SEC Filings Are Protected Activity

Sugarman v. Bennett, No. B307753 (D2d8 Dec. 27, 2021)

Sugarman v. Brown, No. B308318 (D2d8 Dec. 27, 2021)

Two appeals from the same case decide the same issue: statements made in a corporation’s Form 10-K filing with the Securities and Exchange Commission are made “in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law,” and thus protected activity under the anti-SLAPP statute.

Makes sense.

Affirmed, in relevant part.

Style note: I have complained before about the goofy way California appellate courts explain partial publications, by explaining instead which parts of the opinion are not published. The decisions here do that too. But at least the slip opinion helpfully includes headings that say “[Begin nonpublished portion]” and “[End nonpublished portion].” Readers of slip opinions will take whatever we can get.

Not Exactly Between the World and Me.

Bernstein v. LaBeouf, No. B288054 (D2d3 Dec. 6, 2019)

So Shia LeBeouf and a girl, both loaded, walk into a bar—Jerry’s Deli in Studio City. A Bartender refuses to serve them. Shia freaks out, tries to get behind the bar, and is subsequently nabbed and escorted out by security. On the way out, Shia loudly calls the bartender a “Fuckin’ Racist Bitch,” and ultimately shouts out to the crowd, “Wake Up, this Motherfucker is a Racist.”* Of course, this being LA, someone filmed it and it was quickly posted to TMZ. Which earned Bartender, to his displeasure, the lasting moniker, “The Racist Bartender.” 

Bartender sues Shia for defamation, to which Shia responds with an anti-SLAPP motion. The trial court denied it. In a solid analysis of the Supreme Court’s recent FilmOn opinion, the Court of Appeal affirms. As the Court explains, calling some random bartender in the valley a racist has no connection to a public issue and thus is not protected activity under Code of Civil Procedure § 425.16(e)(3) or (4).

The Court rejects the argument that “Shia said it, and he’s a little famous, and people pay attention to dumb stuff famous people say, so it must be a public issue.” (That argument previously prevailed, pre-FilmOn, in the Wayans case. The Supreme Court has granted review in Wayans and transferred it back to the 2/1 for consideration in light of FilmOn.) Under FilmOn, the public issue analysis looks to the specific content of the speech, not the identity of the speaker. And then it examines the quality of the connection between the speech and the issue that is purportedly being addressed. Because drunkenly declaring a bartender to be a “Fuckin’ Racist Bitch” is not furthering some overall discussion of racism in American life, the speech is not protected activity.

Affirmed.

*There’s a lot of weird capitalization going on in the quotes in this opinion that I can’t figure out.

Dumb Case, But Not a SLAPP

Supershuttle Int’l, Inc. v. Labor & Workforce Dev. Agency, No. B292054 (D2d8 Oct. 7, 2019)

Supershuttle won a case in Sacto Superior against various state labor agencies, which resulted in a ruling that some of its drivers were independent contractors, not employees. But then the Labor Commissioner served Supershuttle with a bunch of so-called Berman notices in administrative wage claims brought by drivers in LA. 

The whole Berman procedure  doesn’t apply to independent contractors. But the Labor Commissioner indicated she didn’t intend to be bound by the Sacto ruling. So Supershuttle filed an action in LA Superior, seeking dec relief that the agencies were collaterally estopped from re-litigating the IC/employee issue on behalf of the drivers in the Berman hearings.

The Commissioner filed an anti-SLAPP motion, which the trial court denied. The Commissioner appeals. 

This is all a little hard to follow, because Supershuttle’s moves are kind of procedurally screwy. As the Court points out, Supershuttle could have just argued collateral estoppel in the trial de novo it gets in superior court on appeal of an adverse Berman ruling. So it’s not clear why this declaratory relief action is procedurally legit. (The collateral estoppel point also seems a little fraught, given that the drivers who are making the wage claims weren’t parties to the Sacto case. “Due process prohibits estopping [non-parties to prior cases] despite one or more existing adjudications of the identical issue which stand squarely against their position.” Blonder-Tongue Labs., Inc. v. Univ. of Illinois Found., 402 U.S. 313, 329 (1971).)

In any event, just because a case is dumb or procedurally flawed doesn’t make it a SLAPP. Here, the action arises from and challenges the Commissioner’s official quasi-judicial act of declining to apply preclusive effect to the prior judgment. Although official acts of government bodies are sometimes preceded or conveyed in communications, the acts themselves are not exercises of speech or petitioning. They are thus not subject to anti-SLAPP treatment. The Supreme Court was pretty clear on that in both Park and City of Montebello.

Affirmed.

Contracts Are Not Communications

Valuerock TN Props., LLC v. PK Larwin Square SC LP, No. 6056634 (D4d3 Jun 28, 2019)

This one is pretty easy.

There’s a contract—a commercial lease. Tenant wants to assign it. Landlord refuses to agree. There’s some back and forth on the matter. Sooner or later Tenant sues for unreasonable denial of consent to the assignment. After the complaint is filed, tenant makes a revised proposal, which is again denied, and which subsequently forms the basis of an amended complaint. 

So the question is: Does the case “arise from” a “settlement communication” consisting of the back and forth commercial dealing on the requested assignment, which could make it based on “protected activity” under the anti-SLAPP statute?

No, it doesn’t. The case arises from the decision not to agree to the assignment proposal. While that decision might have been communicated in arguable settlement correspondence, the denial itself is a non-communicative commercial decision, such that it would be protected activity.

Affirmed.

Destined to End Poorly

Optional Capital v. Akin Gump Strauss Hauer & Feld LLP, No. B275274 (D2d1 Dec. 7, 2017)

In connection with an appeal in a related case just about four years ago, we discussed how judgment collection avoidance activities like fraudulent transfers in connection with phony settlements aren’t “protected activity” under the anti-SLAPP state, even though they might be tangentially related to a litigation. 

But after remand, Plaintiff in that case went off and sued the debtor’s litigators for assisting in those activities, on various theories. The attorneys filed an anti-SLAPP motion of their own. And this time it was granted, and the Court of Appeal affirmed. 

The case against the primary defendants is that they were hiding assets by manipulating the legal process. The asset hiding was the key to the claim. In contrast, the new case against the litigators is entirely based on what they did in the litigation. A client’s nefarious purpose does not render an attorney’s litigation activities unprotected. There’s a difference between using the legal process as cover for your asset hiding—which isn’t protected—and conducting that process itself—which is. 

Which isn’t to say there can never be some liability if litigators are in cahoots with their clients in manufacturing a bogus litigation. But that’s a question for the “success” prong of the anti-SLAPP analysis. To show that, Plaintiff would need to provide evidence of acts or statements that are not privileged under Civil Code § 47(b)’s absolute privilege for statements made in connection with a litigation. Plaintiffs didn’t do that here.

Affirmed.

Park Rolls On

Shahbazian v. City of Ranch Palos Verdes, No. B271562 (D2d7 Nov. 22, 2017)

Some grumpy Palos Verdeans in a fence dispute with their neighbors sued a City for issuing an “over-the-counter after-the-fact permit” that approved the new fence. The City filed an anti-SLAPP motion, which the trial court denied on the basis that issuing a permit is not protected activity under Code of Civil Procedure § 425.16(b)(1). The City appealed.

It’s pretty much all Park from here. There, the Supreme Court explained that while governments do and can speak and petition, normal official acts of government are not speech or petitioning, even though they are often arrived at by speaking beforehand and conveyed though some communicative act. Like issuing a permit. So there’s no protected activity.

Affirmed.

Garbage Battle Is a SLAPP.

Indus. Waste & Debris Box. Serv., Inc. v. Murphy, No A142388 (D1d2 Oct. 28, 2016)

Defendant is a waste and recycling consultant. On behalf of Client, it wrote a report about recycling rates that was positive for Client but questioned the veracity of Client’s Competitor’s statements about how much of the waste it collected was ultimately recycled. Client ultimately submitted the report to a local government in Sonoma County, resulting in Client getting a waste hauling contract that Competitor previously held. Competitor sued Defendant for defamation and other similar causes of action.

If you haven’t yet guessed where this is going, you might be new to California.

More on How to Deal with CCP § 425.16(e)(4).

City of Montebello v. Vasquez, No. S219052 (Cal. Aug.8, 2016).

Another big anti-SLAPP opinion drops from the Cal. Supremes.

No Second Shots to Plead Around CCP 425.16(b).

Mobile Med. Servs. for Physicians & Advance Practice Nurses, Inc. v. Rajaram, No. G050111 (D4d3 Oct. 13, 2015)

Plaintiff sued on a number of theories, all based on Defendant’s allegedly making some untrue or defamatory statements in the course of an investigation conducted by the California Nursing Board. Unsurprisingly, that drew a successful anti-SLAPP motion. But the trial court granted the motion with leave to amend, permitting plaintiff to re-allege a breach of contract action whose facts were disaggregated from the allegations about the statements to the Nursing Board. Plaintiff did so amend, withdrawing the Nursing Board statements, and the trial court denied a subsequent anti-SLAPP motion, finding that the amended complaint did not allege claims arising from protected activity.

That was a mistake. Long-settled anti-SLAPP precedent holds that once the trial court finds that a claim arises from protected activity, Plaintiff’s can’t get leave to plead around the protected activity to avoid an anti-SLAPP dismissal. If Plaintiff had a viable claim that didn’t implicate Defendant’s free speech rights, it was incumbent on it to plead the claim that way in the first instance.  

Reversed.

Just More Chances to Lose

San Diegans for Open Gov’t v. Har Const. Co., No. D066514 (D4d1 Sept. 17, 2015).

A good-government group brought this case to cancel a construction contract under Government Code § 1090 as the product of a corrupt bargain between a San Diego-area school district and a contractor. More than a year into the litigation, Contractor filed an anti-SLAPP motion, which the trial court denied because Plaintiff established a likelihood of prevailing on the merits.

From a Bum Seed, a Forest Grows

Park v. Bd. of Trustees of Cal. State Univ., No. B260047 (D2d4, as modified, Sept. 1, 2015)

This anti-SLAPP case goes awry along the same lines as last spring’s DeCambre decision. It assumes that, because statements made during a university’s faculty and tenure selection processes are protected as matters of academic freedom, a complaint alleging unlawful national origin discrimination in awarding tenure addresses “protected activity” under the anti-SLAPP statute.

SLAPP Exception Applies to Keyword Manipulation in Taxi Ads

L.A. Taxi Cooperative, Inc. v. The Indep. Taxi Owners Assoc. of L.A., No. B255909 (D2d4 Aug. 20, 2015)

A cooperative of taxicab companies sued another cooperative for false advertising on the Internet. Allegedly, defendants were buying keyword search terms from search engines that would return Defendants’ links when customers searched for contact information for Plaintiff’s company. Defendants filed an anti-SLAPP motion, claiming that claims arose from speech protected under Code of Civil Procedure § 425.16(b)(1). After Plaintiffs opposed, Defendants stipulated to take the motion off calendar. But they then refiled an essentially identical motion, without even trying to address the arguments Plaintiffs made in their prior opposition.

"A Fight to the Death Litigation Struggle" (and also a SLAPP)

Bergstein v. Stroock & Stroock & Lavan LLP, No B244896 (D2d8 May 8, 2015)

This is the apparent end of one of the many rounds of ugly litigation in various courts arising from a dispute between movie producer and Hollywood businessman David Bergstein and Aramid Entertainment, a film finance hedge fund. The blow-by-blow of what plaintiff calls “a fight to the death litigation struggle” is way too much to recount here. But the pertinent part of the story is that Susan Tregub, Bergstein’s long-time personal lawyer, with whom he had a falling out over fees, supposedly leaked Bergstein’s privileged and confidential information to Aramid and its lawyers. Bergstein won a $50 million breach of fiduciary duty verdict against Tregub. Then, in this case, he sued the lawyers representing Aramid on the litigation side—lawyers who were supposedly on the receiving end of the leaked info and used it in the various litigations. The trial court granted the lawyers’ anti-SLAPP motions.

An Arrest as Free Expression?

Anderson v. Geist, No. E058139 (D4d2 Apr. 22, 2015)
 
This is a § 1983 case over the service of an arrest warrant.  The defendant filed an anti-SLAPP motion, claiming that a cop’s execution of an arrest warrant is protected activity under Code of Civil Procedure § 425.16(e)(4) as an act in furtherance of a criminal prosecution. It’s not. The police are not engaged in any kind of expressive activity in connection with an issue of public concern when they execute warrants. They are just doing their jobs as public employees.

Affirmed.

Legal Malpriactice Is Not Subject to SLAPP

Loanvest I, LLC v. Utrecht, No. A141564 (D1d3 Mar. 26, 2015)

Superficially, claims of litigation malpractice seem like they arise from protected petitioning activity under the first prong of the anti-SLAPP analysis. After all, litigation is quintessential petitioning activity. But when you scratch the surface, the gist of the claims isn’t really the petitioning itself; it is that the petitioning was incompetent. So while claims against attorneys by third parties and claims against attorneys for petitioning on behalf of other clients generally come within the ambit of Code of Civil Procedure § 425.16(e), claims by a client based on petitioning on behalf of that client do not. A pretty long line of cases bears this out.  

Reversed.

Philanthropy as Protected Activity

Save Westwood Village v. Luskin, No. B253013 (D2d2 Jan. 15, 2015).

Plaintiffs here are some kind of NIMBY group that is trying to stop UCLA from building a conference center. Their objection seems to be that the center will include what they characterize as a commercial hotel, which violates some statutory mandate on the UC Regents to not engage in commercial development. But they didn’t just sue the Regents. They also sued a charitable foundation that raises money for UCLA and some of its big donors, one of whom also heads the foundation, for donating funds to UCLA in support of the project. That draws a anti-SLAPP motion, to which the plaintiffs responded by voluntarily dismissing these defendants. The trial court granted the motion and plaintiffs appealed.

The court holds that the plaintiffs’ claim arose from the charitable contributions and some letters these defendants wrote in support of the project. Unsurprisingly, that kind of stuff is conduct in furtherance of a free speech on an issue of public interest and thus “protected activity” under Code of Civil Procedure § 425.16(e)(4). And plaintiffs weren’t entitled to the protection of the public interest exception in § 425.17. While plaintiffs might have a public interest argument against the Regents, there really is no public benefit to be had by restraining philanthropists from donating to a charitable foundation that supports UCLA. And since plaintiffs dismissed the relevant defendants before the motion was heard, they effectively conceded that they had no likelihood of success.

Affirmed.

More SLAPP Sanity

Drell v. Cohen, No. B253688 (D2d8 Dec. 5, 2014)

An attorney who represented a plaintiff in obtaining a settlement sued the plaintiff’s former counsel to obtain a ruling on the validity of prior counsel’s attorney’s lien on the settlement proceeds. Defendants filed an anti-SLAPP motion, contending that the case arose from protected activity in the form of the letter they sent plaintiff asserting their rights under the lien. 

But that’s not really the case. The case does not allege that the defendants engaged in wrongful conduct in the assertion of their lien. It instead seeks a declaratory judgment on the lien’s validity. There’s nothing expressive or petitioning-related to the question of whether the defendants have the right to get paid out of the settlement fund. 

The court goes on to find that the plaintiff waived his right to contest the trial court’s denial of attorney fees when he failed to cross-appeal on the issue. And as to fees on appeal, although the court finds the appeal “has no merit whatsoever and is poorly conceived,” the court is not convinced that it is entirely frivolous, so no fees will be awarded.

Affirmed.

SLAPP 101

Kenne v. Stennis, No. B242262 (D2d5 Oct. 21, 2014)

Unsurprisingly, a complaint based on making false police reports and filing meritless civil harassment petitions arises from protected activity, for anti-SLAPP purposes. Similarly unsurprising is that the plaintiff could not show a probability of success because her claims were barred by the litigation privilege in Civil Code § 47(b), as well as other policy-based privileges. 

Affirmed in part and reversed in part.

Reigning in Some Anti-SLAPP Madness

Ulkarim v. Westfield LLC, No. B247174 (July 14, 2014)

A commercial landlord brought and won an unlawful detainer proceeding to evict a tenant. Thereafter, tenant sued landlord for breach of contract and various and sundry torts arising from alleged breaches of the lease and wrongful eviction. Landlord filed an anti-SLAPP motion. Its theory was that the case arose from the service of the notice of termination for the UD case, which is protected activity under Code of Civil Procedure § 425.16(e). The trial court agreed but the court here reverses. 

As the court explains, “a tenant’s complaint against a landlord filed after the service of a notice of termination and the filing of a complaint for unlawful detainer does not arise from those particular activities if the gravamen of the tenant’s complaint challenges the decision to terminate the tenancy or other conduct in connection with the termination apart from the service of a notice of termination or filing of an unlawful detainer complaint.” The fact that the eviction process entails some court-related activity does not mean that a landlord’s decision to evict is protected petitioning under the First Amendment. The weight of the authority—exhaustively canvassed in the opinion—supports this proposition. To the extent that two cases can be read to suggest otherwise, they are wrong.

Reversed.

Another Dumb Anti-SLAPP Appeal

Old Republic Const. Program Grp. v. The Boccardo Law Firm, Inc., No. H037989 (D6 June 27, 2014).

Defendants stipulated to keep some money in an escrow account pending the litigation of a dispute. When the litigation ended, without resolving the dispute, defendants took the money out of the escrow. Plaintiffs sued for, among other things, breach of the stipulation. Defendants responded with an anti-SLAPP motion. So the issue is: does a lawsuit for violating the stipulation by withdrawing the money from the escrow account arise from protected activity?

One thing is clear: entering the stipulation was clearly protected activity because it is a communicative act performed in a connection with a litigation. See Cal. Code Civ. Proc. § 425.16(e)(2). But that begs the question: Does the breach of contract case arise from the entry of the stipulation? The court here says no. 

After reviewing the overlapping and often abstract tests that have been applied to answer that question, the court comes up with a new one: “a cause of action can only be said to arise from protected conduct if it alleges at least one wrongful act—conduct allegedly breaching a duty and thereby injuring the plaintiff—that falls within the act’s definition of protected conduct.” Plaintiff’s contract claim did not assert that it was wrongful to enter the stipulation; it asserted that it was wrong to breach it by taking the money out of escrow. The mere fact that an agreement is reached in connection with litigation doesn’t mean that a claim for its breach arises from protected activity. Otherwise, every claim for breach of a settlement agreement would draw an anti-SLAPP motion, which does not make sense.

Taking money out of the escrow is not itself protected activity. Withdrawing funds is not communicative at all, so the first three kinds of protected conduct in § 425.16(e)(1)–(3) don’t apply. Although § 425.16(e)(4) does protect “conduct in furtherance” of certain First Amendment-protected rights, it is limited to such acts “in connection with a public issue.” So even if defendants could somehow say that taking money out of an escrow related to their First Amendment rights, because the underlying dispute was about an insurance setoff in a workers’ comp. dispute, it was, by no means, a public issue.

Affirmed.