In an action for defamation, when will attorney fees be recoverable by a defendant against a plaintiff under New York anti-SLAPP laws?

In 1992, New York enacted anti-SLAPP legislation “aimed at broadening the protection of citizens facing litigation arising from their public petition and participation.” Mable Assets, LLC v. Rachmanov, No. 2018-04592, 2021 WL 1112893, at *1 (N.Y.App.Div., 2d Dep't, Mar. 24, 2021) (citing L. 1992, ch. 767, § 1). SLAPP lawsuits “are characterized as having little legal merit but are filed nonetheless to burden opponents with legal defense costs and the threat of liability and to discourage those who might wish to speak out in the future.” Id.

In November 10, 2020, the New York Legislature amended New York's Civil Rights Law and the New York Civil Practice Law and Rules to broaden the scope of the law and provide greater protections to defendants facing SLAPP suits.^[3] See N.Y. Civil Rights Law §§ 70-a & 76-a; N.Y. C.P.L.R. 3211(g) & 3212(h). Among other things, the amendments expanded the definition of an “action involving public petition and participation, ” to include a claim based upon:

(1) any communication in a place open to the public or a public forum in connection with an issue of public interest; or (2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition.
N.Y. Civil Rights Law § 76-a(1)(a). The law also states that the term “public interest” is to “be construed broadly, and shall mean any subject other than a purely private matter.” Id. § 76-a(1)(d).

The present case clearly falls within the scope of the newly amended anti-SLAPP law. Twitter and Rewire News - where the Challenged Statements were published - are both open to the public. Both statements were made in connection with civil and criminal actions against Daleiden, Merritt, and CMP, which are issues of public interest.

In New York state courts, once a claim or action is determined to be one covered by Section 76-a, Civil Rights Law § 70-a also applies. Section 70-a provides,

A defendant in an action involving public petition and participation, as defined in [Section 76-a], may maintain an action, claim, cross claim or counterclaim to recover damages, including costs and attorney's fees, from any person who commenced or continued such action; provided that[] (a) costs and attorney's fees shall be recovered upon a demonstration . . . that the action involving public petition and participation was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for the extension, modification or reversal of existing law[.]

N.Y. Civil Rights Law §§ 70-a(1). Unlike the previous version of this law, which provided that such costs and attorney's fees “may be recovered” upon a demonstration that the action was commenced without a substantial basis in fact and law - and thus left the award to the discretion of the trial court, see West Branch Conservation Ass'n v. Planning Bd., 636 N.Y.S.2d 61 (2d Dep't 1995) - the 2020 amendment provides that in these situations, costs and attorney's fees “shall be recovered.”

§ 70-A. Actions involving public petition and participation; recovery of damages

1. A defendant in an action involving public petition and participation, as defined in paragraph (a) of subdivision one of section seventy-six-a of this article, may maintain an action, claim, cross claim or counterclaim to recover damages, including costs and attorney's fees, from any person who commenced or continued such action; provided that:

(a) costs and attorney's fees shall be recovered upon a demonstration, including an adjudication pursuant to subdivision (g) of rule thirty-two hundred eleven or subdivision (h) of rule thirty-two hundred twelve of the civil practice law and rules, that the action involving public petition and participation was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for the extension, modification or reversal of existing law;

[...]

1. For purposes of this section:

(a) An "action involving public petition and participation" is a claim based upon:

(1) any communication in a place open to the public or a public forum in connection with an issue of public interest; or

(2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition.

(b) "Claim" includes any lawsuit, cause of action, cross-claim, counterclaim, or other judicial pleading or filing requesting relief.

(c) "Communication" shall mean any statement, claim, allegation in a proceeding, decision, protest, writing, argument, contention or other expression.

(d) "Public interest" shall be construed broadly, and shall mean any subject other than a purely private matter.

2. In an action involving public petition and participation, damages may only be recovered if the plaintiff, in addition to all other necessary elements, shall have established by clear and convincing evidence that any communication which gives rise to the action was made with knowledge of its falsity or with reckless disregard of whether it was false, where the truth or falsity of such communication is material to the cause of action at issue.

Turning now to Defendant's request for costs and attorney fees pursuant to Civil Rights Law § 70-a, the Court notes that Civil Rights Law § 70-a provides:

1. A defendant in an action involving public petition and participation, as defined in [Civil Rights Law § 76-a] may maintain an action, claim cross claim or counterclaim to recover damages, including costs and attorney's fees, from any person who commenced or continued such action; provided that:

(a) costs and attorney's fees shall be recovered upon a demonstration, including an adjudication pursuant to [CPLR 3211(g)] or [CPLR 3212(h)], that the action involving public petition and participation was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for extension, modification or reversal of existing law;" [emphasis added].

Pursuant to Civil Rights Law § 70-a(1)(a) and CPLR 3212(h), the Court finds that this action was commenced and continued without a substantial basis in fact and law and could not be supported by a substantial argument for extension, modification or reversal of existing law.

Plaintiffs knew or should have known long ago of the non-meritorious and futile nature of the instant litigation. The conduct is especially egregious where, as here, the Defendant is a news media organization exercising the fundamental rights of a free press, which New York Courts have long and zealously guarded. Owing simply to the exercise of their constitutional rights, Defendants have been forced to suffer this litigation. Under the circumstances, the award of costs and attorney fees is mandatory. Civil Rights Law § 70-a(1)(a). Accordingly, the Court grants the motion for costs and reasonable attorney fees as against Plaintiffs personally, but reserves on the specific amount pending the submission of papers in support of costs and fees actually incurred. If the award of costs and attorney fees were discretionary, the Court would still grant the request.

Under New York law, statutory amendments are generally "presumed to have prospective application unless the Legislature's preference for retroactivity is explicitly stated or clearly indicated." Matter of Gleason (Michael Vee, Ltd.), 96 N.Y.2d 117, 122, 726 N.Y.S.2d 45, 749 N.E.2d 724 (2001). So-called "remedial legislation," however, "should be given retroactive effect in order to effectuate its beneficial purpose." Id. "Remedial statutes are those designed to correct imperfections in prior law, by generally giving relief to the aggrieved party." Nelson v. HSBC Bank USA, 87 A.D.3d 995, 998, 929 N.Y.S.2d 259 (2d Dep't 2011). "Other factors in the retroactivity analysis include whether the Legislature has made a specific pronouncement about retroactive effect or conveyed a sense of urgency; whether the statute was designed to rewrite an unintended judicial interpretation; and whether the enactment itself reaffirms a legislative judgment

[510 F.Supp.3d 27]

about what the law in question should be." Gleason, 96 N.Y.2d at 122, 726 N.Y.S.2d 45, 749 N.E.2d 724.

It is clear that § 76-a is a remedial statute that should be given retroactive effect. The Legislature conveyed a sense of urgency by directing that the amendment was to "take effect immediately." See A.B. 5991-A § 4; see, e.g., Gleason, 96 N.Y.2d at 122, 726 N.Y.S.2d 45, 749 N.E.2d 724. Moreover, the legislative history demonstrates that the amendments to § 76-a were intended to correct the narrow scope of New York's prior anti-SLAPP law. As State Senator Brad Hoylman, the Senate sponsor of the amendments, explained: the prior anti-SLAPP law had been "strictly limited to cases initiated by persons or business entities that are embroiled in controversies over a public application or permit, usually in a real estate development situation." Sponsor Mem. of Sen. Hoylman (July 22, 2020), https://www.nysenate.gov/legislation/bills/2019/s52. "By revising the definition of an ‘action involving public petition and participation,’ this amendment to Section 76-a will better advance the purposes that the Legislature originally identified in enacting New York's anti-SLAPP law" -- namely, "to provide the utmost protection for the free exercise or speech, petition, and association rights, particularly where such rights are exercised in a public forum with respect to issues of public concern." Id. "These factors together persuade [the Court] that the remedial purpose of the amendment should be effectuated through retroactive application." Gleason, 96 N.Y.2d at 123, 726 N.Y.S.2d 45, 749 N.E.2d 724.

Notwithstanding the foregoing, the analysis does not stop there. Defendants ask the court to apply the recently amended anti-SLAPP law, comprised of various provisions of Civil Rights Law §§ 70-a and 76-a, and CPLR 3211(g). The Strategic Lawsuit Against Public Participation ("SLAPP"), laws were enacted originally to broaden the protections of citizens facing litigation arising from their public petition and participation (Yeshiva Chofetz Chaim Radin, Inc. v Vill. of New Hempstead by its Bd. of Trustees of Vill. of New Hempstead, 98 F. Supp. 2d 347, 359 [S.D.N.Y. 2000]). In fact, this version of the law existed on November 2, 2020 (the

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commencement date of this action) (Civ. Rights § 76-a). The purpose of the enactment of the Anti-SLAPP law was to stop meritless, nuisance litigation, by well-funded developers against average citizens who participated in public discourse against the developers or their projects (see 600 West 115th St. Corp. v Von Gutfeld, 80 NY2d 130, 137 [1993]).

Eight days after the commencement of this action, on November 10, 2020, the Anti-SLAPP law was amended, and under CRL §76-a (eff. 1992), the definition of an "action involving public petition and participation" was expanded to include:

(1) any communication [as pertinent here, any writing] in a place open to the public or a public forum in connection with an issue of public interest; or
(2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition. (CRL § 76-a).

The next provision of the Anti-SLAPP Law falls under CPLR 3211(g), which provides that:

A motion to dismiss based on [§3211(a)(7)], in which the moving party has demonstrated that the action, involves public petition and participation as defined in Civil Rights Law, 76-a shall be granted, "unless the party responding to the motion demonstrates that the cause of action has a substantial basis in law or is supported by a substantial argument for an extension, modification or reversal of existing law. The court shall grant preference in the hearing of such motion" (CPLR 3211(g)).

Civil Rights Law §70-a goes a step further, by creating an affirmative cause of action to recover damages from plaintiff, including attorneys' fees, and other damages from plaintiff in specified circumstances, if it can be shown that the applicant brought the action "without a substantial basis in fact and law" (CRL §70-a).

These recent amendments by the Legislature have turned the original purpose of the Anti-SLAPP law upside down. Here, one of the largest newspapers in the world since Abraham Lincoln was engaged in the private practice of law, is claiming protections from an upstart

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competitor armed with a cell phone and a web site. Not only does the amended Anti-SLAPP law grant protection to a Goliath against a David, but 16 years after the SLAPP law was enacted, a newspaper had never qualified for SLAPP protection for its written articles (see Cholowsky v Civiletti, 116 Misc3d 1138 [Sup. Ct, Suffolk Cty 2007]; aff'd 69 AD3d 110 [2d Dept 2009]). Despite this dizzying turnabout created by the Legislature, the court agrees that this action meets the amended Anti-SLAPP standard, as it arises from NYT's reporting on an issue of public interest: allegations of systemic voter fraud and potential disinformation about such voter fraud.

Accordingly, since under CPLR 3211(g) defendants have moved to dismiss the action under CPLR 3211(a)(7), and demonstrated that this action entitles them to additional protections, CPLR 3211(g) shifts the standard burden for a motion to dismiss from Defendants to Veritas to "demonstrate that the cause of action has a substantial basis in fact and law." In opposition, Veritas argues that Civil Rights Law §76-a should not be given retroactive effect here, in that the text of the November 10, 2020 Act amending CRL §§ 70-a and 76-a, along with CPLR 3211(g), nowhere states that the amendments shall apply retroactively, but states only that the act "shall take effect immediately."

Retroactive operation is not favored by courts and "statutes will not be given such construction unless the language expressly or by necessary implication requires it" (Majewski v Broadalbin-Perth Cent. Sch. Dist., 91 NY2d 577, 584 [1998]). However, "remedial legislation should be given retroactive effect in order to effectuate its beneficial purpose" (In re Gleason (Michael Vee, Ltd.), 96 NY2d 117, 122 [2001]). Other factors pertinent here to consider whether the Amendment conveyed a sense of urgency; and whether the enactment itself reaffirms

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a legislative judgment about what the law in question should be (Nelson v HSBC Bank USA, 87 AD3d 995, 998 [2d Dept 2011]).

To date, three federal courts have ruled that the amended Anti-SLAPP Law should be given retroactive effect. In one case where NYT was a defendant, the Southern District ruled that "it is clear that §76-a is a remedial statute that should be given retroactive effect. The Legislature conveyed a sense of urgency by directing that the amendment was to take effect immediately" (Palin v New York Times Co., No. 17-CV-4853 (JSR), 2020 WL 7711593 [S.D.N.Y. Dec. 29, 2020]). Likewise, the Eastern District found the anti-SLAPP amendments are remedial, retroactive legislation:

The memorandum accompanying the bill's introduction states that "as drafted, and as narrowly interpreted by the courts, the application of Section 76-a has failed to accomplish [its] objective." S52A Sponsor Mem. (July 22, 2020), https://www.nysenate.gov/legislation/bills/2019/s52. The memorandum expresses the specific intent that the proposed amendments will "better advance the purposes that the Legislature originally identified in enacting New York's anti-SLAPP law": to protect the free exercise of speech, particularly in public fora on matters of public interest. Id. The bill became effective "immediately." Id. Under New York law, these clear legislative expressions of remedial purpose and urgency give the amendments retroactive effect. See Palin, 2020 WL 7711593, at 5 (quoting Gleason, 96 N.Y.2d at 123 (These factors together persuade [the Court] that the remedial purpose of the amendment should be effectuated through retroactive application) (Steven Douglas Coleman, Plaintiff, v Maria Kim Grand, Defendant., No. 18CV5663ENVRLM, 2021 WL 768167, at 8 (E.D.N.Y. Feb. 26, 2021).

While the federal decisions are not binding on this court, here Veritas has not sufficiently raised any harsh impact that would preclude the applicability of the Anti-SLAPP statute, and thus, the court will apply the Anti-SLAPP statute retroactively.

Eventually, to prevail at trial, Veritas will have a high burden, to show actual malice by clear and convincing evidence. "The burden of proving 'actual malice' requires the plaintiff to demonstrate with clear and convincing evidence that the defendant realized that his statement was

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false or that he subjectively entertained serious doubt as to the truth of his statement "(Prozeralik v Capital Cities Communications, Inc., 82 NY2d 466, 474 [1993]). Actual malice is a high bar and mere allegations about improper political or personal biases do not establish actual malice without additional facts to suggest the speaker acted pursuant to that bias (McDougal v Fox News Network, LLC, No. 1:19-CV-11161 (MKV), 2020 WL 5731954 [S.D.N.Y. Sept. 24, 2020]).

[...]

Turning to the submissions of the parties, the court first must disagree with Defendants that the clear and convincing standard applies to this motion. CPLR 3211(g) does not impose a "clear

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and convincing" standard. The party opposing the motion must demonstrate that the cause of action "has a substantial basis in law" (CPLR 3211[g]); International Shoppes, Inc. v At the Airport, LLC, 131 AD3d 926, 929 (2d Dept 2015). Notably, CPLR 3211(h) contains the same "has substantial basis in law" language as CPLR 3211(g). In deciding a recent CPLR 3211(h) motion, the Second Department held that this standard was below the standard for summary judgment, and that "the plaintiff must adduce allegations and evidence that demonstrate the existence of triable issues of fact" (Golby v N&P Engrs. & Land Surveyor, PLLC. 185 AD3d 792,794 [2d Dept 2020]). The court finds that the documentary proof and the facts alleged by Veritas are sufficient to meet its burden. The facts submitted by Veritas could indicate more than standard, garden variety media bias and support a plausible inference of actual malice. There is a substantial basis in law to proceed to permit the plaintiff to conduct discovery and to then attempt to meet its higher standard of proving liability through clear and convincing evidence of actual malice. Malice focuses on the defendant's state of mind in relation to the truth or falsity of the published information. Here there is a substantial basis in law and fact that Defendants acted with actual malice, that is, with knowledge that the statements in the Articles were false or made with reckless disregard of whether they were false or not. Veritas alleged actual malice by providing facts sufficient to demonstrate Defendants' alleged disregard for the truthfulness of its statements. Accordingly, at this very early stage of the litigation, Veritas' submissions were sufficient to withstand defendants' motions, and further proceedings are necessary to resolve the issues raised.