Tаrla MAKAEFF, on behalf of herself and all others similarly situated, Plaintiff-counter-defendant-Appellant, and Brandon Keller; Ed Oberkrom; Patricia Murphy, Plaintiffs, v. TRUMP UNIVERSITY, LLC, a New York limited liability company, AKA Trump Entrepreneur Initiative, Defendant-counter-claimant—Appellee, and Donald J. Trump, Defendant.
No. 11-55016
United States Court of Appeals, Ninth Circuit
Filed Nov. 27, 2013
1180
Argued and Submitted Jan. 18, 2012.
Jill Ann Martin, Assistant General Counsel, Trump National Golf Club, Rancho Palos Verdes, CA, David Keith Schneider, Yunker & Schneider, John David Loy, Esquire, Legal Director, Aclu Foundation of San Diego and Imperial Counties, San Diego, CA, Christopher M. Burke, Scott & Scott LLP, San Diego, CA, for Defendant-counter-claimant-Appellee.
Before: ALEX KOZINSKI, Chief Judge, KIM McLANE WARDLAW аnd RICHARD A. PAEZ, Circuit Judges.
Order; Concurrence by Judges WARDLAW and CALLAHAN; Dissent by Judge WATFORD.
ORDER
Chief Judge Kozinski and Judge Paez have voted to grant the petition for rehearing en banc. Judge Wardlaw has voted to deny the petition for rehearing en banc.
The full court was advised of the petition for rehearing en banc. A judge requested a vote on whether to rehear the matter en banc. The matter failed to receive a majority of the votes of the nonrecused active judges in favor of en banc consideration.
Appellee‘s petition for rehearing en banc, filed April 30, 2013, is denied. Judge Watford‘s dissent from denial of en banc rehearing, and Judges Wardlaw and Callahan‘s concurrence in the denial of en banc rehearing, are filed concurrently with this Order.
IT IS SO ORDERED.
WARDLAW and CALLAHAN, Circuit Judges, with whom Judges FLETCHER and GOULD join, concurring in the denial of rehearing en banc.
“En banc courts are the exception, not the rule.” United States v. American-Foreign S.S. Corp., 363 U.S. 685, 689, 80 S.Ct. 1336, 4 L.Ed.2d 1491 (1960). They are “not favored,”
I.
The dissent asserts that the motion to strike provision of California‘s anti-SLAPP statute collides with Federal Rules 12 and 56. This was exactly the argument advanced by the SLAPP plaintiff in Newsham. There, we concluded that there was no “direct collision” because the motion to strike and attorneys’ fees provisions of the anti-SLAPP statute and Rules 12 and 56 “‘can exist side by side... each controlling its own intended sphere of coverage without conflict.‘” Newsham, 190 F.3d at 972 (ellipsis in original) (quoting Walker v. Armco Steel Corp., 446 U.S. 740, 752, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980)). We reasoned that, under the anti-SLAPP statute, a SLAPP defendant may bring a special motion to strike. If he is successful, the SLAPP counterclaim will be dismissed and the plaintiff-counter-defendant may be entitled to attorneys’ fees. If he is unsuccessful, he “remains free to bring a Rule 12 motion to dismiss, or a Rule 56 motion for summary judgment.” Id.
The Supreme Court‘s decision in Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S. 393, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010), does not change this reasoning. There, the Supreme Court addressed whether a New York statute that precluded class actions in suits seeking penalties or statutory minimum damages collided with
By its terms this creates a categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action. (The Federal Rules regularly use “may” to confer categorical permission, see, e.g.,
Fed. Rules Civ. Proc. 8(d)(2)-(3) ,14(a)(1) ,18(a)-(b) ,20(a)(1)-(2) ,27(a)(1) ,30(a)(1) , as do federal statutes that establish procedural entitlements, see, e.g.,29 U.S.C. § 626(c)(1) ;42 U.S.C. § 2000e-5(f)(1) .)
Id. at 398-99, 130 S.Ct. 1431. The Rule “provides a one-size-fits-all formula for deciding the class-action question.” Id. at 399, 130 S.Ct. 1431. The state statute directly conflicted with Rule 23‘s categorical rule because it “states that Shady Grove‘s suit ‘may not be maintained as a class action’ (emphasis added) because of the relief it seeks,” even if Shady Grove‘s suit meets the requirements of Rule 23. Id.
In contrast, Rules 12 and 56 do not provide that a plaintiff is entitled to maintain his suit if their requirements are met; instead, they provide various theories upon which a suit may be disposed of before trial. California‘s anti-SLAPP statute, by creating a separate and additional theory upon which certain kinds of suits may be disposed of before trial, supplements rather than conflicts with the Federal Rules.1
Rule 12 provides a mechanism to test the legal sufficiency of a complaint. The question asked by Rule 12 is whether the plaintiff has stated a claim that is plausible on its face and upon which relief can be granted. California‘s anti-SLAPP statutе does not attempt to answer this question; instead,
Furthermore, the contention that
past [California state] cases interpreting this provision establish that the Legislature did not intend that a court ...
California also has a state statutory equivalent to Rule 56. See
The Supreme Court‘s decision in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), is instructive. In Cohen, the Supreme Court determined that a New Jersey statute that required certain plaintiffs to post a bond in shareholder derivative suits could be enforced consistent with former Federal Rule 23 (now Rule 23.1). 337 U.S. at 557, 69 S.Ct. 1221. New Jersey enacted the statute at issue in Cohen to protect against so called “strike suits,” that is, suits “brought not to redress real wrongs, but to realize upon their nuisance value.” Id. at 547-48, 69 S.Ct. 1221. The Court recognized that former Rule 23 “deals with plaintiff‘s right to maintain such an action in federal court,” and places certain requirements on shareholder derivative suits, including that the stockholder‘s complaint be verified by oath and show that the plaintiff was a stockholder at the time of the transaction at issue, and that the action not be dismissed without approval of the court and notice to all parties. Id. at 556, 69 S.Ct. 1221. However, former Rule 23, like current Rule 23.1, did not provide that a shareholder derivative suit “may be maintained” if the requirements were met. Instead, it set forth minimum requirements that were prerequisites—necessary, but not necessarily sufficient—to maintain a suit. Despite the fact that the state statute created an additional and indeed onerous requirement for the maintenance of a shareholder derivative suit, the Court determined that the state statute did not conflict with the requirements of Rule 23 and therefore should apply in federal court.
Just as the New Jersey statute in Cohen sought to limit frivolous strike suits, California‘s anti-SLAPP statute seeks to limit frivolous suits brought primarily for the purpose of chilling the valid exercise of First Amendment rights. And, just as the state statute in Cohen did not conflict with former Rule 23 even though it created supplemental, even onerous requirements for certain plaintiffs, the motion to strike and attorneys’ fees provisions of California‘s anti-SLAPP statute do not conflict with Rules 12 and 56 even though they create supplemental requirements for certain plaintiffs.
California‘s interest in securing its citizens’ free speech rights also cautions against finding a direct collision with the
Where there is no dirеct collision between a Federal Rule and a state statute, we must make the “typical, relatively unguided Erie Choice.” Hanna v. Plumer, 380 U.S. 460, 471, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). Every circuit that has considered the issue has agreed with our conclusion in Newsham that anti-SLAPP statutes like California‘s confer substantive rights under Erie.3 If we had taken this appeal en banc, and decided the other way (as our colleagues advocate in their concurrences), we would have created an inter-circuit split; a result at odds with Rule 35 of the
II.
Our colleagues also want us to overrule Batzel not because of any intervening Supreme Court decision or conflicting circuit opinion, but because they find Batzel‘s reasoning “unpersuasive.”4 In Batzel, we held that the denial of an anti-SLAPP motion to strike is immediately appealable under the collateral order doctrine. 333 F.3d at 1024-26. For the сollateral order doctrine to apply, the order must (1) “conclusively determine the disputed question,” (2) “resolve an important issue completely separate from the merits of the action,” and (3) “be effectively unreviewable on appeal from a final judgment.” Will v. Hallock, 546 U.S. 345, 349, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006) (internal quotation marks omitted). In the dissent‘s view, the denial of an anti-SLAPP motion to strike fails the second and third prongs of the test.
For example, here Tarla Makaeff sued Trump University accusing it of, among other things, deceptive business practices. Makaeff, 715 F.3d at 260. Trump University counterclaimed, alleging that Makaeff‘s letters and online postings, written months prior to the filing of this action and complaining of Trump University‘s business practices, constituted defamation. Id. Using California‘s anti-SLAPP law, Makaeff moved to strike Trump University‘s defamation counterclaim.5 Id. at 260, 270-71. Trump University‘s counterclaim was obviously designed to overwhelm Makaeff by making it more burdensome and expensive for her to pursue her deceptive business practices claims against Trump University. Makaeff‘s mоtion to strike concerned the frivolity of Trump University‘s allegation that her speech about its deceptive business practices was defamatory; its very purpose was to determine whether Trump University‘s counterclaim was designed to chill Makaeff‘s valid exercise of her First Amendment rights.6 The issue adjudicated through the mechanism of the motion to strike was not whether Makaeff was liable for defamation because of her statements condemning Trump University‘s alleged deceptive business practices—the question at the heart of Trump University‘s underlying counterclaim.7 Thus, while the inquiry on the motion to strike may glance at the merits, its central purpose is to provide an added statutory protection from the burdens of litigation that is unavailable during the ultimate merits inquiry.
The Supreme Court has held that issues concerning immunity from suit are often separate from the merits of the underlying dispute in the litigation, even though part of the traditional inquiry touches on the merits: whether a particular constitutional right was clearly established at the time of the alleged governmental misconduct. See, e.g., Mitchell v. Forsyth, 472 U.S. 511, 527-28, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) (noting that a claim of qualified immunity “is conceptually distinct from the
The immunity decisions indicate that some involvement with the underlying facts is аcceptable, as the Court has found the issue of immunity to be separate from the merits of the underlying dispute “even though a reviewing court must consider the plaintiff‘s factual allegations in resolving the immunity issue.” Henry, 566 F.3d at 175 (quoting Mitchell, 472 U.S. at 529, 105 S.Ct. 2806). In other words, an order can touch on the merits and still be sufficiently separate from the merits to satisfy the requirements of the collateral order doctrine. As we concluded in Batzel, “[t]he purpose of an anti-SLAPP motion is to determine whether the defendant is being forced to defend against a meritless claim,” not to determine whether the defendant actually committed the relevant tort. Batzel, 333 F.3d at 1025. The motion to strike thus “exists separately from the merits of the defamation claim itself.” Id. Furthermore, § 425.16 does not conflict with Johnson v. Jones, 515 U.S. 304, 115 S.Ct. 2151, 132 L.Ed.2d 238 (1995), because the “probability” inquiry asks a purely legal question: “whether the facts alleged ... support a claim” that survives a motion to strike. Id. at 313, 115 S.Ct. 2151 (internal quotation marks omitted). Unlike the sufficiency of evidence inquiry at issue in Johnson, it does “not consider the correctness of the plaintiff‘s version of the facts.” Id.
Finally, the policy animating the separability requirement favors our determination in Batzel that the motion to strike inquiry is separable. As the Fifth Circuit observed in Henry, the separability requirement furthers the purpose of the final order rule “by preventing appeals on issues that will be definitively decided later in the case.” 566 F.3d at 176. However, issues that are decided before trial and then not normally revisited, such as immunity, do not implicate this concern. The denial of an anti-SLAPP motion is similar: “although an [anti-SLAPP] motion lоoks to the plaintiff‘s probability of success, the court decides it before proceeding to trial and then moves on.” Id.
We recently reaffirmed the validity of Batzel in light of the Supreme Court‘s intervening decision in Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009). See DC Comics v. Pac. Pictures Corp., 706 F.3d 1009 (9th Cir.2013). We remarked that Mohawk Industries redirected our focus towards “whether delaying review would imperil a substantial public interest or some particular value of a high order.” Id. at 1015 (internal quotation marks and citations omitted). Applying this rule, we held:
[T]he denial of a motion to strike made pursuant to California‘s anti-SLAPP statute remains among the class of orders for which an immediate appeal is available. This is especially so given the particular public interests that the anti-SLAPP statute attempts to vindicate. It would be difficult to find a value of a “high[er] order” than the constitutionally-protected rights to free speech and petitiоn that are at the heart of California‘s anti-SLAPP statute. Such constitutional rights deserve particular solicitude within the framework of the collateral order doctrine. The California legislature‘s determination, through its enactment of the anti-SLAPP statute, that such constitutional rights would be imperiled absent a right of interlocutory appeal deserves respect.
Id. at 1015-16 (second alteration in original; citation omitted).
III.
Through anti-SLAPP laws, the legislatures of Arizona, California, Guam, Hawaii, Nevada, Oregon, and Washington have decided to impose substantive limitations on certain state law actions. See Thomas R. Burke, Anti-SLAPP Litigation App. B (2013) (listing the text of each state‘s anti-SLAPP statute). Refusing to recognize these limitations in federal court is bad policy. If we ignore how states have limited actions under their own laws, we not only flush away state legislatures’ considered decisions on matters of state law,8 but we also put the federal courts at risk of being swept away in a rising tide of frivolous state actions that would be filed in our circuit‘s federal courts. Without anti-SLAPP protections in federal courts, SLAPP plaintiffs would have an incentive to file or remove to federal courts strategic, retaliatory lawsuits that are more likely to have the desired effect of suppressing a SLAPP defendant‘s speech-related activities.9 Encouraging such forum-shopping chips аway at “one of the modern cornerstones of our federalism.” Hanna, 380 U.S. at 474, 85 S.Ct. 1136 (Harlan, J., concurring).
* * * * *
Newsham and Batzel were correctly decided. Every circuit to consider these issues has agreed with our holdings in these cases, concluding that similar anti-SLAPP provisions apply in federal court and rulings on the motions are immediately appealable. Our dissenting colleagues wanted to take this case en banc to overrule Newsham, Batzel, and their progeny, and, in so doing, create an inter-circuit split. But our circuit has already held that citizens of the seven jurisdictions within our circuit that have anti-SLAPP laws should not be stripped of their state‘s free speech protections whenever they step inside a federal court.
En banc review is not an opportunity for us to dig through our cirсuit‘s trove of opinions and call cases that we would have decided differently. “We must recognize that we are an intermediate appellate court,” Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.2003) (en banc), and that we should only invoke the en banc process to secure or maintain uniformity of our decisions or because a question of exceptional importance is involved. See
In United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963 (9th Cir.1999), we held that California‘s anti-SLAPP statute must be applied in federal court. Id. at 972-73. In Batzel v. Smith, 333 F.3d 1018 (9th Cir.2003), we compounded that mistakе by holding that litigants are entitled to take interlocutory appeals from rulings on anti-SLAPP motions. Id. at 1024-26. Neither of those decisions is consistent with controlling Supreme Court precedent, and both warranted reexamination by the court sitting en banc.
I
The Supreme Court has long held that federal courts may not apply state statutes that interfere with the operation of the Federal Rules of Civil Procedure. In Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), the Court established the governing test. “When a situation is covered by one of the Federal Rules,” a federal court must apply the Federal Rule, notwithstanding the existence of a conflicting state statute. Id. at 471, 85 S.Ct. 1136. The Federal Rule governs so long as it “trangresses neither the terms of the [Rules] Enabling Act nor constitutional restrictions.” Id.; see also Sibbach v. Wilson & Co., 312 U.S. 1, 14, 61 S.Ct. 422, 85 L.Ed. 479 (1941); 19 Charles Alan Wright, Arthur R. Miller & Edward H. Coоper, Federal Practice and Procedure § 4510, p. 293 (2d ed.1996). Only if the Federal Rule is inapplicable or invalid must the court “wade into Erie‘s murky waters.” Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010).
The Supreme Court‘s recent decision in Shady Grove sheds new light on how this conflict analysis should proceed. That case concerned a challenge to a New York statute precluding class certification of any action seeking penalties or statutory minimum damages. Id. at 396-97 & n.1, 130 S.Ct. 1431. The Court held that the statute conflicted with
Viewed through Shady Grove‘s lens, California‘s anti-SLAPP statute conflicts with Federal Rules 12 and 56. Taken together, those rules establish the exclusive criteria for testing the legal and factual sufficiency of a claim in federal court. See Makaeff v. Trump Univ., LLC, 715 F.3d 254, 274 (9th Cir.2013) (Kozinski, C.J., concurring) (“The Federal Rules aren‘t just a series of disconnected procedural devices. Rather, the Rules provide an integrated program of pre-trial, trial and post-trial procedures....“). California‘s anti-SLAPP statute impermissibly supplements the Federal Rules’ criteria for prе-trial dismissal of an action.
Let‘s take the conflict with Rule 12 first. Rule 12 provides the sole means of challenging the legal sufficiency of a claim before discovery commences. To survive a
Any attempt to impose a probability requirement at the pleading stage would оbviously conflict with Rule 12. Yet that is exactly what California‘s anti-SLAPP statute does. It bars an action from proceeding beyond the pleading stage “unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”
Similar problems plague the interaction between California‘s anti-SLAPP stаtute and Rule 56. Motions to strike almost invariably require consideration of matters outside the pleadings, and in those circumstances the Federal Rules state that “the motion must be treated as one for summary judgment under Rule 56.”
Our decision in Metabolife International, Inc. v. Wornick, 264 F.3d 832 (9th Cir.2001), further highlights the conflict between the anti-SLAPP statute and Rule 56. California‘s anti-SLAPP statute mandates a stay of all discovery pending the court‘s resolution of a motion to strike.
In short, California‘s anti-SLAPP statute creates the same conflicts with the Federal Rules that animated the Supreme Court‘s ruling in Shady Grove. That intervening decision should have led us to
II
Even if anti-SLAPP motions may be brought in federal court, we should stop entertaining interlocutory appeals from rulings on such motions. In Batzel, we held that interlocutory appeals are authorized under the collateral order doctrine, which applies only if three conditions are met. The order must “[1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits оf the action, and [3] be effectively unreviewable on appeal from a final judgment.” Will v. Hallock, 546 U.S. 345, 349, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006) (internal quotation marks omitted); see also Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 106, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009). Orders granting or denying anti-SLAPP motions don‘t satisfy the second condition of this test, because California‘s anti-SLAPP statute requires courts to assess the merits of the action when ruling on a motion to strike.
California‘s anti-SLAPP statute states that a motion to strike shall be granted “unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”
The absence of an issue completely separate from the merits is sufficient, without more, to preclude application of the collateral order doctrine, since all three of the doctrine‘s conditions must be met. But hold on, some have objected, that can‘t be right. California‘s anti-SLAPP stаtute is intended to afford an immunity from trial, not just from liability, and without the ability to take an immediate appeal that immunity may well be lost. However, even if California‘s anti-SLAPP statute provides an immunity from trial, as we concluded in Batzel, 333 F.3d at 1025-26, that doesn‘t make anti-SLAPP rulings immediately appealable. (As Judge Paez has noted, we‘ve held that similar anti-SLAPP statutes in other States do not afford immunity from trial and thus do not trigger application of the collateral order doctrine. See Makaeff, 715 F.3d at 276 (Paez, J., concurring). That has added yet another layer of incoherence to our circuit‘s anti-SLAPP jurisprudence.)
The Supreme Court has specifically resisted the notion that all claims of a right to avoid trial satisfy the collateral order doctrine‘s requirements. In Will, the Court cautiоned: “Those seeking immediate appeal therefore naturally argue that any order denying a claim of right to prevail without trial satisfies the third condition. But this generalization is too easy to be sound and, if accepted, would leave the final order requirement of § 1291 in tatters.” 546 U.S. at 350-51, 126 S.Ct. 952. Thus, even cases squarely presenting a claimed right not to stand trial must be treated with skepticism. See Digital
We should be skeptical here. The Supreme Court has permitted immediate appeals of immunity rulings in part because immunity questions generally involve issues distinct from the merits and don‘t require extensive factual inquiry. For example, the Court has allowed immediate appeals of absolute and Eleventh Amendment immunity determinations, both of which turn on the legal status of the defendant. See P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 142-47, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993); Nixon v. Fitzgerald, 457 U.S. 731, 741-43, 102 S.Ct. 2690, 73 L.Ed.2d 349 (1982).
Similarly, the Court has allowed immediate appeals of many, but not all, qualified immunity determinations. Under Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), courts must determine whether the law the defendant allegedly violated was “clearly established.” Id. at 818, 102 S.Ct. 2727. In holding that such determinations are immediately appealable under the collateral order doctrine, the Court stressed: “An appellate court reviewing the denial of the defendant‘s claim of immunity need not consider the correctness of the plaintiff‘s version of the facts, nor even determine whether the plaintiff‘s allegations actually state a claim. All it need determine is a question of law....” Mitchell v. Forsyth, 472 U.S. 511, 528, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) (plurality opinion) (emphasis added).
In cases where the qualified immunity inquiry strays beyond a purely legal question, however, the Court has refused to entertain immediate appeals. In Johnson v. Jones, 515 U.S. 304, 115 S.Ct. 2151, 132 L.Ed.2d 238 (1995), the Court held that defendants asserting qualified immunity may not appeal “a fact-related dispute” -- sufficiency of the evidence -- under the collateral order doctrine. Id. at 307, 115 S.Ct. 2151. The Court later explained that Johnson‘s holding is rooted in separability concerns: “[I]f what is at issue in the sufficiency determination is nothing more than whether the evidence could support a finding that particular conduct occurred, the question decided is not truly ‘separable’ from the plaintiff‘s claim....” Behrens v. Pelletier, 516 U.S. 299, 313, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996).
This type of determination—“whether the evidence could support a finding that particular conduct occurred“—is exactly what California‘s anti-SLAPP statute requires. To assess the “probability that the plaintiff will prevail,”
The Court recognized in Johnson that denying immediate appeals of qualified immunity decisions “threatens to undercut the very policy (protecting public officials from lawsuits)” that would ordinarily justify immediate appellate review. Johnson, 515 U.S. at 317, 115 S.Ct. 2151. But the Court concluded that when the immunity issues are not distinct from the merits, “precedent, fidelity to statute, and underlying policies” do not permit interlocutory appeals. Id. Thus, even if California‘s anti-SLAPP statute confers a right not to stand trial, that fact alone is not enough to
* * *
Our circuit‘s anti-SLAPP jurisprudence runs afoul of two separate lines of Supreme Court precedent, both of which involve matters fundamental to the operation of the federal courts. We should have taken this case en banc to bring our case law in line with Shady Grove and the Supreme Court‘s decisions establishing the proper scope of the collateral order doctrine.