Thursday, April 30, 2020

Patel v. Chavez (Cal. Ct. App. - April 30, 2020)

I'm generally sympathetic to the result in this case.  But have one legal -- and I think, important -- concern.

Employee says that Employer paid him less than a minimum wage and brought this and related wage claims against Employer before the California Labor Board.  The Board held a hearing, heard all the relevant testimony, and found in favor of Employee for $235,000.  Okay.

Immediately thereafter, Employer files a state court lawsuit against Employee and two of the officials on the Labor Board, seeking $10 million in damages because Employee allegedly perjured himself at the Labor Board proceeding and the Labor Board officials made various legal and other errors in their award.  The lawsuit's stupid.  That's not how you challenge an award.  And it's deficient for a plethora of other legal reasons as well.  It's definitely going to lose.

And lose it does.  The Labor Board officials file a demurrer that gets sustained, so they're out.  But Employee takes a slightly different tack, and files an anti-SLAPP motion.  Asserting -- correctly -- that since the cause of action arises out of testimony before an administrative tribunal, it's covered by the anti-SLAPP statute, and (on the merits) is also absolutely protected by the litigation privilege.

Spot on.

The only difficult part is this:  One of the Employer's (silly) claims is that the defendants violated his federal constitutional rights by introducing and accepting the false testimony.  That's a federal claim under Section 1983.  We know that the anti-SLAPP statute applies to state claims.  We also know that (under the Erie doctrine) the anti-SLAPP statue applies to state claims in federal court, but that it does not apply to federal claims in federal court.

Does the anti-SLAPP statute nonetheless apply to federal claims in state court?

The California state cases on this issue generally say:  "Yes."  And today's opinion agrees with that result.  A result that's generally said to arise because -- and this part seems largely correct -- the anti-SLAPP statute is mostly a "procedural" rule, and states apply their own procedures, even to federal substantive claims.

But Justice Rothschild says, smartly, that that's not really the whole story.  Yes, states generally apply their own procedural rules to federal claims.  But there's a second prong of this analysis that adds that a state nonetheless can not do so if the procedural rule affects the federal substantive right.  And that's an exception that the prior state cases haven't really addressed.

So Justice Rothschild goes on to do so.  But holds -- understandably -- that the anti-SLAPP statute doesn't really affect those federal substantive rights.  You can still sue.  And if your suit has merit, you can still prevail.  Yes, it's a tiny bit harder.  But that's true for many procedural rules.  In the end, you can still win, and the burden on your federal substantive rights isn't all that great.  So applying the state procedural rules to your federal substantive entitlement under Section 1983 is permissible.

The analysis there is a good one, and reaches a very plausible result.  Plus it's an important add that Justice Rothschild performs the "second-prong" analysis that a lot of the earlier state cases omit.

I have just one lingering concern.

Sure, the plaintiff can still file his Section 1983 suit, and potentially win.  But under the anti-SLAPP statute, if the defendant prevails, the plaintiff is required to pay the defendant's attorneys fees.  No small disincentive to filing your federal substantive claim.

Justice Rothschild responds that's no big deal, because (1) the anti-SLAPP only requires a prima facie case, and (2) allows plaintiff to get fees if the anti-SLAPP motion is frivolous.  Point (2) isn't really at all persuasive (to me), since that hardly makes the statute truly reciprocal, and is both rarely applied as well as very hard to establish.  But Point (1) isn't crazy.  You can often prevail on anti-SlAPP motions.  And will if you can establish a prima facie -- i.e., marginally meritorious -- claim.

My problem is that I wonder if Justice Rothschild isn't focusing on the appropriate substantive right.  Or at least all of them.

Yes, there's a substantive right under Section 1983 to obtain damages.  But there's also a federal right under that statute to (1) obtain your attorney's fees as well (Section 1988), and under that same statute (2) except in very limited cases, to not pay the other side's attorney's fees.  (Hughes v. Rowe)

There's no doubt that those are federal substantive rights as well, which you can tell (among other things) because state courts are required to follow them (e.g., in Section 1983 claims brought in state court, state courts are required to follow these fee-shifting provisions regardless of what state law might otherwise provide).  So in addition to asking whether someone could file a federal claim under Section 1983 under the anti-SLAPP statute (which, yes, they can), it seems to me you've also got to ask whether the anti-SLAPP provisions of state law impede the federal fee shifting rights under Section 1988.

To which the answer seems obvious.  Yes, they do.  Federal law provides that plaintiffs will not be obliged to pay the other side's fees unless the underlying claim was frivolous, whereas state law (by contrast) says that plaintiffs will be obliged -- indeed, mandated -- to pay the other side's fees even if the underlying claim was not frivolous (but instead merely lacked merit).  You can't get much more of a direct conflict than that.

Now, maybe there's a way out of this.  Maybe you can say that the fee-shifting provisions of federal law aren't sufficiently substantive (though, to me, it seems like they clearly are).  Or maybe you can try to say that state law doesn't impair them (though, again, given the direct conflict, I'm not sure how one can support such a position persuasively).

But, at a minimum, one's got to address that issue.  Which today's Court of Appeal opinion does not.

The reminder is basically just that you have to analyze the state and federal conflict (the Erie or "reverse-Erie" issue) on a provision-by-provision basis.  Just like the Ninth Circuit, for example, follows California state anti-SLAPP rules (as a matter of "substance") with respect to the filing of the motion and fee awards, but do not follow those rules with respect to the automatic stay and appellate review (at least nowadays), so too do I think state courts have to analyze this issue on a provision-by-provision basis.  I tend to agree that state law permissibly subjects federal Section 1983 claims filed in state court to an anti-SLAPP motion.  The filing of that motion doesn't impermissibly interfere with the assertion of those claims.

But that a defendant can file such a motion doesn't mean that it can also permissibly obtain a mandatory recovery of its attorney's fees if it prevails.  That provision might well conflict with substantive provisions of federal law applicable in state court.  And hence not be enforced.

So I appreciated Justice Rothschild's intelligent approach to the doctrinal issues here.  I just wonder if it didn't need to go even a bit more deeply.

In a way that may meaningfully alter the result.