Community Lawsuits — Developers Still Have Weapons Despite Anti-SLAPP Law

May 26, 1999

All too often today a developer carefully shepherds an application for a zoning change, a site plan approval, or a permit through the appropriate governmental channels and processes and obtains all required approvals only to face one additional obstacle at the last moment: a community member’s Article 78 proceeding. Given that lenders are unlikely to be willing to extend credit while an Article 78 petition is pending, such an action can delay — or even completely destroy — a project and result in substantial financial injury to the developer.
Certainly, the right to petition the government is guaranteed under the Petition Clause of the First Amendment and the Due Process Clauses of the Fifth and Fourteenth Amendments to the U.S. Constitution,/1 as well as by the New York State Constitution./2 But the right to petition is not an unbridled license to litigate. Despite the constitutional underpinnings of this doctrine, there are limits on its exercise, and there are remedies available to developers that have been subjected to wrongful or frivolous litigation.

SLAPP Suits

A discussion of community members’ challenges to developers’ applications must begin with what have become known as “SLAPP suits.” The acronym “SLAPP” stands for “Strategic Lawsuits Against Public Participation”/3 and was coined some time ago to refer to relatively meritless lawsuits brought against vocal opponents of developers or other parties seeking to obtain certain government action./4 The lawsuits often had the effect of intimidating and chilling the opponents’ interest in expressing their views as a result of the significant financial and emotional costs involved in defending even baseless suits./5

In response to SLAPP suits, earlier this decade, the New York State legislature enacted Civil Rights Law §§70-a and 76-a to protect citizen activists who, usually before a government agency, publicly challenge applications by developers or other businesses for environmental and land use permits, leases, licenses, or other approvals.

In adopting this so-called anti-SLAPP law, the Legislature declared it “to be the policy of the state that the rights of citizens to participate freely in the public process must be safeguarded with great diligence. The laws of the state must provide the utmost protection for the free exercise of speech, petition and association rights, particularly where such rights are exercised in a public forum with respect to issues of public concern.”/6

The legislation sought to remedy the concern over SLAPP suits in several ways. First, the law allows “[a] defendant in an action involving public petition and participation . . . [to] 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.”/7 An “action involving public petition and participation” is defined by §76-a(1)(a) as “an action, claim, cross claim or counterclaim for damages that is brought by a public applicant or permittee, and is materially related to any efforts of the defendant to report on, comment on, rule on, challenge or oppose such application or permission.”

Section 76-a(1)(b) then defines “public applicant or permittee” as “any person who has applied for or obtained a permit, zoning change, lease, license, certificate or other entitlement for use or permission to act from any government body.”

Defendants in actions involving public petition and participation may recover costs and attorney’s fees “upon a demonstration that the action . . . was commenced or continued without a substantial basis in fact and law.”/8 Moreover, defendants may recover other compensatory damages “upon an additional demonstration that the action . . . was commenced or continued for the sole purpose of harassing, intimidating, punishing or otherwise maliciously inhibiting the free exercise of speech, petition or association rights,”/9 and punitive damages may be recovered as well if the action was commenced or continued with the sole purpose of harassing or intimidating./10

To expedite disposition of these cases, at the same time the Legislature amended CPLR 3211 and 3212, allowing defendants in actions involving public petition and participation to obtain quick dismissal or summary judgment unless the plaintiff can demonstrate 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.”/11 Before adoption of the new legislation, plaintiffs in actions involving public petition and participation needed only to demonstrate a reasonable basis in fact or law to defeat a motion to dismiss or a motion for summary judgment.

On careful analysis, it is clear that the anti-SLAPP law does not create unsurmountable impediments to developers. For one thing, an award of attorney’s fees and costs is not mandatory even if a developer has filed a SLAPP suit but is rather within the discretion of the court./12 In addition, the law does not prohibit all lawsuits by developers against community residents or organizations. In fact, courts interpret the law quite narrowly./13 A recent Third Department decision is instructive./14

The case involved Gill Farms, Inc., which owned and operated a farm located in a town in upstate New York, and Maryann Darrow, who owned and lived on property adjacent to the farm. Darrow had claimed that Gill Farms was engaged in improper aerial spraying of pesticides and that the pesticides had drifted onto her property and into her home. Darrow began to voice concerns to numerous government officials and agencies and in addition founded the “Group Against Aerial Spraying of Pesticides” to foster public awareness regarding the aerial spraying.

According to Gill Farms, Darrow also engaged in a course of tortious behavior, including making false complaints to governmental entities that were designed to interrupt the operation of Gill Farms’ business. Gill Farms contended that, as a result of Darrow’s complaints to public agencies and threats to a commercial aerial sprayer, a pilot was unwilling to spray Gill Farms’ fields, which resulted in an infestation of its corn crop.

Gill Farms filed a lawsuit against Darrow claiming intentional infliction of emotional distress, prima facie tort, interference with business relationships and contracts, and related causes of action, and contending that alleged business interruptions resulted in serious economic damages. Darrow moved to dismiss the complaint or, alternatively, for summary judgment; she also claimed that she was entitled to damages for violation of her free speech rights under Civil Rights Law §§70-a and 76-a. The trial court ruled, among other things, that Darrow had failed to show that the provisions of the Civil Rights law with respect to public petition and participation were applicable to Gill Farms’ suit.

On appeal, Darrow contended that Gill Farms’ lawsuit against her qualified as a SLAPP action because it sought damages, was brought by a “public permittee,” and was “materially related” to Darrow’s efforts to “comment” or “oppose” such permission. In response, Gill Farms pointed out that it was not licensed for, and did not perform, aerial pesticide spraying. In fact, Gill Farms only held permits for ground spraying, while Darrow was concerned with aerial spraying.

The Third Department found that Darrow’s SLAPP claim had to fail for two reasons. First, it said, Gill Farms was not a “public permittee” because it did not hold permits for aerial spraying and the permits held by independent aerial sprayers could not be imputed to Gill Farms. Second, it determined, Darrow’s claim failed in that she did not “report on, comment on, rule on, challenge or oppose” an application or permit because Gill Farms did not possess aerial certificates. Accordingly, the appellate court ruled that the trial court properly had concluded that Gill Farm’s actions did not constitute a SLAPP suit.

Other Defenses

In addition to filing their own lawsuits against community members within the constraints of the anti-SLAPP law, developers may be able to take certain steps when facing lawsuits filed by community members intent on stopping a project that will have the effect of keeping the playing field level. Within these proceedings, developers may be able to assert claims for:

Abuse of process;/15 Malicious prosecution;/16 Prima facie tort;/17 Fraud;/18 Statutory litigation costs under CPLR 8301; Statutory allowances under CPLR 8303 not to exceed $3,000; and Costs and sanctions for frivolous conduct not to exceed $10,000 per incident./19

Certainly not all of these claims will be appropriate in every case. It is important for developers — and those who will oppose their applications — to keep in mind, however, that the anti-SLAPP law is not a defense against these traditional claims and does not constitute a total absolution from liability. Community members and organizations may well be held responsible for damage they cause to developers when they file baseless suits that cause actual damage. The anti-SLAPP law serves an important purpose, but like anything else that is taken to an extreme, it can get out of hand and do more than it was intended to do. By a strict interpretation of the anti-SLAPP law and the recognition of traditional causes of action, together with the sanctions provisions of the law and rules, the rights and duties of developers and the community have become better balanced in this area.

NOTES: 1. See, e.g., Bounds v. Smith, 430 U.S. 817 (1977); Lindsey v. Normet, 405 U.S. 56 (1972).

2. Article I, §9.

3. See, e.g., Matter of Gordon v. Marrone, 155 Misc.2d 726 (Sup. Ct. Westchester Co. 1992).

4. See, e.g., In the Matter of Entertainment Partners Group, Inc. v. Davis, 198 A.D.2d 63 (1st Dept. 1993).

5. See, e.g., Pring, “SLAPPs: Strategic Lawsuits Against Public Participation,” 7 Pace Envt’l L. Rev. 3 (1989).

6. L 1992, ch 767, §1.

7. Civil Rights Law §70-a(1).

8. Civil Rights Law §70-a(1)(a).

9. Civil Rights Law §70-a(1)(b).

10. Civil Rights Law §70-a(1)(c).

11. CPLR 3211(g); 3212(h).

12. See, e.g., In the Matter of West Branch Conservation Ass’n, Inc. v. Planning Board of the Town of Clarkstown, 222 A.D.2d 513 (2d Dep’t 1995).

13. See, e.g., Harfenes v. Sea Gate Ass’n, 167 Misc.2d 647 (Sup. Ct. N.Y. Co. 1995) (anti-SLAPP law is in derogation of the common law and is to be construed narrowly).

14. Gill Farms, Inc. v. Darrow, 682 N.Y.S.2d 306 (3d Dept. 1998).

15. See, e.g., Hauser v. Bartow, 273 N.Y. 370 (1937).

16. See, e.g., Butler v. Ratner, 210 A.D.2d 691 (3d Dept. 1994).

17. Curiano v. Suozzi, 63 N.Y.2d 113 (1984).

18. See, e.g., Barclay Arms, Inc. v. Barclay Arms Assoc., 74 N.Y.2d 644 (1989).

19. See Part 130 of the Rules of the Chief Administrator.

John M. Armentano, a partner with the Long Island law firm of Farrell Fritz, P.C., represents local governments and developers in zoning, land use, and environmental matters, including litigation.

This article is reprinted with permission from the May 26, 1999 edition of the New York Law Journal.

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