New York legislators have for years considered amending the state’s statutes that grant rights and protections to the targets of strategic lawsuits against public participation (SLAPP). As it now stands, New York’s anti-SLAPP law is one of the narrowest in the country, and some legislators want to change that. With the new single party control of the legislature and governor’s mansion, this may finally be the year for anti-SLAPP reform in New York. In this article, we will explore what may be in store for New York’s anti-SLAPP laws.

Background

Anti-SLAPP laws are intended to provide procedural protections for citizen activists, whistleblowers, and others who find themselves on the wrong end of vindictive lawsuits intended to punish them for speaking out on public matters. These laws have been enacted in states across the country in response to stories of moneyed interests filing meritless lawsuits against advocates of opposing interests, leveraging the burdens and costs of litigation as a tool to stifle dissent. For example, a typical “SLAPP suit” may be a real estate developer suing opponents of the developer’s request for a zoning variance, or a manufacturer suing activists who have opposed its labor practices, in each case to impose a punishing cost to deter opposition. See, e.g., St. Beat Sportswear v. Nat’l Mobilization Against Sweatshops, 182 Misc. 2d 447 (Sup. Ct., N.Y. Cty. 1999) (New York law); Dirty Work Const. v. McCarroll, No. D038578, 2003 WL 1233074 (Cal. Ct. App. March 18, 2003) (California law).

To combat the threat of SLAPP suits, anti-SLAPP laws provide various protections to defendants named in the cases, such as expedited consideration of the defendant’s motion to dismiss and an automatic stay of discovery while the motion is pending. See, e.g., N.Y. C.P.L.R. §3211(g) (expedited hearing); D.C. Code §16-5502(c)(1) (automatic discovery stay). If the suit is dismissed, anti-SLAPP laws usually afford the defendant a right to seek an award of its attorneys’ fees, costs, and sometimes additional—even punitive—damages. In this way, anti-SLAPP laws seek to disincentivize vexatious lawsuits. See, e.g., N.Y. Civil Rights Law §70-a(1).

A critical and difficult question with these laws is how to define the suits that invoke the anti-SLAPP protections. Under-inclusive definitions of SLAPP suits may provide inadequate protections to accomplish the legislature’s aims, but over-inclusive definitions risk deterring legitimate lawsuits.

New York’s anti-SLAPP law is narrower in scope than most similar laws in other states. It applies only when a lawsuit is “materially related” to speech by the defendant concerning the plaintiff’s application to a “government body” for “a permit, zoning change, lease, license certificate or other entitlement for use or permission to act.” N.Y. Civil Rights Law §76-a. Based on that statutory language, the New York anti-SLAPP law protects activists, whistleblowers, and others who, for example, oppose a restaurant’s request for a liquor license; but it does not protect persons who speak out on matters of public concern unrelated to permits, licenses, or other similar requests to the government for “permission to act.” Additionally, even if the underlying lawsuit qualifies as a SLAPP suit, the target may only be able to recover legal fees for defending himself if the suit “was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for the extension, modification or reversal of existing law”—which is a threshold of frivolousness that, generally speaking, few lawsuits meet. N.Y. Civil Rights Law §70-a. Indeed, a survey of case law in New York finds that fees and penalties are rarely, if ever, awarded in anti-SLAPP cases.

Proposed Amendment

Senate Bill S52 was introduced by Sen. Brad Hoylman (D-Manhattan) on Jan. 9, 2019, and it is now in the Senate Codes Committee. On Feb. 26, 2019, an identical bill, A5991, was introduced in the Assembly. (This article refers to both bills collectively as S52.) The Assembly bill has passed the Judiciary, Codes, and Rules committees and, as of August 2019, is now on the floor calendar. If enacted, the bill will amend the New York anti-SLAPP law to significantly broaden its coverage.

Under S52, a SLAPP suit is defined as any suit that is “based upon: (1) any communication in a place open to the public or a public forum in connection with an issue of public concern; or (2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public concern, or in furtherance of the exercise of the constitutional right of petition.”

A Dramatic Expansion

With this new broad language, it will simply no longer matter whether the plaintiff applied for a permit, permission to act, etc., from a government body. Instead, any speech related to any sort of “issue of public concern” will be enough to invoke the anti-SLAPP law’s protections. Significantly, as discussed below, “issue of public concern” is an undefined term that was borrowed from some of the nation’s most expansive anti-SLAPP laws.

And while the new bill keeps the “without a substantial basis in fact and law” language that weakened the effect of the old anti-SLAPP law, S52 clarifies and expands that standard significantly in two important ways. First, it amends the old bill’s language that costs and fees “may be recovered” upon a finding that the claims were “without a substantial basis in fact and law” to “shall be recovered,” thereby eliminating the court’s discretion to decline a fees award. Second, it specifies that an adjudication of dismissal or summary judgment under the anti-SLAPP law’s special procedural mechanisms is itself a demonstration that the claims were “without a substantial basis in fact and law.”

In other words, S52 will likely usher in a sea change with respect to the availability of damages for SLAPP victims. Unlike under the current law, there will no longer be any divergence between the anti-SLAPP law’s mechanism for dismissing SLAPP suits and the higher bar for a court to award legal fees to the SLAPP suit’s defendant, which courts rarely grant. Instead, under S52, a dismissal under the anti-SLAPP law’s special procedural mechanisms—which are generally understood to impose a “heav[ier] burden” for plaintiffs to uphold their claims as compared to ordinary motions to dismiss in non-SLAPP cases (see, e.g., 161 Ludlow Food v. L.E.S. Dwellers, 60 Misc.3d 1221(A) (Sup. Ct., N.Y. Cty. 2018))—will automatically entitle the defendant to legal fees. This will greatly increase the likelihood of courts awarding damages to anti-SLAPP victims.

If S52 is enacted, New York will join other jurisdictions with broad anti-SLAPP statutes, like California, Texas, and the District of Columbia, to name a few. In fact, with S52, New York’s anti-SLAPP law may become even broader than the statutes in these other jurisdictions, in several ways.

First, by leaving the key statutory term “issue of public concern” undefined, S52 may protect a vast range of speech—for example, commercial speech—which other similar statutes expressly carve out. Suppose an e-cigarette company is sued for allegedly false advertising that misleads the public as to the product’s potential health consequences. Nothing in S52’s proposed statutory text would stop the e-cigarette company in that case from invoking the anti-SLAPP law’s protections on the basis that the advertisements at issue are related to public health, a matter of “public concern.” In the District of Columbia, by contrast, the argument would likely fail, because D.C.’s anti-SLAPP law explicitly disclaims protection for this sort of commercial speech. See D.C. Code §16-5505.

Second, S52 imposes no limitation on what kinds of parties may be deemed to have filed a sanctionable SLAPP suit. If the New York Attorney General were to file a consumer protection action against a company based on corporate conduct that may be characterized as speech on an issue of public concern, nothing in S52’s text—which broadly covers “any lawsuit” without any limitation concerning the party who filed it—would stop the company from invoking the anti-SLAPP law’s protections and, if successful in its defense, recovering costs, attorneys’ fees, and damages from the public fisc. California’s anti-SLAPP law, by contrast, explicitly disclaims application to “enforcement action[s] 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.” Cal. Civ. Proc. §425.16(d).

Relatedly, it should be noted that S52 imposes no limitation on who may invoke the anti-SLAPP law’s protections. While anti-SLAPP laws are often viewed through the lens of a tool to be used by the powerless against the powerful, nothing in New York’s current anti-SLAPP statute imposes this requirement. Even so, some New York courts have still refused to apply the existing anti-SLAPP law when there was no power imbalance between the parties. See, e.g., 149 Mercer Owner v. 151 Mercer Retail, 2017 N.Y. Misc. LEXIS 4655, 2017 WL 6047562 (N.Y. Sup. Ct., Dec. 5, 2017) (“Mercer is not the sort of defendant the SLAPP Statute is intended to protect. This dispute is between presumably well-funded commercial entities. This is not a dispute where a citizen activist or civic group, trying to exercise petition and participation rights, is purportedly being harassed by a financially superior opponent by means of baseless complaints and claims.”). The new law may be understood to overturn these cases. When the definition of what constitutes a SLAPP suit is expanded to broadly cover “any communication … in connection with an issue of public concern,” without any limitation concerning who may invoke the law’s protections, the law can be wielded in circumstances far removed from the sorts of “David versus Goliath” scenarios that originally motivated anti-SLAPP laws.

This has occurred in other jurisdictions with broad anti-SLAPP laws. Consider, for example, the recent anti-SLAPP claim by President Donald J. Trump. He tweeted that Stephanie Clifford, aka Stormy Daniels, who had made accusations against him, was “a total con job, playing the Fake News Media for Fools (but they know it)!” Clifford sued Trump for defamation, but he persuaded the court, pursuant to Texas’s anti-SLAPP law, to dismiss the suit and award him hundreds of thousands of dollars in costs, fees, and sanctions. See Clifford v. Trump, 339 F. Supp. 3d 915 (C.D. Cal. 2018); Clifford v. Trump, No. 2:18-CV-06893, 2018 U.S. Dist. LEXIS 211297, 2018 WL 6519029 (C.D. Cal. Dec. 11, 2018). It is difficult to imagine a more powerful figure than the President of the United States, and yet he was permitted to invoke anti-SLAPP protections in this case. The Texas law, almost identically to S52’s proposal for New York, covers any lawsuit related to speech on “a matter of public concern,” which gives an indication on how courts in New York may apply the new law. Tex. Civ. Prac. & Rem. Code §27.001(3).

Conclusion

As seen above, if the legislature’s current proposal for anti-SLAPP reform becomes law, New York’s anti-SLAPP statute will see a dramatic expansion. From a relatively narrow statute that now covers only speech concerning certain applications to the government for licenses or other benefits, S52 would extend the anti-SLAPP law’s reach to nearly any speech that may be characterized as “of public concern.” Under the broad proposed statutory text, the anti-SLAPP law may be invoked by any party against any other party, presumably even in circumstances that other jurisdictions with broad anti-SLAPP laws have carved out of their respective statutes.

With the legislature still considering the bill, the precise shape of anti-SLAPP reform is still yet to be determined. Practitioners should be aware, however, that if reform passes this year, anti-SLAPP law will likely be significantly expanded. The question is how far, and whether this overdue reform may bring unintended consequences.

Derek Borchardt is an associate and Adam P. Cohen is a partner at Walden Macht & Haran. Their practice includes white-collar defense/internal investigations and general commercial litigation, including representing both plaintiffs and defendants in anti-SLAPP claims.