Howard Appel v. Robert Wolf ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 14 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
HOWARD APPEL, Nos. 19-56131, 19-56184
Plaintiff-Appellee/Cross- D.C. No. 3:18-cv-814-L-BGS
Appellant,
v. MEMORANDUM*
ROBERT WOLF,
Defendant-Appellant/Cross-
Appellee.
Appeal from the United States District Court
for the Southern District of California
M. James Lorenz, District Judge, Presiding
Argued and Submitted December 7, 2020
Pasadena, California
Before: GRABER and BEA, Circuit Judges, and DORSEY,** District Judge.
Robert Wolf appeals the district court’s denial of his motion to strike
Howard Appel’s defamation suit under California’s anti-SLAPP statute, California
Civil Procedure Code sections 425.16–.18. Wolf argues that the district court erred
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Jennifer A. Dorsey, United States District Judge for
the District of Nevada, sitting by designation.
when it held that his email seeking to initiate settlement of Appel’s lawsuit against
Wolf’s client, Concierge Auctions, LLC, was facially defamatory and that it was
neither protected conduct nor immunized by California’s litigation privilege. We
have jurisdiction under 28 U.S.C. § 1291 and the collateral-order doctrine. Hilton
v. Hallmark Cards, 599 F.3d 894, 900 (9th Cir. 2010). Reviewing de novo,
Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828,
832 (9th Cir. 2018), we affirm.1
1. The district court erred when it held that Wolf’s email was not protected
conduct under section 425.16(e)(2). Courts considering a motion to strike under
California’s anti-SLAPP statute “must engage in a two-part inquiry.” Vess v.
Ciba-Geigy Corp. USA, 317 F.3d 1097, 1110 (9th Cir. 2003). First, the defendant
must show that the plaintiff challenges “an act in furtherance of protected
expression,” as defined by California statute. Metabolife Int’l, Inc. v. Wornick, 264
F.3d 832, 840 (9th Cir. 2001); see also Cal. Code Civ. P. § 425.16(e). Once he has
done so, “the plaintiff must show a ‘reasonable probability’ of prevailing [o]n [his]
claims for those claims to survive dismissal.” Metabolife Int’l, Inc., 264 F.3d at1
Because we affirm the district court’s order, we need not and do not reach
Appel’s conditional cross-appeal. See Hilton v. Mumaw, 522 F.2d 588, 603 (9th
Cir. 1975) (dismissing as moot a conditional cross-appeal of a nonfinal order “[a]s
to issues upon which we affirm” in the district court’s order).
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840 (citations omitted). A defendant’s insufficient showing at the first step, or a
plaintiff’s successful showing at the second, mandates denial of the motion. Id.Acts arising from a “defendant’s litigation activity”—which include
“communicative conduct such as the filing, funding, and prosecuting of a civil
action”—are generally considered protected conduct falling within section
425.16(e)(2)’s broad ambit. Rusheen v. Cohen, 128 P.3d 713, 717–18 (Cal. 2006)
(internal quotation marks omitted). This protection extends to “an attorney’s
communication with opposing counsel on behalf of a client regarding pending
litigation” and includes “an offer of settlement to counsel.” GeneThera, Inc. v.
Troy & Gould Pro. Corp., 171 Cal. App. 4th 901, 905, 908 (2009); see also Seltzer
v. Barnes, 182 Cal. App. 4th 953, 964 (2010). The district court misapplied
California law when it reasoned that Wolf’s email—which was sent to Appel’s
counsel, allegedly “begging for a phone[-]call discussion about possible settlement
of Appel’s case against Concierge”—was insufficiently concrete to qualify as
protected conduct. Section 425.16(e)(2) has no such “concreteness” requirement.
2. But that error was harmless, as the district court correctly held that Appel
was reasonably likely to succeed on the merits of his claim, given that Wolf’s
email was facially defamatory and not immunized by California’s litigation
privilege. A claim for defamation under California law involves “a publication”
that is “false,” “defamatory,” “unprivileged,” and that “has a natural tendency to
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injure or that causes special damage.” Taus v. Loftus, 151 P.3d 1185, 1209 (Cal.
2007) (internal quotation marks and citations omitted). A plain reading of both
Appel’s complaint and Wolf’s email, which erroneously stated that Wolf knew
Appel and that Appel “had legal issues (securities fraud),” supports the district
court’s finding that Wolf’s statement “would have negative, injurious ramifications
on [Appel’s] integrity.” Appel’s allegations are sufficient to establish a reasonable
likelihood of success on the merits of a claim for libel per se. See Manzari v.
Associated Newspapers Ltd., 830 F.3d 881, 889 (9th Cir. 2016) (noting that, at the
second stage of the anti-SLAPP analysis, a plaintiff “need only convince us that
[his] claim has ‘minimal merit’”) (quoting Overstock.com, Inc. v. Gradient
Analytics, Inc., 151 Cal. App. 4th 688, 700 (2007)).
In addition, Wolf’s defamatory statement is not privileged, despite being
made in the context of settlement negotiations. California’s expansive litigation
privilege, codified at California Civil Code section 47(b), applies to any
communication “(1) made in judicial or quasi-judicial proceedings; (2) by litigants
or other participants authorized by law; (3) to achieve the objects of the litigation;
and (4) that ha[s] some connection or logical relation to the action.” Rusheen, 128
P.3d at 718 (quoting Silberg v. Anderson, 786 P.2d 365, 369 (Cal. 1990)) (internal
quotation marks omitted). “To be privileged under section 47, a statement must be
‘reasonably relevant’ to pending or contemplated litigation.” Neville v. Chudacoff,
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160 Cal. App. 4th 1255, 1266 (2008) (emphasis omitted). As the California Court
of Appeal held in Nguyen v. Proton Technology Corp., the privilege “does not prop
the barn door wide open” for every defamatory “charge or innuendo,” merely
because the libelous statement is included in a presumptively privileged
communication. 69 Cal. App. 4th 140, 150 (1999). Appel established that Wolf’s
false insinuation that he had been involved in securities fraud is not reasonably
relevant to Appel’s underlying dispute with Concierge. Accordingly, the district
court properly denied Wolf’s anti-SLAPP motion to strike Appel’s complaint.
AFFIRMED.
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