AWI Builders v. Alliant Consulting CA2/4
B294662
| Cal. Ct. App. | Oct 22, 2021Background
- AWI Builders and affiliate CCC contracted on Riverside public works projects; Riverside retained GKK as construction manager and Alliant (Schott) as labor‑compliance monitor. Alliant audited payrolls and reported apparent prevailing‑wage violations.
- During monitoring, Alliant (with a Riverside official) accessed and scanned payroll/time records from a locked site trailer cabinet; Schott later filed complaints with the DLSE and provided information to Riverside and Orange County (OC) district attorney investigators. DA offices obtained search warrants and executed searches.
- Plaintiffs (AWI, CCC, Robert and Anna Mekikyan) sued Alliant, GKK, OC (and certain prosecutors/investigators), Quad‑C, and the State/DLSE investigator alleging §1983 claims (including a Monell claim), and state torts (interference with contracts/prospective economic advantage; negligent supervision).
- Defendants filed special motions to strike under California’s anti‑SLAPP statute (§425.16). The trial court granted Alliant’s, OC’s, GKK’s, and Quad‑C’s motions in full and granted the State’s motion in part (leaving only a §1983 claim against Sandoval). The court awarded attorney fees to all defendants.
- On appeal plaintiffs contested (a) whether anti‑SLAPP applies to §1983 claims; (b) whether they showed a probability of prevailing on §1983 and certain tort claims; (c) exclusion of Schott’s deposition in some anti‑SLAPP proceedings; and (d) the fee awards. The Court of Appeal affirmed all rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether anti‑SLAPP applies to §1983 claims filed in state court | §1983 federal rights should be immune from anti‑SLAPP because anti‑SLAPP's mandatory fee award conflicts with §1983/§1988 protections | Anti‑SLAPP is a procedural state rule; applies to federal claims unless preempted or it alters substantive federal rights; fee award compensates defense of meritless claims | Anti‑SLAPP applies to §1983 claims; no preemption—fee provision does not unlawfully impair §1983 remedies |
| Whether plaintiffs showed a probability of prevailing on §1983 (Fourth Amendment unlawful search) | Defendants (Alliant/Quad‑C and certain prosecutors) acted under color of law and conducted unlawful, warrantless searches (including breaking into cabinet) | Payroll records were required by Labor Code and contract to be available to awarding body, DLSE, and law enforcement; plaintiffs had no reasonable expectation of privacy | No Fourth Amendment violation as to payroll/related records; plaintiffs had no reasonable expectation of privacy; §1983 claim failed |
| Monell claim against County of Orange (failure to train/supervise prosecutors) — anti‑SLAPP applicability | Failure‑to‑train/supervise allegations are distinct from investigatory/prosecutorial acts and not protected | Monell claim depends on the county agents’ investigatory/prosecutorial conduct; thus the claim arises from protected petitioning activity | Anti‑SLAPP applies; plaintiffs failed to show probability of prevailing because underlying Fourth Amendment theory failed |
| Tort claims against State/DLSE for withholding documents (interference and related torts) — anti‑SLAPP applicability | Withholding documents is non‑communicative conduct, not protected by (e)(1)/(e)(2); mandatory release duty removes petitioning context | Failure to disclose in official proceedings can be protected (Navellier/Suarez); catchall (e)(4) also covers conduct in connection with public issues | Anti‑SLAPP applies to withholding claims (e)(2) and (e)(4)); trial court properly struck the tort claims except §1983 claim against Sandoval |
| Intentional interference with contract (Alliant/GKK) — merits and timing | Alliant and Schott intentionally induced Riverside to terminate PD project contract; GKK vicariously liable; evidence supports probability of success | Even if interference occurred, the claim accrued when contract was terminated (July 2014); two‑year statute of limitations bars 2018 suit | Claim barred by the two‑year statute of limitations; discovery rule did not postpone accrual to 2017 |
| Negligent supervision (GKK) — anti‑SLAPP applicability and probability | Negligent supervision is private commercial injury not an issue of public interest; anti‑SLAPP should not reach it | GKK’s supervision/oversight related to Alliant’s participation in public‑interest labor investigations; conduct falls within petitioning/public‑issue protection | Anti‑SLAPP applies (e)(4)); plaintiffs failed to show causation/damages tied to GKK’s supervision, so claim dismissed |
| Attorney fee awards under §425.16 — federal preemption and reasonableness (duplicative time; review of investigative files) | Mandatory fee award conflicts with §1988; trial court failed to discount duplicative or unnecessary time; reviewing voluminous DA records was unnecessary | No federal preemption; fee awards compensate defense against SLAPP suits; trial court reasonably adjusted awards and allowed reasonable time for reviewing investigation files | No preemption; trial court did not abuse discretion in calculating or reducing fees and in awarding time spent reviewing investigative records |
Key Cases Cited
- Baral v. Schnitt, 1 Cal.5th 376 (Cal. 2016) (anti‑SLAPP analysis may target specific allegations and not entire pleadings)
- Wilson v. Cable News Network, Inc., 7 Cal.5th 871 (Cal. 2019) (framework for identifying whether claims arise from protected activity)
- Park v. Board of Trustees of California State University, 2 Cal.5th 1057 (Cal. 2017) (plaintiff must show minimal merit to avoid dismissal)
- Flatley v. Mauro, 39 Cal.4th 299 (Cal. 2006) (standard for considering evidence on anti‑SLAPP motions)
- Ketchum v. Moses, 24 Cal.4th 1122 (Cal. 2001) (mandatory fee shifting for prevailing anti‑SLAPP defendants; lodestar approach)
- Navellier v. Sletten, 29 Cal.4th 82 (Cal. 2002) (omission/non‑disclosure during litigation can fall within anti‑SLAPP protection)
- City of Canton v. Harris, 489 U.S. 378 (U.S. 1989) (Monell failure‑to‑train liability standard)
- Sweetwater Union High School Dist. v. Gilbane Building Co., 6 Cal.5th 931 (Cal. 2019) (deposition transcripts admissible on anti‑SLAPP motions)
- Patel v. Chavez, 48 Cal.App.5th 484 (Cal. Ct. App. 2020) (anti‑SLAPP applies to federal claims in state court absent preemption or interference with substantive federal rights)
- Suarez v. Trigg Laboratories, Inc., 3 Cal.App.5th 118 (Cal. Ct. App. 2016) (failure to disclose in official proceedings can be protected activity)
- Crossroads Investors, L.P. v. Federal National Mortgage Assn., 13 Cal.App.5th 757 (Cal. Ct. App. 2017) (failure to disclose can be anti‑SLAPP protected)
- Anderson v. Geist, 236 Cal.App.4th 79 (Cal. Ct. App. 2015) (distinguishes mandatory/duty‑driven acts from petitioning activity under e(4))
- Rand Resources, LLC v. City of Carson, 6 Cal.5th 610 (Cal. 2019) (anti‑SLAPP requires connection between speech and public‑interest issue; courts must assess the specific speech at issue)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (standard for awarding attorney’s fees under federal statutes)
- Del Rio v. Jetton, 55 Cal.App.4th 30 (Cal. Ct. App. 1997) (no §1988 preemption of state fee claims in certain contexts)
- Fox v. Ethicon Endo‑Surgery, Inc., 35 Cal.4th 797 (Cal. 2005) (discovery rule and accrual principles)
- Quelimane Co. v. Stewart Title Guaranty Co., 19 Cal.4th 26 (Cal. 1998) (elements of tortious interference with contract)