Georgia’s ‘anti-Slapp’ Statute and How It Can Affect Your Commercial Litigation Case

When you are pursuing a commercial litigation action in Georgia, you might find yourself faced with many different types of arguments about why you should not be allowed to pursue your case. While some may relate directly to the facts of your case, others may have nothing at all to do with the underlying facts that led you into court. Whether the arguments against your case are factual, statutory, or procedural, it helps to have an experienced Georgia commercial litigation attorney on your side to make sure that your rights and interests are sufficiently represented and protected.

One case recently decided by the Georgia Court of Appeals involved a defense argument built on a specific statute:  Georgia’s Anti-SLAPP law. The seeds of the dispute dated back to 2015, when members formed a Cumming, Ga.-based LLC holding company to hold some 2,718 acres in Santa Rosa County, Fla. An additional entity was formed at the same time for the express purpose of serving as the managing member of the holding company. There were four entities that were members of that managing member LLC.

Less than a year later, allegations were made that several entities had breached the holding company’s operating agreement. Specifically, the allegation was that they hadn’t made required capital contributions, a claim they denied. Nevertheless, the manager LLC was voted out as the managing member of the holding company and replaced with a different LLC. The members of that new managing member then announced their intention not to develop the bulk of the Florida property but instead to donate it to the government of Santa Rosa County as a tax write-off.

All of this activity triggered a flurry of litigation. The ousted managing member LLC and several of its members sued in Florida, alleging that the process of removing the original managing member (and subsequent attempt to donate the land) was done wrongfully. That lawsuit was dismissed. Another lawsuit, this one in Fulton County, sought a declaration from the judge that two of the original managing member LLC’s members no longer qualified as members of that LLC because they had not made their required capital contributions.

The defendants asked the trial court to dismiss the complaint as a violation of Georgia’s Anti-SLAPP law. “SLAPP” is an acronym that means strategic litigation against public participation. In Georgia, that refers to any lawsuit that, as the Court of Appeals put it, is “intended to silence or intimidate critics or opponents by overwhelming them with the cost of a legal defense until they abandon that criticism or opposition.” The law, then, is designed to protect people or entities exercising their right to free speech or petition in the courts. The defendants’ argument contended that the Georgia lawsuit was a result of the entities’ legal action taken in Florida.

In order for a party to be entitled to use the Anti-SLAPP statute as a basis for getting a complaint against it dismissed, it has to demonstrate that the action that allegedly violated the law arose from some type of protected activity (like the defendants’ filing suit in Florida). In this situation, though, the Georgia lawsuit did not violate the statute, and the plaintiffs were allowed to proceed.

The problem with the defendants’ anti-SLAPP argument was the lack of causation connection between the two lawsuits. The Georgia lawsuit, the court concluded, wasn’t a result of the Florida litigation; it was a result of “a dispute as to corporate governance and membership based on compliance with the terms of the operating agreements” of the LLCs. Since the Florida lawsuit was not the underlying cause of the Georgia lawsuit, the Anti-SLAPP statute didn’t apply, and the Georgia plaintiffs were entitled to go forward.

Whenever you are faced with commercial litigation, you need to make sure you have knowledgeable counsel representing you and making your case. The diligent Atlanta business litigation attorneys at Poole Huffman, LLC have been working for many years to help their clients protect their interests. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

More blog posts:

Commercial Real Estate Broker’s Liens, Atlanta Business Litigation Attorneys Blog, Sept. 23, 2013

Wrongful Foreclosure, Atlanta Business Litigation Attorneys Blog, Atlanta Business Litigation Attorneys Blog, May 16, 2013