Intercon Solutions, Inc. v. Basel Action Network
791 F.3d 729
7th Cir.
2015

Background

  • Intercon Solutions (Illinois) sued Basel Action Network (BAN, Washington) for defamation after BAN published findings that Intercon shipped hazardous e-waste to China and informed state and federal agencies and the public.
  • Parties agreed Illinois law governs the defamation claim because BAN’s statements were circulated in Illinois, but BAN invoked Washington’s anti-SLAPP statute (RCW §§ 4.24.510, 4.24.525) as a defense.
  • Washington’s § 4.24.525 provides an expedited “special motion to strike,” stays discovery, shifts burdens to plaintiffs to show by clear and convincing evidence a probability of prevailing, and awards fees and penalties if granted.
  • The district court denied BAN’s special motion to strike, reasoning that § 4.24.525 conflicts with the Federal Rules (especially Rule 12(d)) and therefore cannot be applied in federal court.
  • The Ninth Circuit/other circuits had split about treating anti-SLAPP statutes as procedural (summary-judgment-like) or substantive; meanwhile the Washington Supreme Court decided Davis v. Cox invalidating § 4.24.525 as unconstitutional and nonseverable.
  • Applying Davis under Erie, the Seventh Circuit held that the entirety of § 4.24.525 is unenforceable in this diversity case, so BAN cannot invoke that Washington statute in federal court; the district court’s judgment is affirmed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Washington's § 4.24.525 applies in federal diversity suit Illinois law governs and thus Washington anti-SLAPP should not displace Illinois substantive law BAN: Washington law protects its speech because statements made in Washington and BAN is Washington-based; Illinois would apply Washington defense Held: Davis invalidated § 4.24.525 in full under Washington law; Erie requires applying that state-law holding, so § 4.24.525 does not apply
Whether § 4.24.525 can be treated as equivalent to federal summary-judgment practice Intercon: federal procedure governs in federal court; state procedure that conflicts with Federal Rules cannot be applied BAN: circuit precedent treats some anti-SLAPP statutes as summary-judgment analogues, so § 4.24.525 could be applied under Rule 56 Held: Washington Supreme Court held § 4.24.525 is not a summary-judgment analogue; regardless, Davis renders the statute unenforceable
Whether procedural components (burden shifting, clear-and-convincing standard, expedited appeal, fee/penalty provisions) survive in federal court Intercon: substantive and procedural aspects conflict with federal rules and jury trial rights; cannot be applied BAN: portions are substantive and should be given effect; § 4.24.525 can be bifurcated/severed Held: Davis held the statute unconstitutional and not severable; thus none of its provisions apply under state law and cannot be used in federal court under Erie
Whether the denial of a special motion to strike was immediately appealable Intercon: denial is not collateral and not immediately appealable; normal appellate route applies BAN: § 4.24.525 provides right to expedited appeal; denial should be reviewable now; also invoked collateral-order doctrine Held: Court accepted § 1292(b) certification and granted interlocutory appeal; but on merits affirmed denial because Davis removes § 4.24.525 as a defense

Key Cases Cited

  • Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 559 U.S. 393 (2010) (federal rules of procedure may govern practice in federal court even when state law prescribes different procedures)
  • Walker v. Armco Steel Corp., 446 U.S. 740 (1980) (federal procedural rules control in federal courts)
  • Hanna v. Plumer, 380 U.S. 460 (1965) (framework for applying Federal Rules vs. state law in federal courts)
  • Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) (Congress may alter federal pleading standards)
  • Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949) (collateral-order doctrine for immediate appeals)
  • Mohawk Indus. v. Carpenter, 558 U.S. 100 (2009) (limits on expanding the collateral-order doctrine)
  • Erie R.R. v. Tompkins, 304 U.S. 64 (1938) (state substantive law governs in diversity cases)
  • United States v. MacDonald, 435 U.S. 850 (1978) (distinguishing defenses from collateral matters)
  • Phoenix Trading, Inc. v. Loops LLC, 732 F.3d 936 (9th Cir. 2013) (treated an anti-SLAPP statute as summary-judgment-like)
  • Liberty Synergistics Inc. v. Microflo Ltd., 718 F.3d 138 (2d Cir. 2013) (applied state anti-SLAPP aspects in federal proceedings)
  • Godin v. Schencks, 629 F.3d 79 (1st Cir. 2010) (applied anti-SLAPP protections in federal court)
  • Henry v. Lake Charles Am. Press LLC, 566 F.3d 164 (5th Cir. 2009) (considered anti-SLAPP procedural application)
  • Abbas v. Foreign Policy Grp., LLC, 783 F.3d 1328 (D.C. Cir. 2015) (held state anti-SLAPP statute could not be applied as written in federal court)
  • Makaeff v. Trump Univ., LLC, 736 F.3d 1180 (9th Cir. 2013) (debate over application of state anti-SLAPP rules in federal court)
Read the full case