ANDERSON, G. BARRY, Justice.
The parties to the present litigation have a long history of conflict, both in district court and otherwise, culminating in the current action brought by Middle-Snake-Tamarac Rivers Watershed District against James Stengrim in Marshall County District Court. The Watershed District sought to enforce a settlement agreement arising out of earlier litigation in which Stengrim agreed to "address no further challenges" to a flood management project in the Red River Valley. Stengrim filed a motion to dismiss the present litigation pursuant to Minn. R. Civ. P. 56 and Minnesota's anti-SLAPP statutes, Minn. Stat. §§ 554.01-.05 (2008),
The district court denied Stengrim's motion to dismiss because the court concluded, as stated in its order, "that there are issues of material fact." But on interlocutory appeal, the court of appeals reversed, holding that the plain language of the anti-SLAPP statutes applies to the Watershed District's lawsuit. Middle-Snake-Tamarac Rivers Watershed Dist. v. Stengrim, No. A08-825, 2009 WL 367286, at *2-3 (Minn.App. Feb. 17, 2009). The court of appeals remanded for resolution of whether Minn.Stat. § 554.03 immunizes Stengrim's actions from liability. Id. at *4. We reverse and remand to the district court.
In response to many years of severe flooding in Minnesota's Red River Valley, the Legislature authorized the Agassiz Valley Water Management Project in 2000. See Act of May 15, 2000, ch. 492, art. 1, § 41, 2000 Minn. Laws 2187, 2249 (codified at Minn.Stat. § 103F.161, subd. 3 (2008)). The Watershed District sought to implement the project, which required acquisition of private land from Stengrim and other landowners. Stengrim was among a group of landowners that brought litigation against the Watershed District, raising various challenges regarding compensation for their land and other matters surrounding the project.
After extensive litigation, the matter was referred to the Board of Water and Soil Resources, which ordered mediation between the parties. As a result of mediation, the Watershed District entered into a settlement agreement with Stengrim and the other landowners effective as of April 21, 2006. The Watershed District agreed to pay $1.7 million for the landowners' property. In return, the landowners agreed that "their challenges to the establishment of the Project are being dismissed with prejudice and that [they] will address no further challenges in litigation or otherwise against the establishment of the Project, which [the] Landowners now understand will be going forward." Both parties agreed to "endeavor to establish a positive and collaborative relationship between Landowners and the District." The settlement agreement also provided that the landowners had a continuing right to "meaningfully attend meetings" and "participate in Project team meetings regarding the Project and any modifications of the Project."
According to the Watershed District, Stengrim breached his agreement to "address no further challenges" to the project in several ways. The Watershed District filed a complaint in the district court of Marshall County, alleging that Stengrim
The Watershed District sought an "[o]rder disgorging [Stengrim] of such proceeds from his share of the $1,700,000.00 settlement sum."
The district court also denied the Watershed District's motion for partial summary judgment, finding genuine issues of material fact regarding Stengrim's alleged breach of the settlement agreement.
Stengrim challenged the district court's ruling on his anti-SLAPP motion in an interlocutory appeal.
We have not previously interpreted Minn.Stat. §§ 554.01-.05. We begin by reviewing SLAPP litigation, along with the background and text of Minnesota's anti-SLAPP provisions. In a typical SLAPP suit, those who oppose proposed real estate development plans find themselves facing a lawsuit—typically a tort claim such as slander or libel—brought against them with the goal of silencing dissent.
Although the purpose of the anti-SLAPP statutes is clear, the language implementing that purpose is less so and the statutes set out a unique procedural framework. A party asserting an anti-SLAPP claim can raise an affirmative defense by bringing a motion under Minn.Stat. § 554.02, subd. 1, based "on the grounds that the claim materially relates to an act of the moving party that involves public participation," and invoke immunity under Minn.Stat. § 554.03 for acts constituting public participation. Once the anti-SLAPP statutes are properly invoked, the underlying claim survives a motion to dismiss only if the plaintiff (or party responding to the anti-SLAPP motion) meets a heavy "clear and convincing evidence" burden.
Minnesota Statutes § 554.03 provides immunity from liability for "[l]awful conduct or speech that is genuinely aimed in whole or in part at procuring favorable government action . . . unless the conduct or speech constitutes a tort or a violation of a person's constitutional rights."
The first issue we must decide is whether Minnesota's anti-SLAPP statutes apply to a lawsuit for an alleged breach of a settlement agreement. The Watershed District argues that the anti-SLAPP statutes are not available to Stengrim in this case because "enforcement of a settlement agreement in good faith cannot be a SLAPP litigation."
The anti-SLAPP statutes "appl[y] to any motion in a judicial proceeding to dispose of a judicial claim on the grounds that the claim materially relates to an act of the moving party that involves public participation." Minn.Stat. § 554.02, subd. 1. A "judicial claim" or "claim" is defined as including "any civil lawsuit, cause of action, claim, cross-claim, counterclaim, or other judicial pleading or filing seeking damages for an alleged injury." Minn.Stat. § 554.01, subd. 3. A "`[m]otion' includes any motion to dismiss, motion for summary judgment, or any other judicial pleading filed to dispose of a judicial claim." Minn.Stat. § 554.01, subd. 4.
Minnesota Statutes § 554.02, subdivision 1, does not contain an express categorical exception for a breach of contract claim for damages involving a settlement agreement.
The anti-SLAPP procedural process begins with the filing of "any motion in a judicial proceeding to dispose of a judicial claim on the grounds that the claim materially relates to an act of the moving party that involves public participation." Minn.Stat. § 554.02, subd. 1. Accordingly, the statute permits a party, such as Stengrim, to assert immunity under the anti-SLAPP statutes by filing a motion to dismiss a breach of contract lawsuit. But the mere filing by a defendant or moving party of a motion under the anti-SLAPP statutes does not automatically place the burden of persuasion on the plaintiff or non-moving party to prove by clear and convincing evidence that the defendant is not immune from liability under Minn.Stat. § 554.03. The plain language of Minn.Stat. § 554.02, subd. 1, states that the motion to dispose of a judicial claim must be based "on the grounds that the claim materially relates to an act of the moving party that involves public participation."
Therefore, a district court must make a preliminary determination about whether the underlying "claim materially relates to an act of the moving party that involves public participation," Minn.Stat. § 554.02, subd. 1, that is, "speech or lawful conduct that is genuinely aimed in whole or in part at procuring favorable government action." Minn.Stat. § 554.01, subd. 6. In other words, applicability of the anti-SLAPP provisions is a threshold question that the district court must first analyze before Minn.Stat. § 554.02, subd. 2, comes into play. Discerning between a SLAPP action and a legitimate lawsuit may present challenges, but it is necessary because such discernment is the entire purpose of the anti-SLAPP statutes.
Minnesota Statutes § 554.02, subdivisions 1-2, therefore require an initial inquiry by the district court. The burden is first on the defendant or moving party to make a threshold showing that the underlying "claim materially relates to an act of the moving party that involves public participation." See Minn.Stat. § 554.02, subd. 1. Once this minimal burden is satisfied, then the plaintiff or responding party must show by clear and convincing evidence that the acts at issue are not immune under Minn.Stat. § 554.03. Clearly, these burdens are not the same, but it is insufficient for a defendant to simply assert that public participation is involved. Stated another way, the defendant, or moving party, must make a threshold showing that the acts that are "materially" related to the responding party's claim are themselves public participation, i.e., "speech or lawful conduct that is genuinely aimed in whole or in part at procuring favorable government action." See Minn. Stat. § 554.01, subd. 6.
Preexisting legal relationships, such as those based on a settlement agreement where a party waives certain rights, may legitimately limit a party's public participation. It would be illogical to read Minn.Stat. §§ 554.01-.05 as providing presumptive immunity to actions that a moving party may have contractually agreed to forgo or limit.
Because the district court determined that it did not have enough facts and that there were genuine issues of material fact concerning the effect of the settlement agreement on Stengrim's actions, we conclude that the district court properly denied Stengrim's motion to dismiss under the anti-SLAPP statute.
Reversed and remanded.
SLAPP suits generally come in the form of tort claims, such as defamation, interference with contract, abuse of process and malicious prosecution, among others. George W. Pring, SLAPPs: Strategic Lawsuits Against Public Participation, 7 Pace Envtl. L.Rev. 3, 9 & nn.11-13 (1989).