Kent L. And Linda Davis v. Grace Cox ( 2014 )

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
KENT L. and LINDA DAVIS,
JEFFREY and SUSAN TRININ, and DIVISION ONE
SUSAN MAYER, derivatively on behalf
of OLYMPIA FOOD COOPERATIVE No. 71360-4-1
Appellants, PUBLISHED OPINION
v.
GRACE COX, ROCHELLE GAUSE,
ERIN GENIA, T.J. JOHNSON, JAYNE
KASZYNSKI, JACKIE KRZYZEK,
JESSICA LAING, RON LAVIGNE,
HARRY LEVINE, ERIC MAPES,
JOHN NASON, JOHN REGAN, ROB
RICHARDS, SUZANNE SHAFER,
JULIA SOKOLOFF, and JOELLEN
REINECKWILHELM,
Respondents. FILED: April 7, 2014
Dwyer, J. — To determine whether a pleaded cause of action falls within
the ambit of Washington's anti-SLAPP1 statutes, the trial court must decide
whether the claim targets activity involving public participation and petition. To
properly do so, the trial court must focus on the principal thrust or gravamen of
the claim. A consideration of the relief sought by the party asserting the cause of
action can be a determinative factor when resolving this question. Here, the
Washington Act Limiting Strategic Lawsuits Against Public Participation.
No. 71360-4-1/2
plaintiffs' prayer for relief included a request that the court order the defendants
to cease activity protected by the First Amendment. Accordingly, the trial court
correctly ruled that the complaint was subject to an anti-SLAPP motion to strike.2
Because the plaintiffs did not demonstrate a sufficient likelihood of success on
the merits of their claim, as required by the relevant statute, the trial court also
properly granted the defendants' motion to dismiss. Given that these two rulings
were properly made, and because we find no error in the other rulings of the trial
court, we affirm.
I
The Olympia Food Co-op (Co-op) is a nonprofit corporation with over
22,000 members. The Co-op was formed pursuant to the Washington Nonprofit
Corporation Act3 with the express purpose of "contributing] to the health and
well-being of people by providing wholesome foods and other goods and
services, accessible to all, through a locally-oriented, collectively managed, not-
for-profit cooperative organization that relies on consensus decision making."
The Co-op has a long and active history of engagement in social, human rights,
ecology, community welfare, and peace and justice issues. In 1993, the Co-op's
board of directors "adopted" a Boycott Policy that prescribed a procedure by
which the Co-op would recognize product boycotts. The Policy provides, in
pertinent part, as follows:
2 RCW 4.24.525 provides that a party may successfully bring a motion to strikeany claim
so long as the moving party shows by a preponderance ofthe evidence that the claim is based on
an action involving public participation and petition, and so long as the responding party fails to
establish by clear and convincing evidence a probability of prevailing on the claim.
3 Ch. 24.03 RCW.
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BOYCOTT POLICY
Whenever possible, the Olympia Food Co-op will honor nationally
recognized boycotts which are called for reasons that are
compatible with our goals and mission statement.
A request to honor a boycott. . . will be referred ... to determine
which products and departments are affected. . .. The [affected]
department manager will make a written recommendation to the
staff who will decide by consensus whether or not to honor a
boycott.
The department manager will post a sign informing customers of
the staff's decision . . . regarding the boycott. Ifthe staff decides to
honor a boycott, the [Merchandising Coordinator] will notify the
boycotted company or body of our decision... .
In March 2009, a cashier proposed to the staff work group a boycott of
Israeli goods and financial investments. The staff members comprising the
Merchandising Coordination Action team (MCAT) considered the request and
attempted to reach an internal consensus for more than a year. After failing to
reach a consensus, the MCAT reported its failure to the board. In May 2010, the
board instructed the staff to again attempt to achieve full staff consensus. After
this renewed effort failed, the board—at its next meeting in July 2010—by
consensus agreed to support the boycott and adopted a resolution approving a
boycott of Israeli-made products and divestment from Israeli companies. At the
same time, the board invited any dissenting members to put the board's decision
to a vote as provided for by the Co-op's bylaws. The board also posted a
reminder on the Co-op's website informing members that they could compel a
member vote by gathering the requisite number of signatures. No member
pursued this option.
On September 2, 2011, Kent Davis, Linda Davis, Jeffrey Trinin, Susan
No. 71360-4-1/4
Trinin, and Susan Mayer (collectively Members) filed a derivative suit on behalf of
the Co-op against 16 current and former board members (collectively Directors)
in Thurston County Superior Court. Their complaint was filed in the wake of a
failed attempt by 3 Members to be elected to the board, and following a demand
letter sent from the Members to the Directors, wherein the Members stated that if
the boycott was not rescinded, "we will bring legal action against you, and this
process will become considerably more complicated, burdensome, and
expensive than it has been already." In their complaint, the Members alleged
that the Directors acted ultra vires and breached their fiduciary duties. The
Members sought a declaratory judgment that the boycott was void, permanent
injunctive relief preventing its enforcement, and monetary damages from all 16
defendants. The Members also served each defendant with a 13-page discovery
demand and, several weeks later, noticed videotaped depositions of each
defendant.
On November 1, the Directors filed a special motion to strike the
Members' complaint pursuant to RCW 4.24.525—Washington's anti-SLAPP
statute. The anti-SLAPP statute contains a two step process that a trial court
must utilize in ruling on such a motion.
A moving party bringing a special motion to strike a claim under this
subsection has the initial burden of showing by a preponderance of
the evidence that the claim is based on an action involving public
participation and petition. If the moving party meets this burden,
the burden shifts to the responding party to establish by clear and
convincing evidence a probability of prevailing on the claim. If the
responding party meets this burden, the court shall deny the
motion.
RCW 4.24.525(4)(b). The statute defines an "action involving public participation
No. 71360-4-1/5
and petition," in pertinent part, as "[a]ny 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." RCW 4.24.525(2)(e).
The Members opposed the motion and, in response, brought a motion for
discovery, arguing that they were entitled to discovery pursuant to the "good
cause" exception to the automatic discovery stay provision of RCW
4.24.525(5)(c). The Directors opposed the Members' discovery motion. The trial
court heard argument on February 23, 2012 and denied the Members' motion.
The court's basis for denying the request for discovery was twofold: (1) the
request was belated, and (2) it was "broad-ranging" and "not focused."
Subsequently, on February 27, the court granted the Directors' motion to
strike the Members' claims. The court ruled that the Directors had shown by a
preponderance of the evidence that their conduct fit within the statutory category
of "any other lawful conduct in . . . furtherance of the exercise of a 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," and that the
Members had failed to establish by clear and convincing evidence a probability of
prevailing on their claims.
In dismissing the Members' claims, the court rejected their argument that
the board lacked authority to resolve the boycott issue, instead concluding that
the board's authorization in the bylaws to "resolve organizational conflicts after all
other avenues of resolution have been exhausted" gave the board authority to
No. 71360-4-1/6
adopt the boycott. In considering this issue, the court excluded as hearsay the
declarations of two former board members, Tibor Bruer and Susan Trinin, who
asserted that the board, by adopting the Boycott Policy, did not intend to retain
the authority to enact a boycott if the staff failed to reach a consensus. However,
the court did not exclude as hearsay the declaration of Harry Levine, another
former board member, who stated that the board, by adopting the Boycott Policy,
did not intend to relinquish its authority to resolve organizational conflict with
respect to boycotts.
After rejecting the Members' various constitutional challenges to the anti-
SLAPP statute, the trial court ordered the Members to pay a total of $221,846.75
to the various defendants, which included attorney fees and $10,000 in statutory
damages payable to each named defendant, as mandated by the anti-SLAPP
statute. RCW4.24.525(6)(a)(ii).
The Members subsequently sought direct review in the Supreme Court.
The Supreme Court denied direct review and transferred the case to Division
Two, which then transferred the case to us.
II
The Members assign error to the trial court's grant of the Directors' anti-
SLAPP motion. Specifically, the Members argue that the Directors failed to
establish by a preponderance of the evidence that the lawsuit targeted activity
involving public participation and petition and that, even if the Directors did meet
their burden, the Members established by clear and convincing evidence a
No. 71360-4-1/7
probability of prevailing on their claims. We are not persuaded by these
arguments.
"We review the grant or denial of an anti-SLAPP motion de novo." Dillon
v. Seattle Deposition Reporters. LLC. Wn. App. , 316 P.3d 1119, 1133
(2014). "Under the anti-SLAPP statute, a party may bring a special motion to
strike 'any claim that is based on an action involving public participation and
petition.'" Dillon. 316 P.3d at 1132 (quoting RCW4.24.525(4)(a)). The two step
process by which we decide an anti-SLAPP motion is as follows:
In deciding an anti-SLAPP motion, a court must follow a two step
process. A party moving to strike a claim has the initial burden of
showing by a preponderance of the evidence that the claim targets
activity "involving public participation and petition," as defined in
RCW 4.24.525(2). U.S. Mission Corp. v. KIRO TV. Inc.. 172 Wn.
App. 767, 782-83, 292 P.3d 137, review denied. 177 Wash. 2d 1014,
302 P.3d 181 (2013). Ifthe moving party meets this burden, the
burden shifts to the responding party "to establish by clear and
convincing evidence a probability of prevailing on the claim." RCW
4.24.525(4)(b). If the responding party fails to meet its burden, the
court must grant the motion, dismiss the offending claim, and award
the moving party statutory damages of $10,000 in addition to
attorney fees and costs. RCW 4.24.525(6)(a)(i), (ii).
Dillon. 316 P.3d at 1132. "[T]he procedure for deciding anti-SLAPP motions is
similar to that used in deciding a motion for summary judgment." Dillon. 316
P.3d at 1132. Thus, a court ruling on an anti-SLAPP motion "shall consider
pleadings and supporting and opposing affidavits stating the facts upon which the
liability or defense is based." RCW 4.24.525(4)(c). However, "the trial court may
not find facts, but rather must view the facts and all reasonable inferences
therefrom in the light most favorable to the plaintiff." Dillon. 316 P.3d at 1143.
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No. 71360-4-1/8
We first inquire whether the trial court erred by concluding that the
Directors did, in fact, establish by a preponderance of the evidence that the
Members' claims targeted activity "involving public participation and petition."
The Members contend that the Directors failed to meet their burden. This is so,
they assert, because their lawsuit was meant to correct corporate malfeasance,
not to target constitutionally protected speech. We disagree.
The anti-SLAPP statute defines "an action involving public participation
and petition" as follows:
(a) Any oral statement made, or written statement or other
document submitted, in a legislative, executive, or judicial
proceeding or other governmental proceeding authorized by law;
(b) Any oral statement made, or written statement or other
document submitted, in connection with an issue under
consideration or review by a legislative, executive, or judicial
proceeding or other governmental proceeding authorized by law;
(c) Any oral statement made, or written statement or other
document submitted, that is reasonably likely to encourage or to
enlist public participation in an effort to effect consideration or
review of an issue in a legislative, executive, or judicial proceeding
or other governmental proceeding authorized by law;
(d) Any oral statements made, or written statement or other
document submitted, in a place open to the public or a public forum
in connection with an issue of public concern; or
(e) 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.
RCW 4.24.525(2). Recently, we adopted a guiding principle for determining
whether a lawsuit targets constitutionally protected speech.
"[I]t is the principal thrust or gravamen of the plaintiff's cause of
action that determines whether the anti-SLAPP statute applies and
when the allegations referring to arguably protected activity are only
incidental to a cause of action based essentially on nonprotected
No. 71360-4-1/9
activity, collateral allusions to protected activity should not subject
the cause of action to the anti-SLAPP statute."
Dillon. 316 P.3d at 1134 (quoting Martinez v. Metabolite Int'l. Inc.. 113 Cal. App.
4th 181, 188, 6 Cal. Rptr. 3d 494 (Cal. App. 2003)). Moreover, if the plaintiffs'
cause of action "targets conduct that advances and assists" the defendants'
exercise of a protected right, then the cause of action targets the exercise of that
protected right. Greater L.A. Agency on Deafness. Inc. v. Cable News Network,
742 F.3d 414, 423 (9th Cir. 2014) (applying California law).4 Additionally,
"[b]ecause the legislature's intent in adopting RCW 4.24.525 was to address
'lawsuits brought primarily to chill the valid exercise of the constitutional rights of
freedom of speech and petition for the redress of grievances,' this court looks to
First Amendment cases to aid in its interpretation." City of Seattle v. Egan.
Wn. App. _, 317 P.3d 568, 570 (2014) (quoting Laws OF 2010, ch. 118, §1(a)).
In seeking to identify the principal thrust or gravamen of the Members'
claim, it is instructive to look to the remedy sought. One remedy the Members
sought was permanent injunctive relief. In essence, the Members sought to have
the court permanently enjoin the Directors from continuing the boycott. Because
the nonviolent elements of boycotts are protected by the First Amendment,
NAACP v. Claiborne Hardware Co.. 458 U.S. 886, 915, 102 S. Ct. 3409, 73 L.
Ed. 2d 1215 (1982), the Members' desired remedy reveals that the principal
thrust of their suit is to make the Directors cease engaging in activity protected by
4"Washington's anti-SLAPP statute mirrors California's anti-SLAPP statute. Therefore, in
most circumstances, California cases may be considered as persuasive authority when
interpreting RCW 4.24.525." Dillon. 316 P.3d at 1132 n.21.
No. 71360-4-1/10
the First Amendment. This is of great significance in resolving the question
presented.
The Directors assert that the boycott is "an action involving public
participation" because it is "lawful conduct in furtherance of the exercise of the
constitutional right of free speech in connection with an issue of public concern."
RCW 4.24.525(2)(e) (emphasis added). Therefore, we must next determine
whether the boycott is in connection with an issue of public concern. "Speech
deals with matters of public concern when it can 'be fairly considered as relating
to any matter of political, social, or other concern to the community.'" Snyder v.
Phelps. 131 S. Ct. 1207, 1216, 179 L. Ed. 2d 172 (2011) (quoting Connick v.
Myers. 461 U.S. 138, 146, 103 S. Ct. 1684, 75 L. Ed. 2d 708 (1983)). The trial
court, as part of its ruling that the boycott was in connection with an issue of
public concern, observed the following:
Four decades of conflict in the Middle East have accompanied the
issues that surround the purposes behind this proposed Boycott
and Divestment Resolution.. . . And for four decades, the matter
has been a matter of public concern in America and debate about
America's role in resolving that conflict. I don't believe there can be
any dispute about that issue being a matter of public concern.
The trial court correctly ruled that the boycott decision was in connection with an
issue of public concern.
Rather than challenge this aspect of the ruling, the Members assert that
the trial court erred because the Directors' conduct was not "lawful," as required
by RCW 4.24.525(2)(e). In essence, the Members argue that adopting the
boycott was not "lawful" because the board violated the Boycott Policy in doing
so.
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No. 71360-4-1/11
Although we consider whether the Directors' activity was "lawful" under the
first step of the anti-SLAPP motion analysis, our review is limited to determining
whether the activity was illegal as a matter of law. If, as part of our review under
the first step, we accepted the Members' invitation to consider whether the
Directors improperly adopted the boycott, the second step would be rendered
superfluous and the burden of proof would be improperly shifted. Chavez v.
Mendoza. 94 Cal. App. 4th 1083, 1089, 114 Cal. Rptr. 2d 825 (Cal. Dist. Ct. App.
2001) ("[U]nder the statutory scheme, a court must generally presume the validity
of the claimed constitutional right in the first step of the anti-SLAPP analysis, and
then permit the parties to address the issue in the second step of the analysis, if
necessary. Otherwise, the second step would become superfluous in almost
every case, resulting in an improper shifting of the burdens." (citation omitted));
see also Gerbosi v. Gaims. Weil. West & Epstein. LLP. 193 Cal. App. 4th 435,
446, 122 Cal. Rptr. 3d 73 (Cal. Dist. Ct. App. 2011) ("[W]hen a defendant's
assertedly protected activity may or may not be criminal activity, the defendant
may invoke the anti-SLAPP statute unless the activity is criminal as a matter of
law." (second emphasis added)). The Members do not assert that the decision
to boycott Israeli goods was an activity that was illegal as a matter of law.
Rather, they contend that it was a decision made in contravention of the
governing rules of the Co-op. Thus, we conclude that the Directors' adoption of
the boycott was "lawful" under the first step ofthe anti-SLAPP statute.5
The Directors demonstrated that the boycott was constitutionally
5The Directors also assert that the boycott is protected as an act of petition. However,
because the boycott constitutes protected speech activity, we need notaddress whether it is also
protected as an act of petitioning.
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No. 71360-4-1/12
protected, lawful, and in connection with an issue of public concern. The
Members sought a court order requiring the protected activity to stop.
Accordingly, the trial court did not err by concluding that the Directors established
that the Members' claims targeted activity involving public participation and
petition.
B
We next inquire whether the trial court erred by concluding that the
Members failed to establish by clear and convincing evidence a probability of
prevailing on their claims. The Members contend that the trial court erred by
improperly weighing the evidence and by ruling as a matter of law that they did
not meet their burden. Although the trial court did err by improperly weighing the
evidence, its error was harmless. Accordingly, the trial court did not err by ruling
as a matter of law that the Members failed to meet their burden.
The Members assert that the trial court improperly weighed evidence.
This is so, they aver, because the trial court—presented with competing theories
as to whether a nationally recognized boycott existed and as to whether an
organizational conflict existed—improperly weighed the evidence and accepted
the Directors' theories. We agree.
"The role of the trial court in determining whether the plaintiff has met his
or her burden under the second step of the anti-SLAPP motion to dismiss
analysis is akin to the trial court's role in deciding a motion for summary
judgment." Dillon. 316 P.3d at 1142. Thus, "[t]he trial court may not find facts or
make determinations of credibility." Dillon. 316 P.3d at 1142. "Instead, 'the court
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No. 71360-4-1/13
shall consider pleadings and supporting and opposing affidavits stating the
facts.'" Dillon. 316 P.3d at 1142 (quoting RCW4.24.525(4)(c)). "[I]n analyzing
whether the plaintiff has shown, by clear and convincing evidence, a probability
of prevailing on the merits" the trial court "must view the facts and all reasonable
inferences therefrom in the light most favorable to the plaintiff." Dillon. 316 P.3d
at 1143.
The Boycott Policy states that "[wjhenever possible, the Olympia Food Co
op will honor nationally recognized boycotts." The Members argued that
"nationally recognized" is synonymous with "nationally accepted," and offered
evidence indicating that the movement to boycott Israeli products had failed to
gain traction on a national scale. Nevertheless, the trial court accepted the
Directors' theory and ruled that a nationally recognized boycott existed because
"[t]he question of its national scope is not determined by the degree of
acceptance."
Here, the meaning of the Boycott Policy depends on a choice among
reasonable inferences. It is not clear from the Policy whether "nationally
recognized" means that boycotts have been enacted across the nation as the
Members contend, or whether it means that people and organizations are trying
to enact boycotts across the nation, as the Directors contend. Both parties
presented evidence in favor of their interpretations—the Members, evidence that
Israeli boycotts had failed on a national level; the Directors, evidence that
hundreds of member organizations of the U.S. Campaign to end the Israeli
Occupation existed across the country—which required the trial court to choose
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No. 71360-4-1/14
between reasonable inferences. When the trial court drew an inference in favor
of the Directors, it erred.
The parties also offered different theories as to whether a lack of
consensus among the staff created an organizational conflict that the board could
resolve or whether it simply meant that consensus had not been achieved—
constituting a decision in and of itself, given the requirement to reach a
consensus for a decision to be made. Again, in ruling against the Members, the
trial court weighed the evidence, selectively excluded declarations submitted by
the Members (while relying on a declaration submitted by the Directors), and
failed to credit reasonable inferences from the Members' evidence. This was
also error. However, because the Boycott Policy does not bind the board, the
trial court's errors were harmless.
Both parties agree that the board "adopted" the Boycott Policy in 1993, but
neither party explained what effect adopting the Policy had on the board's
authority to manage the corporation. Generally, "[t]he charter of a corporation
and its by-laws are the fundamental documents governing the conduct of
corporate affairs." Liese v. Jupiter Corp.. 241 A.2d 492, 497 (Del. Ch. 1968).
The Co-op's bylaws require the board to "adopt major policy changes," but do not
further mandate that the board comply with adopted policy changes. Moreover,
the Policy does not contain any language that obligates the board to adhere to it
once adopted. Presumably, if the board failed to comply with an adopted policy,
and a sufficient number of members were troubled by that fact, they could
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No. 71360-4-1/15
exercise their right to vote the board members off of the board.6 However,
neither an applicable statute, the articles of incorporation, nor the bylaws compel
the board to comply with adopted policies. Thus, although adopting the Policy
presented an opportunity for staff involvement, the board did not relinquish its
ultimate authority to adopt boycotts pursuant to its general authority to manage
the Co-op.
Indeed, notwithstanding the Co-op's emphasis on consensus decision
making, the bylaws task the board with managing the Co-op.7 By virtue of being
tasked with managing the corporation, the board may avail itself of the business
judgment rule. The business judgment rule cautions against courts substituting
their judgment for that of the board of directors, absent evidence of fraud,
dishonesty, or incompetence. In re Spokane Concrete Prods., Inc.. 126Wn.2d
269, 279, 892 P.2d 98 (1995). The Members did not present any evidence of
fraud, dishonesty, or incompetence by the board. Instead, they argued that the
board lacked the authority to adopt the boycott. However, because we conclude
that the board did have the authority to adopt the boycott, and since no evidence
of fraud, dishonesty, or incompetence was presented, there is no basis for us to
question the board's decision to adopt the boycott.
Nonetheless, the Members point to the board's subsequent efforts to
amend the Boycott Policy as evidence that the board could not simply disregard
6 In fact, several of the appellants ran against several respondent board members in a
subsequent election. However, they were unsuccessful in attempting to oust the respondent
board members.
7Additionally, the Washington Nonprofit Corporation Act makes clear that "[t]he affairs of
a corporation shall be managed by a board of directors." RCW 24.03.095.
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No. 71360-4-1/16
an adopted policy. However, the board's attempt to amend the Policy is open to
any number of explanations, including a desire to avoid the perception that it was
usurping the Co-op's goal of consensus decision-making. Although the Co-op as
an organization—including, in all likelihood, the board members in this lawsuit—
may aspire to consensus decision-making, this aspiration does not imbue the
Boycott Policy with authority equivalent or superior to that of the applicable
statutes, articles of incorporation, or the bylaws.
Ultimately, the Members failed to meet their burden. Although the trial
court based its decision on the board's authority to resolve organizational conflict,
we affirm, instead, on the basis that the Co-op's governing documents provided
the board with the authority to adopt the boycott.8
Ill
In addition to their contention that the trial court committed reversible error
by granting the Directors' anti-SLAPP motion, the Members assert that the trial
8 The Members also assert that the trial court erred by requiring them to meet the "clear
and convincing evidence" standard, rather than the statutorily prescribed "clearand convincing
evidence [of] a probability of prevailing on the claim" standard. The transcript from the February
27, 2012 hearing rebuts this assertion.
Therefore, the analysis shifts to the second prong of the statute, where plaintiffs
must prove by clear and convincing evidence a probability of prevailing on the
claim.
This is a new law, and it is also a new or unique evidence standard.
Clear and convincing evidence of a fact is something that the courts are very
used to dealing with. Clear and convincing evidence of a probability is certainly
more unique than clear and convincing evidence of a fact. Probability, I am
satisfied, relying upon the authorities provided me by the plaintiff, means less
than the preponderance standard. Butthe evidence, to meet that threshold
standard, must be clear and convincing under the law.
Some writers have suggested that the proof standard here is akin to the
summaryjudgment standard under Civil Rule 56. My application of the evidence
burden here is not dissimilar to that.
The trial court clearly applied the correct standard.
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No. 71360-4-1/17
court erred in its evidentiary rulings. Specifically, they argue that the trial court
erred by refusing to consider declarations offered by the Members, in which two
former board members—Trinin and Bruer—opined as to what the board intended
when it adopted the Boycott Policy. We disagree.
"Ordinarily, evidentiary rulings are reviewed for abuse of discretion.
However, '[t]he de novo standard of review is used by an appellate court when
reviewing all trial court rulings made in conjunction with a summary judgment
motion.'" Momah v. Bharti. 144 Wash. App. 731, 749, 182 P.3d 455 (2008)
(alteration in original) (quoting Folsom v. Burger King. 135 Wash. 2d 658, 663, 958
P.2d 301 (1998)). Because "the procedure for deciding anti-SLAPP motions is
similar to that used in deciding a motion for summary judgment," Dillon. 316 P.3d
at 1132, we review de novo the trial court's evidentiary ruling made here in
conjunction with the anti-SLAPP motion.
The Members first assert that because both declarants were members of
the board when it adopted the Boycott Policy, their statements constitute an
admission by the board. An admission by a party opponent does not constitute
hearsay. ER 801(d)(2). However, the Members overlook the requirement that
board members must have speaking authority for ER 801(d)(2) to apply.
When applying ER 801(d)(2), Washington follows the Restatement
(Second) of Agency, § 286 (1958), which requires that an agent
have speaking authority. Codd v. Stevens Pass. Inc.. 45 Wash. App.
393, 404, 725 P.2d 1008 (1986), review denied. 107 Wash. 2d 1020
(1987); Donald B. Murphv Contractors. Inc. v. State. 40 Wash. App.
98, 108-10, 696 P.2d 1270, review denied. 103 Wash. 2d 1039 (1985).
In order to fall under the rule, the declarant must be authorized to
make the particular statement at issue, or statements concerning
the subject matter, on behalf of the party. Lockwood v. A C &S.
Inc.. 109 Wash. 2d 235, 262, 744 P.2d 605 (1987); Barrie v. Hosts of
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No. 71360-4-1/18
Am.. Inc.. 94 Wash. 2d 640, 644, 618 P.2d 96 (1980). When a person
does not have specific express authority to make statements on
behalf of a party, the overall nature of his authority to act for the
party may determine if he is a speaking agent. Lockwood, [109
Wn.2d] at 262.
Passovovv. Nordstrom. Inc.. 52 Wash. App. 166, 169-70, 758 P.2d 524 (1988).
The Members provide no evidence that either declarant was authorized to speak
on behalf of the board. Accordingly, ER 801(d)(2) does not exempt their
testimony from application of the hearsay rules.
The Members next assert that the declarants' testimony does not
constitute hearsay because it was based on personal knowledge. In support of
this assertion, the Members rely on Snohomish County Fire District No. 1 v.
Snohomish County Disability Board, 128 Wash. App. 418, 115P.3d 1057(2005).
There, we affirmed a trial court's decision to admit a board member's affidavit
where the board member testified from personal knowledge. Snohomish County
Fire Dist.. 128 Wash. App. at 422-23 n.1. However, we based our decision on the
fact that the board member's statements "were offered to show the research and
procedure that the Board used in adopting the Rules, not to prove the truth ofthe
substance of the statements." Snohomish County Fire Dist.. 128 Wash. App. at
423 n.1. To the contrary, here, both declarants' testimony was offered to prove
the truth of the matter asserted: namely, that the board intended to relinquish to
the staff its authority to adopt a boycott. Accordingly, the trial court did not err in
excluding the declaration testimony as hearsay.
IV
The Members next contend that the trial court erred by denying their
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No. 71360-4-1/19
discovery motion. As the Members failed to show "good cause" for discovery,
their contention is unavailing.
The automatic discovery stay provision in the anti-SLAPP statute reads
thusly:
All discovery and any pending hearings or motions in the action
shall be stayed upon the filing of a special motion to strike under
subsection (4) of this section. The stay of discovery shall remain in
effect until the entry of the order ruling on the motion.
Notwithstanding the stay imposed by this subsection, the court, on
motion and for good cause shown, may order that specified
discovery or other hearings or motions be conducted.
RCW4.24.525(5)(c).
"Appellate courts ordinarily review discovery rulings for abuse of
discretion." Fellows v. Movnihan. 175 Wash. 2d 641, 649, 285 P.3d 864 (2012).
California courts have applied this familiar standard when reviewing decisions
made pursuant to its anti-SLAPP statute's "good cause" exception to the
automatic discovery stay provision. 1-800 Contacts. Inc. v. Steinberg. 107 Cal.
App. 4th 568, 593, 132 Cal. Rptr. 2d 789 (Cal. Dist. Ct. App. 2003); Sipple v.
Foun. for Nat'l Progress. 71 Cal. App. 4th 226, 247, 83 Cal. Rptr. 2d 677 (Cal.
Dist. Ct. App. 1999). Given this persuasive authority, we review the trial court's
denial of the Members' discovery motion for abuse of discretion.
"A trial court abuses its discretion only when its decision is manifestly
unreasonable or based on untenable grounds." In re Marriage of Fiorito, 112
Wash. App. 657, 663-64, 50 P.3d 298 (2002). "[I]t is based on untenable reasons if
it is based on an incorrect standard or the facts do not meet the requirements of
the correct standard." Fiorito. 112 Wash. App. at 664.
19
No. 71360-4-1/20
California courts have provided guidance in interpreting the meaning of
"good cause" for discovery in the context of their state's anti-SLAPP statute.9
Decisions that have considered what constitutes such a showing of
good cause have described it as a showing "that a defendant or
witness possesses evidence needed by plaintiff to establish a prima
facie case." (Lafayette Morehouser. Inc. v. Chronicle Publ'q Co.],
37 Cal. App. 4th [855,] 868[, 44 Cal. Rptr. 2d 46 (Cal. Dist. Ct. App.
1995)].) The showing should include some explanation of "what
additional facts [plaintiff] expects to uncover.. . ." (Sipple [v.
Found, for Nat'l Progress!. 71 Cal. App. 4th [226,] 247[, 83 Cal.
Rptr. 2d 677 (Cal. Dist. Ct. App. 1999)]; see ajso Nicosia v. De
Rooy. 72 F. Supp. 2d 1093, 1111 [N.D. Cal. 1999].) Only in these
circumstances is the discretion under section 425.16, subdivision
(g) to be "liberally exercise[d]." (Lafayette Morehouse, supra. 37
Cal. App. 4th at p. 868.) Discovery may not be obtained merely to
"test" the opponent's declarations. (Sipple. supra. 71 Cal. App. 4th
at p. 247.)
1-800 Contacts. 107 Cal. App. 4th at 593. Moreover, the "good cause" standard
is similar to Civil Rule (CR) 56(f), which allows a party faced with a summary
judgment motion to seek a continuance to engage in discovery "essential to
justify his opposition." Pursuant to CR 56(f), the nonmoving party must show
"how additional discovery would preclude summary judgment and why a party
cannot immediately provide 'specific facts' demonstrating a genuine issue of
material fact." Hewitt v. Hewitt. 78 Wash. App. 447, 455, 896 P.2d 1312 (1995).
The Members sought to depose two individuals who had submitted
declarations in support of the Directors' special motion to strike and a defendant
who they claimed "has abundant evidence regarding the Board's process,
thinking, purposes, and understandings regarding the Boycott Policy and the
Israel Boycott and Divestment Policies at the time those policies were adopted."
9 Cal. Civ. Proc. Code § 425.16(g).
-20
No. 71360-4-1/21
The Members also sought access to "all documents in possession of each of the
Defendants and the Co-op relating in any way to the Co-op's Boycott Policy and
actions taken related thereto." In explaining why it was necessary to depose
witnesses, the Members stated that it was to "test the veracity of Defendants'
voluminous factual allegations."
Explaining the standard that it was applying, the trial court stated, "I
conclude that in the good-cause exception of the anti-SLAPP statute, the test is
at least as stringent and as narrow as the Civil Rule 56 test." The trial court
explained that the CR 56 test "requires an explanation of what the moving party,
the party seeking additional discovery or time to prepare declarations, expects to
discover and why it's important to the motion." In light of the fact that "the
procedure for deciding anti-SLAPP motions is similar to that used in deciding a
motion for summary judgment," Dillon. 316 P.3d at 1132, we conclude that the
trial court applied the correct legal standard.
The Members did not satisfy this standard. The trial court, in declining to
find "good cause," explained that it was denying the motion for discovery for two
reasons: "First, it comes at the end of the process. . . . Second, the discovery is
not focused." As the trial court correctly concluded, the discovery request was an
expansive request with the stated goal of "test[ing] the veracity of Defendants'
voluminous factual allegations." However, 1-800 Contacts and Sipple preclude
this motivation as a basis for granting relief from the stay. 107 Cal. App. 4th at
593; 71 Cal. App. 4th at 247. Additionally, the Members failed to identify with any
specificity what portion of their request for alldocuments in possession of the
21
No. 71360-4-1/22
directors in connection with the Boycott Policy was needed to establish a prima
facie case. Therefore, the trial court did not err in denying the motion.
V
The Members next challenge the constitutionality of the anti-SLAPP
statute, both on its face and as applied to them. They identify two offending
provisions: (1) the automatic discovery stay, and (2) the requirement that they
establish by clear and convincing evidence a probability of prevailing on their
claims. None of their arguments persuade us that either provision is
unconstitutional.
We review the constitutionality of a statute de novo. Putman v.
Wenatchee Valley Med. Ctr.. 166 Wash. 2d 974, 978, 216 P.3d 374 (2009).
"Statutes are presumed to be constitutional, and '[t]he challenger bears the
burden of showing the statute is unconstitutional beyond a reasonable doubt.'"
Ringhofer v. Ridge. 172 Wash. App. 318, 327, 290 P.3d 163 (2012) (alteration in
original) (quoting City of Bothell v. Barnhart. 172 Wash. 2d 223, 229, 257 P.3d 648
(2011)), review denied. 177 Wash. 2d 1009 (2013). Indeed, we will strike down a
statute only ifwe are "'fully convinced, after a searching legal analysis, that the
statute violates the constitution.'" Sch. Dists.' Alliance for Adeguate Funding of
Special Educ. v. State, 170 Wash. 2d 599, 606, 244 P.3d 1 (2010) (quoting Island
County v. State. 135Wn.2d 141, 147, 955 P.2d 377 (1998)).
A
The Members argue that the mandatory discovery stay is unconstitutional.
They first contend that the mandatory discovery stay violates our separation of
22
No. 71360-4-1/23
powers doctrine. This is so, they assert, because the discovery stay conflicts
with CR 26(c) and, since the anti-SLAPP statute is procedural in nature, the court
rule must prevail. Their contention is unavailing.
Washington's constitution "does not contain a formal separation of powers
clause, but 'the very division of our government into different branches has been
presumed throughout our state's history to give rise to a vital separation of
powers doctrine.'" Putman. 166 Wash. 2d at 980 (internal quotation marks omitted)
(quoting Brown v. Owen. 165 Wash. 2d 706, 718, 206 P.3d 310 (2009)).
Washington courts are "vested with judicial power from article IV of our state
constitution and from the legislature under RCW 2.04.190. The inherent power
of article IV includes the power to govern court procedures." Citv of Fircrest v.
Jensen. 158 Wash. 2d 384, 394, 143 P.3d 776 (2006) (footnote omitted). "When a
court rule and a statute conflict, the court will attempt to harmonize them, giving
effect to both." Jensen. 158 Wash. 2d at 394. However, if a statute and a court rule
"cannot be harmonized, the court rule will prevail in procedural matters and the
statute will prevail in substantive matters." Putman. 166 Wash. 2d at 980.
The Members assert that this automatic discovery stay conflicts with CR
26(c). Specifically, they argue that while CR 26(c) allows a party to seek relief
from the court if requested discovery is onerous or burdensome, RCW
4.24.525(5)(c) takes the opposite approach by staying all discovery unless good
cause is shown. However, the anti-SLAPP statutory requirement that good
cause be shown imposes no greater burden than does CR 56(f), which allows a
party faced with a summary judgment motion to obtain discovery that is
23
No. 71360-4-1/24
"essential to justify his opposition." See Dillon. 316 P.3d at 1142; see also Britts
v. Superior Court. 145 Cal. App. 4th 1112, 1129, 52 Cal. Rptr. 3d 185 (Cal. Dist.
Ct. App. 2006) (holding that California's automatic discovery stay does not violate
separation of powers principles). Given that the automatic discovery stay is no
more burdensome than CR 56(f), a rule applied without constitutional controversy
for many years, the Members have not established that it is unconstitutional.
The Members next argue that the automatic discovery stay violates their
right of access to the courts. However, our recent decision in In re Estate of
Fitzgerald. 172 Wash. App. 437, 294 P.3d 720 (2012), review denied. 177 Wash. 2d
1014 (2013), militates against striking down the automatic discovery stay on this
basis.
"The people have a right of access to courts; indeed, it is 'the bedrock
foundation upon which rest all the people's rights and obligations.'" Putman. 166
Wash. 2d at 979 (quoting John Doe v. Puoet Sound Blood Ctr., 117 Wash. 2d 772,
780, 819 P.2d 370 (1991)). "This right of access to courts 'includes the right of
discovery authorized by the civil rules'" and "'[i]t is common legal knowledge that
extensive discovery is necessary to effectively pursue either a plaintiff's claim or
a defendant's defense.'" Putman. 166 Wash. 2d at 979 (alteration in original)
(quoting John Doe. 117 Wash. 2d at 782). Recently, we explained our Supreme
Court's holding in Putman with regard to access to courts.
In Putman. our Supreme Court considered the constitutionality of a
law requiring a plaintiff in a medical malpractice suit to submit a
"certificate of merit" with the pleadings. 166 Wash. 2d at 982-83. The
court explained that "[t]he certificate of merit requirement
essentially requires plaintiffs to submit evidence supporting their
claims before they even have an opportunity to conduct discovery
24
No. 71360-4-1/25
and obtain such evidence." Putman. 166 Wash. 2d at 983. Noting
that the "right of access to courts 'includes the right of discovery
authorized by the civil rules,'" Putman. 166 Wash. 2d at 979 (quoting
John Doe v. Puget Sound Blood Ctr.. 117 Wash. 2d 772, 780, 819
P.2d 370 (1991)), the court held that the certificate of merit
requirement unconstitutionally limited a litigant's access to the
courts. Putman. 166 Wash. 2d at 985.
Fitzgerald. 172 Wash. App. at 449 n.8. However, we declined to interpret Putman
so broadly as to render unconstitutional any statute that limits discovery.
Unlike the situation in Putman, however, in the context of a
TEDRA[1°] proceeding, no decision disposing of the creditor's claim
is mandated before any discovery can be had. The trial court
retains the discretion to permit discovery—in appropriate
circumstances—before determining whether the creditor's claims
are time-barred. Accordingly, unlike the certificate of merit
requirement in a medical malpractice suit, the TEDRA discovery
rules do not unconstitutionally limit a creditor's access to the courts.
Fitzgerald. 172 Wash. App. at 449-50 n.8.
As in the context of a TEDRA proceeding, trial courts retain the discretion
to permit discovery before ruling on an anti-SLAPP motion. Thus, the non-
movant in an anti-SLAPP motion will not categorically be precluded from
obtaining discovery before the trial court rules on the motion. So long as the
non-movant can show good cause to obtain discovery, the trial court should allow
such discovery. RCW4.24.525(5)(c). Therefore, the discovery stay does not
violate the Members' right of access to the courts.
The Members finally aver that the discovery stay is unconstitutional as
applied here. This is so, they assert, because "[t]he trial court effectively read the
good cause requirement out of the statute by finding the anti-SLAPP Act's
'governing principle . . . [is] to avoid the time and expense of litigation, including
10 Trust and Estate Dispute Resolution Act, ch. 11.96A RCW.
-25
No. 71360-4-1/26
discovery,' and that, as a result, Appellants had to acquire all necessary
information before filing suit." Appellant's Br. at 38. However, as explained
above, the trial court applied the correct legal standard in ruling on the Members'
discovery motion. Their assertion to the contrary, supported by selectively culling
language from the trial court's examination of legislative intent, does not warrant
a grant of appellate relief.
B
The Members also argue that the requirement that they establish by clear
and convincing evidence a probability of prevailing on their claim is
unconstitutional. They first contend that this heightened burden violates
separation of powers principles. This is so, they assert, because the heightened
burden of proof conflicts with CRs 8, 11, 12, 15, and 56. However, because
burdens of proof are substantive, not procedural, the Members are incorrect.
"When a court rule and a statute conflict, the court will attempt to
harmonize them, giving effect to both." Jensen. 158 Wash. 2d at 394. However, if a
statute and a court rule "cannot be harmonized, the court rule will prevail in
procedural matters and the statute will prevail in substantive matters." Putman.
166Wn.2dat980.
"Given its importance to the outcome of cases, we have long held the
burden of proof to be a 'substantive' aspect of a claim." Raleigh v. III. Dep't of
Revenue. 530 U.S. 15, 20-21, 120 S. Ct. 1951, 147 L Ed. 2d 13 (2000).
Even were we to decide that a conflict between the statute and the cited
court rules actually exists, a decision we need not make, the Members would not
26
No. 71360-4-1/27
prevail on their claim that the statute violates the separation of powers. If such
conflicts do exist, the statute must prevail, as burdens of proof are substantive
aspects of a claim. Thus, the heightened burden of proof does not violate
separation of powers principles.
The Members next contend that the heightened burden of proof violates
the right of access to the courts. This is so, they assert, because "it permits
claims to be dismissed with prejudice based on a burden of proof greater than
that the claimant would face at trial, and without the claimant having acquired the
discovery needed to establish its case." Appellant's Br. at 41. This contention is
unavailing.
"It is entirely within the Legislature's power to define parameters of a
cause of action and prescribe factors to take into consideration in determining
liability." Sofie v. Fibreboard Corp.. 112 Wash. 2d 636, 666, 771 P.2d 711, 780 P.2d
260 (1989). "The argument that a state statute stiffens the standard of proof of a
common law claim does not implicate" the right of access to courts. Garcia v.
Wveth-Averst Labs.. 385 F.3d 961, 968 (6th Cir. 2004). The legislature has the
prerogative to impose a heightened burden of proof.11 Its choice to do so here
does not violate the Members' right of access to the courts.
11 Indeed, our legislature has utilized a straightforward "clear and convincing evidence"
burden of proofin other contexts. See RCW 4.24.730(3) (presumption of good faith for
employer's disclosure of employee information rebuttable only on showing of "clearand
convincing evidence"); RCW 5.68.010(2) (journalist work-product may be compelled only if"the
party seeking such news or information" shows its relevance and unavailable alternatives "by
clear and convincing evidence"); RCW 13.34.190(1)(a)(i) ("[T]he court may enter an order
terminating all parental rights to a child only if the court finds ... [t]he allegations contained in the
petition ... are established by clear, cogent, and convincing evidence."). Our courts have also
approved ofthis heightened burden of proof in the defamation context. See Mark v. Seattle
Times, 96 Wash. 2d 473, 487, 635 P.2d 1081 (1981) (requiring "that a defamation plaintiff resisting a
-27-
No. 71360-4-1/28
The Members next contend that the requirement that they establish by
clear and convincing evidence a probability of prevailing on their claims violates
their right to a jury trial. We disagree.
Our recent decision in Dillon explained that the standard of clear and
convincing evidence of a probability of prevailing on the claim is applied by
viewing the evidence in a manner similar to how it is viewed in deciding a
summary judgment motion. Dillon, 316 P.3d at 1142. We concluded that the
summary judgment standard does not offend the constitutional right to a trial by
jury and, therefore, the anti-SLAPP statute also does not offend this right.
The summary judgment standard does not offend the constitutional
right to trial by jury because "it was not the purpose of [article I,
section 21] to render the intervention of a jury mandatory . . . where
no issue of fact was left for submission to, or determination by, the
jury.". . .
Accordingly, the anti-SLAPP statute does not violate the
right to trial by jury where the court utilizes a summary judgment
like standard in deciding the motion to strike.
Dillon. 316 P.3d at 1142 (guoting In re Brandon v. Webb. 23 Wash. 2d 155, 159,
160 P.2d 529 (1945); citing Nexus v. Swift. 785 N.W.2d 771, 782 (Minn. App.
2010)).
The Members next argue that the requirement that they establish by clear
and convincing evidence a probability of prevailing on their claims is
unconstitutionally vague. This is so, they assert, because the standard mixes
two standards of proof, such that there is a significant likelihood that the more
rigorous standard—clear and convincing evidence—will be applied without
defense motion for summary judgment must establish a prima facie case by evidence of
convincing clarity").
28
No. 71360-4-1/29
reference to the more relaxed standard of probability of prevailing on the claim.
We disagree.
"The party challenging a statute's constitutionality on vagueness grounds
has the burden of proving its vagueness beyond a reasonable doubt." Haley v.
Med. Disciplinary Bd.. 117 Wash. 2d 720, 739, 818 P.2d 1062 (1991). "A statute is
void for vagueness if it is framed in terms so vague that persons 'of common
intelligence must necessarily guess at its meaning and differ as to its
application.'" Haley. 117 Wash. 2d at 739 (quoting Connallv v. Gen. Constr. Co..
269 U.S. 385, 391, 46 S. Ct. 126, 70 L. Ed. 322 (1926)). Yet, "[condemned to
the use of words, we can never expect mathematical certainty." Gravned v. City
of Rockford. 408 U.S. 104, 110, 92 S. Ct. 2294, 33 L Ed. 2d 222 (1972).
The Members admit that both the "clear and convincing" standard12 and
the "probability" standard are common standards, but then conclude that the two
together will confound persons of common understanding. This is a non
sequitur. Since both standards are well known, there seems to be little risk that,
when considered together, confusion will abound. The Members have failed to
demonstrate beyond a reasonable doubt that this statutory standard is
unconstitutionally vague.
The last of the Members' constitutional challenges is that the clear and
convincing evidence of a probability of prevailing on the claim standard is
unconstitutional as applied to them. This is so, they assert, because this
12 The United States Supreme Court has provided guidance in applying the convincing
clarity standard: "in ruling on a motion for summary judgment, the judge mustview the evidence
presented through the prism ofthe substantive evidentiary burden." Anderson v. Liberty Lobby,
Inc.. 477 U.S. 242, 254, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
29
No. 71360-4-1/30
statutory standard exceeds the burden of proof that they would face at trial or any
other dispositive motion. However, because—at the motion stage—the trial court
must credit the evidence presented by the plaintiffs, it is not true that the same
quantum of evidence that would prevail at trial might not prevail in opposing the
motion, as feared by the Members. The heightened burden, therefore, was not
unconstitutional as applied to them.
VI
The Members next contend that the trial court erred by awarding $10,000
in statutory damages to each defendant. This is so, they assert, because the suit
was a derivative suit brought against the board, not 16 individuals. We disagree.
RCW 4.24.525(6)(a)(ii) mandates that a moving party who prevails on an
anti-SLAPP motion be awarded ten thousand dollars.
(6)(a) The court shall award to a moving party who prevails,
in part or in whole, on a special motion to strike made under
subsection (4) of this section, without regard to any limits under
state law:
(ii) An amount often thousand dollars, not including the
costs of litigation and attorney fees.
RCW4.24.525(6)(a)(ii).
Recently, we interpreted RCW 4.24.525(6)(a)(ii) and stated, in no
uncertain terms, "all persons who prevail on an anti-SLAPP motion filed on their
behalf are entitled to the statutory damage award." Akrie v. Grant. Wn. App.
, 315 P.3d 567, 571 (2013). In reaching this conclusion, we relied on the
legislature's statement that "'[t]his act shall be applied and construed liberally to
effectuate its general purpose of protecting participants in public controversies
30
No. 71360-4-1/31
from an abusive use of the courts.'" Akrie. 315 P.3d at 571 (quoting Laws of
2010, ch. 118, §3).
In view of our pronouncement in Akrie. we must determine whether all 16
board members prevailed or whether it was only the board of directors as a
single unit that prevailed. Put differently, did the Members sue each director
individually or the board as a single entity? Without citation to authority, the
Members aver that they named the individual members as defendants only
because "court rules and statutes required them to do so." Appellant's Br. at 48.
Additionally, the Members assert, they "made no allegations against any
particular defendant; their complaint focused entirely on the actions of the
Board." Appellant's Br. at 48. Their requested relief once again belies their
position on appeal. Tellingly, the Members' complaint sought monetary damages
from all 16 board members. This fact demonstrates that the Members sued the
16 board members individually, seeking monetary recompense from each. Thus,
when the board members prevailed on the anti-SLAPP motion, they were each
entitled to receive the statutorily-mandated $10,000 award.
The Members, nevertheless, argue that the Directors should not each
receive the statutory damage award, reasoning that—even in the event that the
Members had prevailed in the trial court—the Directors would have been
indemnified by the Co-op as provided for by the bylaws, meaning that they never
faced a serious threat of being held financially responsible. Although the
Members are correct that the bylaws authorize indemnification for directors, they
overlook the requirement that directors must act in good faith and in the interests
31
No. 71360-4-1/32
of the Co-op in order for indemnification to be available. Because the Members
argue at length that the Directors failed, in fact, to act in good faith and in the
interests of the Co-op, their indemnification argument is, at best, disingenuous.
Akrie establishes that each defendant was entitled to the statutory damage
award. There was no error.
VII
The Members next contend that the Co-op, as the real party in interest,
should pay the attorney fees awarded to the Directors by the trial court. In
support of this assertion, they cite to the statutes governing derivative actions for
for-profit and for non-profit entities, RCW 23B.07.40013 and RCW 24.03.040,14
and argue that because neither statute authorizes fees against them as
representative plaintiffs, they conflict with the anti-SLAPP statute.
"We review the legal basis for an award of attorney fees de novo and the
reasonableness of the amount of an award for abuse of discretion." Hulbert v.
Port of Everett. 159 Wash. App. 389, 407, 245 P.3d 779 (2011).
Without deciding whether the anti-SLAPP statute does, in fact, conflict
with these derivative action statutes, we conclude that the legislature's intent in
mandating an award of litigation costs and attorney fees to the prevailing party
was clearly expressed by the plain language of the statute: "The court shall
award to a moving party who prevails . . . without regard to any limits understate
law. . . [c]osts of litigation and any reasonable attorneys' fees incurred in
13 Under the for-profit statute, a court may award fees against an unsuccessful
representative plaintiff only if the court finds that there was no "reasonable cause" forthe
proceeding. RCW 23B.07.400(4).
14 The non-profit statute does not expressly authorize an award of fees. RCW 24.03.040.
-32-
No. 71360-4-1/33
connection with each motion on which the moving party prevailed." RCW
4.24.525(6)(a)(i) (emphasis added). Accordingly, even if a conflict existed, the
anti-SLAPP statute would control. Therefore, the trial court did not err by
assigning the liability for financial recompense to the Members.15
VIII
The Directors request their attorney fees on appeal. "The court shall
award to a moving party who prevails, in part or in whole . . . [c]osts of litigation
and any reasonable attorneys' fees incurred in connection with each motion on
which the moving party prevailed." RCW4.24.525(6)(a)(i). Additionally, "where
a prevailing party is entitled to attorney fees below, they are entitled to attorney
fees if they prevail on appeal." Sharbono v. Universal Underwriters Ins. Co.. 139
Wash. App. 383, 423, 161 P.3d 406 (2007). Thus, the Directors' request is well
taken. Upon compliance with RAP 18.1, a commissioner of this court will enter
an appropriate order.
Affirmed.
We concur:
15 The Members, in passing, also assert that the representative nature of their presence
in this lawsuit requires the Co-op, and not them, to be held liable for the statutory damages
award. However, because the Members fail to supportthis assertion with citation to legal
authority, we do not consider it. See Cowiche Canyon Conservancy v. Boslev, 118 Wash. 2d 801,
809, 828 P.2d 549 (1992).
33