JOSÉ A. CABRANES, Circuit Judge:
On its face, this appeal involves a somewhat technical issue of federal appellate procedure — namely, whether we have jurisdiction under the "collateral order" doctrine to consider the merits of this interlocutory appeal. But a similarly difficult inquiry, which also bears on our analysis of the jurisdictional question, is whether the District Court properly applied governing choice-of-law principles under the Rules of Decision Act, see 28 U.S.C. § 1652,
The tricky choice-of-law questions raised in this appeal have arisen because this case has progressed through three different venues. The suit, which alleges malicious prosecution with respect to prior litigation in federal court in New York between the same parties, was originally filed in California state court, later removed to federal court in California, and then voluntarily transferred to the United States District Court for the Eastern District of New York pursuant to 28 U.S.C. § 1404(a).
The questions presented in this appeal are: (1) whether the District Court's decision regarding the inapplicability of California's anti-SLAPP rule is a "collateral order" reviewable on an interlocutory appeal under 28 U.S.C. § 1291; and (2) whether the District Court erred by concluding that California's anti-SLAPP rule is inapplicable in light of its determination that New York law, instead of California law, governs the plaintiff's malicious prosecution claim.
With respect to the first question, we hold that the District Court's denial of the defendants' motion to dismiss under California's anti-SLAPP rule constitutes an immediately appealable collateral order because it (1) conclusively determined the disputed issue; (2) resolved an important question that is completely separate from the merits of the action; and (3) would be effectively unreviewable in a later appeal. See Will v. Hallock, 546 U.S. 345, 349, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006).
With respect to the second question, we hold that the District Court erred in concluding that California's anti-SLAPP rule cannot apply to a claim transferred from a California federal court to a New York federal court and governed, under the Erie doctrine, by New York law. In particular, the District Court conflated the relevant state choice-of-law question with the separate federal choice-of-law inquiry under Erie. State rules that are considered "procedural" under state law may still apply
For these reasons, the District Court's order denying the defendants' motion to dismiss pursuant to California's anti-SLAPP rule is vacated, and the cause is remanded to the District Court for further consideration of the motion to dismiss, and for such further proceedings as may be appropriate in the circumstances.
The plaintiff-appellee in this case, Liberty Synergistics Inc. ("Liberty"), was the defendant in an earlier, now-concluded round of litigation between the same parties in the Eastern District of New York. Thereafter, Liberty filed this malicious prosecution suit in California state court against defendants-appellants Microflo Ltd., Edward Malkin, and Ecotech Ltd. (jointly, "Microflo"). Liberty filed its complaint in California state court on September 17, 2010, alleging that Microflo, in pursuing the previous litigation against Liberty, "undertook no reasonable investigation to verify any of the facts asserted in the[ ] complaint, [and] maintain[ed] the action against Liberty out of motives grounded in spite, malice, and with a vexatious and malicious intent, in complete and utter disregard for the rights of Liberty and others...." Complaint ¶ 27. Microflo removed the case to the Central District of California on November 30, 2010.
Microflo then moved on January 3, 2011, to dismiss the suit under California's anti-SLAPP rule, CAL.CIV.PROC.CODE § 425.16, see note 4, ante, arguing that Liberty's claim is meritless and is intended to inhibit Microflo's constitutionally protected conduct in petitioning for relief in the prior litigation. Microflo also moved to dismiss the case for lack of personal jurisdiction. Before the California federal court decided these motions, however, it transferred the case on January 12, 2011, to the District Court for the Eastern District of New York ("the District Court"), pursuant to a stipulation by the parties, under 28 U.S.C. § 1404(a), see note 3, ante.
Later that year, Microflo reasserted its "Motion to Strike" under California's anti-SLAPP rule. Judge Feuerstein referred the matter to Magistrate Judge E. Thomas Boyle, who heard oral argument on October 6, 2011, and issued an amended report and recommendation ("R & R") on October 26, 2011.
Liberty Synergistics Inc. v. Microflo Ltd., No. CV 11-0523(SJF)(ETB), 2011 WL 4974832, at *11 (E.D.N.Y. Oct. 26, 2011). Judge Feuerstein adopted this aspect of the Magistrate Judge's R & R in an order dated December 1, 2011. See Liberty Synergistics Inc. v. MicroFlo Ltd., No. CV 11-0523(SJF)(ETB), 2011 WL 6100273, at *2 (E.D.N.Y. Dec. 1, 2011).
In this appeal, Microflo contests that part of the District Court's order, arguing that the District Court should have conducted a separate choice-of-law analysis with respect to the anti-SLAPP issue rather than viewing that choice-of-law question as derivative of the Court's conclusion that New York substantive law governs Liberty's malicious prosecution claim. Liberty disputes this argument on the merits and claims, as a jurisdictional matter, that the denial of a motion to dismiss pursuant to California's anti-SLAPP rule is not an immediately appealable order under the collateral order doctrine.
It is common ground that jurisdiction is a threshold matter that must exist before a court may decide the merits of an appeal. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93-102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). As relevant here, our appellate jurisdiction is limited to review of "final decisions" of district courts. 28 U.S.C. § 1291.
"The requirements for collateral order appeal have been distilled down to three conditions: that an order [1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment." Will, 546 U.S. at 349, 126 S.Ct. 952 (brackets in original, internal quotation marks omitted). These conditions are "stringent," id. (internal quotation marks omitted), and "[t]he justification for immediate appeal must therefore be sufficiently strong to overcome the usual benefits of deferring appeal until litigation concludes," Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 107, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009). Moreover,
We begin by considering whether the District Court's ruling that California's anti-SLAPP rule was inapplicable as a matter of law, following the forum transfer, "conclusively determine[d] the disputed question." Will, 546 U.S. at 349, 126 S.Ct. 952 (quotation marks omitted).
"The requirement that the district court's order `conclusively determine' the question means that appellate review is likely needed to avoid th[e] harm" of delay. Johnson v. Jones, 515 U.S. 304, 311, 115 S.Ct. 2151, 132 L.Ed.2d 238 (1995). In this case, the "critical" part of this inquiry is assessing "whether `the essence' of the claimed right" is either "a right not to stand trial," Van Cauwenberghe v. Biard, 486 U.S. 517, 524, 108 S.Ct. 1945, 100 L.Ed.2d 517 (1988) (quoting Mitchell v. Forsyth, 472 U.S. 511, 525, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985)), or a right not to "face the other burdens of litigation," Mitchell, 472 U.S. at 526, 105 S.Ct. 2806. If either such right is at issue, a denial of that right "conclusively determines" the disputed issue by ensuring that "the defendant must bear the burdens of discovery." Ashcroft v. Iqbal, 556 U.S. 662, 672, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (alteration and quotation marks omitted).
Whether the "essence" of a right is to protect against the burdens of litigation "should not, and cannot, depend on a party's agility in so characterizing the right asserted." Digital Equip., 511 U.S. at 872, 114 S.Ct. 1992. Indeed, "in some sense, all litigants who have a meritorious pretrial claim for dismissal can reasonably claim a right not to stand trial." Van Cauwenberghe, 486 U.S. at 524, 108 S.Ct. 1945. Accordingly, we must "examine the nature of the right asserted with special care," id. at 525, 108 S.Ct. 1945, and a certain "skepticism, if not a jaundiced eye," Digital Equip., 511 U.S. at 873, 114 S.Ct. 1992, to determine whether an "essential aspect of the claim" is the right to avoid the burdens of litigation, Van Cauwenberghe, 486 U.S. at 525, 108 S.Ct. 1945. Whether a right satisfies this standard is a question of federal law, see Budinich, 486 U.S. at 198-99, 108 S.Ct. 1717, but where a state rule is at issue, we look to the state law to determine whether the nature of the right is to protect certain defendants against the burdens of litigation.
The nature of the anti-SLAPP rule is clear. According to the Supreme Court of California, "[t]he point of the anti-SLAPP statute is that you have a right not to be dragged through the courts because you exercised your constitutional rights." Varian Med. Sys., Inc. v. Delfino, 35 Cal.4th 180, 193, 25 Cal.Rptr.3d 298, 106 P.3d 958 (2005) (quotation marks omitted). Accordingly, "`[t]he protections afforded by the anti-SLAPP statute against the harassment and burdens of litigation are in large measure lost if the petitioner is forced to litigate a case to its conclusion before obtaining a definitive judgment through the appellate process.'" Id. (quoting Fabre v. Walton, 436 Mass. 517,
We agree. California's anti-SLAPP rule reflects a substantive policy favoring the special protection of certain defendants from the burdens of litigation because they engaged in constitutionally protected activity. The denial of this protection through the rejection of a motion to dismiss is sufficiently "final" to meet the first prong of the collateral order doctrine.
The District Court's ruling also satisfies the requirement that the appealed order must "resolve an important issue completely separate from the merits of the action." Will, 546 U.S. at 349, 126 S.Ct. 952 (quotation marks omitted). The requirement that the issue be "important" is a pragmatic one, ensuring that "the considerations that favor immediate appeals seem comparatively strong and those that disfavor such appeals seem comparatively weak." Johnson, 515 U.S. at 311, 115 S.Ct. 2151; see also Mohawk Indus., 558 U.S. at 107, 130 S.Ct. 599. Immediate appeals are generally more appropriate "where purely legal matters are at issue." Johnson, 515 U.S. at 316, 115 S.Ct. 2151. Whether the question presented is "separate" from the merits depends on whether it turns on matters "significantly different from the fact-related legal issues that likely underlie the plaintiff's claim on the merits." Id. at 314, 115 S.Ct. 2151.
Several factors favor immediate appeal in this case. First, the questions presented are "neat abstract issues of law" that appellate courts are better suited to consider. Id. at 317, 115 S.Ct. 2151 (quotation marks omitted). Those questions, moreover, need only be answered once, since we are asked to consider whether any plaintiff may invoke California's anti-SLAPP rule following a consensual forum transfer — not whether this particular
The District Court's order also was completely separate from the merits of the plaintiff's cause of action. The Court denied Microflo's motion as a matter of law, ruling that the motion was predicated on a source of law that did not apply to the suit. The District Court therefore did not consider the underlying facts in the complaint, much less the "merits" of the malicious prosecution claim. Additionally, as we will see in Part B, post, the question whether California's anti-SLAPP rule applies in this diversity case does not depend on whether California substantive law governs the merits of Liberty's malicious prosecution claim. Accordingly, we are able to review the District Court's order with respect to the anti-SLAPP issue without addressing the District Court's decision that New York law governs the malicious prosecution claim, thereby avoiding the general rule that "one may not bring an interlocutory appeal of a district court's choice of law determination." Gramercy Mills, Inc. v. Wolens, 63 F.3d 569, 571 (7th Cir.1995). For these reasons, the question raised in this appeal presents "an important
Finally, we conclude that the denial of a motion to dismiss pursuant to California's anti-SLAPP rule would "be effectively unreviewable on appeal from a final judgment." Will, 546 U.S. at 349, 126 S.Ct. 952 (quotation marks omitted). As explained in Part A.i., ante, the anti-SLAPP rule is designed to "protect the defendant from the burdens of trial." Batzel, 333 F.3d at 1025. Consequently, even if the defendants could obtain relief in a later appeal regarding some aspects of California's anti-SLAPP rule (under the fee-shifting provisions, for instance), the denial of pre-trial protections would be unreviewable on appeal from a final judgment of a district court.
By itself, however, the inability to review after final judgment the denial of pre-trial protections does not settle whether the third prong of the collateral order test is satisfied. As the Supreme Court explained in Will:
Will, 546 U.S. at 351-52, 126 S.Ct. 952 (quoting Digital Equip., 511 U.S. at 878-79, 114 S.Ct. 1992). Immediate review must further "some particular value of a high order ... in support of the interest in avoiding trial." Id. at 352, 126 S.Ct. 952. "That is, it is not mere avoidance of a trial, but avoidance of a trial that would imperil a substantial public interest, that counts when asking whether an order is `effectively' unreviewable if review is to be left until later." Id. at 353, 114 S.Ct. 1992 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)).
California enacted the anti-SLAPP rule to advance the substantial public interest in safeguarding constitutionally protected activities.
To be sure, we recognize that the particular legal question presented in this appeal — namely, whether the forum transfer made the anti-SLAPP rule inapplicable — could be reviewed following final judgment if Microflo moved for attorneys' fees. But the Supreme Court has clarified that, when the essence of a right is to shield certain defendants from the burdens of litigation, collateral review is not defeated by the opportunity for post-judgment review of the same legal question that arose when considering the earlier order. See, e.g., Behrens v. Pelletier, 516 U.S. 299, 308, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996) ("[T]he defense is meant to give ... a right, not merely to avoid standing trial, but also to avoid the burdens of such pretrial matters as discovery.... Whether or not a later summary judgment motion is granted, denial of a motion to dismiss is conclusive as to this right." (internal quotation marks omitted)). Accordingly, even though we could review the pertinent choice-of-law questions in a post-judgment appeal, that review would not be "effective" in vindicating the compelling public interest protected by the pre-trial aspects of California's anti-SLAPP rule.
For these reasons, we conclude that the denial of the pre-trial protections offered by the anti-SLAPP rule would be "effectively unreviewable" in a later appeal, and that interlocutory appeal is available under the collateral order doctrine.
Having concluded that an interlocutory appeal is available, we now turn to the relevant choice-of-law principles in federal diversity cases. As interpreted by the Supreme Court, the Rules of Decision Act, 28 U.S.C. § 1652, see note 1, ante, provides that federal courts exercising diversity jurisdiction over a state-law claim must consider two conceptually distinct issues. First, a federal court exercising diversity jurisdiction must apply the choice-of-law rules of the state in which that court sits to determine the rules of decision that would apply if the suit were brought in state court. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 494-97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Though constrained in some respects by the United States Constitution, this choice-of-law inquiry is an issue of state law. See Sun Oil Co. v. Wortman, 486 U.S. 717, 729-30, 108 S.Ct. 2117, 100 L.Ed.2d 743 (1988). Second, after using state conflict-of-laws principles to ascertain the rules of decision that would apply in
Whether a particular state rule of decision is "substantive" under Erie is a question of federal law, see Sun Oil Co., 486 U.S. at 726-27, 108 S.Ct. 2117; Hanna v. Plumer, 380 U.S. 460, 465-66, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), and is decided by examining
Gasperini, 518 U.S. at 428 n. 8, 116 S.Ct. 2211 (quotation marks omitted). This test looks not to the labels but to the content of state rules of decision.
"Classification of a law as `substantive' or `procedural' for Erie purposes is sometimes a challenging endeavor," Gasperini, 518 U.S. at 427, 116 S.Ct. 2211, but perhaps even more confounding is the fact that a state's "procedural" rules under its own choice-of-law principles can be "substantive" for purposes of federal diversity jurisdiction. For instance, a state court considering whether to apply its own statutes of limitations to claims governed by the laws of other states, may apply its statutes of limitations as a "procedural" matter. See, e.g., Sun Oil Co., 486 U.S. at 729, 108 S.Ct. 2117. A federal court, however, may apply the same statute of limitations because it is "substantive" within the meaning of Erie. See Guaranty Trust Co., 326 U.S. at 109-10, 65 S.Ct. 1464. As the Supreme Court has explained:
Sun Oil Co., 486 U.S. at 726-27, 108 S.Ct. 2117.
In sum, if state conflict-of-law principles call for a rule of decision (1) that would apply to the suit if it were brought in state court, (2) that is "substantive" within the meaning if Erie, and (3) that is not displaced by a valid federal law or rule governing the same issue, then the Rules of Decision Act, see note 1, ante, requires the federal court sitting in diversity to apply the state rule, irrespective of whether that rule is understood to be "procedural" or "substantive" as a matter of state law. We address below the first of these issues, which is the only one contested by the parties. See generally Greenlaw v. United States, 554 U.S. 237, 243, 128 S.Ct. 2559, 171 L.Ed.2d 399 (2008) ("In our adversary system, in both civil and criminal cases, in the first instance and on appeal, we follow the principle of party presentation. That is, we rely on the parties to frame the issues for decision and assign to courts the role of neutral arbiter of matters the parties present.").
As noted, a federal court exercising diversity jurisdiction generally must apply the choice-of-law rules of the state in which the court sits. Klaxon Co., 313 U.S. at 494-97, 61 S.Ct. 1020. In this case, however, Liberty originally filed suit in California, after which time the parties agreed to transfer the case to the Eastern District of New York pursuant to 28 U.S.C. § 1404(a), see note 3, ante. The Supreme Court has held that, in such circumstances, the governing law "does not change following a transfer of venue under § 1404(a)," regardless of which party initiates the transfer. Ferens, 494 U.S. at 530, 110 S.Ct. 1274. Here, that means that the federal court in New York must pretend, for the purpose of determining the applicable state rules of decision, that it is sitting in California.
We have no reason to doubt that a California state court would apply California's anti-SLAPP rule as a matter of its own procedural rules, even if it applied New York substantive law to the merits of the malicious prosecution action. The anti-SLAPP rule, which appears in California's Code of Civil Procedure, and which California courts have described as a "procedural remedy," Rusheen v. Cohen, 37 Cal.4th 1048, 1055, 39 Cal.Rptr.3d 516, 128 P.3d 713 (2006), and a "mere rule of procedure," Ludwig v. Superior Court, 37 Cal.App.4th 8, 21, 43 Cal.Rptr.2d 350 (1995), states that it is intended to avoid the "abuse of the judicial process" in the form of "lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances," CAL.CIV.PROC.CODE § 425.16(a). To this end, the rule provides for expeditious dismissal and an award of attorney's fees and costs for any meritless "cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue...." Id. § 425.16(b)(1); see also id. § 425.16(c)(1).
Indeed, California courts have repeatedly held, as a matter of state law, that California's anti-SLAPP rule is "procedural" in nature and therefore applies in California courts regardless of which source of law governs a plaintiff's claim. See, e.g., Bradbury v. Superior Court, 49 Cal.App.4th 1108, 1118, 57 Cal.Rptr.2d 207 (1996) ("Where the action is founded on a federal statute and brought in state court,
McDaniel v. McDaniel, No. B226832, 2011 WL 4940687, at *7-8 (Cal.Ct.App. Oct. 18, 2011) (unpublished). It is unclear to us that this type of conflicts analysis was even necessary under California law, given the procedural nature of the anti-SLAPP rule, cf. County of Los Angeles v. Superior Court, 139 Cal.App.4th 8, 17, 42 Cal.Rptr.3d 390 (2006) ("Although federal law controls the substantive aspects of plaintiffs' federal civil rights claim, state rules of evidence and procedure apply unless [the] application of those rules would affect plaintiffs' substantive federal rights."), but we have no doubt that other California courts would reach the same conclusion were they to apply California's "substantive" choice-of-law principles.
To be sure, the Due Process Clause and the Full Faith and Credit Clause, among other constitutional provisions, provide some limitations to the application of state conflict-of-law rules in ways that would frustrate causes of action defined by other states' laws, but this case does not approach those constitutional boundaries.
In sum, California's anti-SLAPP rule would apply to this suit if the claim were proceeding in a California state court. Because the District Court erred with respect to this issue, we vacate the District Court's order and remand for its further consideration of the motion.
To summarize, we hold that:
For these reasons, Liberty's motion to dismiss this appeal for lack of appellate jurisdiction is
Batzel v. Smith, 333 F.3d 1018, 1023-24 (9th Cir.2003) (alterations, internal citations, some internal quotation marks, and paragraph breaks omitted).
To be sure, the Supreme Court, in Nixon, noted, in dictum, that "Cohen established that a collateral appeal of an interlocutory order must `presen[t] a serious and unsettled question.'" 457 U.S. at 742, 102 S.Ct. 2690 (citing Cohen, 337 U.S. at 547, 69 S.Ct. 1221). But after this dictum on Cohen, the Court immediately reverted to the familiar three-factor test, see, e.g., Moses H. Cone Mem'l Hosp., 460 U.S. at 11, 103 S.Ct. 927, and it has used that test ever since without exception, see Under Seal, 326 F.3d at 481 n. 1 (collecting cases). We follow the Supreme Court's lead. See id. at 481-84 (comprehensively reviewing the issue). "There is simply no requirement that the argument on appeal be novel." Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d 1085, 1091 (9th Cir. 2007); cf. 15A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3911.5 (2013).
CAL.CIV.PROC.CODE § 425.16(a).
Similarly, Microflo's argument that "New York has no interest in not applying California's Anti-SLAPP statute in this litigation," Appellants' Brief at 13, is inapposite, because New York's interests would not influence a California court's decision to apply California's anti-SLAPP rule as a procedural matter. It is true that "the transferee court must follow the choice-of-law rules that prevailed in the transferor court," Ferens, 494 U.S. at 519, 110 S.Ct. 1274 (emphasis supplied), but the transferee court must conduct this inquiry as if the case was still being litigated in the transferor court, thereby ensuring that "[a] transfer under § 1404(a) ... does not change the law applicable to a diversity case," id. at 523, 110 S.Ct. 1274. Here, for example, the District Court should have assessed what a California court would do in a case heard in its own court — not what California's choice-of-law rules might prescribe for suits being litigated in a federal court in New York. As the Supreme Court held in Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), "the transferee district court must ... apply the state law that would have been applied if there had been no change of venue." Id. at 639, 84 S.Ct. 805 (emphasis supplied); see also Ferens, 494 U.S. at 519, 110 S.Ct. 1274 (extending the holding of Van Dusen to transfers initiated by a plaintiff rather than a defendant).