California Legal Brief

The Rule of Waterford Property Company v. County of Orange is that a declaratory relief action challenging governmental tax assessments arises from protected activity under the anti-SLAPP statute when the claim relies upon the government entity's public statements, advocacy, petitioning activities, and official communications regarding the tax assessments, under circumstances where the plaintiff frames the dispute as involving broader public policy issues and relies on the government's protected speech to establish both the existence of an actual controversy and the need for declaratory relief.

Appeal from prejudgment order denying special motion to strike in Superior Court, Orange County.

Defendant Appellant was County of Orange — the governmental entity whose assessor imposed property taxes on the project administrator and engaged in public advocacy regarding the taxation of affordable housing administrators.

Plaintiff Respondent was Waterford Property Company — the project administrator of income-restricted apartment complexes who sought to avoid collection of property taxes imposed by the County Assessor.

The suit sounded in declaratory relief seeking to establish that neither Waterford nor its tenants could be held liable for property taxes on properties managed for a Joint Powers Authority.

The key substantive facts leading to the suit were that Waterford administered apartment complexes owned by a tax-exempt Joint Powers Authority, receiving millions in fees and bonds. The County Assessor determined Waterford's control constituted a taxable possessory interest and issued tax assessments. Waterford alleged the Assessor was acting out hostility toward middle-income housing programs and engaging in a "vendetta" through various public statements, advocacy efforts, communications with other assessors, opinion pieces, and legislative advocacy to undermine such housing programs.

The procedural result leading to the Appeal: The trial court denied County's anti-SLAPP motion, ruling that Waterford's claim did not arise from the Assessor's protected activity under the first prong of the anti-SLAPP statute and declining to consider the second prong.

The key question(s) on Appeal: Whether Waterford's declaratory relief claim arose from the County Assessor's protected speech, advocacy, and petitioning activities under the first prong of the anti-SLAPP statute.

The Appellate Court held that Waterford's declaratory relief claim arose from protected activity because Waterford relied almost entirely upon the Assessor's protected speech (public statements, opinion pieces, official communications), advocacy (urging other officials to take action, coordinating with other assessors), and petitioning activities (seeking legislative reform, issuing tax bills and liens) to establish both the existence of an actual controversy and the need for declaratory relief, particularly where Waterford itself characterized the dispute as involving public policy issues regarding affordable housing rather than a simple tax dispute.

The case is inapplicable when the declaratory relief claim does not rely on the government entity's protected speech or petitioning activity to establish the elements of the claim, when the government's conduct is purely ministerial without any advocacy or communication components, or when the plaintiff does not characterize the dispute as involving matters of public interest or policy.

The case leaves open whether Waterford can demonstrate a probability of prevailing on the merits under the second prong of the anti-SLAPP analysis, and does not resolve the underlying substantive question of whether property administrators like Waterford actually hold taxable possessory interests in tax-exempt properties.