January 21, 2009

A relatively new statute exists under Illinois law that all businesses should be aware of going forward. Known as the Citizen Participation Act (CPA), it is commonly referred to as an anti-SLAPP statute. SLAPPs, or "strategic lawsuits against public participation," are filed to discourage individuals from speaking out or otherwise communicating with government in opposition to the interests of the plaintiff—most often a corporate entity.

As an example, assume that ABC Development Company intends to build and develop an eight-story senior citizen center in the town of Suburbia. A group of residents oppose the project, purportedly because of its location. The citizens band together and begin to work against the project by creating literature that identifies supposed problems with the development and by attending public meetings to lobby against it. Angered by this conduct, ABC Development Company believes that certain statements being made by the group are not accurate and wants to sue the citizens for defamation in order to stop their actions. Before doing so, ABC Development Company needs to give serious consideration to the Citizen Participation Act.

A Defendant-Friendly Statute

In essence, the CPA is intended to provide immunity from liability for any acts made "in furtherance of the constitutional rights to petition, speech, association and participation in government." Importantly, the acts are immunized "regardless of intent or purpose," except when they are not "genuinely aimed at procuring favorable government action, result or outcome." Therefore, even if ABC Development Company believed that one of the individuals involved in the group had a financial incentive to see the development fail, that would not negate the applicability of the act.

If ABC Development Company were to file a defamation suit against the group, and the group asserted that the lawsuit is a SLAPP, the CPA would come into play and trigger procedural rules that are not otherwise known in Illinois law. For example, the trial court would be required to hold a hearing and render a decision on the applicability of the act within 90 days after the plaintiff was served with notice of the motion asserting that the lawsuit is a SLAPP. During that 90-day period, no discovery could be taken, with limited exception.

Further, the circuit court would be required to grant the motion and dismiss the lawsuit unless the plaintiff produced "clear and convincing evidence that the acts of the moving party are not immunized from, or are not in furtherance of acts immunized from liability" by the CPA. In other words, the burden essentially shifts at the earliest stage of the litigation to the plaintiff to produce clear and convincing evidence that the defendants' actions in lobbying against the project are not immunized under the CPA. Therefore, ABC Development Company would have to produce evidence that the citizens' acts were not genuinely aimed at procuring favorable government action. This is a very difficult standard to meet, particularly if the evidence must be produced without the benefit of discovery.

Even if ABC Development Company produced such evidence and survived the motion to dismiss, the defendants would still have a right to seek immediate review by the appellate court. Although ordinarily the appellate court could not be asked to review the denial of a motion to dismiss until after the conclusion of the entire litigation, the CPA permits an immediate appeal. The act also directs the appellate court to expedite the appeal in order for the defendants to obtain a review of the trial court's decision as expeditiously as possible.

Clearly, the provisions of the CPA are intended to favor the defendant. This is also evident in the attorneys' fee provision of the act. Specifically, the CPA contains a mandatory provision requiring that attorneys' fees and costs be awarded to a defendant that prevails on a motion brought pursuant to the act. If the defendant is required to obtain an order from the appellate court finding that the CPA applies, the defendant would likely seek recovery of all attorneys' fees and costs associated with the proceedings in both the trial court and the appellate court. In our example, this could result in a significant payment by ABC Development Company to the citizens group if it is determined that their conduct was immunized under the act.

The CPA can be a great tool for an individual being forced to defend against a SLAPP. Unfortunately for businesses, it can also create liability for an entity that files a defamation action. If a trial court finds that the act applies to the case at hand, the plaintiff is required to pay the defendants' attorneys' fees and costs. Accordingly, whether you are contemplating filing a defamation action, or faced with being a defendant in a defamation suit, it is wise to consider the CPA and consult with your attorney to determine its applicability.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.