April 9, 2021

Arcadia Lakes not SLAPPed

On February 10, 2021, almost exactly one year after oral arguments, the Court of Appeals delivered to us an important victory on a long and winding case. The implications of the ruling are much broader and straightforward than the specific technical issues raised in this relatively small and local matter.

This case began more than a decade ago, which increasingly sounds like the SCELP equivalent of “Once upon a time …” In 2008, the South Carolina Department of Health and Environmental Control (DHEC) granted Roper Pond LLC a permit to undertake construction of an apartment complex on property in an unincorporated area of Richland County adjacent to the Town of Arcadia Lakes.

The work included excavating and lowering a lily pad pond and using the pond to manage the development's stormwater. Several individuals, including the town's mayor, and the town itself challenged DHEC's permitting decision. The trial in the Administrative Law Court (ALC) was held in September 2009 and the challenge was dismissed for (drum roll) lack of standing. The Court of Appeals affirmed the ALC's ruling, and the although the Supreme Court agreed to review the case, the dispute was rendered moot by the developer completing the project.

This story could have ended in 2015 with this setback alone but the developer filed and pursued a petition for fees, costs and sanctions once the appeal phase was completed. The petition resulted in the ALC issuing an unprecedented order in the developer’s favor, awarding $205,000 in attorney’s fees and costs and imposing a $200,000 sanction on the town!

Aside from the punitive amounts at issue, the legal grounds of the ALC's decisions were shaky at best (as the Court of Appeals clearly explained), with chilling implications for a key element of our constitutional freedom of speech: the right to petition.

The statute invoked to award fees and costs to the developer only applies to "civil actions," and it should not be a surprise that the Court of Appeals agreed with us that a contested case before the ALC is not a civil action:

“The Developer offers many reasons why it believes the statute should apply to cases at the ALC level, but we must be faithful to the statute's plain text, we must read the statute narrowly rather than broadly, and we believe state and federal precedents support this holding.”

The rule invoked to impose sanctions authorizes the ALC to sanction a party who pursues a case "solely for the purposes of delay" or if the case is frivolous. Roper Pond conceded that the town's pursuit of the case was not frivolous. After the Court of Appeals thoroughly reviewed the extensive record, it concluded that the town did not pursue its challenge solely for delay, as you can read in more detail in the opinion linked below.

It is worth expounding on what was at stake on this apparently narrow point of law. What the developer's action amounted to is commonly referred to as a SLAPP suit, or Strategic Litigation Against Public Participation. This term was coined by two researchers who first analyzed a disturbing trend emerging in the legal sector in the 1980s: being sued for speaking out.

Although the developer's conduct in this case might have been dismissed as retaliation or a business-minded attempt to recover part of the extra costs incurred by the project, the ALC decision is what made the situation all the more alarming and potentially intimidating well beyond the shores of a tiny lily pad pond in the heart of our state.

SLAPP suits are effective because even a meritless lawsuit can take years and many thousands of dollars to defend. To end or prevent a SLAPP suit, those who speak out on issues of public interest frequently agree to muzzle themselves, apologize or “correct” statements. Although SLAPP suits are most commonly used to silence and harass critics of government, corporations or developers by forcing them to spend money to defend baseless suits, imposing groundless and punitive sanctions on someone who was not deterred but happened to lose their case in the court system can obviously reach the very same result.

Despite many states adopting various anti-SLAPP measures over the last two decades, South Carolina has never done so. If the "F" given to our state by the Public Participation Project is a little harsh on our judicial system, we are all the more glad that the Court of Appeals earned a well-deserved "A" for this decision.

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Court of Appeals Opinion

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