The Second Circuit Court of Appeals has split with the Ninth Circuit Court of Appeals and concluded that California’s statute to avoid strategic lawsuits against public participation (anti-SLAPP) does not apply in federal court. The initial impact of the decision is limited, as it would not have binding effect on California district courts.  This decision could result in the Ninth Circuit reversing its position, however, which would then become a significant consideration for employers deciding whether to remove a claim to federal court, as discrimination and retaliation claims can be the subject of anti-SLAPP motions.

Serving as somewhat of a hybrid motion to dismiss/motion for summary judgment, California’s anti-SLAPP statute provides defendants a procedural device to obtain early dismissal of a plaintiff’s claim that targets conduct implicating the defendant’s constitutional rights of speech and petition. If the defendant proves that the complaint targets such “protected” conduct, then the plaintiff must make a showing sufficient to defeat a motion to dismiss or a motion for summary judgment. If the plaintiff cannot, the claim is dismissed.

Under the law, a defendant can file the motion up to 60 days after the complaint is filed without leave of the court and more than 60 days after with leave of the court. Once the motion is filed, discovery is generally stayed, the plaintiff cannot amend the complaint and, if the motion is granted, the defendant is entitled to attorneys’ fees and costs.

As federal courts presiding over substantive state law issues are required to apply the substantive state law but with federal procedural rules, courts have previously wrestled with the application of California’s anti-SLAPP law in federal court. From relatively early on, the Ninth Circuit concluded that the anti-SLAPP statute generally applies in federal court, but it since has held that aspects of the statute –such as (1) the deadline to file the motion, (2) the prohibition against amending the complaint and (3) the general stay of discovery once the motion is filed – do not apply.

In its decision, the Second Circuit concluded the California anti-SLAPP statute is entirely inapplicable in federal court because it conflicts with the Federal Rules of Civil Procedure governing motions to dismiss and motions for summary judgment. The court reasoned that the anti-SLAPP motion serves the same purpose as a motion to dismiss or a motion for summary judgment under the Federal Rules of Civil Procedure (dismissal of a claim prior to trial), but the anti-SLAPP statute requires the plaintiff to make a showing higher than that required under the federal rules in order for the claim to survive to trial.

The significance of this ruling will depend primarily on its effect on the Ninth Circuit. Several judges on the circuit already have expressed skepticism about the anti-SLAPP statute’s application, and this may be what pushes the Ninth Circuit to overrule its prior conclusion that the statute does apply. If the Ninth Circuit does adopt the Second Circuit’s approach eliminating California’s anti-SLAPP statute, it will present employers with a more difficult decision regarding whether to remove a case to federal court. Federal courts provide employers many benefits, but if the employer has a strong case for dismissing the complaint via an anti-SLAPP motion, it may be best to stay in a California court.