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Los Lobos Renewable Power, LLC v. Americulture, Inc.

United States Court of Appeals, Tenth Circuit

March 12, 2018

LOS LOBOS RENEWABLE POWER, LLC, and LIGHTNING DOCK GEOTHERMAL, HI-01, LLC, Plaintiffs-Appellees,
v.
AMERICULTURE, INC., and DAMON SEAWRIGHT, Defendants-Appellants.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO (D.C. NO. 2:15-CV-00547-MV-LAM)

          Charles N. Lakins, Lakins Law Firm, P.C., Albuquerque, New Mexico, for Appellants.

          Clinton W. Marrs and Patrick J. Griebel, Marrs Griebel Law Ltd., Albuquerque, New Mexico, Earl E. DeBrine, Jr. and Emil J. Kiehne, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, New Mexico, and Michelle Henrie, Michelle Henrie, LLC, Albuquerque, New Mexico, for Appellees.

          Before TYMKOVICH, Chief Judge, BALDOCK, and BRISCOE, Circuit Judges.

          BALDOCK, CIRCUIT JUDGE.

         This appeal considers the applicability of a New Mexico statute to diversity actions in federal court. In this action, AmeriCulture filed a special motion to dismiss the suit under New Mexico's anti-SLAPP statute, a provision designed to expedite judicial consideration of so-called "strategic lawsuits against public participation." The district court, however, refused to consider that motion, holding the statute authorizing it inapplicable in federal court.

         For the reasons set forth here, we agree. Judge Baldock first gives the factual background, on which the panel agrees. Chief Judge Tymkovich's opinion, which Judge Briscoe joins, explains why we have jurisdiction to hear this appeal under the collateral order doctrine. The opinion of Judge Baldock explains our unanimous holding on the merits of this appeal. Finally, Judge Baldock dissents to our jurisdictional holding.

         BACKGROUND

         The United States Bureau of Land Management leased 2, 500 acres of geothermal mineral rights in Hidalgo County, New Mexico to Plaintiff Lightning Dock Geothermal HI-01, LLC (LDG), a Delaware company. Consistent therewith, LDG developed and presently owns a geothermal power generating project in Hidalgo County. LDG also developed a geothermal well field on the subject tract as part of its project. Defendant AmeriCulture, a New Mexico corporation under the direction of Defendant Damon Seawright, a New Mexico resident, later purchased a surface estate of approximately fifteen acres overlying LDG's mineral lease-ostensibly to develop and operate a tilapia fish farm. Because AmeriCulture wished to utilize LDG's geothermal resources for its farm, AmeriCulture and LDG (more accurately its predecessor) entered into a Joint Facility Operating Agreement (JFOA). The purpose of the JFOA, at least from LDG's perspective, was to allow AmeriCulture to utilize some of the land's geothermal resources without interfering or competing with LDG's development of its federal lease. We are told that Plaintiff Los Lobos Renewable Power LLC (LLRP), also a Delaware company, is the sole member of LDG and a third-party beneficiary of the JFOA.

         The parties eventually began to quarrel over their contractual rights and obligations. Invoking federal diversity jurisdiction under 28 U.S.C. § 1332, Plaintiffs LDG and LLRP sued Defendants Americulture and Seawright in federal court for alleged infractions of New Mexico state law.[1] Of particular importance here are the factual allegations contained in paragraphs 44D and 44E and the legal conclusions contained in paragraph 77 of Plaintiffs' first amended complaint. The former two paragraphs allege Defendants "impermissibly" objected to permit applications Plaintiffs made before the New Mexico Office of the State Engineer and the New Mexico Oil Conservation Division. Paragraph 77 then concludes:

Defendants Seawright and Americulture have both intentionally and negligently made material misrepresentations concerning the Plaintiffs and the Project to numerous state agencies and other public bodies for the sole purpose of delaying and subverting the Project solely for the purpose of giving Defendants a competitive advantage for the Defendants own intended production of Geothermal Power in violation of the JFOA.

         Defendants responded to these allegations and conclusions by filing a "special motion to dismiss" pursuant to the New Mexico anti-SLAPP statute, a state legislative enactment aimed at thwarting "strategic lawsuits against public participation." N.M. Stat. Ann. §§ 38-2-9.1 & 38-2-9.2. As the factual basis for their motion, Defendants told the district court the permits which Plaintiffs sought and to which Defendants objected "pertained to activities conducted on lands other than the 15-acre fee estate covered by the JFOA." As the legal basis for their motion, Defendants asserted "New Mexico's Anti-SLAPP statute is a substantive state law designed to protect the Defendants from having to litigate meritless claims aimed at chilling First Amendment expression." Defendants described their rights under the state statute as "in the nature of immunity because New Mexico lawmakers also want to protect speakers from the trial itself rather than merely from liability."

         The district court was not persuaded and denied Defendants' "special" motion because "New Mexico's Anti-SLAPP statute is a procedural provision that does not apply in the courts of the United States." Los Lobos Renewable Power, LLC v. Americulture, Inc., 2016 WL 8254920, at *2 (D.N.M. 2016) (unpublished). Recognizing the interlocutory nature of the district court's decision, Defendants subsequently moved the court to amend its order to certify its decision for immediate appeal pursuant to 28 U.S.C. § 1292(b). The court did so. Los Lobos Renewable Power, LLC v. Americulture., 2016 WL 8261743, at *2-3 (D.N.M. 2016) (unpublished). But for whatever reason, Defendants failed to timely petition us for permission to appeal as required by § 1292(b)'s plain language. Instead, three days after the district court certified its ruling for appeal, Defendants filed their notice of appeal.

         Given the respective positions of the panel members, this appeal requires us to resolve two issues:

1. Whether we may exercise jurisdiction over this appeal pursuant to the collateral order doctrine.
2. Whether the New Mexico anti-SLAPP statute applies in this federal diversity action.

         We answer the first query yes, the second query no, and affirm the decision of the district court.

         Because the language of the New Mexico anti-SLAPP statute predominates this appeal, we set forth its relevant provisions prior to both our jurisdictional and merits analyses. The statute consists of two parts, N.M. Stat. Ann. §§ 38-2-9.1 & 38-2-9.2. Because placing § 38-2-9.1 in proper context is imperative to its construction, we commence with § 38-2-9.2, entitled "[f]indings and purpose":

The legislature declares that it is the public policy of New Mexico to protect the rights of citizens to participate in quasi-judicial proceedings before local and state governmental tribunals. Baseless civil lawsuits seeking or claiming millions of dollars have been filed against persons for exercising their right to petition and to participate in quasi-judicial proceedings before governmental tribunals. Such lawsuits [1] can be an abuse of the legal process and [2] can impose an undue financial burden on those having to respond to and defend such lawsuits and [3] may chill and punish participation in public affairs and the institutions of democratic government. These lawsuits should be subject to prompt dismissal or judgment to prevent the abuse of legal process and avoid the burden imposed by such baseless lawsuits.

Id. § 38-2-9.2.

         Consistent with the "[f]indings and purpose" of the New Mexico anti-SLAPP statute, § 38-2-9.1 is entitled "[s]pecial motions to dismiss unwarranted or specious lawsuits; procedures; sanctions; . . . ." Subsections A, B, and C of § 38-2-9.1 provide:

A. Any action seeking money damages against a person for conduct or speech undertaken or made in connection with a public hearing or public meeting in a quasi-judicial proceeding before a tribunal or decision-making body of any political subdivision of the state is subject to a special motion to dismiss, motion for judgment on the pleadings, or motion for summary judgment that shall be considered by the court on a priority or expedited basis to ensure the early consideration of the issues raised by the motion and to prevent the unnecessary expense of litigation.
B. If the rights afforded by this section are raised as an affirmative defense and if a court grants a motion to dismiss, a motion for judgment on the pleadings or a motion for summary judgment filed within ninety days of the filing of the moving party's answer, the court shall award reasonable attorney fees and costs incurred by the moving party in defending the action. If the court finds that a special motion to dismiss or motion for summary judgment is frivolous or solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney fees to the party prevailing on the motion.
C. Any party shall have the right to an expedited appeal from a trial court order on the special motions described in Subsection B of this section or from a trial court's failure to rule on the motion on an expedited basis.

Id. § 38-2-9.1.A-C.[2]

         APPELLATE JURISDICTION

          TYMKOVICH, Chief Judge, with Judge Briscoe joining, on the issue of appellate jurisdiction.

         As a preliminary matter, Plaintiffs contend the court does not ...


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