On August 21, 2023, Justice Chan of the New York County Commercial Division issued a decision in Ascend Wellness Holdings, Inc. v. MedMen NY, Inc., 2023 NY Slip Op. 32872(U), holding that New York’s anti-SLAPP law did not apply to a private contract dispute notwithstanding its connection to a matter of public interest, explaining:
A finding that an action is a SLAPP suit entails serious consequences to the plaintiff. a heightened standard of proof is imposed upon the plaintiff to avoid dismissal of the action. And if the action is one for defamation, an actual malice standard is imposed, which plaintiff shall establish by clear and convincing evidence. A party that is successful in securing a dismissal of a case as an anti-SLAPP lawsuit will be entitled to seek reimbursement of costs and attorneys’ fees, and possibly compensatory and punitive damages upon additional demonstrations. Given these implications, the CPLR puts the onus on the moving party to demonstrate that the alleged SLAPP lawsuit or cause of action is one that involves public petition and participation. The anti-SLAPP law will be strictly construed.
In bringing its motion, Ascend contends that MedMen’s Counterclaims fall within the ambit of New York’s anti-SLAPP statute and should be subject to the heightened pleading standard set forth under CPLR 3211(g). Ascend primarily argues the Counterclaims target issues of public interest because, inter alia, the core of this litigation concerns MedMen’s application to transfer to Ascend a government-granted cannabis license and the critical question of whether state regulators approved the application. In opposition, MedMen responds that the Counterclaims relate to a dispute concerning a purely private matter, namely the parties’ respective contractual rights under the Investment Agreement and Term Sheet. Even if the subject of the parties’ dispute may be newsworthy, MedMen contends, it does impact the public, or some segment of it in, an appreciable way. After careful consideration of the record, the court agrees with MedMen.
The civil rights law broadly defines an action involving public petition and participation as a claim involving (1) any communication in a place open to the public or a public forum in connection with an issue of public interest or (2) any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest, or in furtherance of the exercise of the constitutional right of petition. Public interest, in turn, means any subject other than a purely private matter. New York courts have generally applied a broad interpretation to what constitutes a matter of public concern. Matters of public concern include matters of political, social, or other concern to the community, even those that do not affect the general population.
Here, MedMen’s contractual claims are predicated on Ascend’s alleged government lobbying and financial contribution activities carried out in its efforts to obtain approval for the Transaction. These activities are undoubtedly the type that are generally protected by the First Amendment. And there is, to be sure, public interest in the broad issue of cannabis legalization, licensing, and use in New York that certainly has increased in recent years. The Counterclaims even allude to that public interest to emphasize the alleged importance to the Transaction of complying with New York law.
That said, even if Ascend’s interactions with CCB and OCM may touch on issues that interest the public in some way, MedMen’s claims are ultimately premised on the intricacies of a private transaction between the two parties, as well as the corresponding contractual rights, obligations, and covenants arising under that transaction. These issues concerning the parties’ rights and obligations under the Investment Agreement, and whether any covenants have been breached, are not within the sphere of public interest as is necessary to bring any of the Counterclaims under the ambit of the anti-SLAPP statute. In other words, at their core, MedMen’s claims solely relate to purely private matters.
To avoid this outcome, Ascend cites to a string of cases holding that the anti-SLAPP statute covers activities seeking the approval of public boards. But none of the cases cited are apposite. For example, in Bennett v Towers, the court concluded that plaintiffs had filed a SLAPP suit because their claims for tortious interference and defamation were directly targeting defendants’ efforts to oppose plaintiffs’ application to a local zoning authority for approval of a subdivision and housing construction project on an unimproved parcel of land. Likewise, in Duane Reade v Clark, the court determined that plaintiffs defamation lawsuit was covered by the anti-SLAPP statute because it was materially related to efforts by defendant to oppose plaintiffs application for a permit to erect a billboard that would potentially overshadow a newly developed local memorial park. And in Street Beat Sportswear, Inc. v Nat’l Mobilization Against Sweatshops, the court concluded that plaintiff had asserted a SLAPP lawsuit by advancing tortious interference claims to inhibit defendants from continuing to press their claims of labor law violations before state and federal agencies. Although each of these cases did concern some form of petitioning activity, all involved lawsuits seemingly filed in an effort to stifle that activity, rather than for purposes of addressing a legitimate contractual dispute.
In sum, the court concludes that New York’s anti-SLAPP statute does not apply to any of the Counterclaims, and, as a result, CPLR 3211(g)’s heightened pleading standard does not apply.
(Internal quotations and citations omitted).