[00:00:00] Speaker 02:
All right, we have one more matter, I think.

[00:00:02] Speaker 03:
Inre Latcher, Pamela Latcher-Pellant, Jeffrey D. Schreiber, Council for Appalachians, John M. Lane, and Sue Lane.

[00:00:13] Speaker 02:
Okay, Ms. Locker, you want to make your appearance?

[00:00:16] Speaker 00:
Can you hear and see me?

[00:00:19] Speaker 02:
Yes.

[00:00:20] Speaker 00:
Okay.

[00:00:20] Speaker 02:
I want to reserve some time and go ahead.

[00:00:23] Speaker 00:
Please, five minutes.

[00:00:24] Speaker 02:
Okay, and go ahead and make your appearance just for the record, okay?

[00:00:27] Speaker 00:
Pam Latcher on behalf of myself.

[00:00:29] Speaker 02:
Okay.

[00:00:32] Speaker 02:
All right, go ahead.

[00:00:33] Speaker 00:
Oh, okay, sorry. I thought he was going to make his appearance. Okay.

[00:00:37] Speaker 00:
So, Your Honor, I think this is an interesting issue of first impression where you have a substantive right of a debtor that they would be able to exercise in the state court, exercise by the creditor 20 million years ago, and instead the creditor takes the or to exercise their right in a non-dischargeability claim. And the issue is the intersection of the 523A6 with a specific section of the anti-SLAPP statute, 425.18, which has not yet been addressed by the Ninth Circuit.

[00:01:15] Speaker 00:
And the issue with respect to 425.18 is that it is a very specific, well, the whole California anti-SLAPP statute is a very specific statute, again, made specifically for protection of a debtor's or actually a litigant's right to free speech. That protected right results in an anti-slap judgment. It's not necessarily because the loser debtor lost on the merits.

[00:01:46] Speaker 00:
It's not necessarily because the loser debtor had a bad faith claim. They lost because of a statutory, if they get fees against them and they lose, they could lose and get a statutory penalty. And the statute distinguishes specifically between statutory penalties and tort claims. And in the willful and malicious injury standard, if you look at the two and the intersection of the two together, under willful and malicious injury, you need to apply or find some tort that applies from the specific state you're in in the statutes.

[00:02:19] Speaker 00:
Here, the specific tort arises specifically out of California's anti-SLAPP statute.

[00:02:26] Speaker 00:
And the legislature specifically said that an abusive process, malicious prosecution, that those are special torts specifically out of and they are treated differently from an abusive process or a malicious prosecution in a standard lawsuit. And so the issue is that if you allow or don't allow an anti-SLAPP statute to be applied against a willful or malicious injury claim, the debtor loses the protection of the anti-SLAPP statute that the California legislature gave the debtor.

[00:02:57] Speaker 00:
Because the California legislature said, just because you lose doesn't mean that that's the end of the game. It means you pay a statutory penalty, sort of like discovery costs. It's to compensate for litigation costs. If you suffer more and you win the anti-SLAPP motion, then you can say, I have tort damages. But to get tort damages, you have to exercise your right

[00:03:20] Speaker 03:
Ms. Lasher, let me take you back to maybe a threshold issue here. And before you go on, and I'm concerned about the Gopher Media case. The Ninth Circuit held that an order denying a special motion to strike under California's anti-SLAPP statute is not appealable. So can we even get to the merits of your argument? So why do we have jurisdiction in light of Gopher?

[00:03:53] Speaker 00:
Okay, so actually I filed a motion addressed to that issue, and I apologize. I assume that the denial of the motion in the setting of the oral argument meant that we had already gotten passed that. But Gopher Media actually says it's not an immediately appealable order under the collateral order doctrine, but that doesn't get you out of the idea that you can still request for an interlocutory appeal because there's a specific kind of issue.

[00:04:18] Speaker 03:
But your motion for interlocutory appeal was denied.

[00:04:22] Speaker 00:
But we still set oral arguments. So I was confused because my opponent actually asked to dismiss for lack of jurisdiction, and we're still here. So I guess if we're still litigating that, I don't know if we're still litigating that issue or we're not. And if we are...

[00:04:40] Speaker 03:
It is a threshold issue that I think we have to decide, so it's important for you to address it.

[00:04:45] Speaker 00:
Oh, okay. I appreciate that then. So in this case, the underlying – well, the reason that you should retain jurisdiction over this is for the fact that the Ninth Circuit has yet to decide the applicability of California's anti-SLAPP statute overall. It's still retained right now. Gopher Media hasn't gotten rid of it. Right now it's my understanding from the case law that the Ninth Circuit treats the anti-SLAPP statute or California's anti-SLAPP statute as substantive, but there's definitely a concern as to whether it's a substantive or a procedural type of claim.

[00:05:25] Speaker 00:
My argument is it's a substantive claim, and if you don't use it as a substantive claim, you deny a debtor like me a right that I would have had Had this case been kind of like the discussion you've been having with everybody else before me today, what would have happened if I didn't declare bankruptcy and the Lanes went to the state court and attempted to do this 20 years later? They would have been kicked out of the water because I would have filed an anti-SLAPP statute, 425.18 says I have a right to do so. I would have done my motion and they would have lost because they would have been kicked out of the water because it's too late.

[00:06:00] Speaker 00:
Or the converse.

[00:06:02] Speaker 00:
The Carol B. Boer case that comes out of our southern district says that the mere filing, and so does California law, the mere filing of a slap suit in and of itself is not an abusive process. So the only way you ever get to a willful malicious injury claim is if you can figure out some tort, and that tort arises in the anti-slap statute. And I believe that this is a case of first impression because there are no cases that discuss where a creditor used the anti-SLAPP statute as a shield to get a case dismissed early on, and now is using that same statute in order to preclude a debtor from getting a discharge, but without having the debtor the ability to use the anti-SLAPP statute to protect themselves.

[00:06:48] Speaker 00:
So the creditor gets to use the statute, but the debtor doesn't.

[00:06:52] Speaker 00:
And I know that I wrote in my brief about pendant state law claims. And I realize it doesn't really qualify as a pendant state law claim. However, it is so intimately intertwined that they're inseparable from each other. And I guess, arguably, I would say that a, um, that a federal court could hear the, assuming it wasn't belated, could hear the 425.18 claim concurrent with the statute. So what I'm saying is that for the jurisdiction issue, that this court should hear it because it's a matter of public importance.

[00:07:30] Speaker 00:
It addresses the substantive versus procedural issues that reign throughout the Ninth Circuit right now and go for me to discuss that. It discusses the ability, it discusses the, for the first time, the use of an anti-SLAPP statute to a federal question. I have realized that A 52386 claim is a federal question jurisdiction. I realize ERIE applies to diversity jurisdiction. I realize I don't have a complete pendant state law claim. However, the way that this judgment seeks to get around dischargeability is by basically making a claim that arises from my filing of a lawsuit deemed a slap that ultimately if there were tort damages, the creditor would have had to exercise their rights to do.

[00:08:24] Speaker 00:
And so I think it's a matter of public importance for, I want to say for lawyers who litigate all the time, for us to know the parameters of anti-SLAPP. Some sections of anti-SLAPP I noted in my brief apply and other ones don't. So like the collateral order doctrine was the equivalent of our immediately appealable order.

[00:08:47] Speaker 00:
I asked for the stay of that section. That's immediately appealable in state court, but it was denied, but it was denied based on using bankruptcy law or federal law and not using California's anti-SLAPP statute. And I think it's important for the court to resolve these issues because, so for example, let's just say that you rule in my favor, the anti-SLAPP statute applies I've now spent another however long it's been since it took me to get to this point, litigating in the bankruptcy court where I have a substantive right to stop this whole litigation, which also puts us into the second part I was going to ask before I started my argument.

[00:09:33] Speaker 00:
I didn't know the scope based on the original appealable order, the original jurisdiction issue, the scope that you guys left me with was the denial of the anti-SLAPP.

[00:09:45] Speaker 00:
And that denial requires looking at both prongs one and prong two of the statute because automatically my speech under California law is protected speech. So I automatically qualify as protected. And I'm not protected because I'm in the bankruptcy court right now where the federal law hasn't said that my statute that I can use to protect myself applies as a shield. and it's being used against me more than once in order to deprive me of rights that I personally have in the state of California that wouldn't exist in the bankruptcy or the creditors wouldn't be able to pursue unless they were in the bankruptcy right now.

[00:10:26] Speaker 02:
I'll point out that this is a good place to pause. You're right at about five minutes for what it's worth.

[00:10:33] Speaker 00:
Okay, thank you.

[00:10:34] Speaker 02:
Oh, sure, you bet. Okay.

[00:10:37] Speaker 02:
Okay, let's hear from the appellee.

[00:10:42] Speaker 01:
Thank you, Your Honors. Jeff Shriver on behalf of the appellant John Lane.

[00:10:47] Speaker 01:
Going to the first point that was raised by court, Gopher Media, our position is that Gopher Media has now divested this court of jurisdiction to hear this appeal because it is an interlocutory appeal from a motion to dismiss based upon the SLAPP statute. So at this point in time, the courts should dismiss it on the basis of lack of jurisdiction based on the Gopher Media case. Secondly, because I'm still struggling to find out where Ms. Latcher is going with this, because the whole issue here of this anti-SLAPP statute, we can see that it is available to people in federal court, but it is only available in federal court for diversity actions and for where there are pendant or supplemental claims to a pending federal question.

[00:11:39] Speaker 01:
This case is a bankruptcy statute. It is solely a bankruptcy statute. It's just willful and malicious injury. It has nothing to do with anything other than a federal question, and it is very clear under this court's point holding in Rustino, Wogtrotter, Hilton v. Hallmark Cards, Lockheed, there's been consistency that the anti-SLAPP statute in California has no application in cases involving federal questions and only federal questions.

[00:12:13] Speaker 01:
She's trying to, I don't know what it's properly called, muddle it, but she's telling us that she admits that it's not a pending claim, but says that it is a pending claim. Actually, it is not a pending claim. It's pretty clear that this is a bankruptcy statute federal question issue, and that's all we have here.

[00:12:33] Speaker 01:
Further, just for one more point, This is not just a SLAPP issue. Where the whole thing comes about is it's her subsequent conduct in trying to enforce the judgment that was based upon the SLAPP statute. There was, raising all the way to the point that Judge Trapp in San Diego County Superior Court has specific findings of contempt under state law statutes and ordered the Pelley's money damages because of the fact that she had willfully and deliberately disobeyed court orders that have been issued to her.

[00:13:17] Speaker 01:
So this is not just a slap statute issue. In fact, that was just the genesis, but it is not the basis for where we're going with this. She filed several motions. She went to appellate court in San Diego. The California Court of Appeals found that her appeals were frivolous. So we're talking about not just an anti-SLAPP statute, which has no application, but even if it did, there are other issues here which have been addressed and are in the complaint for non-dischargeability, which have to do with damages which were the result of trying to enforce this judgment against her and her conduct trying to keep us from being able to collect on the judgment.

[00:13:58] Speaker 01:
So at this point in time, I'm going to submit on that unless the court has any other questions of me.

[00:14:05] Speaker 00:
I don't. Thank you.

[00:14:06] Speaker 02:
No more questions. Thank you very much.

[00:14:10] Speaker 02:
Thank you, Your Honors. Okay. And Ms. Locker, you've got a little under five.

[00:14:14] Speaker 00:
Yes, Your Honor. So if you look at the actual anti-SLAPP statute, subsequent conduct 10 years later doesn't arise from the filing of the lawsuit. And every single act that would be done within the confines of that judgment is considered a SLAPP judgment. and part of the SLAPP judgment. So for example, the appeal is part of the SLAPP fees. For example, if they file a discovery request, well, discovery is, and if they, I don't know, they issue a writ and they win the issue, they automatically get fees because of the SLAPP statute.

[00:14:50] Speaker 00:
But the SLAPP statute is clear that this is, that subsequent conduct 10 years later, as they're trying to argue, is not, doesn't fall within the SLAPP statute. The SLAPP statute is standing on its own. Secondly, the bankruptcy court subsequent to our appeal has made several orders that are, and in relation to our appeal, have made several orders that are important to this. Number one, the bankruptcy court denied collateral estoppel effect to the contempt judgment.

[00:15:20] Speaker 00:
Number two, it's already made a ruling that there's no abuse of process on the filing, a mere filing of the SLAPP statute, which is what Carol B. Bowers says. And the tortious conduct that we're talking about can't be separated out from the SLAPP statute. Under the SLAPP statute, the legislature is clear that in order to get tort conduct, damages, as he's trying to say, tortious damages, there's no proximate cause.

[00:15:44] Speaker 00:
The statute says it is a statutory penalty only. and that the tortious damages have to arise from the creditor serving a suit on the debtor and proving their point. This actual underlying judgment, it wasn't on the merits. It was a judgment because there was no opposition on file. The court actually gave me leave to amend my original lawsuit, and there's actually a law that says, and I didn't know we were getting into the merits of this as counsel did, but there's law that actually says that...

[00:16:16] Speaker 00:
that essentially if you grant leave to amend under the anti-SLAPP statute, it is a legally impermissible exercise of the court's jurisdiction, which would make this judgment void on its face, and to grant fees. And in this case, the actual fact pattern shows that the SLAPP motion was twice denied as moot and only brought back because the court thought that it had to award fees because they granted the demur because I had no opposition on file. And so this whole judgment actually is void.

[00:16:48] Speaker 00:
What we didn't talk about also is I have a satisfaction that's never been vacated. That satisfaction that's never been vacated makes all these subsequent orders void as a matter of California law. And so I didn't have to comply with any of those regardless of the merits of them or whether they're valid or a court sanctioned me. There's a whole body of legal issues that arise around the underlying facts, let alone litigation privilege. But as far as applicability of the statute, in order for them, if a court denies the use of this anti-slap statute or denies jurisdiction, that means the creditor gets to bypass the statute itself.

[00:17:27] Speaker 00:
And here in bankruptcy court, the creditor gets to say, oh, you approximately caused damage, but I don't have tort damages because the statute and the case law that I think the supplemental authorities I filed the other day actually says that there is no proximate cause. Even if I did everything they say I did and I was all wrong, they don't have tort damages. And therein is the fallout of why you have to allow somebody to apply the anti-SLAPP statute to the 52386 claim. Otherwise, you take away, you relabel what California calls a statutory penalty and you make it a tortious conduct, which is contrary to actual anti-SLAPP statute.

[00:18:10] Speaker 00:
And I would One thing I didn't argue is that you have to actually comply with statute limitations and affect your rights before you can be accredited and come here. They didn't do any of that. If I did all these bad things to them, they had 16 years to actually go file a lawsuit against me and get tort damages. The statute even allows them to ask permission for that.

[00:18:31] Speaker 00:
But the underlying statute, it's been satisfied. The bankruptcy court said no collateral estoppel to any of the the contempt or any of the orders that already a ruling of no abuse of process. So this whole theory about my abuse to process, that's all down. If we're talking about post conduct, since I didn't know we were going there, the state bars already admitted the bankruptcy court did not find or conclude that I engaged in misconduct. And there's a summary adjudication motion now pending.

[00:19:02] Speaker 00:
The Supreme Court, as the court knows, remanded it back and didn't affirm any of those findings. So there's a lot more to then Council says this looks bad on the outside. Okay.

[00:19:11] Speaker 02:
That might be a good place to rest, okay? We're a little over your time. Okay. So the matter is submitted. Thank you very much. Thanks for your good arguments, and we'll get you a written decision as soon as we can. And with that, I think we're adjourned, right?

[00:19:24] Speaker 02:
Okay. Thank you very much. Thanks, everyone.

[00:19:27] Speaker 02:
I'll rise. The court has completed its session.

[00:19:31] Speaker 03:
The session is now adjourned.