Superior
Court Ct. App. 2/1 B245959 Los Angeles County No. BC488767
Rolf M. Treu Judge
Revere
& Wallace and Frank Revere for Defendants and Appellants.
AlvaradoSmith, Raul F. Salinas, Mary M. Monroe; Leibold
McClendon & Mann, Leibold McClendon and John G. McClendon
for Plaintiff and Respondent.
Joseph
T. Francke and Steven J. André for Californians Aware,
First Amendment Coalition, First Amendment Project, Penelope
Canan, Michael Harris, Libertarian Law Council, Klaus J. Kolb
and Center for Constitutional Jurisprudence as Amici Curiae
on behalf of Plaintiff and Respondent.
No
appearance for Intervener and Respondent.
Janis
L. Herbstman for California State Association of Counties and
League of California Cities as Amici Curiae.
Corrigan, J.
The
City of Montebello sued three of its former councilmembers
and a former city administrator, claiming they violated
Government Code section 1090 by voting on a waste hauling
contract in which they held a financial
interest.[1] It sought to invalidate the contract
and force defendants to disgorge campaign contributions made
by the company that was awarded the contract. Defendants
moved to strike the complaint under the anti-SLAPP statute.
(Code Civ. Proc., § 425.16.)[2] The trial court denied
the motion, and the Court of Appeal affirmed.
We
hold, as did the courts below, that this case does not come
within the statutory anti-SLAPP exemption for public
enforcement actions. However, the votes cast in favor of the
contract at issue were protected activity under section
425.16. The Court of Appeal’s judgment to the contrary
is reversed.
I.
BACKGROUND
In
2008, the franchise for residential waste collection in
Montebello was held by intervener Arakelian Enterprises,
doing business as Athens Disposal Company (Athens). Athens
had been the City’s residential waste hauler for over
40 years, but a number of companies provided commercial waste
services. Athens’s executive vice-president, Dennis
Chiapetta, was approached by defendant Robert Urteaga, who
suggested that Athens consider seeking an exclusive
commercial waste hauling contract.[3]
During
subsequent negotiations over adjustments to the residential
contract, City representatives invited Athens to submit a
proposal for a commercial and industrial waste hauling
contract. Chiapetta agreed. He negotiated primarily with the
city administrator, defendant Richard Torres, but also with
the city attorney. Chiapetta said Torres had previously
opposed the idea of an exclusive contract, but changed his
mind because the waste hauling industry was undergoing
consolidation, landfills were preparing to close, and the
City faced compliance issues under the Integrated Waste
Management Act (Pub. Resources Code, § 40000 et seq.).
Under a proposed comprehensive contract, Athens would pay the
City $500, 000, improve its residential services, and
indemnify the City for any failure to comply with the
Integrated Waste Management Act.
At a
city council meeting, more than 20 people spoke against the
contract. Nevertheless, it was approved by a three to two
vote. Urteaga and codefendants Kathy Salazar and Rosemarie
Vasquez voted in favor. Mayor William Molinari was in the
minority. When presented with the finalized contract,
Molinari declined to sign it because of various misgivings.
He sought the advice of the city attorney, who told him he
had a ministerial duty to execute the document. The city
attorney advised Molinari in writing that a decision not to
sign would “warrant a determination that for purposes
of this Agreement only, you are deemed ‘absent’
thus vesting in the mayor pro tem the authority to execute
this contract.” The city attorney stated he would
instruct the mayor pro tem to sign, with an annotation
reflecting her authority to perform that duty in the
mayor’s absence.
Acting
as mayor pro tem, Vasquez signed the contract with the city
attorney’s annotation. Thereafter, Molinari asked the
Los Angeles County District Attorney’s office to
investigate possible money laundering by Salazar, along with
Brown Act violations by all three councilmembers who had
voted for the contract. (See Gov. Code, § 3500 et seq.)
The office responded that Brown Act violations could not be
investigated without some evidence of an illegal closed
session, but that it would look into the money laundering
allegation.
The
district attorney’s office ultimately filed no charges
against Salazar. Its investigation revealed no impropriety in
her alleged use of campaign donations from Athens to make
loans to a nonprofit organization where she served as
executive director. Nor did Athens’s donations to that
organization disqualify Salazar from voting on the Athens
contract. There was no evidence she had offered to vote for
the contract in exchange for money. While a technical
conflict of interest might “possibly” be
established under Government Code section 1090, the district
attorney did not believe Salazar had a corrupt motive in
voting on the Athens contract.
Montebello
resident Mike Torres sued the City in April 2009, seeking to
invalidate the Athens contract on various
grounds.[4] The trial court denied an anti-SLAPP
motion filed by the City, and it appealed. Mayor Molinari and
Councilmember Vasquez were up for reelection in November
2009. Montebello voters qualified a recall of Councilmembers
Urteaga and Salazar, and a special election was set for
February 2010. Athens contributed $37, 300 to defeat
Molinari, $45, 000 to reelect Vasquez, and $352, 912.73 to
defeat the recall.[5] Despite those efforts Molinari was
reelected, Vasquez was not, and Urteaga and Salazar were
recalled. Richard Torres announced his retirement as city
administrator shortly after the November election.
The
City abandoned its appeal in the Mike Torres action, and
substituted new counsel in place of the city attorney. In May
2011 it filed an amended answer, declaring it no longer
disputed the material allegations of the petition. Athens,
however, continued to defend its contract as real party in
interest in the Mike Torres litigation.
The
City filed the action now before us in July 2012, represented
by the same outside counsel who took over in the Mike Torres
case. The complaint states a single cause of action against
Urteaga, Salazar, Vasquez, and Richard Torres for conflict of
interest in violation of Government Code section 1090. It
seeks a declaration that the Athens contract is void, and an
order requiring the councilmember defendants to disgorge the
campaign contributions they received from Athens.
Three
days after the City filed its complaint, the trial court in
the Mike Torres action issued a writ of mandate setting aside
the Athens contract.[6] Defendants then moved to strike the
City’s complaint under the anti-SLAPP statute. Noting
that the Athens contract had been voided, they contended the
City’s action was little more than a politically driven
attempt to punish them for exercising their constitutional
right of free speech in connection with issues of public
interest related to their official duties. The City claimed
its action fell within the public enforcement exemption of
section 425.16, subdivision (d) (hereafter, §
425.16(d)). Alternatively, the City argued that voting by
public officials is not protected under the First Amendment,
citing Nevada Commission on Ethics v. Carrigan
(2011) 564 U.S. 117 (Carrigan). If the court were to
disagree and consider the likelihood of the lawsuit
succeeding, the City maintained that its case was
sufficiently strong.
The
trial court denied the motion to strike. It ruled that the
public enforcement exemption did not apply because, contrary
to the requirements of section 425.16(d), the action was not
“brought in the name of the people” by the city
attorney as a public prosecutor. Deciding that
defendants’ actions were protected activity for
purposes of section 425.16, the court went on to consider the
likelihood the City would prevail. (§ 425.16, subd.
(b)(1).) It found sufficient evidence of a conflict of
interest in the showing that Urteaga and Richard Torres had
encouraged Athens to seek an exclusive contract, and that
Athens contributed to the campaigns of Urteaga, Salazar, and
Vasquez after the contract was approved.
The
Court of Appeal affirmed. It agreed that the public
enforcement exception did not apply. However, it held that
defendants’ votes on the contract were not
protected activity under section 425.16. Accordingly, the
court did not review the question of whether the City could
establish a probability it would prevail. We address the
exemption first, because its application would take the case
entirely out of the anti-SLAPP statutory scheme.
II.
DISCUSSION
A.
The Public Enforcement Exemption
The
Legislature enacted section 425.16 in 1992, noting “a
disturbing increase in lawsuits brought primarily to chill
the valid exercise of the constitutional rights of freedom of
speech and petition for the redress of grievances.”
(§ 425.16, subd. (a).) The statute authorizes defendants
to file a special motion to strike in order to expedite the
early dismissal of unmeritorious claims. (§ 425.16,
subds. (b)(1), (f).) “[T]o encourage continued
participation in matters of public significance, ” and
to ensure “that this participation should not be
chilled through abuse of the judicial process, ” the
Legislature has specified that the anti-SLAPP statute
“shall be construed broadly.” (§ 425.16,
subd. (a).)
The
statute has always included an exemption for public
enforcement actions. (Stats. 1992, ch. 726, pp. 3523-3524.)
Section 425.16(d) provides: “This section shall not
apply to any enforcement action brought in the name of the
people of the State of California by the Attorney General,
district attorney, or city attorney, acting as a public
prosecutor.” A split of authority has developed on the
scope of this exemption. On one side, two opinions from the
Second District Court of Appeal have taken an expansive view.
(City of Long Beach v. California Citizens for
Neighborhood Empowerment (2003) 111 Cal.App.4th 302
(City of Long Beach); City of Los Angeles v.
Animal Defense League (2006) 135 Cal.App.4th 606
(City of Los Angeles).) On the other, the Fourth
District has applied the statutory language narrowly.
(City of Colton v. Singletary (2012) 206 Cal.App.4th
751 (City of Colton).) We conclude that the narrow
interpretation is consistent with the statutory language and
with our decisions construing exceptions to the anti-SLAPP
statute.
In
City of Long Beach, the city sued an organization
and its treasurer for violating municipal campaign
contribution limits. (City of Long Beach,
supra, 111 Cal.App.4th at p. 304.) In response to
the defendants’ anti-SLAPP motion, the city claimed its
action was exempt. The defendants argued that the exemption
did not apply because the action was “not brought in
the name of the people of the State of California, ” as
required by section 425.16(d). The Court of Appeal agreed. It
relied on legislative history to conclude that the public
enforcement exemption was meant to apply to actions in the
name of local authorities, as well as the people of
California. In a brief opinion, the court conceded that the
history of section 425.16 was silent on this point. It
referred instead to comments in a bill analysis pertaining to
a different statute: section 998, which governs cost awards
after offers to compromise. The Legislature added a public
enforcement exemption to section 998 in 2001, using terms
identical to those of section 425.16(d). (§ 998, subd.
(g)(2); Stats. 2001, ch. 153, § 1, p. 1444.)
The
section 998 bill analysis explained that when section 425.16
was enacted in 1992, subdivision (d) was included “[a]t
the request of the Attorney General’s office.”
(Sen. Com. on Judiciary, Analysis of Assem. Bill No. 732
(2001-2002 Reg. Sess. July 3, 2001, p. 5.) “Legislative
staff involved in the drafting of the [anti-SLAPP] bill
report that this provision was not included to provide a
special exemption that otherwise would have been considered
nonexistent, but rather to confirm the existence of the
prosecutorial exemption assumed by the drafters.”
(Ibid.) The City of Long Beach court relied
on this passage to support its belief that the section 998
exemption was intended to “apply broadly to
‘civil enforcement actions’ seeking injunctions,
restitution and civil penalties, but not damages.”
(City of Long Beach, supra, 111 Cal.App.4th
at p. 307.) Based on that inference, the court reasoned that
nearly a decade after the anti-SLAPP statute was enacted,
“the Legislature understood the language at issue in
this case (albeit in the context of section 998) to encompass
the type of lawsuit now before us.” (Ibid.)
The
court also noted that a committee analysis of the first
anti-SLAPP bill, which was ultimately vetoed, had reflected
the Attorney General’s concern over the unintended
consequence of hindering enforcement of consumer protection
laws by local as well as state agencies. (City of Long
Beach, supra, 111 Cal.App.4th at pp. 307-308.)
It pointed out that the anti-SLAPP statute was meant to
thwart abusive lawsuits intended to chill the exercise of
First Amendment rights, whereas “ ‘[t]he
prosecutor’s motive derives from the constitutional
mandate to assure that the laws of the state are uniformly
enforced and to prosecute any violation of these
laws....’ ” (Id. at p. 308.) The court
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