Wednesday, January 3, 2007
C.A.: Anti-SLAPP Statute Does Not Apply to Arbitration Claims
By TINA BAY, Staff Writer
The anti-SLAPP statute does not authorize a motion to strike an arbitration claim filed only in an agreed-upon arbitral forum and not in any complaint, cross-complaint or petition filed in court, the Sixth District Court of Appeal has held.
Reversing a ruling by Santa Clara County Superior Judge Jamie Jacobs-May, the court Friday denied Terrence J. Sheppard’s motion to strike a breach of contract claim asserted against him by his former employer Lightpost Museum Fund and Art for Children Charities, Inc.
Justice Nathan D. Mihara, writing for the panel, explained that the anti-SLAPP statute, Code of Civil Procedure Sec. 425.16, subjects a “cause of action” in a “complaint” arising from the defendant’s exercise of free speech to a special motion to strike, but does not expressly apply to arbitration claims asserted in an arbitral forum.
“The statute was expressly intended to prevent abuse of the ‘judicial process,’ and its terms are not reconcilable with a legislative intent to extend it to arbitration claims filed only in private nonjudicial forums,” he wrote.
Sheppard worked for Lightpost and ACC—non-profit organizations linked to artist Thomas Kinkade—from October 2002 to September 2003, pursuant to an employment agreement that included a non-disclosure clause that would remain applicable at any time after his employment ended. The parties agreed to submit any disputes relating to their contract or one another to binding arbitration before Christian Dispute Resolution Professionals.
In 2004, Sheppard submitted a wrongful termination claim, and the charities submitted a breach of contract claim to CDRP relating to the non-disclosure clause. The arbitrator did not award relief to any party, and in April 2004, the charities asked that CDRP revisit their non-disclosure claim against Sheppard.
They claimed that after the arbitration, Sheppard, as a third party witness, turned over confidential documents, testified about confidential information in arbitration proceedings, and expressly stated he was not bound by the non-disclosure clauses. Additionally, they maintained, the former employee continued to posses confidential documents and disclose information to others.
Free Speech Claim
Sheppard in May 2005 sued the charities and among other tort causes of action alleged they were attempting to prevent him from writing a book involving Kinkade. Such conduct, he stated in his complaint, violated Sec. 425.16 and was subject to a special motion to strike. The next month, he filed his anti-SLAPP motion, which was followed by a motion to compel arbitration by Lightpost and ACC.
In granting Sheppard’s motion, Jacobs-May said the motion to compel arbitration pertained to the claim that Sheppard had breached the non-disclosure clause by writing a book and testifying as a third party. Because this part of the arbitration claim implicated his free speech right, she reasoned, it was subject to an anti-SLAPP motion.
Disagreeing with her analysis, Mihara wrote:
“Sheppard’s motion to strike did not target any cause of action in a complaint, cross-complaint or petition filed by LMF and ACC in the superior court. Sheppard’s motion to strike explicitly targeted only LMF and ACC’s April 2005 arbitration claim, not their subsequently filed motion to compel.”
Justice Wendy Clark Duffy concurred in the opinion.
Justice Richard J. McAdams wrote a separate concurrence to “commend the trial court’s instincts” in attempting to resolve what was essentially an arbitration dispute through the procedural device of an anti-SLAPP motion.
The case is Sheppard v. Lightpost Museum Fund, H029574.
Copyright 2007, Metropolitan News Company