Rushing McCarl asks California Supreme Court to clarify appealability of collateral orders

This procedural issue is seemingly esoteric but has far-reaching practical effects for litigation clients. The lawsuit in which Rushing McCarl filed the petition shows why.

In 2023, Rushing McCarl successfully moved to strike a defendant’s strategic counterclaims under California’s anti-SLAPP statute, then moved for attorneys’ fees (which are mandatory for litigants who win anti-SLAPP motions to strike). The trial court granted only 18% of the firm’s fee request, and the client appealed. (You can read our opening brief on appeal here).

The Fifth District Court of Appeals, declining to consider the appeal’s substantive merits, held in an unpublished opinion that the trial court’s order was not appealable under the collateral order doctrine because it did not require the appellant (our client) to pay money. The effect of that decision was to leave the client stuck with most of the fees caused by an opponent’s decision to file SLAPP counterclaims.

Unless the California Supreme Court grants our petition for review, our client will have no avenue to challenge the fee order until after the entire lawsuit is completed, even though the fee order is unrelated to the claims at issue in the lawsuit. The Court of Appeals’ ruling creates incentives for well-resourced defendants to file baseless counterclaims aimed at increasing a plaintiff’s litigation expenses; if the claims are stricken under the anti-SLAPP statute but the plaintiff is not compensated for all the fees the defendant imposed, the defendant will have achieved their strategic goal of imposing financial pressure on the plaintiff.

The Court of Appeals based its decision on the  California Supreme Court’s 1948 case Sjoberg v. Hastorf.[1] Sjoberg said that an order is appealable under the collateral order doctrine if it (1) is collateral (entirely distinct from the underlying issues in the lawsuit), (2) is final as to the collateral matter, and (3) directs the payment of money by the appellant or the performance of an act by or against the appellant. In Rushing McCarl’s case, the court ruled that the third element was not met because our client’s opponent (the respondent on appeal) was the one ordered to pay fees.

In later opinions, however, the California Supreme Court has largely ignored the third element mentioned in Sjoberg. Notably, the Court said in the 1976 case In re Marriage of Skelly[2] that an otherwise collateral order is appealable if it directs anyone to pay money or perform an act. Other cases have continued to muddy the waters, leaving the collateral order doctrine unclear and forcing cautious attorneys to appeal collateral orders that may or may not be held appealable.

Rushing McCarl’s petition, which can be viewed here, asks the California Supreme Court to clarify the collateral order doctrine by deciding whether otherwise collateral orders are appealable only if they require the would-be appellant to pay money.

Notes: