CHANGSHA METRO GROUP CO., LTD., Plaintiff and Respondent, v. PENG XUFENG et al., Defendants and Appellants.
E073322 (Super.Ct.No. CIVDS1823603)
In the Court of Appeal of the State of California, Fourth Appellate District, Division Two
Filed November 3, 2020
CERTIFIED FOR PUBLICATION. Following supplemental briefing (opinion filed 5/20/20 vacated on 5/21/20).
APPEAL from the Superior Court of San Bernardino County. Donna G. Garza, Judge. Affirmed.
Thomas Ogden for Defendants and Appellants.
Skadden, Arps, Slate, Meagher & Flom, Jack P. Dicanio, Lance A. Etcheverry, Caroline Van Ness and Julia M. Nahigian for Plaintiff and
The trial court found Peng Xufeng and Jia Siyu (collectively, defendants) filed a frivolous anti-SLAPP motion against Changsha Metro Group Co., Ltd. (Changsha). The trial court ordered defendants to pay Changsha $61,915 for Changsha‘s attorney‘s fees in opposing the anti-SLAPP motion. (
PROCEDURAL HISTORY
Changsha sued defendants for (1) breach of fiduciary duty; (2) constructive fraud; (3) aiding and abetting; (4) unjust enrichment; and (5) a constructive trust. Defendants responded with an anti-SLAPP motion.
On March 20, 2019, Changsha filed its opposition to the anti-SLAPP motion. Changsha (1) contended defendants’ motion was frivolous and solely intended to cause delay and (2) requested the trial court “award Changsha its fees associated with opposing the Motion.” Changsha explained that it “submitted evidence supporting a fee award of $88,823, to be supplemented with additional fees and costs incurred through the hearing.”
On March 27, defendants replied to Changsha‘s opposition. Defendants asserted their anti-SLAPP motion was not frivolous. Alternatively, defendants contended, “If the court is inclined to believe the Anti-SLAPP is frivolous then defendants object to the short time to respond to the perfunctory way the issue is raised in the Opp. CCP s. 128.5 governs frivolous Anti-SLAPP motions requiring reasonable opportunity to respond.”
On April 3, the trial court heard defendants’ anti-SLAPP motion. The trial court denied the anti-SLAPP motion, determined Changsha was entitled to an award of attorney‘s fees, and set a further hearing on June 4th to determine the amount of fees to award.
On May 7, Changsha filed further evidence of its attorney‘s fees and requested “the Court award attorney‘s fees in the amount of $121,823.” Defendants filed a request to vacate the June 4th hearing due to a lack of jurisdiction. They asserted, “Defendants were never afforded any 21-day safe
Changsha opposed defendants’ motion to vacate contending that the only procedural requirements for an award of fees are notice and an opportunity to be heard, both of which were provided to defendants. Further, Changsha contended the 21-day safe harbor provision could not apply to an award of fees in an anti-SLAPP case because, in order to be entitled to fees, a plaintiff must prevail on the anti-SLAPP motion, and if the plaintiff has already prevailed, then it is necessarily too late to withdraw or correct the anti-SLAPP motion.
At the June 4th hearing, the trial court denied the motion to vacate the hearing and awarded Changsha attorney‘s fees “in the total amount of $61,915.00 based on the Court‘s prior order finding that Defendants’ anti-SLAPP motion is frivolous.”
DISCUSSION
A. ISSUES
Defendants’ appeal raises two issues: First, when a plaintiff contends that a defendant‘s anti-SLAPP motion is frivolous and the plaintiff seeks an award of attorney‘s fees under
B. STATUTORY INTERPRETATION
1. PROCEDURE AND STANDARD OF REVIEW
“The interpretation of a statute is a question of law, which we review de novo.” (Bright v. 99¢ Only Stores (2010) 189 Cal.App.4th 1472, 1477.) Our fundamental task when interpreting a statute is to determine the Legislature‘s intent. We begin by examining the statute‘s plain language. If the plain language clearly demonstrates the Legislature‘s intent, then we go no further in our examination. (City of San Jose v. Superior Court (2017) 2 Cal.5th 608, 616-617.) In assessing the Legislature‘s intent when the plain language is unclear, we “may consider other aids, such as the statute‘s purpose, legislative history, and public policy.” (Ibid.)
The anti-SLAPP statute‘s plain language states that, if an anti-SLAPP motion is frivolous, then “the court shall award costs and reasonable attorney‘s fees to a plaintiff prevailing on the motion, pursuant to Section 128.5.” (
The second mention of attorney‘s fees in
The purpose of the safe harbor provision is “to conserve judicial resources otherwise spent adjudicating a sanctions motion by affording a prescribed period of time during which a party may correct or withdraw a frivolous or improper pleading or motion without any penalty. [Citation.] If the merits of
Subdivision (f) provides that a sanctions award may only be made after the court “issues an order pursuant to subdivision (a).” (
When read separately, subdivisions (a), (c), and (f), are clear and unambiguous. However, when read together as a whole, which is the way one must interpret a statute (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 543), the statute is entirely unclear due to the inconsistencies between subdivisions (a) and (c), on the one hand and subdivision (f) on the other. We have tried a variety of ways to reconcile subdivisions (a), and (c), with subdivision (f) in the context of requests for attorney‘s fees, but have concluded that it cannot be done.
A superficial reading of subdivisions (a), (c), and (f), suggests that if a party seeks compensation for its attorney‘s fees, then it may
Although that interpretation comports with the plain language of subdivisions (a), (c), and (f), it effectively renders the 21-day safe harbor period meaningless because the 21-day safe harbor provision can only be triggered after a party has (1) requested an award of expenses; (2) provided the opposing party notice and an opportunity to be heard; and (3) obtained an order on that request. (
We made a variety of attempts to read the plain language of the statute in a manner that would not render a portion of it meaningless. We attempted to interpret subdivision (a) as requiring a finding pertaining to frivolity—rather than an order for attorney‘s fees—such that the subdivision (f) prerequisite for an “order” under subdivision (a) was really a prerequisite for a finding. However, having a frivolity finding as a prerequisite to triggering the subdivision (f) safe harbor provision once again presents the situation in which the safe harbor provision is rendered meaningless because the trial court is still required to review the allegedly frivolous filing and the associated arguments regarding frivolity before the safe harbor period begins.
Next, we considered if there were some way to reconcile the procedures of subdivisions (c) and (f) so as to read them as requiring the same steps. That approach also fails because the two are contradictory. For example, subdivision (f) requires a request for attorney‘s fees to be made in a separate motion, while subdivision (c) permits a request for attorney‘s fees to be made in opposition papers. If one tried to read the section as requiring both—a party must request fees in both its opposition papers and a separate motion—then we again circle back to the safe harbor provision being rendered meaningless. Something has to be filed to obtain the order under subdivision (a). Presumably that first filing would be the opposing papers. The trial court would then make a finding under subdivision (a). Subdivision (f)‘s safe harbor is triggered after all of that has occurred, rendering the safe harbor meaningless.
Next, we considered the conditional nature of subdivision (f)‘s safe harbor provision and whether that allowance for exceptions could somehow
We considered whether subdivisions (a), (c), and (f) could be separated—if perhaps one subdivision provided a general rule while another provided an exception to that rule. For example, if perhaps one subdivision provided a general rule applicable to a broad category of filings while another subdivision was narrower and applied only to certain motions. (See Miller v. Superior Court (1990) 221 Cal.App.3d 1200, 1210 [specific legislation can create an exception to general legislation].) Such an interpretation fails because an order under subdivision (a) is a prerequisite to an order under subdivision (f). (
We tried the approach of Nutrition Distribution, which reconciled subdivision (c) with a former version of subdivision (f). The appellate court concluded, “The plain language of former subdivision (f) mandating that a court ordering sanctions adhere to the ‘standards, conditions, and procedures’ set forth in section 128.7, subdivisions (c), (d), and (h) . . . appears unambiguous: All the conditions and procedures in [section 128.7,] subdivision (c),” which includes a 21-day safe harbor period, “must be imposed to the extent they are compatible with the other requirements of section 128.5.” (Nutrition Distribution, supra, 20 Cal.App.5th at pp. 126-127, fn. omitted.)
The version of subdivision (f) discussed in Nutrition Distribution did not require an order under subdivision (a) before triggering subdivision (f). (Nutrition Distribution, supra, 20 Cal.App.5th at p. 124.) Nutrition Distribution did not explain the extent to which subdivision (c) and former subdivision (f) were compatible. (Nutrition Distribution, at pp. 126-127.)
The current version of subdivision (f), which requires an order under subdivision (a) is not compatible with subdivision (c). If one obtains an order under subdivision (a), then the safe harbor provision of subdivision (f) is
The plain language of
“Impossibility, as an aid to statutory interpretation, is akin to the absurdity canon, which counsels courts to avoid any [statutory] construction that would produce absurd consequences.” (National Shooting, supra, 5 Cal.5th at p. 433.) We turn to legislative history with the hope that it will illuminate the Legislature‘s intent in amending
Before turning to the legislative history, we address defendants’ theory of the plain language. In defendants’ supplemental briefing, they assert, “[Defendants] believe sanctions under [section] 128.5 can only be entered under one provision. That is, sanctions can only be entered under [section] 128.5 as a whole, as encapsulated by [section] 128.5(a).” Defendants’ theory that there is only one means of obtaining attorney‘s fees under
a. 1992 Through 2014
The anti-SLAPP statute was added to the
The version of
The pre-2015 version of subdivision (c) was nearly identical to the current version with the exception of a minor grammatical difference: “responding papers; or the court‘s own motion” became “responding papers or, on the court‘s own motion.” (
b. 2015 to August 6, 2017
The version of
The 2014 amendment to
The anti-SLAPP statute (
The anti-SLAPP statute‘s reference to
c. August 7, 2017, to the Present
The Assembly Committee on the Judiciary‘s Report reflects that, when considering the amendment, the Committee examined San Diegans for Open Government v. City of San Diego (2016) 247 Cal.App.4th 1306. (Cal. Comm. Rep. on Assem. Bill No. 984 (2017-2018 Reg. Sess.) hearing date April 25, 2017, p. 5.) The Report reads, “[T]he San Diegans court held that ‘a party filing a sanctions motion under [section] 128.5 does not need to comply with the safe harbor waiting period described in section 128.7, subdivision (c)(1).’ [Citation.] In the court‘s reasoning, it held that since Section 128.5 is broader, [the] safe harbor provisions of Section 128.7 ‘cannot be used to withdraw or appropriately correct past bad faith actions or tactics.’ [Citation.] Again, while this legal analysis appears to be well-reasoned, it is inconsistent with the legislative intent that Section 128.5 should be imposed ‘consistently with the standards, conditions, and procedures set forth in subdivisions (c), (d), and (h) of Section 128.7.’
The author of the 2017 amendment explained the purpose of the amendment this way: ”Instead of referencing the standards, conditions, and procedures under Section 128.7, this bill copies the provisions (basically the standards, conditions, and procedure[s]) in Section 128.7 and inserts them into Section 128.5. As amended, this bill deletes the statutory reference under Section 128.5 (‘standards, conditions, and procedures set forth in all of the provisions under subdivisions (c), (d), and (h) of Section 128.7‘) and replaces it by taking language from subdivisions (c), (d), and (h) of Section 128.7, and placing it into Section 128.5. Granted, in order to make the language workable and grammatically consistent, the language lifted from subdivisions (c), (d), and (h) in Section 128.7 had to be slightly modified and is therefore not identical to the language in Section 128.5‘s subdivisions (f), (g), and (h). However, the policy approach is the same, but for one exception: this bill limits the safe harbor provisions to only those alleged actions and tactics that can be withdrawn or appropriately corrected, consistent with the interpretation under San Diegans for Open Government v. City of San Diego (247 Cal.App.4th 1306, 1311) and common sense. Obviously, some actions and tactics—such as oral statements or physical conduct—cannot be withdrawn or appropriately corrected.” (Cal. Comm. Rep. on Assem. Bill No. 984 (2017-2018 Reg. Sess.) hearing date April 25, 2017, p. 7.)
The Committee Report reflects the Legislature wanted the safe harbor provision to apply to all actions that could be withdrawn or corrected. The draft of the bill that was in effect at the time the Committee Report was
Approximately two months later, another Committee Report was written. The Report reflected, “This bill would provide that if, after notice and a reasonable opportunity to respond, the court issues an order pursuant to Section 128.5(a) of the Code of Civil Procedure, the court may impose an appropriate sanction upon the party, the party‘s attorneys, or both, for the violation.” (Cal. Comm. Rep. on Assem. Bill No. 984 (2017-2018 Reg. Sess.) hearing date June 27, 2017, p. 4.) This reflects the Legislature was aware that an order under subdivision (a) would be needed before a party could seek sanctions under subdivision (f).
However, in that same report, it was written, “[T]his bill imports the safe harbor provisions from Section 128.7(c)(1) and (c)(2), but would only apply them ‘[i]f the alleged action or tactic is the making or opposing of a written motion or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading that can be withdrawn or appropriately corrected.‘” (Cal. Comm. Rep. on Assem. Bill No. 984 (2017-2018 Reg. Sess.) hearing date June 27, 2017, p. 7.) The Report does not reconcile how the prerequisite of an order under subdivision (a) would work with the safe harbor provision. (Ibid.)
Our review of the
The legislative history leaves us in as much of a quandary as the plain language of the statute. We cannot simply dismiss the procedures of subdivisions (a) and (c) because the legislative history expressly reflects that an order under subdivision (a) would be required before triggering the sanctions procedure under subdivision (f). Thus, it appears the Legislature wanted the subdivision (a) prerequisite. It is unclear, however, how the Legislature intended for that prerequisite to function.
As explained ante, the impossibility presented by a statute does not give a court “a ground for invalidating a statutory mandate altogether.” (National Shooting, supra, 5 Cal.5th at p. 436.) Thus, we cannot simply declare the statutory procedure impossible and invalid. After reviewing the legislative history, as unclear as that history is, we conclude that the Legislature meant for the safe harbor provision to apply as much as possible. In the Committee on the Judiciary‘s report, in its discussion of San Diegans for Open Government v. City of San Diego, supra, 247 Cal.App.4th 1306, it was expressed that the safe harbor provision should have expansive use. (Cal. Comm. Rep. on Assem. Bill No. 984 (2017-2018 Reg. Sess.) hearing date April 25, 2017, pp. 6-7.) The one exception was for situations in which withdrawal or correction would not be practical. Therefore, if one is attempting to obtain attorney‘s fees under
To implement that intent, we conclude that if it is not possible to comply with the safe harbor and separate motion requirements of subdivision (f) when seeking attorney‘s fees, then one should use the procedures set forth in subdivisions (a) and (c). We derive that interpretation from the Legislature‘s comments that when it is not practical to apply the safe harbor provision then it need not be used. (Cal. Com. Rep. on Assem. Bill No. 984 (2017-2018 Reg. Sess.) hearing date June 27, 2017, p. 7.)
Defendants provide a minimal discussion of legislative history. Without citations to legislative history, defendants contend:
Changsha provided a bit of legislative history and concluded that because the Legislature left subdivision (c) intact following the 2017 amendment, it must have wanted parties to use subdivision (c). We delved further into the legislative history, discussing items such as committee reports, because we hoped to gain a better understanding of what exactly the Legislature intended when amending
C. APPLICATION TO THE ANTI-SLAPP STATUTE
We now apply the foregoing statutory interpretation to the anti-SLAPP statute. An anti-SLAPP motion must be filed “within 60 days of the service of the complaint.” (
In order to comply with the 21-day safe harbor notice, a plaintiff would need to draft and serve its subdivision (f), sanctions motion almost immediately after receiving the anti-SLAPP motion due to the 30-day clock that is running for the hearing date. Then, the plaintiff would need to draft its opposition to the anti-SLAPP motion while risking that the defendant will withdraw or correct its anti-SLAPP motion during the 21-day safe harbor period. (
If the plaintiff does not want to risk the cost of drafting its opposition while the defendant has the 21-day option to withdraw or correct its motion, then the plaintiff might apply to continue the anti-SLAPP hearing until after the 21-day safe harbor period has elapsed (Li v. Majestic Industry Hills LLC, supra, 177 Cal.App.4th at p. 594 [“could have sought a continuance“]), but that would contradict the express purpose of the anti-SLAPP statute, which was designed “to establish an efficient screening mechanism for ‘disposing of SLAPP‘s quickly and at minimal expense to taxpayers and litigants.‘” (City of Montebello v. Vasquez (2016) 1 Cal.5th 409, 422.)
Of course, in the context of this case, we are discussing attorney‘s fees for frivolous motions, which means our focus is more toward anti-SLAPP
Another option would be for a plaintiff to seek an order shortening the 21-day safe harbor period. (Li v. Majestic Industry Hills LLC, supra, 177 Cal.App.4th at p. 594 [“could have sought . . . an order shortening time“].) In that situation, a plaintiff who is faced with a frivolous anti-SLAPP motion would need to (1) apply for an order shortening time on the safe harbor period; (2) obtain the order shortening time from the court; (3) finish and serve the separate sanctions motion with the shortened date; (4) wait for the shortened safe harbor period to expire to see if the defendant withdraws or amends his/her anti-SLAPP motion; and (5) if the defendant does not withdraw or amend the motion, then draft an opposition, which is due “at least nine court days . . . before the hearing.” (
The foregoing process could work in theory, and it would keep with the spirit of resolving anti-SLAPP issues quickly. However, it means that an order shortening time would always be necessary. A plaintiff would need to know that, in addition to following the procedures in subdivision (f) (minus the prerequisite for a subdivision (a) order), she/he also needs to obtain an order shortening time. It also means the trial judge is effectively required to grant the request for an order shortening time, despite any opposition from the defendant, because that is the only way to make the process work while satisfying the purpose of the anti-SLAPP statute. In practice, such a procedure is too limiting on the trial court because it takes away the court‘s discretion, and it is too cumbersome for the parties. It is not realistic to
For all these reasons, subdivision (f) does not work with the anti-SLAPP statute. Therefore, we conclude the proper procedure for the trial court to follow in regard to a request for attorney‘s fees related to an anti-SLAPP motion is the procedure set forth in subdivisions (a) and (c).5
Defendants assert that if we conclude the procedures of subdivision (f) are inapplicable to requests for anti-SLAPP attorney‘s fees, then we will contradict the holding of Moofly Productions, LLC v. Favilla (2018) 24 Cal.App.5th 993. In Moofly, the “defendants contend[ed] that when imposing sanctions under section 1008, subdivision (d), a court need not comply with the requirements of section 128.7, including the 21-day safe harbor period.” (Id. at p. 997.) The appellate court “conclude[d] that the requirements of section 128.7 do apply to sanctions imposed under section 1008, subdivision (d).” (Ibid.)
Within its analysis, the appellate court discussed the anti-SLAPP statute. The court wrote, “This interpretation is consistent with the one courts have applied in analogous cases involving the award of attorney fees and costs under the anti-SLAPP statute, section 425.16. The anti-SLAPP statute requires courts to ‘award costs and reasonable attorney‘s fees to a plaintiff prevailing on the motion, pursuant to [s]ection 128.5.’ (
We do not find defendants’ reliance on Moofly to be persuasive because defendants do not include an explanation of how the 21-day safe harbor procedure can function within the anti-SLAPP deadlines. Because defendants fail to offer practical insight into how subdivision (f) can
Defendants contend that if we conclude subdivision (f) does not apply to attorney‘s fees associated with frivolous anti-SLAPP motions, then we will be contradicting Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th 1382, which defendants contend is “this Court‘s own case law.” This court did not issue the opinion in Decker. In Decker, the Fourth District, Division Three, Court wrote, “[W]e believe the reference to section 128.5 in section 425.16, subdivision (c) means a court must use the procedures and apply the substantive standards of section 128.5 in deciding whether to award attorney fees under the anti-SLAPP statute.” (Id. at p. 1392; see also Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 817 [quoting a portion of the foregoing Decker quote].) Notably, at the time of Decker, subdivision (f) was not part of
We understand and appreciate that
Defendants assert that if we conclude strict compliance with the safe harbor provision is not required in the anti-SLAPP context, then we are “legislating into s.128.5 an exception to strict safe harbor compliance.” Defendants repeatedly assert that
For example, defendants complain of the timeline in the instant case. Defendants write, “The only time period [defendants] could‘ve taken action to withdraw or correct the Anti-SLAPP was the time between service of
Due to the lack of practical insight into how one could make subdivision (f) function in an anti-SLAPP context and due to a lack of meaningful analysis of legislative history, we find defendants’ criticism to be unpersuasive. Accordingly, as set forth ante, the proper procedure for a trial court to follow in regard to a request for attorney‘s fees related to a frivolous anti-SLAPP motion is the procedure set forth in subdivisions (a) and (c).
D. APPLICATION TO THE RECORD IN THIS CASE
We now examine the record in the instant case to determine whether there was compliance with the procedures of subdivisions (a) and (c).
Subdivision (a) permits a trial court to order a party “to pay the reasonable expenses, including attorney‘s fees, incurred by another party.” Subdivision (c) permits a request for attorney‘s fees to be made in “responding papers,” and requires an “opportunity to be heard.”
Changsha requested an award of attorney‘s fees in its opposition to the anti-SLAPP motion. The request was proper because it was presented in Changsha‘s “responding papers.” (
Because the request was properly submitted in Changsha‘s opposition and defendants were given an opportunity to be heard, we conclude the trial court followed the proper procedure in awarding attorney‘s fees to Changsha. (
The order is affirmed. Respondents are awarded their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
CERTIFIED FOR PUBLICATION
MILLER J.
We concur:
RAMIREZ P. J.
CODRINGTON J.