Chip Paucek had been the CEO of a company (U2, Inc.) which had failed under some negative circumstances. Paucek is now the CEO of a new company (Pro-Athlete Community, Inc. a/k/a “PAC”) which provides educational and other support to professional athletes who have ceased playing. Paucek came to the attention of Dahn Shaulis, who is a blogger covering the education industry through his publication Higher Education Inquirer (“HEI”). After following Paucek’s failure with U2, Shaulis then began to investigate and cover Paucek’s new venture, PAC.
Long story short, Shaulis made some unflattering comments about Paucek on social media. Paucek had his attorney send Shaulis a cease-and-desist letter which also called for Shaulis to retract the offending comments. Shaulis agreed to do so, but only on terms that were unacceptable to Paucek. The day after receiving Paucek’s cease-and-desist letter, Shaulis then posted on social media that he had received the letter but that he stood by the statements therein based on a variety of information.
Paucek then sued Shaulis in the U.S. District Court for the District of New Jersey. Paucek alleged that Shaulis’ social media posts were defamatory and that Shaulis had intentionally interfered with Paucek’s prospective business relations. Shaulis responded by filing a motion to first determine if the New Jersey Uniform Public Expression Protection Act (“UPEPA”) applied in federal court and which of several states’ Anti-SLAPP laws should be applied to this controversy. The idea here was that the court would decide these threshold issues before Shaulis filed his UPEPA motion to dismiss (which had not yet been filed as of the time of this opinion). Shaulis also answered Paucek’s complaint with a counterclaim under the UPEPA.
All of this led to the opinion in Paucek v. Shaulis, 2025 WL 1298457 (D.N.J., May 6, 2025), that you can and should read for yourself here, and which we will next review.
The first question addressed by the court was whether the New Jersey UPEPA would be recognized in federal court.
The issue here is that the Federal Rules of Civil Procedure (FRCP) already provide a means for the early dismissal of a case, which is by way of a Rule 12(b)(6) motion to dismiss. If a defendant attaches evidence to a Rule 12(b)(6) motion, then that motion is converted to a motion for summary judgment under Rule 56. As I have often written, a special motion to dismiss or strike under the UPEPA is essentially an early summary judgment motion and akin to a “motion to dismiss on steroids”. In fact, the UPEPA deliberately uses the summary judgment standard to test whether the plaintiff’s complaint should be dismissed because that standard is well-understood by the courts and has already withstood constitutional challenges based on the plaintiff’s right to a jury trial. So, the question becomes: if the Rule 12(b)(6) motion to dismiss is already employed by the federal courts, then why substitute it with the UPEPA? The answer is twofold.
First, in diversity of citizenship cases (as here), the federal courts will apply their own procedural rules but they are also required to apply the substantive rules of the state from where the action arises. This is known as the Erie doctrine, after a 1938 U.S. Supreme Court opinion of that name. But there is an important limitation, being that if the state substantive law “is in direct collision” with the federal procedure on some issue, then the federal procedure will govern that issue.
Second, there are some differences between a Rule 12(b)(6) motion and a UPEPA special motion, mostly being the UPEPA special motion triggers a stay of discovery and the UPEPA automatically awards attorney fees to a defendant who successfully asserts a UPEPA special motion. A Rule 12(b)(6) motion does neither of these things.
This is not the first time that a federal court has addressed whether the state law UPEPA should apply in the federal courts. In fact, throughout the nation, the state law UPEPA has been asserted in many federal court cases. The problem is that the federal courts have not all agree on the outcome, but rather there has been a split of opinion by the various federal circuits. The Fifth, Tenth, Eleventh and D.C. Circuit Courts of Appeals have held that Anti-SLAPP laws do not apply in federal court, while the 1st and 9th Circuits have held that they do. For its part, the Second Circuit has opinions going both ways, but with the latest opinions stating that Anti-SLAPP law do not apply in federal court. Obviously, the U.S. Supreme Court is eventually going to have to step in and resolve this split of decisions among the Circuits, but we’re not there yet. The District of New Jersey, where this case was heard, sits in the 3rd Circuit which hasn’t ruled yet on the issue.
The court here declined to look at the issue as merely being one of whether an Anti-SLAPP law should apply in federal court or not. Rather, the court thought that the correct analysis was whether a particular Anti-SLAPP law (here, New Jersey’s UPEPA) through its text and structure was in conflict with the Federal Rules of Civil Procedure. This would be the analysis to be followed by the court.
To this end, it was obvious to the court that some provisions of the UPEPA do indeed conflict with the FRPC. One example is that of the UPEPA mandating that a defendant who successfully brings a UPEPA special motion will be awarded attorney’s fees. By contrast, the FRPC instead requires that before such attorney fees can be awarded, a successful party would have to prevail on either summary judgment or at trial. This means the defendant must prove that the plaintiff has no case, which is different than the UPEPA which requires the plaintiff to establish that he can make at least a prima facie case to avoid dismissal. Other conflicts of the UPEPA with the FRPC include an immediate appeal of right to the defendant if the UPEPA special motion is unsuccessful, and also the automatic stay of discovery upon the filing of a UPEPA special motion.
So, there were conflicts between the UPEPA and the FRPC where their provisions collided. But that did not mean to the court that the entire UPEPA would be disallowed in federal court, but rather only that the conflicting provisions of the UPEPA would be surgically excised and in those places the federal rules would be substituted in their stead. This is known as “severability” and it is essentially the same process as where the illegal provisions of a contract are cut out but the surviving operating provisions will be enforced. This is the approach that has been followed by the Second and Ninth Circuits, which allows a court to enforce the state Anti-SLAPP procedures where they do not conflict with the federal rules, but replace those procedures with the corresponding federal rule where they do conflict.
Now the court returned to the Erie doctrine which, it will be recalled, requires a federal court sitting in diversity jurisdiction to apply state substantive law but federal procedural law. Thus, it would only be the procedural parts of a state’s Anti-SLAPP laws, including the UPEPA, that would be replaced by the federal rules. The substantive parts of the state’s Anti-SLAPP laws would survive and be utilized under the Erie doctrine.
This brought the court to one of the questions before it: Was the UPEPA’s mandatory award of fees to a defendant who successfully asserted a UPEPA special motion to be considered substantive or procedural in nature?
Under the Erie doctrine, a fee-shifting provision is typically considered to be substantive in nature because it is tied to the outcome of the litigation (a procedural rule is not). But there are times when a fee-shifting provision would be procedural, such as when such fees are awarded because of a party’s bad faith conduct ― but that is not tied to the outcome of the litigation. Because the UPEPA’s mandatory fee award is tied to the outcome, since it can only be awarded if the defendant prevails on the UPEPA special motion, the court held that the UPEPA fee-shifting provision is substantive and not procedural.
But the UPEPA in fact has two fee-shifting provisions. As mentioned, the first provision awards attorney fees to a defendant who wins on the UPEPA special motion. This is different than the second provision, by which a court has the discretion to award attorney fees to the plaintiff and against the defendant if the defendant filed the UPEPA special motion in bad faith or for purposes of delay. This latter provision is not tied to the outcome of the case, since the case continues if the defendant loses the UPEPA special motion, and thus is procedural in nature.
The upshot to this is that if the defendant wins the UPEPA special motion, then the mandatory fee award in favor of the defendant is substantive and determined by state law. However, if the defendant loses the special motion then the issue of whether fees can be awarded against the defendant would be procedural in nature and determined if at all by the FRCP. The court also noted another factor in determining the UPEPA’s mandatory fee award to be substantive: One of the purposes of that mandatory fee award is to deter the filing of abusive litigation.
Disposing of a minor issue, the court also held that UPEPA relief is only obtainable through the filing of a UPEPA special motion and not by way of a counterclaim.
The balance of the opinion deals with a conflict of law issue; namely, which state’s Anti-SLAPP law would apply. The court ultimately concludes that the New Jersey UPEPA applies, and although the court’s discussion of the issue is quite interesting, it is beyond the scope of this article.
ANALYSIS
Anti-SLAPP laws such as the UPEPA are indeed a mix of substantive and procedural law ― they are not purely one or the other. It therefore makes sense for the federal courts in applying the Erie doctrine to apply the substantive portions but reject the procedural ones. This may be the best that we get until the U.S. Supreme Court resolves the split between circuits (and that could go either way) or Congress adopts a federal Anti-SLAPP law (which is regularly introduced, but never seems to go anywhere).
But in the words of the Rolling Stones: “You can’t always get what you want. You get what you need.”
Read the full article here
