Relating to Real Estate

In a case of first impression by a Maryland state appellate court, the Court of Special Appeals (CSA) upheld a decision of the Circuit Court for Baltimore City that found that a developer’s lawsuit against two associations and five individuals who protested the developer’s plans to amend the approved Planned Unit Development (PUD) plan for Clipper Mill in Baltimore City was a SLAPP suit. Consequently, the circuit court dismissed the developer’s action, and the CSA affirmed. MCB Woodberry Dev., LLC v. Council of Owners of Millrace Condo., Inc., --- Md. App. ---, No. 1187, Sept. Term 2020, 2021 WL 5937413 (Dec. 16, 2021).

SLAPP suits are, in the words of Judge Glenn Harrell who wrote the CSA’s decision, “wrongfully brought” cases filed to deter, punish or intimidate efforts at critical public comment and participation in governmental proceedings involving the interests of the plaintiff. Maryland has a law, codified at §5-807 of the Courts and Judicial Proceedings Article, known as the Maryland’s Strategic Lawsuits Against Public Participation statute (Anti-SLAPP statute) that voids SLAPP suits. The Anti-SLAPP Statute was the basis for the decisions of the circuit court and the CSA.

VS Clipper Mill, LLC (VS) requested that the Baltimore City Planning Commission ( Planning Commission) approve proposed changes to the PUD plan for Clipper Mill to allow the construction of additional townhouses where surface vehicular parking had been planned and the redevelopment of an existing building. Residents of the PUD and their homeowners’ associations (Challengers) opposed these plans, claiming that they constituted major changes to the PUD and hence under Baltimore’s zoning ordinance required the approval of the Baltimore City Council, not just the Planning Commission. The Planning Commission voted to accept VS’s requests, which it considered to be a minor amendment, and the Challengers filed an action with the circuit court. The circuit court remanded the matter to the Planning Commission.

Four days later, on June 29, 2020, VS filed the subject lawsuit. In its complaint, VS alleged that the Challengers’ actions opposing VS contravened the Clipper Mill Community Declaration and tortiously interfered with VS’s business and economic relations. VS demanded compensatory damages, $25 million in punitive damages, and declaratory relief. The Challengers filed a motion to dismiss VS’s lawsuit, contending that it was a SLAPP suit. The circuit court agreed and it further found that the community declaration did not prohibit the actions of the Challengers.

VS appealed to the CSA. MCB Woodberry Developer, LLC was substituted for VS (either is called the Developer). In its opinion, the CSA noted that there are three requirements for a SLAPP suit, and it found that VS’s action met these requirements.

Two of these prongs are that a SLAPP suit must be materially related to the defendant’s communication and that the SLAPP suit must be intended to inhibit or inhibits the exercise of rights under the First Amendment of the U.S. Constitution or the Maryland Declaration of Rights. The CSA was satisfied that these conditions were met.

The third and primary component of a SLAPP suit is that the suit is brought in bad faith against a party who has communicated with a governmental body or the public at large in exercise of the party’s rights under the First Amendment of the U.S. Constitution or the Maryland Declaration of Rights, and that communication pertains to a matter within the authority of a government body or any issue of public concern. The Developer argued that the Challengers’ primary concern related to “personal parking concerns” and that these were not public concerns. However, the CSA held that Challengers’ issues related to a matter within the authority of a governmental body and therefore are of public concern. Furthermore, the CSA stated that a matter of “public concern” means an issue that is “fairly considered as relating to any matter of political, social, or other concern to the community,” or when it is a subject of legitimate news interest; that is a subject of general interest and of value and concern to the public. Given these definitions, it was easy for the CSA to characterize the Challenger’s actions as being of public concern.

The CSA stated that in connection with a motion to dismiss a SLAPP case, the issue of bad faith is determinable as a matter of law by the trial court. “Bad faith” means the pursuit of litigation “vexatiously, for the purpose of harassment or unreasonable delay, or for other improper reasons” in the context of when sanctions are appropriate.

The CSA held that the Developer’s suit was filed in bad faith based on its timing relative to the underlying action; the claim for $25 million in punitive damages was without support that the Challengers acted with “evil motive”; the case was filed for the purpose of intimidation; discovery requests were abusive, unreasonable and overreaching; and the allegations in the complaint were “conclusory” and “devoid of any specific facts” to support the claim that the Challengers made any false or misleading allegations. The CSA summarized its holding by stating that the Developer’s lawsuit was pursued vexatiously in retaliation against the Challengers for their public opposition to the Developer’s development efforts and to deter them from continuing those efforts.

Accordingly, the CSA deemed the Developer’s case a SLAPP suit and affirmed the circuit court’s decision to dismiss the Developer’s action.

Pending Legislation: House Bill 70, introduced in the Maryland General Assembly in January 2022, would alter certain of the conditions for determining whether a civil action is a SLAPP suit; affect the burden of proof in a SLAPP suit; and permit a court, if it grants an anti-SLAPP motion or if it finds that a motion to dismiss the case is frivolous, to order the losing party to pay the other party’s legal fees.

For more information, contact Edward J. Levin.

Ed Levin
410-576-1900 • elevin@gfrlaw.com