remains intact. Tamarack Scientific, in line with Mann, agreed that the following factors should be considered when determining a fee award for a partially successful defendant: (1) the extent to which the defendant’s litigation posture was advanced by the motion; (2) whether the same factual allegations remain to be litigated; (3) whether discovery and motion practice have been narrowed; (4) the extent to which future litigation expenses and strategy were impacted by the motion; and (5) miscellaneous factors such as the experience and abilities of the attorney and novelty and difficulty of the issues (lodestar enhancement factors). See Slip Opn., at p. 30, quoting Mann, supra, 139 Cal.App.4th at 345.
Similar to the “pragmatic” test for determining section 1717 prevailing party status as enunciated in Hsu (see our “Leading Cases”), the Tamarack Scientific court stressed that the bottom line consideration for awarding fees to partially successful SLAPP defendants boils down to determining “the extent to which the motion changed the nature and character of the lawsuit in a practical way.” (Slip Opn., at p. 30, quoting Mann.) In fact, the appellate panel went on to eschew the “inextricably intertwined” test of Civil Code section 1717 in this particular context.
The Court of Appeal also relied on language from Moran v. Endres, 135 Cal.App.4th 952, 956 (2006), where the appellate court determined that a defendant only obtaining dismissal of one claim may not be considered “successful” when all claims of a multi-count complaint are considered. Applying both Mann and Moran, the Tamarack Scientific court found no abuse of discretion because the malicious prosecution claim remained, which meant the SLAPP victor still faced substantial exposure.
The value of this decision is that two appellate courts now side with the partially successful defendant SLAPP test formulated in Mann.