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Media Alerts - Makaeff v. Trump University- Ninth Circuit
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February 3, 2014
  Makaeff v. Trump University- Ninth Circuit
Headline: Ninth Circuit denies petition for rehearing en banc with four concurring judges finding that Federal Rules of Civil Procedure 12 and 56 do not preempt California's anti-SLAPP statute and four dissenting judges finding en banc review necessary to overrule Ninth Circuit precedent that (1) California's anti-SLAPP statute applies in federal cases and (2) denial of an anti-SLAPP motion is immediately appealable.

Area of Law: First Amendment; Federal Civil Procedure

Issue Presented: Whether California's anti-SLAPP statute is preempted by Federal Rules of Civil Procedure 12 and 56 in light of the U.S. Supreme Court's recent Erie opinion in Shady Grove Orthopedic Associates v. Allstate Insurance Co.

Brief Summary: Plaintiff, a former customer of Trump University, filed suit against Trump University alleging deceptive business practices. Trump University filed a counter-claim against plaintiff alleging defamation. Plaintiff filed a motion to strike Trump University's defamation claim under California's anti-Strategic Lawsuits Against Public Participation (SLAPP) statute. When the District Court denied the motion, plaintiff immediately appealed. The Court of Appeal reversed and remanded for further proceedings consistent with the Court's opinion. Trump University filed a petition for re-hearing en banc which the Ninth Circuit panel denied.

Four concurring judges approved of the panel opinion because the decision (1) followed Ninth Circuit precedent, (2) prevented an inter-circuit split, and (3) recognized that the case lacked an issue of exceptional importance warranting en banc review. The judges found that California's anti-SLAPP provisions apply in federal court and that rulings on such motions are immediately appealable.

Four dissenting judges disapproved of the panel opinion because in light of Shady Grove (1) California's anti-SLAPP statute conflicts with Federal Rules 12 and 56 as a collective body of federal rules and usurps the Federal Rules' criteria for pre-trial dismissal of an action and (2) an anti-SLAPP motion to strike is not immediately appealable under the collateral order doctrine.

Extended Summary: In letters and online postings, plaintiff accused Trump University of using deceptive business practices. Months later, plaintiff filed a class action suit against Trump University based on those allegations. Trump University brought a counterclaim against plaintiff alleging the written postings constituted defamation. Plaintiff moved to strike the defamation counterclaim under California's anti-SLAPP statute. Although the District Court denied plaintiff's motion to strike, the Court of Appeal reversed and remanded. Subsequently the Ninth Circuit panel denied Trump University's petition for re-hearing en banc.

In determining whether California's anti-SLAPP statute is preempted by Federal Rules of Civil Procedure, the concurring judges concluded that Federal Rules 12 and 56 did not "direct[ly] collide" with California's anti-SLAPP provisions and therefore did not preempt state law. The judges applied and distinguished Shady Grove, finding that California's anti-SLAPP provision answers a different question than the Federal Rules; Rule 12 "provides a mechanism to test the legal sufficiency of a complaint" whereas the anti-SLAPP statute determines "whether the claims rest on the SLAPP defendant's protected First Amendment activity and whether the plaintiff can meet the substantive requirements California has created to protect such activity from strategic, retaliatory lawsuits." The concurring judges further distinguished Shady Grove by observing that "California's anti-SLAPP statute, by creating a separate and additional theory upon whichcertain kinds of suits may be disposed of before trial, supplements rather than conflicts with the Federal Rules."

In terms of plaintiff's right to immediate appeal of the initial denial of her anti-SLAPP motion under the collateral order doctrine, concurring judges found that the issue on appeal was separate from the merits of the defamation claim because the central purpose of the motion to strike was to determine whether the counterclaim was designed to chill plaintiff's First Amendment rights to Free speech, not whether she was liable for defamation because of her statements. Also, according to the concurring judges, failure to recognize state anti-SLAPP protections in the federal courts would encourage forum shopping.

The dissenting judges applied Hanna v. Plumer and found that Federal Rules 12 and 56 preempt California anti-SLAPP law because by "forcing the plaintiff to establish that success is not merely plausible but probable, the anti-SLAPP statute effectively stiffens the Rule 12 standard for testing the legal sufficiency of a claim." Also, the dissenting judges found that the anti-SLAPP statute "eviscerates Rule 56" because it requires the plaintiff to prove that she will probably prevail if the case goes to trial rather than identify material factual disputes that a jury could reasonably resolve in favor of plaintiff. The dissenting judges then analogized Shady Grove and concluded that California's anti-SLAPP statute
bars claims at the pleading stage that Rules 12 and 56 would allow to proceed.

Panel: Judges Kozinski, Wardlaw, Paez, Callahan, Watford, Bea, Gould, and Fletcher

Date of Issued Opinion: November 27, 2013

Docket Number: 3:10-cv-00940-IEG-WVG

Decided: Petition for re-hearing en banc denied

Case Alert Author: Monique Midose

Author(s) of Opinion: Judges Wardlaw, Callahan, Fletcher and Gould concurring; Judges Watford, Kozinski, Paez, and Bea dissenting

Case Alert Circuit Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 02/03/2014 02:57 PM     9th Circuit  

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