PACIFIC LEGAL FOUNDATION

January 24,2012

Honorable Tani Cantil-Sakauye, Chief Justice, and Honorable Associate Justices Supreme Court of California 350 McAllister Street, Room 1295 San Francisco, CA 94102 Re: Vargas v. City of Salinas, No. S198996 Dear Chief Justice Cantil-Sakauye and Associate Justices: Pacific Legal Foundation (PLF) is a nonprofit legal foundation founded in 1973 for the purpose of litigating matters affecting the public interest in property rights, limited government, individual rights, free enterprise, and environmental regulation in courts across the country. PLF has experience with the issues raised in this case, having participated as an amicus curiae in Vargas v. City of Salinas, 46 Cal. 4th 1 (2009) (Vargas I), and Equilon Enterprises, L.L. C. v. Consumer Cause, Inc., 29 Cal. 4th 53 (2002). And PLF' s experience as a public interest legal foundation will provide this Court with a valuable and unique perspective on the issues raised in the Petition for Review filed by Angelina Vargas and Mark Dierolf (Vargas). The Petition for Review asks whether a nonfrivolous petition to government for redress of grievances is entitled to constitutional protection under the First Amendment, such that an exorbitant award of attorneys fees to the government defendant imposes an unlawful burden upon the petition rights of a citizen challenging a government policy. PLF supports Vargas' Petition because the case raises an important question of constitutional law which, if left unreviewed, could have a significant and chilling effect on the First Amendment rights of California's citizens, in general, and the practice of public interest law, in particular. This Court should grant review to settle the important questions of public policy and law raised by the Petition. See Cal. R. Ct. 8.500(b)(1). Public interest lawyers rely on the Petition Clause of the First Amendment of the United States Constitution, which guarantees that every citizen shall have the right to litigate cases that advance

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Honorable Tani Cantil-Sakauye, Chief Justice, and Honorable Associate.Justices January 24,2012 Page 2

the law on matters of public importance without fear of government retribution. 1 Cal. Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508,510 (1972) ("The right of access tothe courts is indeed but one aspect of the right of petition."). In a recent Petition Clause case, the U.S. Supreme Court recognized the vital role that public interest lawsuits play in the development of our legal and cultural institutions. Borough of Duryea v. Guarnieri,564 US. _, 131 S. Ct. 2488, 2498-2500 (2011). Public interest litigation "seek[ s] to advance political, social, or other ideas of interest to the community as a whole." Id. at 2498. Indeed, public interest petitions have been central to many milestones in American history. For example, petitions played a central role in the effort to abolish slavery in the years preceding the Civil War. Id. at 2499-2500. Petitions also played an important role in the early women's suffrage movement. Id. And, "[i]n the context of the civil rights movement, litigation provided a means for 'the distinctive contribution of a minority group to the ideas and beliefs of our society.'" Id. at2500 (quoting 'MCP v. Button, 371 U.S. 415, 431 (1963)). Public interest litigation also provides a vehicle for i dividuals to engage in '''effective political expression and association, as well as a means of co unicating useful information to the public. '" Id. (quoting In re Primus, 436 U.S. 412,431 (1978)). Public interest litigation, however, can only flourish were courts safeguard the liberties guaranteed by the First Amendment. See United Mine Workers V'Jl. State Bar Ass 'n, 389 US. 217,222 (1967) (The right to petition is one of "the most precious of the liberties safeguarded by the Bill of Rights."); City of Long Beach v. Bozek, 31 Cal. 3d 527, 532 (1982) (The right to petition "is accorded 'a paramount and preferred place in our de ocratic system. "') (citation omitted). If the government is allowed to punish litigants for filing good faith lawsuits, public interest lawsuits-and the benefits that society accrues therefrom-will be heatly reduced or eliminated. Borough of Duryea, 131 S. Ct. at 2500.
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Often, public interest lawyers file lawsuits seeking a Jrecedential ruling that establishes, clarifies, limits, expands, or changes the law. This, howevkr, means that public interest litigants are vulnerable to dispositive motions at the trial court levJl. See Cal. Teachers Ass 'n v. State, 20 Cal. 4th 327, 345 (1999) ("[I]t is impossible to predict the outcome of a colorable challenge to dismissal or suspension."). And that is precisely what happened in the underlying case. Vargas' lawsuit, which challenged the City of Salinas' expenditure of bub lie funds on campaign related materials,
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U.S. Const. amend. 1 ("Congress shall make no law" abridging the "right of the people ... to petition the Government for a redress of grievances"). The Petition Clause is incorporated against the states via the Fourteenth Amendment. Gitlow v. New York, 268 US. 652 (1925).
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Honorable Tam Cantil-Sakauye, Chief Justice, and Honorable Associate Justices January 24,2012 Page 3

was brought in good faith to litigate a matter of broad public interest. 2 The trial court dismissed her lawsuit on an anti-SLAPP motion to strike and the court of appeals affirmed. In doing so, however, both courts adopted an incorrect legal standard. Vargas I, 46 Cal. 4th at 34-40. This Court reversed the court of appeals, agreeing with Vargas on the correct legal standard and explaining that the lower court's decision would allow government to circumvent the law proscribing expenditure of public funds on political matters. Id at 20-34. Having corrected the legal test, this Court took an additional 7 pages of analysis to apply the facts of the case to the correct legal test which resulted in a decision affirming the trial court's order of dismissal on different grounds. Id at 34-40. The results in Vargas' case are not unusual for a public interest case; such lawsuits are frequently unsuccessful before the lower courts, only to set new and important precedent before the Supreme Court. What is unusual about this case is that, regardless of her partial success, the trial court ordered Vargas to pay an outrageous and punitive attorney fee award of $226,928 simply because Vargas had lost on a dispositive motion filed under the State's anti -SLAPP statute.' Vargas v. City of Salinas, 200 Cal. App. 1331, 1338 (2011) (Vargas II); Hilton v. Hallmark Cards, 599 F.3d 894, 899 n.1 (9th Cir. 2010) (The fee shifting provision of the anti-SLAPP statute is intended to punish baseless lawsuits that are filed for the purpose of chilling someone from exercising his or her First Amendment right to speak on a matter of public interest.). The exorbitant fee award in this case raises a significant question under the First Amendment. Vargas' lawsuit unquestionably falls within the protections of the First Amendment. See City of Long Beach v. Bozek, 31 Cal. 3d 527,534 (1982) ("[T]he act of filing suit against a governmental entity represents an exercise of the right of petition and thus invokes constitutional protection."). And the First Amendment prohibits the government from punishing a person for having exercised his or her right to petition. See Gable v. Lewis, 201 F.3d 769, 772 (6th Cir. 2000) (Government retaliation for the act of filing a petition "violates the literal language of the Petition Clause."). So why didn't the court of appeals reverse the fee award? The answer to this question demonstrates why this Court's review is necessary.

2 The importance of the legal issues raised by Vargas' lawsuit is demonstrated by the large number of amicus curiae briefs filed in support of and in opposition to her arguments. Vargas I, 46 Cal. 4th at 6-7.

The outrageous size of the attorney fee award alone warrants review because it eclipses other antiSLAPP awards, which typically range from $15,000 to $40,000. See Kathryn W. Tate, California's Anti-SLAP P Legislation: A Summary of and Commentary on Its Operation and Scope, 33 Loy. L.A. L. Rev. 801, 845 (2000) (reviewing published appellate opinions and the Judicial Council of California's Legislative Report: Special Motions to Strike Strategic Lawsuits against Public Participation (1999)).
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Honorable Tani Cantil-Sakauye, Chief Justice, and Honorable Associate Justices January 24,2012 Page 4

The court of appeals held that a lawsuit that is dismissed under an anti-SLAPP motion to strike is not protected by the First Amendment. Vargas II, 200 Cal. App. at 1342-43. To reach this conclusion, the court of appeals equated Vargas having lost on a dispositive motion with the type of baseless and frivolous litigation that is typically not afforded protection under the First Amendment. Id.; see also Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 743 (1983) (The Petition Clause does not protect those who file lawsuits "based on intentional falsehoods or on knowingly frivolous claims."); Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60-61 (1993) (The First Amendment does not protect "objectively baseless" litigation aimed at interfering with another person's rights.). The court's reasoning is oversimplified and incorrect. The decision below overlooks U.S. Supreme Court precedent holding that the First Amendment's protections are not limited to "successful petitioning." BE & K Constr. Co. v. NLRB, 536 U.S. 516, 532 (2002). The First Amendment protects the right to petition "whenever it is genuine, not simply when it triumphs" because "even unsuccessful but reasonably based suits advance some First Amendment interests." Id. The U.S. Supreme Court explained: Like successful suits, unsuccessful suits allow the "public airing of disputed facts," and raise matters of public concern. They also promote the evolution of the law by supporting the development of legal theories that may not gain acceptance the first time around. Moreover, the ability to lawfully prosecute even unsuccessful suits adds legitimacy to the court system as a designated alternative to force. Id. (citation omitted). Thus, "except in the most extreme circumstances[,] citizens cannot be punished for exercising this right 'without violating those fundamental principles of liberty and justice which lie at the base of all civil and political institutions." McDonald v. Smith, 472 U.S. 479,486 (1985) (Brennan, J., concurring) (citation omitted). The court of appeals' decision to group non-frivolous, good-faith lawsuits (protected by the First Amendment) into the same category as objectively baseless litigation (not protected by the First Amendment) conflicts with the above-cited decisions from the U.S. Supreme Court and warrants review. The protections provided by the First Amendment are of particular importance to public interest practitioners in California. Unlike the vast majority of private lawsuits, public interest lawsuits against the government frequently involve statements made by government officials during-or related to-legislative, executive, or judicial proceedings. In California, such lawsuits will often raise the possibility of fee-shifting under the anti-SLAPP statute. See, e.g., Mission Oaks Ranch v. County of Santa Barbara, 65 Cal. App. 4th 713,729 (1998) (awarding anti-SLAPP fees in a lawsuit challenging denial of a land use permit after fmding that the environmental impact report that served as the basis for permit denial constituted a public statement within anti-SLAPP statute), overruled

Honorable Tani Cantil-Sakauye, Chief Justice, and Honorable Associate Justices January 24,2012 Page 5

on other grounds by Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106 (1999)). Prior to Vargas II, public interest lawyers could rely on the U.S. Supreme Court precedent holding that the First Amendment protects good faith litigation from punitive measures like the anti -SLAPP fee provision. But the decision below calls the scope of those constitutional protections into question. Vargas 11,200 Cal. App. at 1342-43. If left unreviewed, the court of appeals' decision will expose public interest litigation to outrageous and punitive attorney fee awards, and could operate to foreclose litigation as a realistic means for under-represented citizens to exercise their First Amendment liberties. PLF, therefore, urges this Court to grant review of Vargas' petition to determine whether the trial court's exorbitant award of attorneys' fees constituted an unconstitutional burden on the right to petition. The anti-SLAPP statute is intended to deter baseless lawsuits that are filed for the purpose of stifling another citizen's right to speak on matters of public significance. That policy was not served in this case. Vargas' lawsuit raised meritorious and good-faith arguments that resulted in a Supreme Court decision setting the proper legal test for determining whether a public expenditure of money constitutes an unlawful campaign expenditure. Ironically, it was the court of appeals' decision-not Vargas' lawsuit-that carries with it the greatest risk of chilling the exercise of First Amendment rights. This Court should grant review to address the important policy and legal questions raised in Vargas' petition. Respectfully submitted, DEBORAH J. LA FETRA, No. 148875 BRIAN T. HODGES, Of Counsel

Attorneys for Amicus Curiae Pacific Legal Foundation

DECLARATION OF SERVICE BY MAIL I, Tawnda Elling, declare as follows: I am a resident of the State of California, residing or employed in Sacramento, California. I am over the age of 18 years and am not a party to the above-entitled action. My business address is 930 G Street, Sacramento, California 95834. On January 24, 2012, true copies of PACIFIC LEGAL

FOUNDATION'S

AMICUS CURlAE LETTER BRIEF IN SUPPORT OF

THE PETITION FOR REVIEW were placed in envelopes addressed to: Steven J. Andre Attorney at Law 26415 Carmel Rancho Boulevard, Suite A Carmel, CA 93923 Counsel for Plaintiff and Appellant Angelina Morfin Vargas Joel Franklin Law Offices of Joel Franklin 2100 Garden Road, Suite G Monterey, CA 93940-5393 Counsel for Defendant and Respondent City of Salinas and David Mora Vanessa W. Vallarta City Attorney City of Salinas 200 Lincoln Avenue Salinas, CA 93901 Counsel for Defendant and Respondent City of Salinas

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Court Clerk Monterey County Superior Court 240 Church Street Salinas, CA 93901 Court Clerk California Court of Appeal Sixth Appellate District 333 West Santa Clara Street, Suite 1060 San Jose, CA 95113 which envelopes, with postage thereon fully prepaid, were then sealed and deposited in a mailbox regularly maintained by the United States Postal Service in Sacramento, California. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed this 24th day of January, 2012, at Sacramento, California.

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