PH II, Born Anew

Moran v. Prime Healthcare Mgmt., Inc., No. G060920 (D4d3 Aug. 7, 2023)

This is mostly a case about healthcare law. I don’t do that. But procedurally, this is a rare recent option to touch on the usefulness of the common law motion to strike, so it’s worth a note.

As I said a long time ago, the oft-cited rule that a demurrer lies only to a whole “cause of action” provides a strong incentive for plaintiffs to engage in what I’ve called “claim jamming”—the practice of combining different legal theories into the same count. And because nobody really wants to suffer the brain damaged required to get into the sausage of how a “cause of action” is made, that generally lets crafty plaintiffs shield dubious legal theories from a demurrer (and get discovery on them) by intermingling them with more ordinary ones. It also deprives a defendant of the one real shot it has to get rulings on important legal questions at a relatively early point in a case. 

Some relief from this unnecessary formalism was held out by a Court of Appeal case from almost 30 years ago. In a 1995 case called PH II, the Court of Appeal recognized that an traditional motion to strike under Code of Civil Procedure § 436 permits a trial court to strike out part of a pleaded count that relies on an invalid legal theory, even though it does not dispose of a whole cause of action. That is a useful rule, but for whatever reason, it went essentially unapplied in another published case for a long, long, time. The Supreme Court cited it favorably in 2016 in Baral v. Schnitt—the case that explained how a “special” motion to strike under the anti-SLAPP statute applied to “mixed” causes of action. Even that, however, did not revive the utility of PH II.

But this case applies the PH II rationale. Plaintiff lost most of its claims in a class action in a prior appeal. But the Court of Appeal let one theory go. On remand, Plaintiff amended his complaint to add new theories under the UCL and CLRA. But he jammed those theories into the same “cause of action” as the prior theory endorsed on appeal. The trial court followed PH II and struck the language that implicated those theories, holding that they were not actionable as a matter of law. 

On a death knell doctrine appeal, Plaintiff argued that because Defendant didn’t challenge the part of his claim that was previously blessed by the Court of Appeal, any resolution of the other legal theories needed to await a motion for summary adjudication*. The Court here rejects that argument, finding that the issue “easily falls within the purview of PH II[.]” As the Court explains,  “[t]here is no need for an expensive motion for summary adjudication to add to what must already be the high costs of this almost 10-year-old case. The purported defects are clear from the face of the complaint, and therefore, a motion to strike was proper.”

So now, at least, there’s something from this century to cite for the point.

Affirmed.

*Summary adjudication is similarly limited to whole causes of action under § 437c(f), so not sure what that would be any better.

Some Anti-SLAPP Formalism

Park v. Nazari, No. B320483 (D2d5 Jul. 25, 2023)

This is an anti-SLAPP case that arises in the context of a somewhat confusing collections action. So far as I can gather, Defendants owe Plaintiffs about $1 million from a prior action involving a dispute over the sale of truck stop. During the prior case, after the jury’s verdict but before judgment had been entered, Defendants’ attorney recorded $125k in liens against property owned by Defendants. This case seeks, among other things, to invalidate the liens. It also claims (and this is where I am confused) something about a sham foreclosure and that the Defendants interfered with efforts to address soil contamination and one of the properties and to obtain cleanup funding from an environmental regulator.

Defendants, filed an anti-SLAPP motion, arguing that the attorney liens were how they funded the prior litigation, and were thus protected litigation-connected activity under Code of Civil Procedure § 425.16(e)(2). Because the liens were the “gravamen” of the whole action, argued Defendants, the whole complaint should be stricken. But when, during argument, the trial court pointed out that parts of the case—like the environmental stuff and the foreclosure—had nothing to do with the liens, Defendants argued that the court could instead just strike parts of the complaint. The trial court declined to parse the motion more finely, reasoning that it had no obligation to save Defendants from their overbroad motion and denied the motion.

The Court of Appeal affirms. It reasons that because Defendants “moved to strike only the entire complaint, and did not identify in their motion individual claims or allegations that should be stricken even if the entire complaint were not, the trial court was permitted to deny the anti-SLAPP motion once it concluded—correctly—that the complaint presented at least one claim that did not arise from anti-SLAPP protected conduct.”

The Court of Appeal holds that “[i]f a defendant wants the trial court to take a surgical approach, whether in the alternative or not, the defendant must propose where to make the incisions. This is done by identifying, in the initial motion, each numbered paragraph or sentence in the complaint that comprises a challenged claim and explaining ‘the claim’s elements, the actions alleged to establish those elements, and wh[y] those actions are protected.” (emphasis mine). It purports to find this rule in Bonni’s, statement that “[i]f a cause of action contains multiple claims and a moving party fails to identify how the speech or conduct underlying some of those claims is protected activity, it will not carry its first-step burden as to those claims.”

Affirmed.

The essential rule here, that if a moving party files an anti-SLAPP motion against a whole cause of action, a trial court can deny it without any Baral/Bonni-style claim by claim parsing, is somewhat of a stretch. After all, in Bonni itself, the defendant moved to strike a whole cause of action for retaliation. But the Supreme Court nonetheless picked apart the various retaliatory acts claim by claim. Justice Kruger’s discussion of parsing in Bonni is in the context of rejecting an anti-waiver basis for the “gravamen” rule that the Defendants mistakenly invoked here. And her discussion of the burden of identification does not really anticipate a requirement for the kind of line by line formalism suggested by the court here. I don’t have the Defendants’ superior court briefs, but their appellate brief—which somewhat bafflingly cites neither Bonni nor Baral—does make clear that the role of the liens in funding the prior litigation is the protected activity they are going after. That’s the kind of “identification” Bonni is taking about.

The court here, however, seems to be saying that if a party expects a Baral/Bonni analysis, even in the alternative, it needs to effectively follow Rule of Court 3.1322(a), which specifically requires that a notice of motion for a traditional (non-SLAPP) motion to strike recite each precise item of complaint text to which the motion is directed. As the Court here recognizes, that kind of rule is in tension with, and perhaps contrary to, Balla v. Hall, 59 Cal. App. 5th 652, 672 (2021), which applied a Baral analysis in a motion directed to a whole cause of action for defamation because the moving party’s brief “addressed individual publications and elements.” There the court observed that “Baral makes clear that not only can an anti-SLAPP motion attack portions of causes of action, but also that whether it does so turns on how the issues are framed—not simply the text of the notice of motion.” Id.

So there’s a likely split of authority. Although it’s perhaps on too narrow a procedural point to expect the Supreme Court to step in to resolve it anytime soon. 

In the meantime, anyone bringing an anti-SLAPP motion should take heed of this requirement. Even if the motion appears adequate to sink a whole cause of action or complaint, argue a Baral/Bonni analysis in the alternative and identify the various “claims” in the notice of motion.

A Firm Line in the Peer Review Sand

Bonni v. St. Joseph Health Sys., No. S244148 (Cal. Jul. 29, 2021)

There has been a lot of litigation over the application of the anti-SLAPP statute employment litigation touching on hospital peer review processes. Peer review is an “official proceeding,” so questions often arise regarding whether employment decisions made in connection with a peer review process are “protected activity” under Code of Civil Procedure § 425.16(e). 

I have been droning on about the appropriate line to draw for years. If the rub of the litigation is that someone is liable for some statement made in connection with a peer review process, it is protected. But the ultimate decision or result of a peer review—generally a decision to continue or discontinue a physician’s employment or privileges—is not such a statement. So, for instance, when a doctor sues a hospital for retaliatory discharge, but the hospital claims that its peer review decision grounded in quality of care was a legitimate non-retaliatory reason for the firing, no protected activity is involved.

That’s basically what the Court of Appeal held in this case in 2017. And that’s what the Supreme Court, in a unanimous opinion by Justice Kruger, holds here. 

There is one little twist to the analysis, however. In Wilson, the Supreme Court refined the elements based “arising from” analysis from its prior decision in Park to specify that if any single element of a cause of action constitutes protected activity, it satisfies the test. So in Wilson the defendant—CNN—claimed that the very act of firing the plaintiff for plagiarism was protected because it itself was an act of journalistic ethics enforcement and thus affected its ability to speak on an issue of public concern. In reaching that result, the Court disapproved of the Court of Appeal’s decision in this case, to the extent that it somewhat categorically suggested that the act of terminating someone categorically cannot constitute protected activity. But that doesn’t really matter here, because, unlike CNN, the hospital here doesn’t claim that terminating the doctor for alleged poor care—the result of the peer review—was itself some kind of protected expressive act or otherwise an act in furtherance of its ability to speak. 

The Court also addresses a second issue, although it seems like that issue was already settled by the Court in Baral, which held that the anti-SLAPP analysis needs to parse and strike only the protected allegations within a claim. Plaintiff’s claim here was mixed—some of his allegations were addressed to protected statements made during the peer review, while others were addressed only to the unprotected outcome. 

But defendant’s motion—filed pre-Baral—was addressed only to the cause of action as a whole. So Plaintiff argues that Baral should only apply when the moving defendant specifies the sub-parts of a cause of action that should be struck. Otherwise, says the plaintiff, courts should apply the “gravamen” test that some courts used prior to Baral. The Supreme Court, however, isn’t buying it. If a moving defendant fails to show that specific portions of a cause of action arise from protected activity, it has not met its burden on those claims under Baral and the analysis of those claims needs to proceed no further.

Court of Appeal affirmed.

The Baral-Park 1-2 . . .

Newport Harbors Offices & Marina, LLC v. Morris Cerullo World Evangelism, No. G054146 (D4d3 May 9, 2018) 

This is a long-running real estate litigation over a sublease to an office building in the OC. There have been four different appeals in the case, including a trip to the Supreme Court last year. Most of them are disputes over anti-SLAPP motions. This one is too.

A Trade Association Is Not an Official Proceeding

Kettler v. Gould, No. B282160 (D2d8 Apr. 20, 2018)

Some Heirs are upset with the Trustee who manages their late parents’ trust, to which Heirs are beneficiaries. Heirs complained about Trustee’s conduct, quite vociferously. They accused him of embezzlement, elder abuse, perjury, and a bunch of other bad stuff to, among others, FINRA, the California Department of Insurance, the Certified Financial Planners Board of Standards, Trustee’s employer, and an insurance company.

Sometimes the Supreme Court Is Just too Inconvenient

Okorie v. L.A. Unified Sch. Dist., No. B268733 (D2d1 Aug. 16, 2017)

This anti-SLAPP opinion is problematic. But to get to the bottom of it, we need to talk about how to harmonize the California Supreme Court’s recent anti-SLAPP decisions in Baral and Park. 

Turnabout on Remand

Crossroads Investors, L.P.  v. Fed. Nat’l Mortgage Assoc., No. C072585A (D3 Jul. 27, 2017)

This is an odd one. The Court of Appeal issued an opinion affirming the denial of an anti-SLAPP motion. The Supreme Court issued a grant-and-transfer, ordering reconsideration based on an intervening decision. And now, the the Court of Appeal reverses whole hog, in a ruling that is inconsistent with is prior decision in ways untouched by the intervening Supreme Court case.

Now a Scalpel, No Longer Just a Hammer.

Shelley v. Harrop, No. C07747 (D3 Mar. 20, 2017) 

This is an appeal of the denial of an anti-SLAPP motion. The motion comes out of a cross complaint alleging three causes of action based, in part, on the cross-defendants maintenance of a frivolous lawsuit, in waste of corporate assets. These causes of action, however, also mix in allegations about other corporate mismanagement like excessive compensation, self-dealing etc.—stuff that’s clearly not addressed under the anti-SLAPP protection. The trial court denied the motion, based on the idea that there were sufficient unprotected assertions to proceed on each claim.

Following the Supreme Court’s recent ruling in Baral v. Schnitt, an anti-SLAPP motion can be used with more precision than that. So long as the protected activity allegations aren’t merely incidental, courts need to look at the portions of claims that do, in fact address protected activity, determine whether there’s a likelihood of prevailing specifically as to the protected activity, and if not, to strike those particular allegations from the complaint, leaving the rest intact. So here, the trial court should have stuck the parts of the causes of action that were addressed to the filing and maintenance of an allegedly meritless litigation, an undisputed form of protected activity.

Reversed in part.

A Course Correction on the Anti-SLAPP Journey

Baral v. Schnitt, No. S225090 (Cal. Aug. 1, 2016)

In first of several pending cases addressing the anti-SLAPP statute, the Supreme Court resolves a longstanding split about how to handle so-called “mixed” causes of action. That is, causes of action that implicate both protected and unprotected activity. I’ve discussed this split previously here and here, as well as in my original post on the Court of Appeal’s decision in this case. 
In a cogent analysis focusing on both the text and the practicalities of the issue, the Court ultimately adopts the current minority rule.

A Conundrum for Mann-Hunter(s)

Baral v. Schnitt, No. B253620 (D2d1 Feb. 5, 2015)
 
Yet another court weighs in on the Mann rule, which says that an anti-SLAPP motion lies only to an entire cause of action. The upshot of the rule is that when a cause of action arises from both non-incidental activity protected under Code of Civil Procedure § 425.16(b)(1), as well as activity that is not subject to anti-SLAPP protection, the motion should be denied so long as the plaintiff can make a prima facie showing of success on any part of the claim. Over the last few years, a substantial split in appellate authority has arisen on this issue, with cogent arguments being raised on both sides.