Filed 8/18/14
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FIRST APPELLATE DISTRICT

                                     DIVISION TWO


THE PEOPLE,
        Plaintiff and Respondent,
                                                    A140922
v.
THE MCGRAW-HILL COMPANIES,                          (San Francisco City & County
INC. et al.,                                        Super. Ct. No. CGC-13-528491)
        Defendants and Appellants.


        The People, by and through the Attorney General, brought this action against
McGraw-Hill Companies, Inc. and Standard & Poor’s Financial Services LLC
(defendants) for statutory violations arising out of defendants’ alleged business practice
of inflating their credit ratings of various structured finance securities. The complaint
alleged four causes of action, including two for violations of the California False Claims
Act (CFCA). Defendants filed a special motion to strike the CFCA causes of action
pursuant to section 425.16, subdivision (b) of the Code of Civil Procedure, the
anti-SLAPP statute.1 The superior court denied the motion on the ground that the
People’s enforcement action was exempt from the special motion to strike procedure
pursuant to section 425.16, subdivision (d), which provides that “This section shall not
apply to any enforcement action brought in the name of the people of the State of
California by the Attorney General, district attorney, or city attorney, acting as a public
prosecutor.” Defendants filed a notice of appeal.

        1
        All statutory references are to the Code of Civil Procedure. And, to facilitate a
clear analysis, we refer to the relevant provisions of section 425.16 by their subdivision
designation.


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       The People filed a motion to dismiss the appeal, challenging this court’s
jurisdiction to review the trial court’s order, relying on the express language of
subdivision (d). Defendants opposed the motion, contending that this appeal is
authorized by the express language of subdivision (i), which provides that “[a]n order
granting or denying a special motion to strike shall be appealable under Section 904.1.”
The motion was thoroughly briefed, and we held oral argument, which was vigorous
indeed. We now rule, concluding that the order is not appealable, and we therefore grant
the motion to dismiss the appeal.2
                                     BACKGROUND
Section 425.16
       “In 1992, the Legislature enacted section 425.16, the anti-SLAPP statute, to
provide for the early dismissal of unmeritorious claims filed to interfere with the valid
exercise of the constitutional rights of freedom of speech and petition for the redress of
grievances. [Citation.]” (Club Members for an Honest Election v. Sierra Club (2008)
45 Cal.4th 309, 315; see also Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th
180, 192 (Varian) [section 425.16 enacted in order “to prevent and deter” SLAPP suits
“ ‘brought primarily to chill the valid exercise of the constitutional rights of freedom of
speech and petition for the redress of grievances.’ ”].)
       “Section 425.16 authorizes a defendant to file a special motion to strike any cause
of action arising from an act in furtherance of the defendant’s constitutional right of
petition or free speech in connection with a public issue. It establishes a procedure by
which the trial court evaluates the merits of the lawsuit using a summary-judgment-like
procedure at an early stage of the litigation. [Citations.]” (Haight Ashbury Free Clinics,
Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539, 1546-1547.)
       This special motion to strike procedure implements subdivision (b) of the statute
which states: “A cause of action against a person arising from any act of that person in


       2
         In light of our disposition of this motion, we deny defendants’ request for
judicial notice which was filed in support of the merits of their appeal.


                                              2
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 shall be
subject to a special motion to strike, unless the court determines that the plaintiff has
established that there is a probability that the plaintiff will prevail on the claim.”
       When section 425.16 was originally proposed, the Attorney General expressed
concern that it “might impair the ability of state and local agencies to enforce certain
consumer protection laws.” (City of Long Beach v. California Citizens for Neighborhood
Empowerment (2003) 111 Cal.App.4th 302, 307-308 (City of Long Beach).) Thereafter,
the Governor vetoed versions of the bill that failed to address this concern. (See People
v. Health Laboratories of North America, Inc. (2001) 87 Cal.App.4th 442, 447 (Health
Labs). Eventually, a provision was added to the proposed statute which recognized a
prosecutorial exemption for enforcement actions to protect the consumer and/or the
public. With the addition of this express exemption, the anti-SLAPP statute was enacted
in 1992. (Ibid.) This exemption is set forth in subdivision (d), which states that
section 425.16 “shall not apply to any enforcement action” brought by a public
prosecutor.
       “As originally enacted in 1992, section 425.16 contained no provision for an
immediate appeal of orders made pursuant to that section. [Citation.] Orders made
pursuant to section 425.16 could be reviewed only as an appeal after judgment [citations]
or by petition for an extraordinary writ. . . . [¶] In 1999 the Legislature added former
section 425.16, subdivision (j) . . , providing an appeal may be taken directly from an
order granting or denying a special motion to strike under section 425.16.” (Doe v.
Luster (2006) 145 Cal.App.4th 139, 144-145 (Doe).) “The Legislature found it necessary
to enact [former] subdivision (j) because, without the ability to appeal, a SLAPP
‘defendant will have to incur the cost of a lawsuit before having his or her right to free
speech vindicated.’ [Citation.]” (Varian, supra, 35 Cal.4th at p. 194.) This direct appeal
provision is now set forth in subdivision (i), which states that orders granting or denying




                                               3
a special motion to strike “shall be appealable under Section 904.1.” And it is
subdivision (i) on which defendants base their appeal.3
The Parties’ Contentions
       The People contend that this appeal must be dismissed because the express
language of subdivision (d) exempts this action from the direct appeal procedure set forth
in subdivision (i). According to the People, the phrase “this section shall not apply” in
subdivision (d) means what it says: that all of section 425.16, including subdivision (i),
does not apply to a prosecutor’s enforcement action. The People also contend that the
Legislature never intended for subdivision (d) findings to be subject to immediate
appellate review.
       Defendants contend the trial court’s subdivision (d) order is made appealable by
subdivision (i). They argue that there is nothing unclear or ambiguous about
subdivision (i)’s statutory language which explicitly authorizes their appeal from the
order denying their special motion to strike. Defendants also argue that the history of the
anti-SLAPP statute reflects a legislative intent to create a right to immediately appeal any
order granting or denying a special motion to strike.
                                       DISCUSSION
       Although each party invokes a different provision of the anti-SLAPP statute, their
respective interpretations are mutually exclusive. To resolve this conflict, we apply
settled rules of statutory construction.
       “ ‘When interpreting a statute our primary task is to determine the Legislature’s
intent. [Citation.] In doing so we turn first to the statutory language, since the words the
Legislature chose are the best indicators of its intent.’ [Citations.] The Supreme Court
has emphasized that the words in a statute selected by the Legislature must be given a


       3
         Actually, defendants also cite to section 904.1, subdivision (a)(13), which states
that an appeal may be taken from “an order granting or denying a special motion to strike
under Section 425.16.” That subdivision was added to section 904.1 in 1999, to
accommodate the newly added section 425.16, subdivision (j), now subdivision (i).
(Stats. 1999, ch. 960 (A.B. 1675). It thus adds nothing to defendants’ position.


                                             4
‘commonsense’ meaning when it noted: ‘ “Our first step [in determining the
Legislature’s intent] is to scrutinize the actual words of the statute, giving them a plain
and commonsense meaning. [Citations.]” [Citation.]’ [Citation.] Further, our Supreme
Court has noted, ‘ “ ‘If the language is clear and unambiguous there is no need for
construction, nor is it necessary to resort to indicia of the intent of the Legislature (in the
case of a statute) . . . .’ ” ’ [Citations.]” (Goldstein v. Ralphs Grocery Co. (2004)
122 Cal.App.4th 229, 233.)
         Because this case requires us to interpret language from two subdivisions of the
anti-SLAPP statute, we are particularly guided by the rule requiring us to “consider
portions of a statute in the context of the entire statute and the statutory scheme of which
it is a part, giving significance to every word, phrase, sentence, and part of an act in
pursuance of the legislative purpose.” (Curle v. Superior Court (2001) 24 Cal.4th 1057,
1063.)
         Applying these rules leads to several conclusions.
         First, subdivision (b) is the linchpin of the anti-SLAPP statute: it authorizes the
motion to strike procedure established by the Legislature in order to protect acts in
furtherance of the constitutional rights to free speech and petition.
         Second, subdivision (d) completely exempts public enforcement actions from the
subdivision (b) motion to strike procedure. Thus, for example, a subdivision (d) order
does not require any judicial assessment of the nature of the defendant’s conduct or
substantive evaluation of the merits of the plaintiff’s lawsuit. Rather, as stated by our
colleagues in Division Five, the “anti-SLAPP remedy is unavailable” to a defendant in an
action brought by a public prosecutor. (Health Labs, supra, 87 Cal.App.4th at p. 448.)
         Third, the direct appeal right created by subdivision (i) unequivocally applies to an
order granting or denying a special motion to strike pursuant to the procedures
promulgated to implement subdivision (b).
         Finally, the direct appeal provision in subdivision (i) cannot be stretched to apply
to a trial court determination that an action is exempt from the anti-SLAPP statute under
subdivision (d). Subdivision (i) authorizes a direct appeal from a ruling on the merits of a


                                               5
subdivision (b) special motion to strike. A subdivision (d) order is not a ruling on the
merits of a special motion to strike, but rather a determination that the entire anti-SLAPP
procedure does not apply to the case.
       Defendants contend that the broad language of subdivision (i) manifests the
Legislature’s “unambiguous intent that an immediate appeal should be available from any
order granting or denying a motion to dismiss under section 425.16.” However,
interpreting subdivision (i) as authorizing an immediate appeal from a subdivision (d)
finding would undermine the very function of the subdivision (d) exemption, subjecting
the public prosecutor’s action to a specific type of judicial scrutiny that the exemption
expressly prohibits. Moreover, defendants’ over-broad construction of subdivision (i) not
only fails to account for the language in subdivision (d), it would render that exemption
meaningless, something a reasonable Legislature would not have intended.
       Defendants argue that the timing of the adoption of the two subdivisions reflects a
legislative intent to authorize an immediate appeal from a subdivision (d) order. As
noted above, subdivision (d) was part of the original anti-SLAPP statute enacted by the
Legislature in 1992. Subdivision (i), on the other hand, was added by a 1999
amendment. So, defendants reason, if the Legislature had intended to except public
enforcement actions from the broad right to an immediate appeal created by subdivision
(i), “it would have said so.” This argument, however, ignores what the plain language of
subdivision (d) actually says: the anti-SLAPP statute does not apply to prosecutor
enforcement actions. In light of this preexisting exemption, it was not necessary for the
Legislature to expressly carve out another exemption for public prosecutor actions in the
text of subdivision (i). 4

       4
         This also disposes of defendants’ reliance on exemptions to the anti-SLAPP
statute contained in section 425.17, which was added in 2003. (See generally Goldstein,
supra, 122 Cal.App.4th at p. 232.) Defendants argue that section 425.17, subdivision (e)
shows that the Legislature knew how to create an exemption from the right of immediate
appeal under subdivision (i) (and section 904.1, subd. (a)(13)), but did not do so for
public prosecution actions. However, nothing more was needed for public prosecutor
actions because of the clear language of subdivision (d) and its legislative history.


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       Defendants also contend that published authority compels the conclusion that
subdivision (d) orders are immediately appealable under subdivision (i), citing three
cases: Health Labs, supra, 87 Cal.App.4th 442; City of Los Angeles v. Animal Defense
League (2006) 135 Cal.App.4th 606; and People ex re Lockyer v. Brar (2004)
115 Cal.App.4th 1315. The essence of defendants’ argument is that in these cases the
courts considered the merits of appeals from subdivision (d) orders.
       As best we can determine—and, from comments by defendants’ counsel at oral
argument, as best he can determine—no party in any of these three cases questioned the
appellate court’s jurisdiction. Certainly, the opinions do not address the question whether
a subdivision (d) order is appealable under subdivision (i). They thus do not avail
defendants: “ ‘It is axiomatic that language in a judicial opinion is to be understood in
accordance with the facts and issues before the court. An opinion is not authority for
propositions not considered.’ [Citation.]” (Kinsman v. Unocal Corp. (2005) 37 Cal.4th
659, 680; see also Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn. 2 [“Language used in
any opinion is of course to be understood in the light of the facts and the issue then before
the court, and an opinion is not authority for a proposition not therein considered”];
Palmer v. GTE California, Inc. (2003) 30 Cal.4th 1265, 1278 [quoting Ginns].)
       Citing Olson v. Corey (1983) 35 Cal.3d 390, 398 (Olson), defendants contend that
an appellate court “necessarily” affirms its jurisdiction by hearing an appeal “[b]ecause
courts are required to consider jurisdictional issues without regard to whether they are
raised by the parties.” Defendants’ reliance on Olson is misplaced. In that case, one
party filed a brief suggesting that the appeal had been taken from an nonappealable order,
but all of the material parties urged the court to review the ruling on the merits. Rejecting
that proposal, the Olson court stated that “since the question of appealability goes to our
jurisdiction, we are dutybound to consider it on our own motion.” (Id. at p. 398.) Olson
is relevant here because, as happened there, doubt about the appealability of the order in
question has been brought to the court’s attention. Olson does not, however, support
defendants’ very different contention: that appellate courts must search for jurisdictional
problems never raised by the parties.


                                             7
       Furthermore, defendants overlook Doe, supra, 145 Cal.App.4th 139, a case
holding that the denial of a motion for attorney fees pursuant to subdivision (c) of
section 425.16 is not immediately appealable under subdivision (i). There, the defendant
argued that the order was appealable because other appellate courts had entertained
interlocutory appeals from subdivision (c) orders. (Id. at p. 150.) Rejecting the
argument, the court concluded, among other things, that a judicial opinion addressing the
merits of an appeal which “does not suggest either that the parties raised the jurisdictional
issue or that the court considered it” is not authority for the proposition that the order is
actually appealable. (Ibid.)
       As noted at the outset of our analysis, both parties claim support for their
respective theories in the legislative history of the anti-SLAPP statute. We question the
need to resort to arguments about what the Legislature may have intended. (See
Goldstein, supra, 122 Cal.App.4th at p. 233 [if statutory language is clear, no need to
resort the legislative history].) Section 425.16 is not ambiguous when its subdivisions are
considered together rather than at odds with each other.
       But were it relevant to this discussion, the legislative history of section 425.16
reinforces our conclusion that decisions against defendants under subdivision (d) are not
immediately appealable. “The legislative history of section 425.16 plainly implies” that
its purpose was to prevent the harm caused by SLAPP plaintiffs, litigants who “do not
care so much about winning their lawsuits as they care about delaying and distracting the
defendant from his or her objective, which is generally economically adverse to those of
the SLAPP plaintiff. SLAPP plaintiffs achieve their goal if their suits deplete the
defendant’s resources and energy. [Citations.]” (Health Labs, supra, 87 Cal.App.4th at
p. 450; see also City of Long Beach, supra, 111 Cal.App.4th at pp. 308-309.)
       But by their very definition public prosecutor enforcement actions are not SLAPP
cases. “[A] public prosecutor’s enforcement action is not motivated by a retaliatory
attempt to gain a personal advantage over a defendant who has challenged his or her
economic ambition. The prosecutor’s motive derives from the constitutional mandate to
assure that the laws of the state are uniformly enforced and to prosecute any violation of


                                               8
these laws, so that order is preserved and the public interest protected. [Citations.]
Nothing in the legislative history of section 425.16 implies that the problem the
Legislature sought to rectify thereby was created by prosecutors bringing meritless
enforcements actions.” (Health Labs, supra, 87 Cal.App.4th at p. 450.)
       To the contrary, the legislative history shows that the subdivision (d) exemption
was enacted in order to preclude defendants from using the anti-SLAPP statute to impair
the ability of state and local agencies to enforce consumer protection laws. (Health Labs,
supra, 87 Cal.App.4th at pp. 446-447; City of Long Beach, supra, 111 Cal.App.4th at
pp. 307-308.) Subjecting public prosecutors to the direct appeal process authorized by
subdivision (i) would undermine legislative intent, because it would impede the public
prosecutor’s efforts to protect the health and safety of the citizenry, delaying the
enforcement action while the defendant pursues an appeal of the subdivision (d)
determination.
       Defendants contend that the legislative history leading to subdivision (i) reflects
an intent that every ruling on a special motion to strike would be subject to immediate
appellate review. Specifically, they rely on evidence that proponents of the immediate
appeal provision expressed concern that without the ability to directly appeal a section
425.16 order, a defendant in an actual SLAPP suit might have to incur the cost of a
lawsuit before having his or her right to free speech vindicated. (See Brar, supra,
115 Cal.App.4th at p. 1317-1318; Doe, supra, 145 Cal.App.4th at p. 147.)
       As we recognized in a case that did not involve the subdivision (d) exemption, the
right to appeal can be important to the extent it protects defendants from the
consequences of an erroneous denial of a meritorious anti-SLAPP motion. (Grewal v.
Jammu (2011) 191 Cal.App.4th 977, 1000.) That said, we went on in Grewal, in a
section entitled “A Losing Defendant’s Right to Appeal Is the Aspect of the Anti-SLAPP
Statute Most Subject to Abuse” (id. at p. 1000-1003), to discuss Supreme Court and
Court of Appeal opinions reflecting on the possibility for abuse, including quoting this
observation by the Supreme Court in Varian, supra, 35 Cal.4th at p. 195: “In light of our
holding today, some anti-SLAPP appeals will undoubtedly delay litigation even though


                                              9
the appeal is frivolous or insubstantial. As the Court of Appeal observed and plaintiffs
contend, such a result may encourage defendants to ‘misuse the [anti-SLAPP] motions to
delay meritorious litigation or for other purely strategic purposes.’ ” These concerns are
a fortiori applicable here—an enforcement action by a public prosecutor.
       Health Labs, supra, 87 Cal.App.4th 442, one of the cases relied on by defendants,
concludes with this terse summation, one pointedly applicable here: “We conclude that
the classification created by subdivision (d)’s exemption of public prosecutors’
enforcement actions from anti-SLAPP motions bears directly on furthering the state’s
legitimate interest of allowing prosecutors—who did not create the SLAPP problem—to
pursue actions to enforce laws, unencumbered by delay, intimidation, or distraction.” (Id.
at p. 451.)
                                     DISPOSITION
       The appeal is dismissed.




                                            10
                                              _________________________
                                              Richman, J.


We concur:


_________________________
Kline, P.J.


_________________________
Brick, J.*




      * Judge of the Alameda County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

People v. McGraw-Hill Companies, Inc. et al. (A140922)




                                         11
Trial Court:                                Superior Court of the City and County of
                                            San Francisco

Trial Judge:                                Honorable Curtis E.A. Karnow

Attorneys for Defendants and Appellants:    Morrison & Foerster, Melvin R. Goldman,
                                            Ryan G. Hassanein, Nicholas Napolitan;
                                            Cahill Gordon & Reindel, Floyd Abrams,
                                            Adam Zurofsky, Jason M. Hall, Peter J.
                                            Linken

Attorneys for Plaintiff and Respondent:     Kamala D. Harris, Attorney General,
                                            Martin Goyette, Senior Assistant Attorney
                                            General, Fredrick W. Acker, Deputy
                                            Attorney General




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