Tuesday, December 28, 2010
Order Allowing Amendment in SLAPP Not Appealable—Court
Collateral Order Doctrine Does Not Allow Review When Leave to Amend Granted, Panel Says
By SHERRI M. OKAMOTO, Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday declined to consider the propriety of a district court’s grant of leave to amend a complaint against two San Jose attorneys, in what the court had found to be a strategic lawsuit against public participation.
In a decision by Senior U.S. District Judge Louis H. Pollak of the Eastern District of Pennsylvania, sitting by designation, the panel concluded that it lacked jurisdiction under the collateral order doctrine to entertain the appeal by James Cilley, Mark Schmuck, and Temmerman, Cilley & Kohlmann LLP.
The attorneys and their firm had represented the adoptive parents of Elsie Terchen’s great granddaughter in a dispute with the Greensprings Baptist Christian Fellowship Trust arising from Terchen’s conveyance of certain real property to the trust prior to her death in 2000.
After this underlying suit was dismissed, Greensprings filed an action for malicious prosecution against the attorneys, their firm and their clients in the property dispute. The defendants then moved to strike the complaint pursuant to California Code of Civil Procedure Sec. 425.16.
U.S. District Judge Samuel Conti of the Northern District of California granted the anti-SLAPP motion, finding that Greensprings did not offer sufficient evidence that the defendants had acted with subjective malice. However, citing Federal Rule of Civil 15(a)’s policy favoring liberal amendment of claims, Conti granted Greensprings leave to amend its complaint “if it believes that it can make a successful showing of malice.”
The attorneys and their firm appealed, contending Conti had erred in applying Rule 15(a) rather than California law, which Pollak noted generally prohibits granting a plaintiff leave to amend following a dismissal pursuant to a special motion to strike.
Pollak declined to reach the merits of this argument—although he posited that the defendants’ position was rejected by the Ninth Circuit in Verizon Del. Inc. v. Covad Commc’ns Co., (2004) 377 F.3d 1081—since he said Conti’s order was not a final decision.
Based on the 2006 Supreme Court decision in Will v. Hallock, 546 U.S. 345, Pollak explained that an order must “ conclusively determine the disputed question,  resolve an important issue completely separate from the merits of the action, and  be effectively unreviewable on appeal from a final judgment” to be reviewed on collateral appeal.
Although the Ninth Circuit has ruled the denial of an anti- SLAPP motion to strike is immediately appealable as a collateral order in Batzel v. Smith, 333 F.3d 1018, Pollak reasoned an order granting a motion to strike is not because it fails the first prong of the test set forth in Will.
“[T]he grant of an anti-SLAPP motion with leave to amend is not ‘made with the expectation that [it] will be the final word’ on the applicability of the statute,” he said. Pollak emphasized the “inherent tentativeness” of Conti’s order, which specifically “invited Greensprings to submit additional evidence that the Attorney defendants were motivated by malice—evidence which would, in turn, permit the court to reassess the propriety of granting the anti-SLAPP motion.”
Joined by Judges Stephen Reinhardt and Marsha S. Berzon, Pollak concluded the appellate court was therefore without jurisdiction to hear the appeal.
The case is Greensprings Baptist Christian Fellowship Trust v. Cilley, 09-16924.
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