Long Beach Unified School Dist. v. Margaret Williams, LLC, B290069M

Background

Margaret Williams formed Margaret Williams, LLC (Williams LLC) in 2006 because the Long Beach Unified School District (District) required a business entity to contract with it; Williams performed nearly a decade of construction-management and environmental-compliance work for the District.
The 2013 contract between Williams LLC and the District was a standardized form that contained a broad defense-and-indemnity clause and a separate provision stating each party would bear its own litigation costs arising out of the agreement.
After a dispute over contaminated material at a school site, Williams alleged arsenic poisoning and Williams and Williams LLC sued the District (Underlying Action); the District tendered defense and indemnity under the contract, and Williams LLC refused to defend or indemnify.
The District filed a cross-complaint seeking breach of contract, declaratory relief, equitable indemnity, and apportionment of fault; Williams LLC moved to strike the cross-complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16).
The trial court granted the anti-SLAPP motion and denied the District leave to add nine pages to its opposition brief; the Court of Appeal affirmed, holding the cross-claims arose from protected petitioning activity and that the indemnity clause was unconscionable as applied.

Issues

Issue	Plaintiff's Argument (District)	Defendant's Argument (Williams LLC)	Held
1. Do the District’s cross-claims arise from protected activity (anti-SLAPP)?	Cross-claims arise from Williams LLC’s refusal to defend/indemnify (a contractual dispute), not from protected petitioning.	Cross-claims arise directly from the Underlying Action (filing/prosecution of suit is protected); refusal to fund litigation is conduct in furtherance of petitioning.	Cross-claims arose from protected activity (Underlying Action); refusal to defend also protected.
2. Has the District shown a probability of prevailing given Williams LLC’s unconscionability defense?	Indemnity provision potentially covers District’s liability and is enforceable.	The indemnity clause is substantively unconscionable (bars meaningful recovery — "heads I win, tails you lose") and procedurally unconscionable (adhesion, oppression, surprise).	District failed to show a probability of prevailing; high substantive + moderate procedural unconscionability found.
3. If clause is unconscionable, what remedy applies?	Enforce clause to obtain defense/indemnity.	Invalidate or limit the clause to avoid unconscionable result.	Court limited clause under Civ. Code §1670.5: rendered it inapplicable to claims brought by Williams LLC and by Williams.
4. Did the trial court abuse discretion by denying nine extra pages in opposition and must the anti-SLAPP be reheard?	Denial prevented full presentation; remand for rehearing is required.	Denial was within discretion and District has not shown prejudice.	Denial was not an abuse; no prejudice shown; affirmed.

Key Cases Cited

Wilson v. Cable News Network, Inc., 7 Cal.5th 871 (Cal. 2019) (summarizes anti‑SLAPP two‑step analysis)
Baral v. Schnitt, 1 Cal.5th 376 (Cal. 2016) (plaintiff must show probability of prevailing at anti‑SLAPP second step)
Lennar Homes of California, Inc. v. Stephens, 232 Cal.App.4th 673 (Cal. Ct. App. 2014) (indemnity claim arising from underlying litigation is protected; clause that bars meaningful recovery is substantively unconscionable)
Takhar v. People ex rel. Feather River Air Quality Mgmt. Dist., 27 Cal.App.5th 15 (Cal. Ct. App. 2018) (litigation funding decisions are protected petitioning activity)
OTO, L.L.C. v. Kho, 8 Cal.5th 111 (Cal. 2019) (framework for procedural and substantive unconscionability analysis)
Sanchez v. Valencia Holding Co., LLC, 61 Cal.4th 899 (Cal. 2015) (adhesive contracts establish procedural unconscionability baseline)
Crawford v. Weather Shield Mfg., Inc., 44 Cal.4th 541 (Cal. 2008) (discusses indemnity allocation and bargaining power concerns)