Rand Resources, LLC v. City of Carson , 243 Cal. Rptr. 3d 1 ( 2019 )

IN THE SUPREME COURT OF
CALIFORNIA
RAND RESOURCES, LLC, et al.,
Plaintiffs and Appellants,
v.
CITY OF CARSON et al.,
Defendants and Respondents.
S235735
Second Appellate District, Division One
B264493
Los Angeles County Superior Court
BC564093
February 4, 2019
Justice Cuéllar authored the opinion of the court, in which
Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu,
Kruger, and Ashmann-Gerst* concurred.
*
Associate Justice of the Court of Appeal, Second Appellate
District, Division Two assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
RAND RESOURCES, LLC v. CITY OF CARSON
S235735
Opinion of the Court by Cuéllar, J.
The City of Carson (City) hired Rand Resources as its
agent to negotiate with the National Football League (NFL)
about the possibility of building a football stadium in the City.
But Rand Resources eventually sued the City, its mayor, and
rival developer Leonard Bloom after the City replaced Rand
Resources with Bloom’s company. The defendants responded by
making a motion under a California statute designed to hasten
resolution of certain disputes commonly characterized as
strategic lawsuits against public participation (SLAPP) ––
lawsuits meant to chill the valid exercise of the public’s rights to
free speech and petition for redress of grievances. (Code Civ.
Proc., § 425.16, subd. (a)1; see also Rusheen v. Cohen (2006) 37
Cal. 4th 1048, 1055 (Rusheen).) Known as the anti-SLAPP
statute, this law permits a defendant facing such a lawsuit to
dispose of it through a special motion to strike one or more
causes of action.
To describe the standard governing whether such a motion
will succeed, the statute uses certain open-ended terms that
raise nuanced questions of interpretation. A special motion may
target “cause[s] of action against a person arising from any act
of that person in furtherance of the person’s right of petition or
free speech under the United States Constitution or the
1
All further references to section 425.16 are to the Code of
Civil Procedure.
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Opinion of the Court by Cuéllar, J.
California Constitution in connection with a public issue . . . ,
unless the court determines that the plaintiff has established
that there is a probability that the plaintiff will prevail on the
claim.” (§ 425.16, subd. (b)(1).) A plaintiff who fails to persuade
the court that he or she will probably prevail on the cause of
action in question faces immediate dismissal of that cause of
action.
The question we tackle here is whether the causes of
action asserted in Rand Resources’ dispute with the City and
other defendants arise — as required to advance a valid anti-
SLAPP motion — from the defendants’ acts in furtherance of
their right of free speech in connection with a public issue. What
we find is they do not, aside from two discrete claims asserted
against Bloom and his company. The relevant provisions of the
anti-SLAPP statute procedurally protect statements made “in
connection with an issue under consideration or review” by a
legislative body (§ 425.16, subd. (e)(2)) or “any other conduct in
furtherance of” the constitutional rights of petition or free
speech “in connection with a public issue or an issue of public
interest” (§ 425.16, subd. (e)(4)).
The City Council indeed reviewed whether to renew
plaintiffs’ contract with the City. But the anti-SLAPP statute
protects defendants’ statements made “in connection with” that
issue only where such statements form the basis of plaintiffs’
claims — that is, where the statements themselves constitute
the wrongs giving rise to the complaint. In this case, the
statements on which plaintiffs based their claims against the
City defendants were either (1) unrelated to the issue
considered by the City Council, or (2) made long before the issue
came “under consideration or review” by the City Council.
(§ 425.16, subd. (e)(2).) Under such circumstances, we hold that
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Opinion of the Court by Cuéllar, J.
these statements do not satisfy the requirements of section
425.16, subdivision (e)(2). In contrast, the statements
attributed to the City’s codefendants — Bloom and his company
— are at the heart of the intentional interference claims
asserted against these codefendants. These claims do fall within
the ambit of subdivision (e)(2) because they rely on statements
Bloom made “in connection with” the issue the City Council
reviewed.
We also find that none of defendants’ statements are
within the scope of subdivision (e)(4) of the anti-SLAPP statute,
save for those statements underlying the claims against Bloom.
The parties in this case agree that the building of a sports
stadium in the City of Carson to host an NFL team is — given
the wide-ranging impact that a project of such scale could have
on the City — an issue of public interest. Yet, except as to two
claims, the conduct providing the basis for plaintiffs’ claims has
only the slightest bearing on whether or not, or how, the stadium
should be built, nor does it concern any comparable matter of
public interest. Instead, the conversations underlying plaintiffs’
action relate only to who should be responsible for the ordinary
functions associated with representing the City in the
negotiations with the NFL — plaintiffs or the other entities
named as the City’s codefendants. Since there is no evidence or
persuasive argument that the identity of the City’s agents was
a matter of public interest in this case, defendants’ conduct does
not qualify as protected activity under section 425.16,
subdivision (e)(4).
Because we find some of plaintiffs’ causes of actions are
based on protected activities under subdivision (e)(2) and (e)(4)
of section 415.26 but others are not, we affirm in part and
reverse and remand in part the appellate court’s judgment.
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Opinion of the Court by Cuéllar, J.
I.
The plaintiffs in this case are Richard Rand and his
companies, Rand Resources and Carson El Camino, LLC
(collectively, Rand Resources or plaintiffs). The defendants are
the City of Carson and its mayor, James Dear (collectively, the
City defendants). Also named as defendants are Leonard Bloom
and Bloom’s company, U.S. Capital, LLC (collectively, the Bloom
defendants). According to the complaint, in 2012, Rand
Resources and the City entered into a contract in which Rand
Resources was to act as the City’s exclusive agent in negotiating
with the NFL to build “a new, state-of-the-art sports and
entertainment complex within the City” that would serve as the
home stadium for an NFL team. All parties agree this
development would have transformed the City and was a matter
of public interest.
The agreement did not begin under the most auspicious
circumstances. One of the City’s earlier mayors had attempted
to extort a bribe from Rand, and Rand, instead of paying, sued
the mayor and the City. Rand won. While the case was on
appeal, the City and Rand Resources entered into an agreement,
the Exclusive Negotiating Agreement (ENA), which governed,
inter alia, development of Rand Resources’ own land within the
parcel that the City was hoping to turn into a sports stadium.
Rand Resources alleges the City extended the ENA multiple
times.
In 2012, Rand Resources and the City entered into a new
agreement, the contract underlying the dispute in this case.
Under this agreement, the Exclusive Agency Agreement (EAA),
Rand Resources became the City’s exclusive authorized agent to
negotiate with the NFL. The EAA obligated the City not to
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Opinion of the Court by Cuéllar, J.
“engage, authorize or permit any other person or entity
whomsoever to represent City, to negotiate on its behalf, or to
otherwise act for City” in “coordinating and negotiating with the
NFL for the designation and development of an NFL football
stadium.” As part of that exclusivity condition, the City
committed that it “shall not itself, through its officials,
employees or other agents, contact or attempt to communicate
with the NFL or any agent or representative of the NFL.”
The EAA covered a term of two years but included an
option for renewal. The extension provision states: “The term
may be extended by mutual written consent of the parties for up
to two (2) additional periods of one (1) year. The City’s City
Manager, or designee, may grant such extension upon receipt of
an extension request and a report from Agent indicating in
specific terms the efforts of Agent to date and the anticipated
steps to be undertaken in the extension period for completion of
the applicable planning and negotiation phases of the Project.
To the extent that such efforts are reasonably determined by the
City to be consistent with the requirements of this Agreement,
the City shall grant such extension request. The granting of any
extension pursuant to this Section 5 shall be within the sole and
unfettered discretion of the City.”
Plaintiffs allege that City Attorney Bill Wynder
nonetheless made certain representations to Rand regarding
extension of the EAA. In particular, plaintiffs assert that “[i]n
August 2012 prior to Rand entering into the EAA, City Attorney
Bill Wynder, acting on behalf of the City, told Mr. Rand that,
even though the EAA only initially provided for a term of two
years, the City would extend the EAA for two years beyond that
period, just as it had with the ENA, so long as Rand showed
reasonable progress with respect to bringing an NFL franchise
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Opinion of the Court by Cuéllar, J.
to Carson.” Plaintiffs allege that “[p]ursuant to the EAA,” they
“expended significant time and resources in bringing an NFL
team to Carson.”
What prompted plaintiffs’ lawsuit was that the City
“stopped adhering to the terms of the EAA” around April 2013,
within the initial term of the agreement and shortly after Rand
settled his earlier litigation against the City. Rand alleges the
City breached the exclusivity condition by, among other things,
allowing the Bloom defendants to act as its representative in
negotiating with the NFL.
Plaintiffs advance a variety of allegations to support these
claims. The most pertinent ones involve speech and so
potentially implicate the anti-SLAPP statute: allegations that
the Bloom defendants and Mayor Dear “would send each other
‘confidential emails’ to discuss matters relating to building a
stadium in Carson”; “Mayor Dear regularly sent Mr. Bloom and
U.S. Capital, LLC private and confidential City of Carson
documents relating to development of an NFL stadium”; and
“Messrs. Bloom and Dear were involved in discussions with the
City as to how to ‘get around’ the EAA.”
With respect to the Bloom defendants specifically,
plaintiffs allege, “Leonard Bloom and U.S. Capital, LLC, with
the knowledge and support of representatives of the City,
including Mayor Dear, were contacting NFL representatives
and purporting to be agents of the city with respect to bringing
an NFL franchise to Carson.” In addition, “Mr. Bloom was using
promotional materials that were derivative of those created and
used by Rand in connection with meetings with NFL officials
and others.” In August 2014, Bloom also directed the vice
president of his company “to form a new entity with the same
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exact name as Mr. Rand’s company that entered into the EAA,
Rand Resources, LLC,” presumably so that he could pass off the
entity as Rand’s company.
Plaintiffs also contend the City and Bloom defendants
sought to hide their activities. In particular, plaintiffs allege
that when Rand asked Mayor Dear about Bloom, “[t]he Mayor
falsely told Rand that he did not know Mr. Bloom and was not
aware of what, if anything, Mr. Bloom was doing with respect to
the City and the NFL.”
In July 2014, Rand Resources submitted to the City a
request to extend the EAA for another year. After Rand
Resources presented its request but before the City voted upon
the matter, Bloom “met with Mayor Dear and at least one
Carson councilperson . . . to discuss and conspire about how to
breach the EAA and not extend it.” Another meeting also took
place days before the vote, this one attended by Rand and City
Attorney Wynder. During this encounter, Wynder informed
Rand that the City was not going to extend the agreement.
Wynder further stated that “the City had been ‘walking on
eggshells’ with Leonard Bloom and ‘did not need’ Rand
anymore.” According to plaintiffs, the City then committed
another breach of the EAA when its City Council voted to deny
the requested extension.
On the strength of these allegations, plaintiffs lodged a
six-count complaint against the City, Mayor Dear, and the
Bloom defendants. The first three causes of action are directed
at the City and include breach of contract, tortious breach of
contract, and promissory fraud. The next count of fraud is
asserted against all defendants; and the last two counts —
intentional interference with contract and intentional
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Opinion of the Court by Cuéllar, J.
interference with prospective economic advantage — are
asserted against the Bloom defendants alone.
Defendants responded by making special motions to strike
the second through sixth causes of action. The trial court
granted their motions. The appellate court reversed, concluding
the causes of action at issue did not arise from conduct in
furtherance of defendants’ constitutional rights of free speech in
connection with a public issue, as defined by section 425.16. We
granted review to clarify the scope of the statute.
II.
A.
The Legislature enacted section 425.16 in response to “a
disturbing increase in lawsuits brought primarily to chill the
valid exercise of the constitutional rights of freedom of speech
and petition for the redress of grievances.” (§ 425.16, subd. (a).)
These lawsuits prompted the Legislature to declare that “it is in
the public interest to encourage continued participation in
matters of public significance, and that this participation should
not be chilled through abuse of the judicial process.” (Ibid.) To
limit such risks, the anti-SLAPP legislation provides a special
motion to strike “intended to resolve quickly and relatively
inexpensively meritless lawsuits that threaten free speech on
matters of public interest.” (Newport Harbor Ventures, LLC v.
Morris Cerullo World Evangelism (2018) 4 Cal.5th 637, 639.) In
1997, the Legislature amended the statute to provide that,
directed to this end, the statute “shall be construed broadly.”
(§ 425.16, subd. (a); see also Equilon Enterprises v. Consumer
Cause, Inc. (2002) 29 Cal. 4th 53, 59–60, fn. 3 (Equilon)
[providing a history of the anti-SLAPP statute].)
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Opinion of the Court by Cuéllar, J.
The procedure made available to defendants by the anti-
SLAPP statute has a distinctive two-part structure. (E.g., Barry
v. State Bar of California (2017) 2 Cal.5th 318, 321; Baral v.
Schnitt (2016) 1 Cal.5th 376, 384 (Baral); Simpson Strong-Tie
Co., Inc. v. Gore (2010) 49 Cal. 4th 12, 21; Equilon, supra, 29
Cal.4th at p. 67.) A court may strike a cause of action only if the
cause of action (1) arises from an act in furtherance of the right
of petition or free speech “in connection with a public issue,” and
(2) the plaintiff has not established “a probability” of prevailing
on the claim. (§ 425.16, subd. (b)(1) [“A cause of action against
a person arising from any act of that person in furtherance of
the person’s right of petition or free speech under the United
States Constitution or the California Constitution in connection
with a public issue shall be subject to a special motion to strike,
unless the court determines that the plaintiff has established
that there is a probability that the plaintiff will prevail on the
claim”].)
A defendant satisfies the first step of the analysis by
demonstrating that the “conduct by which plaintiff claims to
have been injured falls within one of the four categories
described in subdivision (e) [of section 425.16]” (Equilon, supra,
29 Cal.4th at p. 66), and that the plaintiff’s claims in fact arise
from that conduct (Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1063 (Park)). The four
categories in subdivision (e) describe conduct “in furtherance of
a person’s right of petition or free speech under the United
States or California Constitution in connection with a public
issue.” (§ 425.16, subd. (e).) Defendants here contend plaintiffs’
causes of action arise from two of those categories:
communications “made in connection with an issue under
consideration or review by a legislative body” (§ 425.16, subd.
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Opinion of the Court by Cuéllar, J.
(e)(2)) and “conduct in furtherance of the exercise of . . . free
speech in connection with a public issue or an issue of public
interest” (§ 425.16, subd. (e)(4).).
According to subdivision (e)(2) of section 425.16, “any
written or oral statement or writing 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” is an “act in furtherance of a person’s right of petition or
free speech under the United States or California Constitution
in connection with a public issue.” By requiring the
communication to be in connection “with an issue under
consideration or review” (§ 425.16, subd. (e)(2), italics added),
the terms of subdivision (e)(2) make clear that “it is insufficient
to assert that the acts alleged were ‘in connection with’ an
official proceeding.” (Paul v. Friedman (2002) 95 Cal. App. 4th
853, 867.) Instead, “[t]here must be a connection with an issue
under review in that proceeding.” (Ibid.; see also McConnell v.
Innovative Artists Talent & Literary Agency, Inc. (2009) 175
Cal. App. 4th 169, 177 [same]; Blackburn v. Brady (2004) 116
Cal. App. 4th 670, 677 [same].)
Alternatively, under subdivision (e)(4) of section 425.16,
plaintiffs’ causes of action must arise from defendants’ conduct
“in connection with a public issue or an issue of public interest.”
(See, e.g., Tamkin v. CBS Broadcasting, Inc. (2011) 193
Cal. App. 4th 133, 142–143 [“A cause of action arises from
protected activity within the meaning of section 425.16,
subdivision (e)(4) if (1) defendants’ acts underlying the cause of
action, and on which the cause of action is based, (2) were acts
in furtherance of defendants’ right of petition or free speech
(3) in connection with a public issue”].)
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Not surprisingly, we have struggled with the question of
what makes something an issue of public interest. (See Briggs
v. Eden Council for Hope & Opportunity (1999) 19 Cal. 4th 1106,
1122 & fn. 9). The appellate courts, however, have derived some
guiding principles that characterize a matter of public interest.
We share the consensus view that “a matter of concern to the
speaker and a relatively small, specific audience is not a matter
of public interest,” and that “[a] person cannot turn otherwise
private information into a matter of public interest simply by
communicating it to a large number of people.” (Rand
Resources, LLC v. City of Carson (2016) 247 Cal. App. 4th 1080,
1092 (Rand Resources), quoting Weinberg v. Feisel (2003) 110
Cal. App. 4th 1122, 1132–1133.)
Here, the Court of Appeal properly identified three
nonexclusive and sometimes overlapping categories of
statements within the ambit of subdivision (e)(4). (See Rand
Resources, supra, 247 Cal.App.4th at pp. 1091–1092.) The first
is when the statement or conduct concerns “a person or entity in
the public eye”; the second, when it involves “conduct that could
directly affect a large number of people beyond the direct
participants”; and the third, when it involves “a topic of
widespread, public interest.” (Rivero v. American Federation of
State, County, and Municipal Employees, AFL–CIO (2003) 105
Cal. App. 4th 913, 919; see id. at pp. 919–924.)
But to prevail on an anti-SLAPP motion, a defendant must
do more than identify some speech touching on a matter of
public interest. As we have explained, “ ‘the defendant’s act
underlying the plaintiff’s cause of action must itself have been
an act in furtherance of the right of petition or free speech.’ ”
(Park, supra, 2 Cal.5th at p. 1063 [holding that in deciding
whether the “arising from” requirement is met, “courts should
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consider the elements of the challenged claim and what actions
by the defendant supply those elements and consequently form
the basis for liability”].) In other words, a claim does not “arise
from” protected activity simply because it was filed after, or
because of, protected activity, or when protected activity merely
provides evidentiary support or context for the claim. Rather,
the protected activity must “supply elements of the challenged
claim.” (Id. at p. 1064.)
In what follows, we consider counts two through six of the
complaint within the above framework, asking, first, what
conduct or statements underlie plaintiffs’ claims; and second,
whether the conduct was “in furtherance of” defendants’ rights
of petition or free speech “in connection with a public issue,” as
defined by either subdivision (e)(2) or (e)(4). (§ 425.16, subd. (e).)
B.
Plaintiffs’ second and fourth claims allege tortious breach
of contract against the City defendants and fraud against all
defendants, respectively. But they rest on allegations that are
virtually identical.2 Although plaintiffs’ third claim involves
promissory fraud, it differs in material ways from the tortious
breach of contract and fraud claims, so we treat it separately.
The crux of the second and fourth claims is that
defendants concealed and affirmatively lied about the City’s
2
We have established a “general rule precluding tort
recovery for noninsurance contract breach,” except to the extent
the claim is simply a fraud claim by another name. (Freeman &
Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal. 4th 85, 102.)
Plaintiffs’ tortious breach claim (count two) does appear to be a
fraud claim by another name, and we thus refer to it as among
plaintiffs’ fraud-based claims.
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breach of the exclusivity provision. (See Park, supra, 2 Cal.5th
at p. 1060.) Plaintiffs allege that Mayor Dear and the Bloom
defendants conspired to conceal the City’s breach of the
exclusivity provision by meeting in secret, exchanging
“confidential emails,” and “form[ing] a new entity . . . with the
same exact name as Plaintiff Rand Resources” to “make it
appear that [Bloom] was affiliated with and controlled Rand
Resources.” Plaintiffs also allege affirmative
misrepresentations, including that Mayor Dear falsely told
Rand that the mayor “did not know Mr. Bloom and was not
aware of what, if anything, Mr. Bloom was doing with respect to
the City and the NFL”; and that Wynder “falsely told Mr. Rand
that, so long as Rand showed reasonable progress,” the EAA
would be renewed.
Among these allegations, Mayor Dear’s and Wynder’s false
statements to Rand supply an element of the fraud-based
claims: misrepresentation in the form of concealment,
nondisclosure, or false representation.3 These
misrepresentations are not simply “evidence of liability or a step
leading to some different act for which liability is asserted”; they
are themselves the “wrong[s] complained of.” (Park, supra, 2
Cal.5th at p. 1060.) They therefore satisfy the anti-SLAPP
3
Mayor Dear’s and Wynder’s statements, not directly or
indirectly attributable to the Bloom defendants, cannot supply
the elements of a fraud claim asserted against the Bloom
defendants. (See City of Montebello v. Vasquez (2016) 1 Cal.5th
409, 426 [distinguishing between activities of the municipal
government and those of individuals, who happened to be
officials of the municipality]; Area 51 Productions, Inc. v. City of
Alameda (2018) 20 Cal.App.5th 581, 599–600 [agreeing that
“Vasquez . . . ‘emphasizes that each person’s conduct is to be
analyzed separately’ ”].)
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requirement that the challenged claim “aris[e] from”
defendants’ conduct. (§ 425.16, subd. (b)(1).)
But these particular statements were not made “in
connection with” either the issue before the City Council — the
relevant legislative body, under subdivision (e)(2) — or an issue
of public interest, under subdivision (e)(4). A closer look at the
facts in light of these two statutory provisions shows why.
Consider first subdivision (e)(2). It is undisputed that the
City Council met and took a vote affecting Rand Resources and
the Bloom defendants. But the issue that the legislative body
reviewed, considered, and voted on was whether to extend the
EAA with Rand Resources in 2014. The City Council did not
separately consider whether the Bloom defendants should be
allowed to represent the City during the original term of the
EAA, when the City was legally bound to use Rand Resources as
its exclusive agent. Only communications made in connection
with the renewal of the EAA — what the City Council actually
considered — constitute “written or oral statement[s] or
writing[s] made in connection with an issue under consideration
or review” by the City Council. (§ 425.16, subd. (e)(2).) Plaintiffs
present no other rationale for treating statements that are the
basis of these claims as covered by subdivision (e)(2).
Statements concerning anything else at issue in these claims,
including those reflecting or concealing a breach of the EAA’s
exclusivity provision, fall outside the scope of this subdivision.
As to subdivision (e)(4), the parties agree that building an
NFL stadium in the City is a matter of public interest. But
defendants’ speech concerned only the narrower issue of who
should represent the City in the negotiations with the NFL. The
affirmative misrepresentations, for instance, concerned only the
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falsehoods that Mayor Dear did not know Bloom and was not
aware of his involvement in the NFL negotiations, and that the
City would continue to let Rand be its exclusive agent if his
company made “reasonable progress.” Neither of these
statements was directed to the public issue of whether to “hav[e]
an NFL team, stadium, and associated developments in Carson”
or what trade-offs might be entailed in the process. (Rand
Resources, supra, 247 Cal.App.4th at p. 1093.) Rather, what
Mayor Dear and Wynder misrepresented — the issue “in
connection with” their statements — was the identity of the
City’s agent in negotiations with the NFL.
Defendants disagree. “Speech about ‘who’ should
represent the City in its NFL negotiations,” they contend, “is
just as protected as the speech ‘of’ that exclusive representation
with the NFL” — “[t]he two kinds of speech are inextricably
intertwined.” What defendants fail to explain is how or why that
is the case here, under circumstances where no obvious
connection existed between the identity of the representative
and a matter of public concern.
Defendants instead contend that this case is no different
than Tuchscher Development Enterprises, Inc. v. San Diego
Unified Port Dist. (2003) 106 Cal. App. 4th 1219 (Tuchscher). In
Tuchscher, a developer had an exclusive deal with a city to “take
preliminary steps and negotiate towards a development
agreement for the creation of a mixed use real estate project . . .
on certain bayfront property within the City.” (Id. at p. 1227.)
The parties did not dispute that the planned development was
an issue of public interest. (Id. at p. 1233.)
Yet ultimately, the developer and city failed to reach an
agreement on the project. The developer then sued, alleging the
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defendants had interfered with the contract it had with the city.
To support its claims, the developer introduced evidence of
communications between the defendants, a rival developer, and
the city. The developer’s claims failed when the trial court
granted the defendants’ motion to strike under section 425.16
and the appellate court affirmed.
Tuchscher is distinguishable. Unlike any communications
at issue here, those in Tuchscher pertained to the actual
development of real estate — an issue of public interest — and
formed the basis of the developer’s claims. For instance, the
challenged communications in Tuchscher included a letter from
the rival developer to a defendant discussing such matters as
the construction of “ ‘H St. Marina View Parkway,’ ” the
demolition of “ ‘the existing structures on Port property,’ ” and
the development of “ ‘residential housing on the adjacent fee
owned property and commercial on Port property.’ ” (Tuchscher,
supra, 106 Cal.App.4th at p. 1229.) If, as the Court of Appeal in
Tuchscher said, these communications were “the activity
underlying [the developer’s] causes of action,” Tuchscher is
instructive mainly in its differences from this case. (Id. at
p. 1233.)
No such communications relating to the building of the
NFL stadium underlie plaintiffs’ fraud-based claims. True: the
defendants allegedly discussed building a stadium among
themselves and with the NFL, while Bloom forged a deliberately
confusing parallel entity. But those discussions and activities
are not the misrepresentations that form the basis of the fraud.
Rather, they serve as evidence that the City’s statements to
plaintiffs in denying Bloom’s involvement were fraudulent. (See
Park, supra, 2 Cal.5th at p. 1068.) In other words,
communications exchanged between the City, the Bloom
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defendants, and the NFL did not defraud plaintiffs; the City
defendants’ lie about their communications did. The lie,
however, related only to the matter of who was representing the
City. It had nothing to do with the merits of whether, how, and
in what form the stadium should be built.
Defendants also argue that the issue of who served as the
City’s agent is a matter of public significance because “the better
the negotiating party, the more likely that an NFL stadium
would be delivered.” As a preliminary matter, we reject the
proposition that any connection at all — however fleeting or
tangential — between the challenged conduct and an issue of
public interest would suffice to satisfy the requirements of
section 425.16, subdivision (e)(4). (See, e.g., Jewett v. Capital
One Bank (2003) 113 Cal. App. 4th 805, 814 [reversing the grant
of a special motion to strike when “the attempt to connect the
solicitations [the speech at hand] with an issue of public interest
is tenuous at best”]; Bikkina v. Mahadevan (2015) 241
Cal. App. 4th 70, 84 (Bikkina) [holding that the defendant’s
statements did not qualify as being in connection with an issue
of public interest when the “statements were only remotely
related to the broader subject of global warming or climate
change”].)
At a sufficiently high level of generalization, any conduct
can appear rationally related to a broader issue of public
importance. What a court scrutinizing the nature of speech in
the anti-SLAPP context must focus on is the speech at hand,
rather than the prospects that such speech may conceivably
have indirect consequences for an issue of public concern. (E.g.,
Bikkina, supra, 241 Cal.App.4th at p. 85 [“Here, the specific
nature of the speech was about falsified data and plagiarism in
two scientific papers, not about global warming”]; Consumer
17
RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
Justice Center v. Trimedica International, Inc. (2003) 107
Cal. App. 4th 595, 601 [“If we were to accept [defendant’s]
argument that we should examine the nature of the speech in
terms of generalities instead of specifics, then nearly any claim
could be sufficiently abstracted to fall within the anti-SLAPP
statute”]; Commonwealth Energy Corp. v. Investor Data
Exchange, Inc. (2003) 110 Cal. App. 4th 26, 34 [“While
investment scams generally might affect large numbers of
people, the specific speech here was a telemarketing pitch for a
particular service marketed to a very few number of people. . . .
The speech was about [defendant’s] services, not about
investment scams in general”].)
We acknowledge that who precisely represents a city in
sports franchise negotiations could indeed conceivably prove a
matter of public interest. The identity of the speaker and the
concededly important subject of the speaker’s speech may, in
some cases, be sufficiently linked so that the speech relating to
the speaker’s identity constitutes “conduct in furtherance of the
exercise of the constitutional right of . . . free speech in
connection with a public issue or an issue of public interest.”
(§ 425.16, subd. (e)(4).) But defendants’ argument does not
allow us to justify such a conclusion here. Defendants failed to
suggest anything more than the most attenuated connection
between the identity of the City’s agent and a matter of public
importance.4 Nor is there anything in the record to support the
4
The Court of Appeal noted that the City was not paying
Rand Resources at all for its work as an agent. (Rand Resources,
supra, 247 Cal.App.4th at p. 1094.) As such, we need not
address the City’s argument that “an EAA for the City’s agent
to negotiate the potential development of a large-scale project .
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RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
conclusion that the nature of the representation at issue
involved more than routine functions ordinarily associated with
such arrangements. The failure to introduce such evidence is a
material deficiency since defendants bear the burden at the first
stage of the anti-SLAPP analysis. (See Baral, supra, 1 Cal.5th
at p. 396 [“At the first step, the moving defendant bears the
burden of identifying all allegations of protected activity, and
the claims for relief supported by them”].) Defendants have not
carried their burden.
Ultimately, the conversations underlying plaintiffs’ claims
focus on who should be responsible for day-to-day functions
associated with representing the City, not whether an NFL
stadium should be built. Any furtive communications and
behind-the-scenes machinations that did relate to the merits of
an NFL stadium did not form the basis of plaintiffs’ fraud
claims.
Similar complications arise in plaintiffs’ third claim, for
promissory fraud against the City defendants. Promissory
fraud arises where a promise is made without any intention to
perform. (Lazar v. Superior Court (1996) 12 Cal. 4th 631, 638
[“A promise to do something necessarily implies the intention to
perform; hence, where a promise is made without such
intention, there is an implied misrepresentation of fact that may
be actionable fraud”].) The claim arises directly from Wynder’s
statement to Rand, before he signed the EAA, that “so long as
Plaintiffs showed reasonable progress with respect to bringing
an NFL franchise to Carson, the EAA would be extended,”
. . fall[s] squarely within the definition of an issue of public
interest [in part] because an agent could be paid a substantial
amount of public funds for a project of great public significance.”
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RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
followed by the City Council’s denial of an extension to the EAA
in 2014.
Because Wynder’s promise supplies an element of the
promissory fraud claim (Rossberg v. Bank of America, N.A.
(2013) 219 Cal. App. 4th 1481, 1498), it properly arises from
speech that might be protected under section 425.16,
subdivision (e)(2) or (e)(4). (See Park, supra, 2 Cal.5th at
p. 1063.) Wynder’s statement, unlike Mayor Dear’s, did relate
to the EAA renewal issue before the City Council.
Yet Wynder’s statement was made in 2012, about two
years before the renewal issue even came before the City
Council.5 Section 425.16, subdivision (e)(2) protects only those
“written or oral statement[s] or writing[s] made in connection
with an issue under consideration or review.” (Italics added.)
The subdivision thus appears to contemplate an ongoing — or,
at the very least, immediately pending — official proceeding.
Conversely, if an issue is not presently “under consideration or
review” by such authorized bodies, then no expression — even if
related to that issue — could be “made in connection with an
issue under consideration or review.” (§ 425.16, subd. (e)(2).)
What our appellate courts have declined to do is presume
speech meets the requirements of section 425.16, subdivision
(e)(2) when no official proceeding was pending at the time of the
speech. (Mission Beverage Co. v. Pabst Brewing Co., LLC (2017)
5
Although the City Council approved the EAA in 2012, the
parties do not dispute that the EAA is a valid contract, and
defendants do not seem to have argued the City Council’s
approval of the EAA in 2012 was relevant until they briefed the
case before us. We therefore do not consider the action of the
City Council in 2012.
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Opinion of the Court by Cuéllar, J.
15 Cal.App.5th 686, 703 [“[P]reparatory communications do not
qualify as a protected activity if future litigation is not
anticipated, and is therefore only a ‘possibility’ — and this is
true even if the communication is a necessary prerequisite to
any future litigation.”]; Kajima Engineering & Construction,
Inc. v. City of Los Angeles (2002) 95 Cal. App. 4th 921, 930
[“Kajima admits that ‘a majority of the alleged acts occurred, if
at all, at or about the time [it] submitted its bid in early 1995.’
. . . Kajima was not exercising its right of petition at the time of
the alleged acts; it was seeking to secure and working on a
construction project”]; People ex rel. 20th Century Ins. Co. v.
Building Permit Consultants, Inc. (2000) 86 Cal. App. 4th 280,
285 [stating that “[a]t the time defendants created and
submitted their reports and claims, there was no ‘issue under
consideration’ pending before any official proceeding” and
concluding “defendants failed to make a prima facie showing
that the causes of action in the lawsuit arose from free speech or
petition activity”].) We agree. “[U]nder consideration or review”
does not mean any issue a legislative body may conceivably
decide to take up months or years in the future. Wynder’s
statement was not made at the time or on the eve of the renewal
decision; it was made years before the issue came under review
by the City Council. Wynder did not even refer to the City
Council’s review process in his promise.
Nor does Wynder’s 2012 promise relating to the EAA
extension merit protection as speech “in connection with a public
issue or an issue of public interest” under subdivision (e)(4).
Even charitably reading Wynder’s statement to encompass the
identity of the City’s agent –– as we did in connection with
plaintiffs’ other fraud-based claims –– defendants have not
shown the issue to be one of public interest in this case. (Cf.
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Opinion of the Court by Cuéllar, J.
Tuchscher, supra, 106 Cal.App.4th at p. 1233 [finding claims
within the ambit of subdivision (e)(4) where they arose from
“communications to either the City or Lennar involving the
proposed development of Crystal Bay and other bayfront
property”].)
The City elliptically suggests another basis to strike the
promissory fraud claim: in 2014, days before the City Council
considered the EAA extension, Wynder told Rand the City would
not be extending the EAA because it “did not need” Rand
anymore and had been “walking on eggshells” with Bloom.
True: the statement may be evidence the City was acting in bad
faith. It tends to show the City had already made up its mind
not to extend the EAA, certainly, and it involves protected
activity (speech in the form of an oral statement) relating to an
issue considered by a legislative body (renewal of the EAA). But
this is not enough.
What the anti-SLAPP statute protects is speech that
“provides the basis for liability.” (Park, supra, 2 Cal.5th at pp.
1060, 1065 [instructing that in determining whether a cause of
action arises from protected speech, courts must distinguish
“between speech that provides the basis for liability and speech
that provides evidence of liability”].) This, the statement does
not do. Rather, the statement is analogous to the comments
found in Park to fall outside the scope of section 425.16. (See id.
at p. 1068 [“The tenure decision may have been communicated
orally or in writing, but that communication does not convert
Park’s suit to one arising from such speech. The dean’s alleged
comments may supply evidence of animus, but that does not
convert the statements themselves into the basis for liability”].)
As was the case in Park, Wynder’s 2014 statement — leaving
aside any refusal to renew the contract — would not form the
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RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
basis of a promissory fraud claim. But the wrongful refusal to
renew the contract, even without the prior communication,
“surely could.” (Ibid.)
C.
We turn next to plaintiffs’ claims against the Bloom
defendants for intentional interference with contract and
intentional interference with prospective economic advantage.
Plaintiffs assert the Bloom defendants disrupted the
relationship between plaintiffs and the City by interfering with
plaintiffs’ twin rights under the EAA and with plaintiffs’
prospective economic advantage as the City’s exclusive agent in
negotiations. The two intentional interference claims share
many elements — principally, an intentional act by the
defendant designed to disrupt the relationship between the
plaintiff and a third party. (Edwards v. Arthur Andersen LLP
(2008) 44 Cal. 4th 937, 944 [stating that an intentional
interference with prospective economic advantage claim
requires, among other things, “an intentional act by the
defendant, designed to disrupt the relationship”]; Quelimane Co.
v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 55 [laying
out the elements of an intentional interference with contract
claim, one of which is that the defendant undertook
“ ‘intentional acts designed to induce a breach or disruption of
the contractual relationship’ ”].)
Plaintiffs advance two related arguments in making these
claims. First, they contend the Bloom defendants “began acting
as the City’s agent” by “contacting NFL representatives” using
Rand Resources’ promotional materials and company name.
Second, plaintiffs claim that “[a]fter Rand provided the City
with its [EAA] extension request but before the City voted on
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RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
the extension,” the Bloom defendants met with Mayor Dear and
a councilmember to “conspire about how to breach the EAA and
not extend it.”
These two courses of conduct are more than “merely a
reference to a category of evidence that plaintiffs have to prove
their claims.” (Rand Resources, supra, 247 Cal.App.4th at p.
1096.) The Bloom defendants’ communications with the NFL
served only as evidence of plaintiffs’ fraud-based claims. Yet the
very same communications constitute the conduct by which
plaintiffs claim to have been injured in their intentional
interference claims. (See Park, supra, 2 Cal.5th at p. 1064.)
Similarly, although Bloom’s secret communications with the
City served as evidence of, or context for, claims based in fraud,
those very communications are the interference now complained
of in claims five and six. (See ibid.)
Moreover, the Bloom defendants’ acts giving rise to
plaintiffs’ intentional interference claims were “in connection
with a public issue,” as defined in subdivision (e)(2) and (e)(4) of
the anti-SLAPP statute. In contrast to Wynder’s 2012 promise,
the Bloom defendants lobbied Mayor Dear and a councilmember
in 2014, “[a]fter Rand provided the City with its extension
request but before the City voted on the extension.” The Bloom
defendants’ communications — designed to influence the City’s
renewal decision while the renewal application was pending —
are reasonably considered communications “in connection with
an issue under consideration or review by a legislative . . . body”
within the meaning of subdivision (e)(2). Indeed, they appear to
be part of Bloom’s lobbying the City not to renew the EAA and
instead to use Bloom’s company as the City’s negotiator.
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RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
Along with their direct lobbying efforts, the Bloom
defendants allegedly contacted and met with NFL
representatives to discuss a possible NFL franchise in the City.
Although in this case the identity of the City’s exclusive agent
was not a matter of public interest, the NFL’s possible franchise
relocation to the City was a matter of public interest. As in
Tuchscher, the Bloom defendants’ statements to the NFL
regarding that matter of public interest are themselves
statements “in connection with a public issue or an issue of
public interest.” (§ 425.16, subd. (e)(4).)
In short, the Bloom defendants’ communications with the
NFL — like the communications at issue in Tuchscher, and
unlike those in plaintiffs’ fraud-based claims — formed the basis
of the interference claims. Moreover, they were made “in
connection with” the issue of bringing a football franchise to the
City. Likewise, defendants’ statements to Mayor Dear in 2014,
while the EAA extension was pending before the City Council,
also formed the basis of the interference claims and were made
“in connection with” the issue of the EAA renewal that was
before the City Council.
III.
At the heart of this case is a dispute about who represents
a city in its negotiations with a national sports league.
Defendants in that dispute made a motion under the anti-
SLAPP statute, which must be read broadly, in light of its
remedial purpose. (See, e.g., Equilon, 29 Cal.4th at pp. 59–60.)
But we do not understand it to swallow a person’s every contact
with government, nor does it absorb every commercial dispute
that happens to touch on the public interest. What the statute
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RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
targets in a dispute like this one is liability premised on speech
or petitioning activity “in connection with” a public issue.
While many of the claims at issue here — those alleging
fraud, for instance — necessarily involved oral and written
exchanges, few of those exchanges were themselves the
“wrong[s]” about which plaintiffs complained. (Park, supra, 2
Cal.5th at p. 1060.) With two exceptions, the communications
that did give rise to plaintiffs’ claims were not made “in
furtherance of” defendants’ rights of free speech or petition “in
connection with a public issue.” (§ 425.16, subd. (b)(1).) Such
speech does not merit anti-SLAPP protection.
Plaintiffs’ intentional interference claims are different.
Where other claims arose from speech peripherally related to
the issue of public interest (the relocation of an NFL franchise)
or tenuously involving an issue that would eventually come
before a legislative body (the EAA extension), the intentional
interference claims arose from the Bloom defendants’ speech “in
connection with” both the EAA extension in 2014 and the public
interest issue of attracting the NFL to the City. The Court of
Appeal erred in denying the motion to strike these two claims at
the first stage of the anti-SLAPP analysis. The court’s judgment
in other respects was correct.
We affirm in part and reverse in part the Court of Appeal’s
judgment. We remand the matter for proceedings consistent
with this opinion — including a determination of whether
plaintiffs have established a probability of prevailing on their
intentional interference claims. (§ 425.16, subd. (b)(1).)
26
RAND RESOURCES, LLC v. CITY OF CARSON
Opinion of the Court by Cuéllar, J.
CUÉLLAR, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
KRUGER, J.
ASHMANN-GERST, J.*
*
Associate Justice of the Court of Appeal, Second Appellate
District, Division Two assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
27
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Rand Resources, LLC v. City of Carson
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 247 Cal. App. 4th 1080
Rehearing Granted
__________________________________________________________________________________
Opinion No. S235735
Date Filed: February 4, 2019
__________________________________________________________________________________
Court: Superior
County: Los Angeles
Judge: Michael L. Stern
__________________________________________________________________________________
Counsel:
Huang Ybarra Singer & May, Huang Ybarra Gelberg & May, Joseph J. Ybarra, Aaron M. May, Kevin H.
Scott and Carlos A. Singer for Plaintiffs and Appellants.
Aleshire & Wynder, Sunny K. Soltani, William W. Wynder, Anthony R. Taylor and Christina M. Burrows
for Defendants and Respondents City of Carson and James Dear.
Tamborelli Law Group and John V. Tamborelli for Defendants and Respondents Leonard Bloom and U.S.
Capital LLC.
Burke, Williams & Sorensen, Thomas B. Brown and Amy E. Hoyt for League of California Cities and
California State Association of Counties as Amici Curiae on behalf of Defendant and Respondent City of
Carson.
Davis Wright Tremaine, Kelli L. Sager, Thomas R. Burke, Rochelle L. Wilcox and Dan Laidman for
California Newspaper Publishers Association, Californians Aware, The Center for Investigative Reporting,
First Amendment Coalition, The Reporters Committee for Freedom of the Press, A&E Television
Networks, LLC, BuzzFeed, Inc. Cable News Network, Inc., CBS Corporation, Dow Jones & Company,
First Look Media Works, Inc., The Hearst Corporation, NBCUniversal Media, LLC, The New York Times
Company and The Motion Picture Association of America as Amici Curiae on behalf of Defendants and
Respondents City of Carson, James Dear and Leonard Bloom.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Kevin H. Scott
Huang Ybarra Gelberg & May
550 South Hope Street, Suite 1850
Los Angeles, CA 90071-1560
(213) 884-4900
Anthony R. Taylor
Aleshire & Wynder
18881 Von Karman Avenue, Suite 1700
Irvine, CA 92612
(949) 223-1170
John V. Tamborelli
Tamborelli Law Group
21700 Oxnard Street, Suite 1590
Woodland Hills, CA 91367
(818) 710-3696