September 3, 2002

The Honorable Gray Davis
Governor, State of California
State Capitol
Sacramento, CA 95814

RE: SB 789(Kuehl)

Dear Governor Davis:

I am writing to urge that you veto Senate Bill 789 (Kuehl). The Civil Justice Association of California remains strongly opposed to this proposal (which was in SB 1651 prior to last minute amending).

The August 19, 2002, amendments to SB 789 are a change from the SB 1651 language, but do nothing to change the discriminatory effect of the proposal: to deny the ability of an entire class of defendants (businesses selling or leasing goods or services) to protect themselves against lawsuit filed for the purpose of stifling the constitutional right of freedom of speech and the right to petition for the redress of grievances. Nothing can justify the allocation of free speech protection on the basis of one's status in community. Nothing can justify total denial of the Anti-SLAPP suit protections to every statement by almost* every entity regarding its products, services, or business operations.

Regarding new language in the current SB 789:

• The inclusion of attorney fee-related language on page3, lines 26-36, suggests an attempt to prevent businesses from defending themselves against "legal shakedowns" being increasingly brought under Business and Professions Code Sec. 17200. We note that many small businesses being targeted these days have less "economic horsepower" that the lawyers suing them.
• The addition of "insurance, securities, or financial" is a transparent attempt to play on current news to bolster SB 789's broadside attack on businesses of all kinds and sizes.

The Anti-SLAPP statute is designed to provide early, pre-discovery dismissal of lawsuits premised on the defendant's exercise of some form of protected speech - even commercial speech. The "new" SB 1651 continues to propose a distinction between commercial and non-commercial speech and continues broadly to prohibit an anti-SLAPP motion from being employed against any cause of action arising from statements or conduct an act in furtherance of a wide variety of commercial activity. The intent remains to ensure that the business community can never benefit from the Anti-SLAPP motion to dismiss a lawsuit that operates to harass rather than pursue a valid legal claim.

A recent California Supreme Court decision (Kasky v. Nike) involved distributing freedom of speech protection among statements depending upon their "commercial" or "non-commercial" status. There was robust dispute among the majority and dissent over whether a commercial v. non-commercial distinction is useful or even constitutional. Nevertheless, even the Kasky majority, in favoring the distinction, at least recognized that at times a commercial entity's speech can be non-commercial and therefore protected under the decision.

No such distinction is recognized in SB 789. The bill's carte blanche denial of the ability to protect one's free speech rights against intentionally chilling litigation is an affront to the courts, constitutionally-protected free speech, and to the spirit of CCP 425.16.

Review by the United States Supreme Court is being sought in Kasky v. Nike. We believe the prudent course is to await determination on this matter before enacting this legislation.

Enactment of SB 789 would break new ground in advertising to the nation that the California business environment is hostile, unsafe, and extremely unfair.

For these reasons, we strongly urge you to veto SB 789.

Sincerely,

John H. Sullivan, Esq. President