California Legal Brief

The Rule of People ex rel. Yolo-Solano Air Quality Management District v. Spencer Defty is that a cross-complaint challenging the validity of an internal agency policy does not arise from protected activity under the anti-SLAPP statute when the regulatory enforcement actions are merely evidence of the policy's application rather than the basis for liability, under circumstances where the cross-complaint seeks declaratory relief that the policy was adopted without proper rulemaking procedures.

Appeal from order denying anti-SLAPP motion to strike cross-complaint in Superior Court of Yolo County.

Plaintiff Appellant was Yolo-Solano Air Quality Management District — the air quality regulatory agency that sued for statutory violations and sought to strike the cross-complaint.

Defendant Respondents were Spencer Defty and Diamond D General Engineering, Inc. — the agricultural service provider and its CEO who filed the cross-complaint challenging the validity of internal agency policy.

The suit sounded in regulatory enforcement for air quality violations. The cross-complaint sought declaratory and injunctive relief challenging agency rulemaking procedures.

The key substantive facts leading to the suit were District issued three notices of violation to Diamond between 2023-2024 for operating equipment without permits and failing to control emissions. At settlement meetings, District referenced "Policy 24" restricting agricultural exemptions for independent contractors, citing case law from Farmers Reservoir & Irrigation Co. and Julius Goldman's Egg City. Diamond learned of Policy 24's existence only from District's complaint, as it was not publicly available and had allegedly been used internally for 24 years without proper rulemaking procedures.

The procedural result leading to the Appeal: The trial court denied District's anti-SLAPP motion to strike the cross-complaint, ruling that the cross-complaint challenged the validity of the policy upon which the notices were based, not the protected activities themselves.

The key question(s) on Appeal: 1. Whether the cross-complaint challenging the validity of internal agency policy arises from protected petitioning activity under the anti-SLAPP statute 2. Whether it is necessary to address the public interest exemption when disposing of an anti-SLAPP motion on other grounds

The Appellate Court held the cross-complaint does not arise from protected activity because it challenges the validity of Policy 24 itself, while District's investigation, notices of violation, settlement attempts, and lawsuit filing were merely evidence related to the policy's application rather than the basis for District's liability.

The case is inapplicable when the cross-complaint directly challenges the merits of regulatory enforcement actions rather than the underlying validity of the policy or rule being enforced, or when the enforcement activities themselves form the basis for liability rather than serving as evidence of policy application.

The case leaves open the substantive question of Policy 24's validity and whether it was properly adopted under required rulemaking procedures, as well as the broader application of the public interest exemption to regulatory enforcement cases.