Defending a Westchester County Cooperative, Adam Leitman Bailey, P.C. Prevails in a Defamation Action
A Westchester County cooperative corporation had commenced an action against certain individuals for defamation arising out of libelous statements circulated to homeowners containing defamatory statements accusing Board members of dishonesty and illegal conduct.
The defendants sought to assert a Counterclaim based on Civil Rights Law §§ 70-a and 76-a, and to seek attorneys’ fees and compensatory damages, alleging that the underlying case for defamation, originally filed in 2019, is a continuing SLAPP suit under New York Civ. Rights Law § 76-a, as amended in November 2020 (the “2020 Amendment”). The issue was whether the amended statute should be applied retroactively to this case, which was commenced prior to the effective date of the Amendment but continued after the effective date.
The Court of Appeals in the seminal case on this issue Gottwald v. Sebert, 2023 WL 3959051 (June 13, 2023) held that the 2020 Amendment would not be applied retroactively to cases commenced before the effective date, but that the defendant could seek relief if the case was continued after the effective date.
In January 2024, the Appellate Division, Second Department issued two decisions of material relevance in interpreting the holding in the Gottwald case: VIP Pet Grooming Studio, Inc. v. Sproule, 2024 WL 172927 (App. Div. 2d Dept. January 17, 2024) and Burton v. Porcelain, 2024 WL 253298 (App. Div. 2d Dept. January 24, 2024).
In VIP Pet Grooming Studio, Inc. v. Sproule, the Second Department held that the anti-SLAPP amendments would not be retroactively applied, and therefore defendants were not protected under the prior version of the anti-SLAPP statute. VIP had commenced an action against the Sproules for defamation and related injunctive relief on November 2, 2020. Eight days later, the amendment to the anti-SLAPP statute was enacted, which expanded the scope of the statute. On January 11, 2021, the Sproules moved pursuant to CPLR §3211(a)(7) and (g) to dismiss the Complaint and for an award of attorneys’ fees and costs. The Supreme Court denied the motion. On appeal, the Second Department affirmed and denied the Sproule’s application for attorneys’ fees and costs under Civil Rights Law § 70-a, holding that “only actions within the scope of the former anti-SLAPP statute, if continued after the effective date of the 2020 anti-SLAPP amendments, are subject to the remedial provision of Civil Rights Law §§ 70-a and 76-a, as amended.” The Court went on the explain:
In sum, the broadened definition of public petition and participation under Civil Rights Law § 76-a does not apply retroactively to this action. The complaint, therefore, is governed by the prior statutory definition of public petition and participation, which was limited, at the time of this action’s commencement, to matters involving only public applicants and permittees, and did not apply to a broader universe of defendants such as the Sproules.
In Burton v. Porcelain the plaintiff sought to recover damages for libel per se and defendant counterclaimed alleging that the action was a SLAPP suit, seeking, among other things, attorneys’ fees, costs and damages pursuant to Civil Rights Law § 70-a. Plaintiff moved to dismiss the counterclaim. The Court below granted the motion but was reversed by the Second Department on appeal. In granting the motion to dismiss the counterclaim, the Appellate Court stated:
While actions within the scope of the former anti-SLAPP statute, if continued after the effective date of the 2020 anti-SLAPP amendments, are subject to the remedial provisions of Civil Rights Law §§70-a and 76-a as amended’ (VIP Pet Grooming Studio, Inc. v. Sproule, A.D.3d, N.Y.S.3d, 2024 N.Y. Slip Op. *6). Here, the evidentiary material submitted by plaintiff in support of her motion demonstrated that this action was not materially related to the defendant’s efforts to report on, comment on, challenge or oppose an application by the plaintiff (citations omitted). Therefore, the plaintiff established that the defendant did not have a viable cause of action alleging a violation of the anti-SLAPP law (see CPLR 3211(a)[7]).
These two recent Second Department decisions clarify that where an action was commenced prior to the effective date of the amended anti-SLAPP statute, and continued thereafter, an anti-SLAPP counterclaim will only apply if the original action fell within the prior definition of public petition and participation. Where the action is not materially related to the defendant’s efforts to report on, comment on, challenge or oppose an application by the plaintiff, it is not within the scope of the former anti-SLAPP statute and not subject to the remedial provisions of the 2020 amendments.