In response to an action filed by a coop corporation against a former board member and one of its shareholders alleging that the defendants had defamed Board members by distributing newsletters and emails anonymously accusing the Board members of dishonesty and fraudulent conduct, one of the defendants moved to dismiss the complaint pursuant to New York Civil Rights Law § 70(a) and § 76(a), commonly known as a strategic lawsuit against public participation or SLAPP suit, as amended on November 10, 2020 (the “2020 Amendment”). The defendant argued that the 2020 Amendment should be applied retroactively and that the defamation action was a SLAPP suit intended to inhibit the shareholder’s rights of free speech, petition, and association rights in the cooperative corporation.

The 2020 Amendment 76(a) significantly expanded the applicability of the statute and extended it to cover almost all modes of public communication, construed broadly. The amended statute broadened the definition of an “action involving public petition and participation” from one brought by a “public applicant or permittee” to “any communication in a place open to the public or a public forum in connection with an issue of public interest.” The amended statute also made an award of legal fees mandatory, rather than discretionary, and provided for other compensatory and punitive damages not available under the existing statute.

Adam Leitman Bailey P.C. opposed the motion, arguing that the 2020 Amendment should not be applied retroactively to the pending action on the grounds that the text of the 2020 Amendments fails to explicitly state or clearly indicate that the law should be applied retroactively. Where there is no specific pronouncement of retroactivity in the text of the legislation, the presumption against retroactivity should apply.

The Court agreed with Adam Leitman Bailey P.C. and denied the Defendant’s motion, holding that the 2020 Amendment should not be given retroactive effect and therefore would not apply to the instant action. The Defendant appealed.

While the appeal was pending, the Court of Appeals in the seminal case on this issue Gottwald v. Sebert, 2023 WL 3959051 (June 13, 2023) issued a decision holding that the 2020 Amendment would not have a retroactive effect to apply to actions commenced before its effective date. The Court addressed the issue of

Whether the 2020 Amendments to the anti-SLAPP statute applied to the litigation, engaged in a comprehensive analysis of the statute and held it should not be applied retroactively. However, the Court went further and held that the 2020 Amendment would apply to actions that were “continued” after the effective date of the amendment and that if the Defendant prevailed it would be entitled to recover legal fees incurred in defense of the defamation action to the extent they were incurred after the effective date.

Bonnie Reid Berkow, a partner at Adam Leitman Bailey, P.C. in the Coop/Condo Litigation Group represented the Coop Corporation in this matter.