Graham-Sult v. Clainos
756 F.3d 724 (2013)
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Rule of Law:
Conduct undertaken after a judicial body has issued its final order is not an 'act in furtherance of the person’s right of petition' and is therefore not protected activity under California's anti-SLAPP statute, even if the conduct relates to the subject matter of the prior judicial proceeding.
Facts:
- Famed rock promoter Bill Graham died in 1991, leaving a will that appointed his friend Nicholas Clainos as executor of his estate and trustee for trusts created for his two sons, Alexander Graham-Suit and David Graham.
- At the time of his death, Graham personally held copyrights to hundreds of concert posters and the trademark for 'The Fillmore'.
- During the estate's administration, Clainos, with counsel from his attorney Richard Greene, determined that this intellectual property belonged to Graham's company, Bill Graham Enterprises (BGE), not to the estate directly.
- In 1994, the BGE shares were distributed from the estate to the beneficiaries, including Graham's sons, who then sold their shares to a new entity, Bill Graham Presents (BGP), in a transaction that gave Clainos a 13% stake.
- On August 8, 1995, the probate court entered its final order of distribution for Graham's estate.
- Three weeks later, on August 31, 1995, Clainos executed an 'Assignment' prepared by Greene's law firm which transferred Graham's personally-held intellectual property to BGE. The document was backdated to August 1, 1995.
- Through a series of corporate sales, the intellectual property and other archival materials were eventually acquired by William Sagan and his companies (the 'BGA Defendants').
- In 2009, Graham's sons discovered the backdated Assignment, prompting an investigation that revealed the extent of their father's personal intellectual property holdings, leading them to believe assets were wrongfully diverted from their inheritance.
Procedural Posture:
- Alexander Graham-Suit and David Graham (Plaintiffs) filed a lawsuit in the United States District Court against Nicholas Clainos, the Greene Defendants, and the BGA Defendants, alleging various torts including breach of fiduciary duty and conversion.
- Defendants Clainos and the Greene Defendants filed a special motion to strike the claims against them under California's anti-SLAPP statute.
- The BGA Defendants filed a motion to dismiss for failure to state a claim.
- The district court granted the anti-SLAPP motion in its entirety, striking all claims against Clainos and the Greene Defendants.
- The district court also granted the BGA Defendants' motion to dismiss all claims against them.
- The district court subsequently awarded attorney's fees to all prevailing defendants.
- The Plaintiffs, as appellants, appealed the district court's rulings on the motion to strike, the motion to dismiss, and the awards of attorney's fees to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does an estate executor's conduct, such as executing and backdating a property assignment after a probate court has entered its final order of distribution, constitute a protected activity 'in connection with an issue under consideration or review by a... judicial body' under California's anti-SLAPP statute?
Opinions:
Majority - N.R. Smith, Circuit Judge
No, an executor's conduct after a probate court's final order is not protected activity under California's anti-SLAPP statute. The court applies a two-step analysis to the anti-SLAPP motion. First, the defendant must show the plaintiff's claim arises from protected activity. Second, if that burden is met, the plaintiff must show a probability of prevailing on the merits. Here, the claims for conversion and unjust enrichment against Clainos are not subject to the anti-SLAPP statute because they are based on conduct—executing the Assignment—that occurred after the probate court issued its final order on August 8, 1995. At that point, the distribution of assets was no longer an 'issue under consideration or review' by the court. Therefore, this conduct was not protected petitioning activity. Other claims, such as breach of fiduciary duty, were 'mixed' because they were based on both protected communications during the probate and unprotected post-order conduct. For the claims that did arise from protected activity, the court found that while the litigation privilege barred claims based on statements made during the probate proceeding, defenses like the statute of limitations and res judicata did not defeat all claims. The statute of limitations was tolled because of the fiduciary relationship between Clainos and the sons, who were entitled to rely on his representations. The res judicata effect of the probate order was overcome by allegations of extrinsic fraud (concealment of assets).
Analysis:
This decision significantly clarifies the temporal boundaries of California's anti-SLAPP protection for litigation-related conduct. By holding that the statute's shield does not extend to actions taken after a court has issued a final order, the ruling prevents the statute from being used to immunize potentially wrongful, extra-judicial acts merely because they relate to the subject of a prior lawsuit. This is particularly important in fiduciary contexts, like estate administration, as it ensures that executors cannot use the anti-SLAPP law to block claims of self-dealing or conversion that occur after court oversight has concluded. The case sets a precedent that the phrase 'in connection with an issue under consideration' requires the issue to be actively or imminently before a judicial body, not just historically related to one.
