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Makaeff v. Trump University, LLC

United States Court of Appeals, Ninth Circuit

November 27, 2013

Tarla MAKAEFF, on behalf of herself and all others similarly situated, Plaintiff-counter-defendant— Appellant,
TRUMP UNIVERSITY, LLC, a New York limited liability company, AKA Trump Entrepreneur Initiative, Defendant-counter-claimant— Appellee, and Brandon Keller; Ed Oberkrom; Patricia Murphy, Plaintiffs, and Donald J. Trump, Defendant.

Argued and Submitted Jan. 18, 2012.

Amber Eck, Zeldes Haeggquist & Eck, LLP, Amanda M. Frame, Rachel L. Jensen, Thomas R. Merrick, Robbins Geller Rudman & Dowd LLP, San Diego, CA, for Plaintiff-counter-defendant— Appellant.

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.

Appeal from the United States District Court for the Southern District of California, Irma E. Gonzalez, Chief District Judge, Presiding.

Before: ALEX KOZINSKI, Chief Judge, KIM McLANE WARDLAW and RICHARD A. PAEZ, Circuit Judges.

Order; Concurrence by Judges WARDLAW and CALLAHAN; Dissent by Judge WATFORD.


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. Fed. R.App. P. 35(f).

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.


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," Fed. R.App. P. 35, and " convened only when extraordinary circumstances exist," American-Foreign S.S. Corp., 363 U.S. at 689, 80 S.Ct. 1336. Because the panel opinion faithfully follows our circuit's precedent, creates no inter-circuit split, does not present an issue of exceptional importance, and because the contrary result would create a circuit split, a call to rehear this appeal en banc failed to gain the support of a majority of our active judges. We concur.

Page 1181

Our dissenting colleagues urge us to overrule our decisions in United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963 (9th Cir.1999), and Batzel v. Smith, 333 F.3d 1018 (9th Cir.2003). In Newsham, we held that the motion to strike and attorneys' fees provisions of California's anti-SLAPP statute apply in diversity cases; in Batzel, we held that the denial of an anti-SLAPP motion is immediately appealable under the collateral order doctrine. Newsham and Batzel were correctly decided. Not only is the dissent's desire to use this appeal as a vehicle to change our circuit's law based on a misreading of Supreme Court precedent; it also distorts our standard for rehearing an appeal en banc.


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 Federal Rule of Civil Procedure 23. The Court framed the " direct collision" inquiry in a new way: it asked whether the state statute at issue " attempts to answer the same question" as the Federal Rule. Id. at 399, 130 S.Ct. 1431. To determine the questions answered by Rule 23, the Court looked to the plain language of the Rule, which " states that ‘ [a] class action may be maintained’ if two conditions are met: The suit must satisfy the criteria set forth in subdivision (a) ( i.e., numerosity, commonality, typicality, and adequacy of representation), and it also must fit into one of the three categories described in subdivision (b)." Id. at 398, 130 S.Ct. 1431 (alteration in original) (quoting Fed.R.Civ.P. 23(b)). Focusing on Rule 23's use of the words " maybe maintained," the Court continued:

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.

Page 1182

The dissent's assertion that Rules 12 and 56 together define a cohesive system for weeding out meritless claims that is akin to Rule 23's categorical rule turns Shady Grove's lens into a kaleidoscope. This assertion overlooks the Court's reliance on textual analysis in Shady Grove. Rule 23 states that " [a] class action may be maintained" if certain requirements are met. Therefore, Rule 23 provides a categorical rule: if the requirements are met, then a plaintiff is entitled to maintain his suit as a class action.

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 statute does not attempt to answer this question; instead, California Code of Civil Procedure § 430.10, the state statutory analog of Rule 12, does. See Cal.Civ.Proc.Code § 430.10.[2] That the California legislature enacted both an analog to Rule 12 and, additionally, an anti-SLAPP statute is strong evidence that the provisions are intended to serve different purposes and control different spheres. Moreover, the anti-SLAPP statute asks an entirely different question: whether the claims rest on the SLAPP defendant's protected First Amendment activity and whether the plaintiff can meet the substantive requirements California has created to protect such activity from strategic, retaliatory lawsuits.

Furthermore, the contention that California Code of Civil Procedure § 425.16 imposes a probability requirement at the pleading stage ignores California Supreme Court precedent. Although § 425.16 asks courts to determine whether " the plaintiff has established that there is a probability that the plaintiff will prevail on the claim," (emphasis added), the California Supreme Court has held that:

past [California state] cases interpreting this provision establish that the Legislature did not ...

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