Isaly v. Garde Clarifies Procedure for Seeking Attorneys’ Fees

In a recent order, the New York Supreme Court simultaneously clarified the procedure for seeking attorneys’ fees under the anti-SLAPP law in state court and suggested an avenue for obtaining fees in federal court.  See Isaly v. Garde, Index No. 160699/2018, 2024 NY Slip Op 24056 (NY County, Feb. 13, 2024).  

New York’s anti-SLAPP law is contained partly in provisions of the Civil Procedure Law and Rules (§§ 3211(g) and 3212(h)), which provide for dismissal of SLAPPs at the motion-to-dismiss and summary judgment stages, and partly in provisions of the Civil Rights Law (§§ 70-a and 76-a), which separately provide causes of action for attorneys’ fees, compensatory damages, and punitive damages.

On their face, it is not clear how these provisions relate procedurally.  Since the law was amended in late 2020, there has been some confusion among state courts about whether a defendant can seek attorneys’ fees via a pre-answer motion under § 3211(g) or whether a defendant must separately assert a counterclaim for fees in their answer.  Compare Javino v. Newsday LLC, Index No. 607954/2023, 2023 NYLJ LEXIS 2387 *9 (Suffolk County, Sep. 12, 2023) (requiring defendant to separately assert a counterclaim) with Golan v. Daily News, L.P., Index No. 151135/2022, 77 Misc. 3d 258, 273 (NY County, Oct. 3, 2022) (ordering that defendant was entitled to attorneys’ fees in deciding a motion to dismiss under § 3211(g)).

According to the February 13 order in Isaly, a defendant in state court can seek fees via a pre-answer motion to dismiss.  The court noted that the First Department seemingly held as much in Aristocrat Plastic Surgery P.C. v. Silva, 206 AD3d 26 (1st Dept. 2022), albeit only implicitly and without reasoning.  See Isaly, 2024 NY Slip Op 24056 at **6-7.  Isaly itself supplies the textual reasoning: the Civil Rights Law states that a defendant “shall” recover attorneys’ fees and costs, inter alia, “upon . . . an adjudication pursuant to [CPLR 3211(g)].”  See id. at *6 (quoting § 70-a(1)(a)). 

Why, then, does § 70-a provide that a defendant may assert an anti-SLAPP counterclaim, something a defendant can only do after a motion to dismiss?  Part of the answer, according to Isaly, is that a defendant’s discretionary entitlement to damages is less likely to be resolvable via a motion to dismiss than a defendant’s non-discretionary entitlement to fees.  See id. at *7. The Civil Rights Law states that compensatory and punitive damages “may only be recovered” “upon an additional demonstration” of malicious intent.  See id. (quoting § 70-a(1)(b)-(c)).  Establishing intent might require further litigation and possibly discovery. 

More to the point, Isaly says, § 70-a provides a counterclaim for attorneys’ fees in order to enable a defendant to recover fees in federal court.  See id. at *8.  So far, federal district courts in the Second Circuit have generally held that anti-SLAPP motion-to-dismiss and summary judgment procedure do not apply in federal court, because under Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), in a federal diversity action, federal courts must apply federal procedure. But a cause of action for attorneys’ fees is part of substantive New York law, and under Erie, a federal court must apply the substantive law of the state in which the federal court sits.  

While this conclusion is logical under Erie and its progeny, as one commentator has noted, New York federal courts have so far produced muddled case law on whether defendants can seek fees under the anti-slapp law via counterclaim.  Isaly is helpful authority in support.