Business Law Journal

The statute delineates several categories of “acts” that are specifically declared to be “in furtherance of” a defendant’s speech or petition rights, including “any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law,” and “any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law.”  These provisions are often applied to strike claims for tortious interference with contract or extortion based upon a demand letter or lawsuit, but their language makes them susceptible to a much broader interpretation.  On October 7, 2019, however, the California Court of Appeal confirmed in Supershuttle International, Inc. v. Labor and Workforce Development Agency that these provisions will not be applied to work the very evil that the anti-SLAPP law was designed to prevent — chilling an employer’s exercise of its own petition rights by filing a lawsuit to enjoin administrative proceedings.

Supershuttle International, Inc. (“Supershuttle”) provides shared ride transportation to and from airports in California.  For more than a decade, it has operated using a franchise model under which drivers own their vans and are treated as independent contractors by Supershuttle.  In 2007, the Employment Development Department (“EDD”) initiated an audit to determine if Supershuttle’s drivers were properly classified as independent contractors.  The EDD concluded that the drivers were employees and imposed assessments for unpaid employment taxes.  This determination was upheld during an administrative appeal to the California Unemployment Insurance Appeals Board (“CUIAB”), but was ultimately reversed by the Sacramento County Superior Court in August 2017.  The Sacramento court concluded that Supershuttle’s drivers were independent contractors, not employees, and ordered the CUIAB to set aside its decision upholding the EDD’s conclusion.  After the Superior Court’s judgment became final, the CUIAB set aside its decision as ordered.

The same week that the CUIAB set aside its decision, the EDD’s sister agency, the Department of Labor Standards Enforcement (“DLSE”), served Supershuttle with notices of administrative hearings regarding 13 wage claims filed by Supershuttle drivers who alleged that they were employees, not independent contractor.  The DLSE is only empowered to award wages to employees, and cannot do so with respect to independent contractors.  Thus, Supershuttle informed the DLSE of the Sacramento court’s decision and took steps to stop the administrative hearings from proceeding based on that decision.  The DLSE, however, declined to honor the Sacramento court’s judgment and stated that the hearings would go forward.  During this time, the number of wage claims grew from 13 to 34 as drivers continued to seek a result before the DLSE that differed from that reached by the Sacramento court.

In April 2018, Supershuttle filed a lawsuit against the DLSE and other defendants in Superior Court, seeking a decree that the DLSE is bound by the Sacramento court’s judgment and an order directing the DLSE not to proceed with the scheduled administrative hearings.  The DLSE responded with a motion to strike Supershuttle’s lawsuit under the anti-SLAPP law, arguing that Supershuttle’s claims arose from statements and writings made in connection with an issue under consideration in official proceedings authorized by law, and, therefore, were subject to anti-SLAPP protections.  The Superior Court disagreed and denied the motion to strike, prompting an appeal by the DLSE and its co-defendants. 

As the Court of Appeal immediately noted at the outset of its analysis, the anti-SLAPP analysis requires careful and precise identification of the conduct giving rise to a claim.  In this case, that conduct was the DLSE’s intended act of refusing to apply the Sacramento court’s judgment to the wage claims before it which, in turn, would require Supershuttle to repeatedly re-litigate the issue of whether its drivers were employees rather than independent contractors.  Although the DLSE argued that Supershuttle’s claims “arose from” its statements or writings in connection with the wage claims, which are proceedings authorized by law, the court concluded that this fact was insufficient to bring Supershuttle’s claims within the scope of the anti-SLAPP law.  The court noted that, without more, “acts of governance,” such as administrative proceedings to adjudicate a wage claim, were not themselves exercises of the right to speech or petition.  The DLSE’s decision not to recognize and apply the Sacramento court’s judgment was an act of governance, and, as such, it could not form the basis for an anti-SLAPP motion on its own.

The court also rejected the DLSE’s argument that the anti-SLAPP law should apply because the wage claims were intended to further third party petitioning rights of the individual drivers who had filed wage claims.  Here, again, the framing of the conduct giving rise to the challenged claims was paramount.  The court observed that Supershuttle’s claims arose not from the fact that individual drivers had filed wage claims in the first place, but rather from the DLSE’s decision to ignore the Sacramento court’s judgment and proceed with a hearing at which Supershuttle would be required to re-litigate the status of those drivers.  In effect, the DLSE was inviting the court to equate the phrase “arising from” in the anti-SLAPP law with “in response to,” such that a claim would be subject to dismissal under the anti-SLAPP law if it was filed in response to another lawsuit or proceeding.  This would lead to an absurd result and potentially render all cross-complaints subject to dismissal, thereby foreclosing an entire class of petitioning activities and accomplishing the very evil that the anti-SLAPP law was designed to prevent. 

Instead, the court explained that an anti-SLAPP motion is proper only if protected speech or petitioning activity is itself “the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.”  Supershuttle’s claims fell definitively in to the latter category; although the wage claims may have prompted the DLSE’s decision to proceed with administrative hearings despite the Sacramento court’s judgment, it was the decision to proceed itself that formed the basis for Supershuttle’s claims.  And, because Supershuttle was entitled to challenge the legality of that action in court regardless of the DLSE’s specific statements and writings, its claims did not arise from those statements and writings and were not subject to dismissal under the anti-SLAPP law. 

Many of the more recent anti-SLAPP cases have addressed other categories of speech or petitioning activity.  Although there are cases addressing those protections in the context of demand letters and other communications that explicitly anticipate the initiation of a lawsuit, the outer limits of anti-SLAPP protections in this area are not tested as often as other categories of protected speech and petitioning activity.  Supershuttle International provides some much-needed clarification regarding the scope of anti-SLAPP protections for statements made in connection with official proceedings. 

Attorneys who are considering a special motion to strike must carefully consider the specific conduct upon which the plaintiff’s claims are based.  It is not enough that a statement was made during the course of an official proceeding; an anti-SLAPP motion lies only when that statement is itself the wrong giving rise to liability.  As this case shows, that line is not always clear and must be drawn with precision.  Defendants who are sued for conduct that is related to an official proceeding should promptly discuss the lawsuit with counsel to determine what remedies are available.  Clients with questions regarding such a lawsuit are encouraged to contact the author.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process. 

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