The San Francisco Recorder published an article on 1/27/12 about a recent unpublished SLAPP case Brain Research Labs LLC (BRL) v. Thomas Howard Clarke, et al. (filed 1/26/12 No. A127544) from the First Dist. Div. 3. In BRL, Clarke a lawyer published a nine minute video on Youtube whose purpose was to solicit potential clients for a class action against BRL, the maker of Procera alleging that Procera is a dangerous and ineffective supplement and that BRL's claims about Procera are false and illegal. Hence, the solicitation of potential clients for a class action for false advertising, inter alia. In the video, the Court noted a number of libelous statements. Also, attorney Clarke and his client were interviewed in a short segment on KTVU about the case. Each of these communications formed the basis of BRL's libel and intentional interference action, inter alia. The attorney, defendant Clarke, filed an anti-SLAPP motion pursuant to CCP 425.16. As to prong one, the Court also determined that the commercial speech exemption under CCP 425.17(c) does not apply under the recent High Court ruling in Simpson-Strong-Tie Co. v. Gore (2010) 49 Cal.4th 12, 22. The Court reasoned per Simpson that because Clarke's statements in the video and KTVU segment were about BRL and Procera and not about Clarke's goods or services. Hence, the commercial speech exemption under CCP 425.17(c) did not apply.
Accordingly, the court found that the statements in the video about Procera and BRL concerned a matter of significant public interest as the public has an interest in consumer information and the burden shifted to BRL to show a probability of prevailing.
As to prong two, the court revisited the recent controversy over the application of the Mann rule, which holds that the plaintiff need only prove up any part of its claim and need not prove up all counts or theories within a single cause of action to prevail on prong two of a SLAPP motion. Mann v. Quality Old Time Service (2004) 120 Cal.App.4th 90, 106. The BRL Court noted the High Court's recent decision in Oasis West Realty v. Goldman (2011) 51 Cal.4th 811, 820-821, which recently applied and reaffirmed the Mann rule despite recent criticism of the Mann rule in Wallace v. McCubbin (2011) 196 Cal.App.4th 1169, 1195-1212 and Justice Jones disagreeing with majority on Mann rule pp. 1216-1220. (See my previous blog on the Mann rule controversy fall 2011 for a thorough discussion).
The defense asserted the litigation privilege of CC 47(b) and common interest privilege of CC 47(c). The Court rejected each of these defenses based primarily on the Rothman v. Jackson (1996) 49 Cal.App.4th 1134, a great read for libel cases where attorneys seek to litigate in the press. In order to be privileged under CC 47(b), the communication "must function intrinsically, and apart from any consideration of the speaker's intent, to advance a litigant's case, i.e. the litigant's ability obtain the remedies which can be awarded by courts."
The crux of defendant's argument is that the Youtube video as a whole is an attorney solicitation of client's for a potential class action suit in the future. But the court found that "there is no evidence in the record that defendants contemplated in good faith , and seriously considered filing, any litigation other than the Rotenberg action" (the main underlying action pending against BRL). "Accordingly, whether the Youtube video is privileged depends solely on its functional connection to the Rotenberg action."
Under the well-settled Nguyen v. Proton Technologies (1999) 69 Cal.App.4th 140, 142-143, 148, 150-152, the court found that even if the Youtube video as a whole is categorized as an attorney solicitation, not all of the individual statements made within the video are protected by the litigation privilege. Because the statements in the Youtube video did not focus solely on Procera but also discussed on other supplements made by BRL and other manufacturers that had no nexus to the Rotenberg action.
The video and the statements within it were overbroad and exceeded the scope of issues necessary to advance the objectives of the Rotenberg action.
More importantly, under Rothman, supra, publishing the video on Youtube made it accessible to the general public and could be accessed by anyone, regardless of whether he or she had a potential claim or interest in participating in the litigation. Hence, the publication of the attorneys solicitation was "excessive."
Similar reasoning applies to the CC 47(c) common interest privilege.
As a result, the Court affirmed the trial court order denying the SLAPP motion as to BRL's claims.
In my opinion, this case is a great read because it covers a host of well-established litigation and common interest privilege cases while addressing many recent SLAPP cases regarding the mixed cause of action analysis on prong one, the commercial speech exemption of CCP 425.17(c), and the Mann rule on prong two.
I have represented many SLAPP defendants as well as plaintiffs in libel actions as well as many attorney defendants in malicious prosection and abuse of process claims where the various privileges have been raised. Contrary to the opinions of some of the attorneys quoted in the S.F. Recorder article, I do not see any real cutting-edge issues in the BRL case other than the application of well-established litigation privilege cases (primarily Rothman and Nguyen v. Proton) to a 21st century medium of the internet. I do not see any real distinction between a settlement demand letter in Proton and the Youttube video. Nor do I see a distinction between the excessive publication i.e. "litigating in the press" in Rothman and the Youtube video or the KTVU interview of Clarke here. Either way the analysis is the same.
Your comments are welcome!!!
Showing posts with label mixed cause of action. Show all posts
Showing posts with label mixed cause of action. Show all posts
Monday, January 30, 2012
Monday, October 24, 2011
In Defense of The Mann rule - the SLAPP Equalizer
In so far as prong one is concerned, the anti-SLAPP statute's application to a given cause of action, the Legislature has made clear that CCP section 425.16 is to be broadly construed. Once defendant meets this prong one showing ( i.e. that the cause of action arises at least in part from protected speech or petition activity described in subd. (e) of section 425.16), the burden shifts to plaintiff to show a probability of prevailing on the merits of each claim in order to defeat the SLAPP motion on prong two. In mixed SLAPP causes of action - i.e. causes of action that base liability in part on protected activity and in part on non-protected activity - the groundbreaking case of Mann v. Quality Old Time Service (2004) 120 Cal.App.4th 90, 106 holds essentially that the SLAPP statute is to be broadly construed to apply to a cause of action and shift the burden to plaintiff in mixed SLAPP causes of action in accordance with the preamble. But on prong two, Mann created a well recognized prong-two rule for the plaintiff to use in discharging its burden on prong two - the notorious Mann rule.
The Mann rule essentially holds that in any cause of action subject to anti-SLAPP treatment on prong one, the plaintiff need only prove up any part of its claim to defeat the anti-SLAPP motion on prong two. A court need not parse causes of action and strike only those parts of a claim that plaintiff cannot prove up. Example: Jean Newton is a vet tech that has worked for ABC animal hospital for 2 years. Dr. Borjal is the owner and manager. Newton sues Borjal and the Clinic for retaliation on the following grounds: (1) Dr. Borjal demanded Newton to perform sexual favors; Newton refused the Dr. 's demands; and she was terminated the next day; and (2) Dr. Borjal reported Newton to the police for stealing narcotics from the Clinic the day she was terminated and participated as a witness in the subsequent criminal prosecution. This is clearly a mixed cause of action. Defendant can easily meet its first prong burden by showing that at least one act of petitioning activity is a basis of liability - i.e. the false police report and participation in the criminal trial. This is protected petition activity under subdivisions (e)(1) and (2). It is also barred by the absolute litigation privilege of CC 47(b) on the merits. So to the extent the retaliation were excluisively based on the police report and criminal trial activity, the cause of action would be stricken as a meritless SLAPP suit. But this cause of action has several counts. The first count bases liability squarely on the act of firing her in retaliation for refusing sexual favors - no protected SLAPP petitioning or speech activity here. Assume there is no privilege or Statute of limitations defense otherwise barring the claim. If plaintiff can offer a declaration with proper foundation averring that the Dr. demanded sex from her, that she refused, and that she was fired the next day, and that she suffered specific harm as a result, she has adduced competent admissible evidence that, if credited, by the trier of fact would entitle her to judgment
as a matter of law on a retaliation claim. One could argue that the result under Mann is that the litigation privilege allegations survive to chill another day. Here, the plaintiff has shown a probability of prevailing on "any part of its claim" regardless of whether it is protected activity or unprotected activity, like the termination.
The Mann rule has recently been vituperatively criticized by one Justice in the First Dist. Division 5 Court of Appeal. It started out as Justice Needham's thought provoking dissent in the 2010 Haight-Ashbury Free Clinic v. Happening House (2010) 184 Cal.App.4th 1539. This dissent has more recently morphed into 20-pages of dicta in the majority opinion in Wallace v. McCubbin (2011) 196 Cal.App.4th 1169. Justice Needham engaged in an exhaustive analysis of why the Mann rule impairs that anti-SLAPP statute's efficacy in striking meritless SLAPP suits.
The first argument is based on the plain language of the the statute arguing essentially that the Legislature intended something different when it used the terms "cause of action" and "claim"
in subd (b)(1). He is correct that the false police report allegations and participation in the criminal trial would survive to chill another day under Mann. He argues that the plain language of the statute, Legislative History, and the broad construction would dictate that Mann be rejected. However, the broad plain language construction was intended to get as many causes of action that arise even partly from petition or free speech activity within the broad swath of the SLAPP statute's early screening test on prong one. But as Justice Jones pointed out in a cogent concurring opinion, the Mann rule has been the well established precedent in this State for over seven years now and the Legislature has amended the anti-SLAPP statute at least three times since the Mann rule was first announced in 2004. More importantly, when one examines the Legislative History of the statute, it is apparent that the definition of a SLAPP suit was one that entirely lacked merit was filed to chill First Amendment speech and petition rights. These suits that were filed by wealthy land developers against environmental activists has no potential merit. According to the plain language of the statute itself, a SLAPP suit is defined as a lawsuit that arises from the protected speech or petition activity AND lacks merit. In the Legislative History and the writings of Pring and Canaan - two professors who discovered and defined the phenomenon of SLAPP suits - found that "the sine qua none of a SLAPP suit is it lack of merit."
So the intent and the law is that you can sue people all day long for speaking out or petitioning as long as the suit has some merit. This interpretation is buttressed by numerous California Supreme Court decisions beginning with Navallier v. Sletten (2002) 29 Cal.4th 82, 92 stating that plaintiff may discharge its secondary burden of showing a probability of prevailing by showing the claims have "minimal merit". Navellier predated Mann by two years. Here, allowing Newton's claim under the Mann rule to proceed is consistent with the policy and purpose of the anti-SLAPP statute especially when considered in light of the early stage at which the SLAPP motion is brought, the no leave to amend rule in Simmons v. Allstate 92 Cal.App.4th 1063, and the automatic stay on discovery under subd, (g).
While Justice Needham certainly has some good points, in my opinion, the biggest problem with adopting the rule he would suggest is administrability. He has not satisfactorily shown how a court, without unduly complicating matters, gets around the problem of striking parts of causes of action based on protected activity and allowing the nonprotected activity to survive. Nor has he even discussed how attorneys fees and costs might be apportioned under that rule when a part of a cause of action is stricken.
Most importantly, the one thing that stopped Justice Needham from making his 20 pages of dicta in Wallace into conflicting authority was his acknowledgment that our Supreme Court has recently approved of the Mann rule and applied it in a closely related context and found no reason why the Supreme Court would disapprove of applying Mann in the way it was applied in the Newton v. Borjal example above. Wallace v. McCubbin (2011) 196 Cal.App.4th 1169 citing (Oasis West Realty v. Goldman (2011) 51 Cal.4th at 820). Fortunately, it was Oasis that stopped the Wallace majority from creating authority that would conflict with Mann and necessitate Supreme Court review. After all is a claim that is based on at least some actionable conduct a lawsuit that constitutes "abuse of the judicial process"? [CCP 425.16, subd. (a)]
As a SLAPP specialist who represents both defendants and plaintiffs, I believe that Mann rule creats an appropriate state of equipoise. In fact, it is the only counterbalancing rule that gives some credence to a plaintiff's due process rights in the context of a SLAPP motion on prong two and comports with the policy and purpose of the anti-SLAPP statute as envisioned by the Legislature. The Mann rule is the ultimate equalizer balancing the clear advantage a moving SLAPP defendant has over a plaintiff once the SLAPP motion is filed in state court.
Comments welcome
By James J. Moneer, Esq.
The Mann rule essentially holds that in any cause of action subject to anti-SLAPP treatment on prong one, the plaintiff need only prove up any part of its claim to defeat the anti-SLAPP motion on prong two. A court need not parse causes of action and strike only those parts of a claim that plaintiff cannot prove up. Example: Jean Newton is a vet tech that has worked for ABC animal hospital for 2 years. Dr. Borjal is the owner and manager. Newton sues Borjal and the Clinic for retaliation on the following grounds: (1) Dr. Borjal demanded Newton to perform sexual favors; Newton refused the Dr. 's demands; and she was terminated the next day; and (2) Dr. Borjal reported Newton to the police for stealing narcotics from the Clinic the day she was terminated and participated as a witness in the subsequent criminal prosecution. This is clearly a mixed cause of action. Defendant can easily meet its first prong burden by showing that at least one act of petitioning activity is a basis of liability - i.e. the false police report and participation in the criminal trial. This is protected petition activity under subdivisions (e)(1) and (2). It is also barred by the absolute litigation privilege of CC 47(b) on the merits. So to the extent the retaliation were excluisively based on the police report and criminal trial activity, the cause of action would be stricken as a meritless SLAPP suit. But this cause of action has several counts. The first count bases liability squarely on the act of firing her in retaliation for refusing sexual favors - no protected SLAPP petitioning or speech activity here. Assume there is no privilege or Statute of limitations defense otherwise barring the claim. If plaintiff can offer a declaration with proper foundation averring that the Dr. demanded sex from her, that she refused, and that she was fired the next day, and that she suffered specific harm as a result, she has adduced competent admissible evidence that, if credited, by the trier of fact would entitle her to judgment
as a matter of law on a retaliation claim. One could argue that the result under Mann is that the litigation privilege allegations survive to chill another day. Here, the plaintiff has shown a probability of prevailing on "any part of its claim" regardless of whether it is protected activity or unprotected activity, like the termination.
The Mann rule has recently been vituperatively criticized by one Justice in the First Dist. Division 5 Court of Appeal. It started out as Justice Needham's thought provoking dissent in the 2010 Haight-Ashbury Free Clinic v. Happening House (2010) 184 Cal.App.4th 1539. This dissent has more recently morphed into 20-pages of dicta in the majority opinion in Wallace v. McCubbin (2011) 196 Cal.App.4th 1169. Justice Needham engaged in an exhaustive analysis of why the Mann rule impairs that anti-SLAPP statute's efficacy in striking meritless SLAPP suits.
The first argument is based on the plain language of the the statute arguing essentially that the Legislature intended something different when it used the terms "cause of action" and "claim"
in subd (b)(1). He is correct that the false police report allegations and participation in the criminal trial would survive to chill another day under Mann. He argues that the plain language of the statute, Legislative History, and the broad construction would dictate that Mann be rejected. However, the broad plain language construction was intended to get as many causes of action that arise even partly from petition or free speech activity within the broad swath of the SLAPP statute's early screening test on prong one. But as Justice Jones pointed out in a cogent concurring opinion, the Mann rule has been the well established precedent in this State for over seven years now and the Legislature has amended the anti-SLAPP statute at least three times since the Mann rule was first announced in 2004. More importantly, when one examines the Legislative History of the statute, it is apparent that the definition of a SLAPP suit was one that entirely lacked merit was filed to chill First Amendment speech and petition rights. These suits that were filed by wealthy land developers against environmental activists has no potential merit. According to the plain language of the statute itself, a SLAPP suit is defined as a lawsuit that arises from the protected speech or petition activity AND lacks merit. In the Legislative History and the writings of Pring and Canaan - two professors who discovered and defined the phenomenon of SLAPP suits - found that "the sine qua none of a SLAPP suit is it lack of merit."
So the intent and the law is that you can sue people all day long for speaking out or petitioning as long as the suit has some merit. This interpretation is buttressed by numerous California Supreme Court decisions beginning with Navallier v. Sletten (2002) 29 Cal.4th 82, 92 stating that plaintiff may discharge its secondary burden of showing a probability of prevailing by showing the claims have "minimal merit". Navellier predated Mann by two years. Here, allowing Newton's claim under the Mann rule to proceed is consistent with the policy and purpose of the anti-SLAPP statute especially when considered in light of the early stage at which the SLAPP motion is brought, the no leave to amend rule in Simmons v. Allstate 92 Cal.App.4th 1063, and the automatic stay on discovery under subd, (g).
While Justice Needham certainly has some good points, in my opinion, the biggest problem with adopting the rule he would suggest is administrability. He has not satisfactorily shown how a court, without unduly complicating matters, gets around the problem of striking parts of causes of action based on protected activity and allowing the nonprotected activity to survive. Nor has he even discussed how attorneys fees and costs might be apportioned under that rule when a part of a cause of action is stricken.
Most importantly, the one thing that stopped Justice Needham from making his 20 pages of dicta in Wallace into conflicting authority was his acknowledgment that our Supreme Court has recently approved of the Mann rule and applied it in a closely related context and found no reason why the Supreme Court would disapprove of applying Mann in the way it was applied in the Newton v. Borjal example above. Wallace v. McCubbin (2011) 196 Cal.App.4th 1169 citing (Oasis West Realty v. Goldman (2011) 51 Cal.4th at 820). Fortunately, it was Oasis that stopped the Wallace majority from creating authority that would conflict with Mann and necessitate Supreme Court review. After all is a claim that is based on at least some actionable conduct a lawsuit that constitutes "abuse of the judicial process"? [CCP 425.16, subd. (a)]
As a SLAPP specialist who represents both defendants and plaintiffs, I believe that Mann rule creats an appropriate state of equipoise. In fact, it is the only counterbalancing rule that gives some credence to a plaintiff's due process rights in the context of a SLAPP motion on prong two and comports with the policy and purpose of the anti-SLAPP statute as envisioned by the Legislature. The Mann rule is the ultimate equalizer balancing the clear advantage a moving SLAPP defendant has over a plaintiff once the SLAPP motion is filed in state court.
Comments welcome
By James J. Moneer, Esq.
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