September 28, 2022

Volume XII, Number 271

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Documents Filed With The Secretary Of State Do Not Qualify For Anti-SLAPP Protection

An individual formed a nonprofit public benefit corporation, Xi'an Jiaotung University Alumni Association of Norther California by filing articles of incorporation with the California Secretary of State.  Thereafter, he filed statement of information identifying himself and another individual as officers of the corporation.  He also filed applications for tax-exempt status with the Internal Revenue Service.  The application listed another individual as a director, but he was not informed of this fact and he did not consent to being named in the form.  After the IRS approved tax-exempt status for the corporation, the incorporator filed a Submission of Exemption Request to the Franchise Tax Board.  

The unwitting director, however, was not happy and let it be known Wechat.  This led to the filing of a complaint for defamation and libel which led to a cross-complaint.  The plaintiffs (the incorporator and the other officer) filed a special motion to strike the cross-complaint under Anti-SLAPP statute.  The trial court denied the motion, ruling that the plaintiffs had not met their burden of establishing that the allegations against them arose from protected activity.

The Court of Appeal held that the application made to the IRS constituted protected activity because it was a writing made before or in connection with a protected activity.  Fuzu Li v. Jigang Jin, 2022 WL 4288954.  The Court, however, determined that the filings made with the Secretary of State and Franchise Tax Board did not qualify as either writings made before or in connection with an official proceeding or in connection with an issue of public interest.  The Court considered the IRS application to involve an official proceeding because it included space for a brief narrative description of the organization's activities.  

I am not so sure about some aspects of the Court's reasoning.  The Court, for example, distinguished the filing of articles from the IRS application because the "filing of articles of incorporation establishes a corporation's existence without the necessity of action or approval by the Secretary of State or any other government agency".   However, the Secretary of State is required to file an instrument only if it "conforms to law".  Cal. Corp. Code § 5008.  As California practitioners well know, the Secretary of State's office is not reluctant to "bounce" filings that it determines to be deficient.  The Court of Appeal also found that "there is no evidence that these disputed statements are of any interest to anyone else (even other members of the Association) . . .".   If they are of no public interest, why does the state require that they be filed and make them publicly available?  

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 263
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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