The location of several National Football League franchises have been in flux for years, with teams such as the Chargers, Raiders, and Rams seeking modern, amenity-laden stadiums they have been unable to attain in their current locations. Although earlier this year the NFL approved the relocation of the Rams from St. Louis to Inglewood, the repercussions of the league’s decision to bypass Carson in favor of Inglewood continue to play out.
On May 31, 2016, in Rand Resources, LLC v. City of Carson, __ Cal.App.4th __ (2016) (Case No. B264493), the Court of Appeal for the Second Appellate District rejected Carson’s attempt to use California’s anti-SLAPP statute to defend a breach of contract claim. Carson had wanted to develop a new sports and entertainment complex, including a football stadium, to attract one, or even two, NFL franchises to the community. To advance that goal, the City entered into an exclusive agreement with Richard Rand and several entities to serve as the City’s exclusive agent in coordinating and negotiating with the NFL.
Rand’s relationship with the City soured early, however, when he refused to pay a bribe to the then-mayor and sued and prevailed in federal court for civil rights violations. The City appealed and Rand cross-appealed on the issue of damages. Following settlement of the federal court action, the City stopped complying with the exclusive agreement and allowed other entities to serve as its agent and representative. Rand then sued the City on various grounds, including breach of contract. The City responded by filing an anti-SLAPP motion under Code of Civil Procedure section 425.16.
The legislature adopted the anti-SLAPP statute to address civil lawsuits filed to prevent citizens from exercising their political rights or punishing those who have done so. Such suits–known as strategic lawsuits against public participation (“SLAPP”)—masquerade as ordinary lawsuits, including defamation and interference with prospective economic advantage, but they are generally meritless suits brought primarily to chill the exercise of free speech or petition rights by threatening economic sanctions against the defendant.
To address the problems associated with SLAPP suits, the anti-SLAPP statute provides for a special motion to strike that allows defendants to expedite the early dismissal of meritless claims. The motion involves a two-step process. First, the defendant must show that the plaintiff’s claim arises from something the defendant did to advance the defendant’s right of free speech or petition in connection with a public issue. If the defendant makes this showing, the court must then consider whether the plaintiff has shown a probability of prevailing on the claim.
Rand’s suit alleged, among other things, that the City breached the exclusive agreement by failing to keep its promise to make Rand the City’s exclusive agent and allowing other entities to represent the City and negotiate on its behalf to bring an NFL team and stadium to the community. The City filed an anti-SLAPP motion to strike, alleging that the proposed real estate development, including an NFL stadium, is necessarily a matter of public interest. The trial court agreed with the City and granted the motion.
On appeal, the court focused on whether the matter was a public issue or matter of public interest, rather than an issue or matter of mere private interest. The court rejected the City’s argument the desired development itself, including NFL stadium, is a matter of public interest. Instead, the court agreed with Rand that the focus of the complaint was the City’s breach of the exclusive agreement and the other parties’ interference with that contract, neither of which was an act taken in furtherance of the City’s constitutional right of free speech or petition. In other words, Rand’s breach of contract claim was not premised on protected free speech or the right to petition for redress of grievances but upon the City’s conduct in carrying out, or failing to carry out, its contract with Rand.
According to the court,
“While having an NFL team, stadium, and associated developments in Carson is no doubt a matter of substantial public interest, plaintiffs’ complaint does not concern speech or conduct regarding a large scale real estate development or bringing an NFL team to Carson and building it a stadium. It instead concerns the identity of the person(s) reaching out to the NFL and its teams’ owners to curry interest in relocating to Carson. The identity of the City’s representative is not a matter of public interest.”
Rand Resources thus underscores the requirement for anti-SLAPP suits to focus on speech or conduct that is a matter of “public interest.” As the court of appeal aptly noted, issues of public interest must “go beyond the parochial particulars of the given parties.” Thus, even when a governmental entity seeks to accomplish something as high profile as landing a professional sports franchise and building a new stadium, the public is typically not interested in the details of how that objective is achieved.
Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.
For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.