Loren J. Zutz, et al., Appellants,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0137

Loren J. Zutz, et al.,
Appellants,

vs.

John Nelson, et al.,
Respondents.

Filed August 14, 2017
Reversed
Johnson, Judge

Marshall County District Court
File No. 45-CV-08-59

Paul A. Sortland, Sortland Law Office, Minneapolis, Minnesota (for appellants)

Sarah E. Bushnell, Colin S. Seaborg, Arthur, Chapman, Kettering, Smetak & Pikala, P.A.,
Minneapolis, Minnesota (for respondents)

Considered and decided by Johnson, Presiding Judge; Larkin, Judge; and Toussaint,
Judge.
U N P U B L I S H E D O P I N I O N
JOHNSON, Judge
Appellants argue that the district court erred by rejecting their argument that the so-
called anti-SLAPP statute is unconstitutional as applied to their claims against respondents.

Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant
to Minn. Const. art. VI, § 10.
2
We conclude that appellants did not waive their constitutional challenge by not asserting it
at an earlier stage of the case . We also conclude that the anti -SLAPP statute is
unconstitutional as applied to appellants’ claims against respondent s. Therefore, we
reverse.
FACTS
This case was commenced a decade ago, i n August 2007 . Loren Zutz and Elden
Elseth alleged that John Nelson and Arlyn Stroble defamed them. Zutz and Elseth sought
damages and requested a declaration that they had not violated Minnesota law. The
underlying facts have been thoroughly recited in prior appellate opinions and need not be
repeated here. See Zutz v. Nelson, No. A08-1764, 2009 WL 1752139, at * 1 (Minn. App.
June 23, 2009) (Zutz I); Zutz v. Nelson, 788 N.W.2d 58, 59-61 (Minn. 2010) (Zutz II); Zutz
v. Nelson, No. A14 -0573, 2014 WL 7344058 , at *1-3 (Minn. App. Dec. 29, 2014) (Zutz
III), review denied (Minn. Mar. 25, 2015).
In March 2008 , Nelson and Stroble moved for judgment on the pleadings . See
Minn. R. Civ. P. 12. 03. They made six arguments, including an argument that they are
protected by an absolute legislative privilege and an argument that they are immune from
liability under the anti-Strategic Litigation Against Public Participation (anti-SLAPP)
statute, Minn. Stat. §§ 554.01-.05 (2006).1 The district court granted the motion on the
ground that Nelson and Stroble are protected by an absolute legislative privilege . The

1The statute is concerned with so -called “SLAPP suits,” which typically are
intended “to in timidate opponents’ exercise of rights of petitioning and speech .”
Leiendecker v. Asian Women United of Minnesota , 848 N.W.2d 224, 228 (Minn . 2014)
(Leiendecker II).
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district court did not consider Nelson and Stroble ’s argument based on the anti-SLAPP
statute. On appeal, this court affirmed. Zutz I, 2009 WL 1752139, at *2 . But on further
review, the supreme court reversed on the ground that Nelson and Stroble are not protected
by an absolute legislative privilege but, rather, by a qualified legislative privilege. Zutz II,
788 N.W.2d at 66. The supreme court remanded the case to the district court for further
proceedings. Id.
In August 2013, Nelson and Stroble moved for summary judgment. See Minn. R.
Civ. P. 56.03. They made five arguments, including an argument under the anti-SLAPP
statute. In February 2014, the district court granted the motion for two reasons: (1) Nelson
and Stroble’s allegedly tortious statements were true, and (2) Zutz and Elseth did not
submit sufficient evidence that Nelson and Stroble acted with actual malice . The district
court considered Nelson and Stroble ’s argument under the anti -SLAPP statute but
concluded that Nelson and Stroble are not entitled to anti-SLAPP immunity because they
are protected by a qualified legislative privilege.
Zutz and Elseth filed a notice of appeal, and Nelson and Stroble filed a notice of
related appeal. In December 2014, t his court affirmed with respect to the issue of actual
malice. Zutz III, 2014 WL 7344058 , at *3-5. But we reversed with respect to the anti -
SLAPP statute. Id. at *5-7. We reasoned that Nelson and Stroble’s qualified legislative
privilege does not preclude them from obtaining anti-SLAPP immunity, and we noted that
the anti-SLAPP statute allows for the recovery of attorney fees and costs. Id. In discussing
the anti-SLAPP statute, we applied the supreme court’s opinion in Leiendecker II, which
was issued while the Zutz III appeal was pending. Zutz III, 2014 WL 7344058, at *5. In
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Leiendecker II, the supreme court held that after a defendant asserting an anti -SLAPP
motion makes “a threshold showing that the underlying claim materially relates to an act
of the moving party that involves public participation,” the district court must grant the
anti-SLAPP motion unless the responding party shows by clear and convincing evidence
that the defendant is not entitled to anti-SLAPP immunity. 848 N.W.2d at 229 (quotations
omitted). In Zutz III, we remanded this case to the district court with instructions to apply
Leiendecker II and to determine whether Zutz and Elseth had produced clear and
convincing evidence that Nelson and Stroble’s statements were tortious. 2014 WL
7344058, at *7.
On remand, the district court ordered the parties to submit supplemental memoranda
concerning Leiendecker II. Zutz and Elseth argued, among other things, that the anti -
SLAPP statute is unconstitutional as applied because the statute would deprive them of
their right to a jury trial on any valid claims . In response, Nelson and Stroble argued ,
among other things, that Zutz and Elseth waived their constitutional challenge by not
asserting it at an earlier stage of the case . The district court ruled that Zutz and Elseth
waived their constitutional challenge by not asserting it earlier. The district court applied
Leiendecker II and concluded that “Zutz and Elseth have failed to present clear and
convincing evidence that the statements made by Stroble and Nelson are not e ntitled to
immunity.” Thus, the district court granted Nelson and Stroble’s motion and concluded
that they are “entitled to recover their reasonable costs and attorney fees, as provided by
statute.” See Minn. Stat. § 554.04, subd. 1. In November 2016, the district court issued an
5
order in which it awarded Nelson and Stroble a total of $20,501.14 in attorney fees and
costs. The court administrator entered judgment. Zutz and Elseth appeal.
D E C I S I O N
Zutz and Elseth argue that the district court erred by ruling that they waived their
constitutional challenge to the anti -SLAPP statute and by not ruling that the statute is
unconstitutional as applied on the ground that it would deny them their right to a jury trial.
A.
We first consider Zutz and Elseth’s argument that the district court erred by ruling
that they waived their constitutional challenge to the anti-SLAPP statute. If the underlying
facts are not in dispute, this court applies a de novo standard of review to the issue of
waiver. Leiendecker v. Asian Women United of Minnesota , 895 N.W.2d 623, 631 (Minn.
2017) (Leiendecker III).
The district court determined that Zutz and Elseth waived their constitutional
challenge to the anti-SLAPP statute for the following reasons:
[T]he Court of Appeals determined that Nelson and Stroble had
made a threshold showing that the anti -SLAPP law applied to
their statements and remanded the case to the district court. If
the district court was now allow ed to find the anti -SLAPP
statute unconstitutional, it would be disregarding the specific
remand instructions given to it by the appellate court. If Zutz
and Elseth wanted to challenge the constitutionality of the anti-
SLAPP law, they should have raised the issue when Nelson and
Stroble filed their anti -SLAPP motion because the
constitutional issue now raised by Zutz and Elseth was
inextricably linked to Nelson and Stroble’s claim that the
statute applied to their statements.

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While this appeal was pendin g, the supreme court issued an opinion in a different
case that addressed the same issue. See Leiendecker III , 895 N.W.2d at 631 -33. The
Leiendecker defendants moved to dismiss a lawsuit for numerous reasons, including anti-
SLAPP immunity. Leiendecker II, 848 N.W.2d at 227. In an earlier appeal, the supreme
court clarified the procedures that apply to an anti-SLAPP motion and remanded the case
to the district court. Id. at 228-33. On remand, the Leiendecker plaintiffs challenged the
constitutionality of the anti -SLAPP statute for the first time . See Leiendecker III , 895
N.W.2d at 630. In the subsequent appeal, the supreme court considered whether the
plaintiffs had waived their constitutional challenge by not asserting it earlier. Id. at 631.
The supreme court held that the plaintiffs had not waived their constitutional challenge
because it was predicated on the supreme court’s interpretation of the anti-SLAPP statute
in the prior appeal . Id. at 633. The supreme court reasoned that the plaintiffs’
constitutional argument “was not ripe until the case was remanded to the district court and,
therefore, could not have been waived at an earlier point in time.” Id. at 631.
In this case, we asked the parties to submit supplemental briefs on the applicability
of Leiendecker III. Because the procedural history of this case is similar to the procedural
history of the Leiendecker case, Zutz and Elseth’s argument is similar to the argument of
the Leiendecker plaintiffs. Before the supreme court issued its opinion in Leiendecker II
on June 25, 2014, the applicable caselaw concerning anti -SLAPP immunity was
considerably different from what it is today. In June 2013, this court held that a plaintiff
responding to a motion under the anti-SLAPP statute “need not produce actual evidence to
meet its burden.” Leiendecker v. Asian Women United of Minnesota, 834 N.W.2d 741, 751
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(Minn. App. 2013) (Leiendecker I), rev’d, 848 N.W.2d 224 (Minn. 2014). Accordingly,
when they responded to Nelson and Stroble’s anti-SLAPP motion in October 2013, Zutz
and Elseth reasonably could have believed that their allegations of tortious conduct would
be sufficient to defeat the anti-SLAPP motion. In short, the unconstitutionality of the anti-
SLAPP statute was not yet apparent. Zutz and Elseth’s constitutional challenge to the anti-
SLAPP statute did not become viable until June 25, 2014, when the supreme court
interpreted the anti-SLAPP statute in Leiendecker II. See 848 N.W.2d at 230. In discussing
the issue of waiver in Leiendecker III, the supreme court s tated, “the . . . current
[constitutional] challenge is entirely based on our new interpretation of the law, which did
not exist when we first reviewed this appeal.” 895 N.W.2d at 632. The same is true in this
case. Nelson and Stroble have provided no valid reason to distinguish this case from the
waiver analysis in Leiendecker III.
Thus, the district court erred by ruling that Zutz and Elseth waived their
constitutional challenge to the anti-SLAPP statute by not asserting it at an earlier stage of
the case.
B.
We next consider Zutz and Elseth’s argument that the statute is unconstitutional on
the ground that it would deny them their right to a trial by jury if they had claims that
warranted a trial. We are mindful that, in light of this court’s most recent prior opinion,
Zutz and Elseth do not have any pending claims that warrant a trial. See Zutz III, 2014 WL
7344058, at *7. The constitutionality of the anti-SLAPP statute as applied to Zutz and
Elseth nonetheless is a live issue because, in Zutz III, we reversed that part of the district
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court’s February 2014 ruling in which it rejected Nelson and Stroble’s argument for anti-
SLAPP immunity and remanded the case to t he district court for further consideration of
Nelson and Stroble’s anti-SLAPP motion. Id. Whether Nelson and Stroble are entitled to
anti-SLAPP immunity is consequential only insofar as Nelson and Stroble seek an award
of attorney fees and costs under t he anti -SLAPP statute. This court applies a de novo
standard of review to the question whether a statute is unconstitutional . Leiendecker III,
895 N.W.2d at 634-35.
In Leiendecker III, the supreme court held that the anti-SLAPP statute deprived the
plaintiffs of their constitutional right to a jury trial. Id. at 633-37. The supreme court
reasoned that section 554.02, subdivision 2, “unconstitutionally instructs district courts to
usurp the role of the jury by making pretrial factual fi ndings that can . . . result in the
complete dismissal of the underlying action,” even though “ the role of resolving disputed
facts belongs to the jury, not the court.” Id. at 635. The supreme court also reasoned that
section 554. 02, subdivision 2, is unconstitutional because it “require[s] the responding
party to meet a higher burden of proof before trial (clear and convincing evidence) than it
would have to meet at trial (preponderance of the evidence).” Id. at 636. Thus, the supreme
court concluded that the anti-SLAPP statute was unconstitutional as applied. Id. at 638.
Zutz and Elseth argue that the anti-SLAPP statute would affect them in essentially
the same manner in which it affected the Leiendecker plaintiffs. A straightforward
application of Leiendecker III to this case leads to the same conclusion: the anti -SLAPP
statute is unconstitutional. See id.
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Nelson and Stroble contend that this case is distinguishable from Leiendecker III on
the ground that the anti-SLAPP statute was not the sole reason that the district court granted
summary judgment in their favor. In essence, they argue that the anti -SLAPP statute did
not actually violate Zutz and Elseth’s right to a jury trial because Zutz and Elseth would
not have had a right to a jury trial even if Nelson and Stroble had not invoked the anti -
SLAPP statute. As noted above, our review of the anti-SLAPP issue was prompted by the
notice of related appeal that Nelson and Stroble filed after the district court’s February
2014 decision. Nelson and Stroble had prevailed in the district court for two reasons , but
they elected to pursue a cross -appeal to establish a third reason for a judgment in their
favor, presumably because a favorable ruling under the anti -SLAPP statute w ould allow
them to recover attorney fees and costs . We granted them appellate relief on their cross -
appeal and remanded to the district court for further consideration of their anti -SLAPP
argument. See Zutz III, 2014 WL 7344058 at *7. The limited purpose of the remand was
to determine whether Nelson and Stroble are entitled to anti -SLAPP immunity, without
regard for whether they are entitled to summary judgment for other reasons. See id. Having
earlier persuaded this court to reverse and remand on their anti-SLAPP argument, without
consideration of other reasons for a judgment in their favor, Nelson and Stroble cannot now
argue that this court should consider those other reasons when ruling on Zutz and Elseth’s
constitutional challenge to the anti-SLAPP statute.
Thus, the district court erred by not ruling that the anti-SLAPP statute is
unconstitutional as applied.
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C.
We last consider whether, in light of the foregoing analysis and conclusions, Nelson
and Stroble are entitled to an award of attorney fees and costs under the anti-SLAPP statute.
At oral argument, Nelson and Stroble conceded that , if this court were to decide that the
anti-SLAPP statute is unconstitutional as applied, there would be no statutory basis for the
district court’s award of attorney fees and costs. We agree. The applicable statute provides,
“The court shall award a moving party who prevails in a motion under this chapter
reasonable attorney fees and costs associated with the bringing of the motion.” Minn. Stat.
§ 554.04, subd. 1 . Because we have concluded that the anti -SLAPP statute is
unconstitutional as applied to Zutz and Elseth ’s claims , Nelson and Stroble have not
“prevail[ed] in a motion under” the anti-SLAPP statute. See id. Thus, Nelson and Stroble
are not entitled to the attorney fees and costs associated with their anti-SLAPP motion. See
J.E.B. v. Danks, 785 N.W.2d 741, 751 n.4 (Minn. 2010) (reversing defendant’s statutory
fee award due to reversal of grant of summary judgment).
In sum, we conclude that Zutz and Elseth did not waive their constitutional
challenge to the anti-SLAPP statute, that the anti -SLAPP statute would violate Zutz and
Elseth’s constitutional right to a jury trial if they had claims that warranted a trial, and that
Nelson and Stroble are not entitled to an award of attorney fees and costs under the anti-
SLAPP statute. We hope that this opinion brings this long-pending lawsuit to a conclusion.
Reversed.