Nevada Needs A Revised Anti-SLAPP Statute, But The Ninth Circuit Gives Us Some Daylight

As a lawyer licensed in five states (MA, FL, CA, AZ, and NV) and who practices free speech law nationwide, I am in a position to comment on the relative merits of various states' views on First Amendment principles. Among the many states where I have worked on cases, Flori-duh is the worst. Hands down.

It has no anti-SLAPP law to speak of. Its state legislation intended to deter frivolous litigation, Fla. Stat. 57.105, looks great on the books but is a "paper tiger." While the statute was amended in 2002 to give it some real teeth, the state judiciary generally does not apply it. As a result, Flori-duh is a hotbed of frivolous SLAPP litigation.

If Nevada does not update its anemic anti-SLAPP law, it bears the risk of becoming the Florida of the West – at least with respect to frivolous SLAPPs. That risk is laid bare for all to see in the recent case of Metabolic Research v. Ferrell, despite the fact that the Ninth Circuit seems to have tossed in a prescription to cure some of the symptoms of the Nevada anti-SLAPP statute's lack of a fully developed spine.

What Happened?

From the Ninth Circuit's opinion:

On October 20, 2009, Scott J. Ferrell, an attorney practicing law in Orange County California, sent “demand letters” to Metabolic Research, Inc. (“Metabolic”), at its address in Las Vegas, Nevada, and to General Nutrition Centers, Inc. (“GNC”), at its address in Pittsburgh, Pennsylvania. The demand letters purported to notify the recipients that they had violated California Civil Code §§ 1750-1756, the California Consumer Legal Remedies Act (“CLRA”), by falsely advertising the properties and potential benefits of a product named Stemulite, which they marketed as a natural fitness supplement. Ferrell represented that he was acting on behalf of Michael Campos, Thomas Hess, and Sarah Jordan, all of whom he alleged purchased Stemulite in California, in reliance on the supposed false advertising, and had not received the purported benefits.

Op. at 7027. Ferrell demanded that Metabolic and GNC "cease their false advertising of Stemulite" (Op. at 7027), identify purchasers of the substance, provide refunds to them all, disgorge profits from Stemulite sales, and implement a corrective advertising campaign. A failure to do so would be met with a lawsuit.

Metabolic did not cave. Instead, they filed a lawsuit for extortion against Ferrell and the putative class he claimed to represent. The suit also included claims for "conspiracy to engage in racketeering, civil extortion, tortious interference with contract, and tortious interference with prospective economic relations, i.e., interfering with the agreement between Metabolic and GNC. Metabolic sought declaratory relief and punitive damages." (Op. at 7028). Ferrell sought to have the case dismissed under the Nevada anti-SLAPP statute, Nev. Rev. Stat. § 41.660. However, the motion was doubly useless.

The Law

Judge Mahan of the District of Nevada found that Nevada's anti-SLAPP statute only covers communications made "directly to a governmental agency." That seems to be a bit narrow of a reading of the statute, which is reproduced below:

NRS 41.660  Attorney General or chief legal officer of political subdivision may defend or provide support to person sued for engaging in right to petition; special counsel; filing special motion to dismiss; stay of discovery; adjudication upon merits.

1. If an action is brought against a person based upon a good faith communication in furtherance of the right to petition:

(a) The person against whom the action is brought may file a special motion to dismiss; and

(b) The Attorney General or the chief legal officer or attorney of a political subdivision of this State may defend or otherwise support the person against whom the action is brought. If the Attorney General or the chief legal officer or attorney of a political subdivision has a conflict of interest in, or is otherwise disqualified from, defending or otherwise supporting the person, the Attorney General or the chief legal officer or attorney of a political subdivision may employ special counsel to defend or otherwise support the person.

2. A special motion to dismiss must be filed within 60 days after service of the complaint, which period may be extended by the court for good cause shown.

3. If a special motion to dismiss is filed pursuant to subsection 2, the court shall: