Monster Energy Company v. Schechter

IN THE SUPREME COURT OF
CALIFORNIA
MONSTER ENERGY COMPANY,
Plaintiff and Respondent,
v.
BRUCE L. SCHECHTER et al.,
Defendants and Appellants.
S251392
Fourth Appellate District, Division Two
E066267
Riverside County Superior Court
RIC1511553
July 11, 2019
Justice Corrigan authored the opinion of the Court, in which
Chief Justice Cantil-Sakauye and Justices Chin, Liu, Cuéllar,
Kruger, and Groban concurred.
MONSTER ENERGY CO. v. SCHECHTER
S251392
Opinion of the Court by Corrigan, J.
Here the parties to a tort action agreed to settle their
lawsuit. Their agreement was reduced to writing and included
several provisions purporting to impose confidentiality
obligations on the parties and their counsel. All parties signed
the agreement and their lawyers signed under a notation that
they approved the written agreement as to form and content.
Counsel allegedly violated the agreement by making
public statements about the settlement and were sued, inter
alia, for breach of contract. Counsel urged they were not
personally bound by the confidentiality provisions and moved
to dismiss the suit under the anti-SLAPP1 statutes. As to the
cause of action at issue here, the trial court denied counsels’
motion. The Court of Appeal reversed that ruling, concluding
the notation meant only that counsel recommended their
clients sign the document. We conclude the notation does not
preclude a factual finding that counsel both recommended their
clients sign the document and intended to be bound by its
provisions.
1
“ ‘SLAPP’ is an acronym for ‘strategic lawsuit against
public participation.’ ” (Baral v. Schnitt (2016) 1 Cal.5th 376,
381, fn. 1 (Baral), citing Equilon Enterprises v. Consumer
Cause, Inc. (2002) 29 Cal. 4th 53, 57.)
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MONSTER ENERGY CO. v. SCHECHTER
Opinion of the Court by Corrigan, J.
I. BACKGROUND
In 2012, Wendy Crossland and Richard Fournier sued
Monster Energy Company (“Monster Energy”) for products
liability and wrongful death following the death of their
daughter. (Hereafter “the Crossland suit.”) Bruce L.
Schechter and his firm R. Rex Parris Law Firm represented
Crossland and Fournier.2 In 2015, the parties entered into a
confidential settlement agreement. The agreement stated that
it was made “on the behalf of the settling Parties, individually,
as well as on the behalf of their, without limitation, respective
beneficiaries, trustees, principals, attorneys, officers, directors,
shareholders, employers, employees, parent company(ies),
affiliated company(ies), subcontractors, members, partners,
subsidiaries, insurers, predecessors, successors-in-interest, and
assigns.”3 (Emphasis added.) The agreement included a
confidentiality clause: “The Parties understand and
acknowledge that all of the terms, conditions and details of this
Settlement Agreement including its existence are to remain
confidential. Plaintiffs and their counsel agree that they will
keep completely confidential all of the terms and contents of
2
Crossland and Fournier were also represented by
attorney Michael E. Blumenfield of Miles & Stockbridge P.C.
3
A section entitled “Binding Agreement” stated: “The
Parties acknowledge that this Settlement Agreement, inclusive
of the releases contained herein, was the product of good faith
negotiations, is final, and wholly binding upon them, as well as
inure to the benefit of the Released Parties, inclusive of, but
not limited to, their respective successors, devisees, executors,
administrators, affiliates, representatives, insurers, spouse,
dependents, successors, heirs, issue, assigns, officers, directors,
partners, agents, subcontractors, attorneys, employers, and
employees.”
2
MONSTER ENERGY CO. v. SCHECHTER
Opinion of the Court by Corrigan, J.
this Settlement Agreement, and the negotiations leading
thereto, and will not publicize or disclose the amounts,
conditions, terms, or contents of this Settlement Agreement in
any manner . . . . [¶] Specifically, and without limitation,
Plaintiffs and their counsel of record, individually and on
behalf of themselves and their principals, partners, agents,
attorneys, servants, representatives, parents, spouse,
dependents, issue, heirs, insurers, predecessors, successors-in-
interest and assigns agree and covenant, absolutely and
without limitation, to not publicly disclose to any person or
entity, including, but not limited to, newspapers, magazines,
television, fliers, documentaries, brochures, Lawyers &
Settlements, VerdictSearch (or the like), billboards, radio,
newsletters, and/or the Internet” certain facts related to the
settlement. (Emphasis added.) The agreement continued that
“[i]n regard to any communication concerning the settlement of
this Action, the Parties and their attorneys and each of them
hereby agree that neither shall make any statement about the
Action, each other party or Defendants’ products in relation to
this Action, in the media, including but not limited to print,
television, radio or Internet,” and any comment “shall be
limited to the following, or words to their effect: ‘This matter
has been resolved.’ ” (Emphasis added.) The agreement also
contained other provisions referring to attorneys for the parties
in the Crossland suit.4 The agreement was signed by the
4
The provisions included: (1) a release and discharge of
the parties and their attorneys from claims arising from the
suit, except that “[n]othing herein, however, shall be deemed a
limitation of any kind, release, and or discharge on, or
prohibition of Plaintiffs’ attorneys’ prosecution of any current
or future claims against the Released Parties not arising out of
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MONSTER ENERGY CO. v. SCHECHTER
Opinion of the Court by Corrigan, J.
parties. The parties’ attorneys, including Schechter, signed
under the preprinted notation “APPROVED AS TO FORM
AND CONTENT.”
Shortly after the settlement, an article appeared on the
website “LawyersandSettlements.com” entitled “ ‘Substantial
Dollars’ for Family in Monster Energy Drink Wrongful Death
Suit.” The article, written by Brenda Craig, attributed several
quotes to Schechter. According to the article, “Schechter’s
most recent case resulted in ‘substantial dollars’ for the family
of a 14-year-old that went to the mall with girlfriends in the
summer of 2011, drank two Monster Energy drinks and died of
cardiac arrest. [¶] Schechter can’t reveal the exact amount
because he says, ‘Monster wants the amount to be sealed.’ ”
The article describes how Schechter has filed three additional
suits against Monster Energy and quotes his statements that
he believes its products are unsafe. The article concluded with
a link and a phone number for “Monster Energy Drink Injury
Legal Help.” Craig attested to the accuracy of Schechter’s
statements quoted in the article.
Monster Energy sued defendants Schechter and R. Rex
Parris Law Firm, alleging four causes of action: breach of
contract; breach of the implied covenant of good faith; unjust
the Incident in any jurisdiction and venue”; and (2) a non-
disparagement clause applicable to the parties but which did
not limit “Plaintiffs’ attorneys’ ability to disparage (within the
confines of the law) Defendants or Defendants’ products in
connection with other current or future litigation against the
Released Parties in any jurisdiction and venue” or “Plaintiffs’
attorneys’ prosecution of other current or future litigation
against the Released Parties in any jurisdiction and venue.”
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Opinion of the Court by Corrigan, J.
enrichment; and promissory estoppel. Defendants filed a
special motion to strike the complaint (Code Civ. Proc.,
§ 425.16), arguing the suit implicated Schechter’s
constitutional free speech rights. The court denied the motion
as to the breach of contract claim but granted it as to the other
causes of action. The court found “the settlement clearly
contemplates counsel as being subject to the agreement” and
noted that “Schechter signed the agreement.” The court
concluded that the “suggestion that [Schechter] is not a party
to the contract merely because he approved it as to form and
content only is beyond reason.” The Court of Appeal reversed
the trial court’s denial of the anti-SLAPP motion as to the
breach of contract claim. (See Monster Energy Co. v. Schechter
(2018) 26 Cal.App.5th 54.)
II. DISCUSSION
A. Legal Background
“Code of Civil Procedure section 425.16 sets out a
procedure for striking complaints in harassing lawsuits that
are commonly known as SLAPP suits . . . which are brought to
challenge the exercise of constitutionally protected free speech
rights.” (Kibler v. Northern Inyo County Local Hospital Dist.
(2006) 39 Cal. 4th 192, 196.) A cause of action arising from a
person’s act in furtherance of the “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 claim will prevail. (Code Civ. Proc., § 425.16, subd. (b)(1).)
“The anti-SLAPP statute does not insulate defendants
from any liability for claims arising from the protected rights of
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Opinion of the Court by Corrigan, J.
petition or speech. It only provides a procedure for weeding
out, at an early stage, meritless claims arising from protected
activity. Resolution of an anti-SLAPP motion involves two
steps. First, the defendant must establish that the challenged
claim arises from activity protected by section 425.16.
[Citation.] If the defendant makes the required showing, the
burden shifts to the plaintiff to demonstrate the merit of the
claim by establishing a probability of success. We have
described this second step as a ‘summary-judgment-like
procedure.’ [Citation.] The court does not weigh evidence or
resolve conflicting factual claims. Its inquiry is limited to
whether the plaintiff has stated a legally sufficient claim and
made a prima facie factual showing sufficient to sustain a
favorable judgment. It accepts the plaintiff’s evidence as true,
and evaluates the defendant’s showing only to determine if it
defeats the plaintiff’s claim as a matter of law. [Citation.]
‘[C]laims with the requisite minimal merit may proceed.’ ”
(Baral, supra, 1 Cal.5th at pp. 384-385, fn. omitted.) The grant
or denial of an anti-SLAPP motion is reviewed de novo. (Park
v. Board of Trustees of California State University (2017) 2
Cal.5th 1057, 1067.) As to the second step, a plaintiff seeking
to demonstrate the merit of the claim “may not rely solely on
its complaint, even if verified; instead, its proof must be made
upon competent admissible evidence.” (San Diegans for Open
Government v. San Diego State University Research
Foundation (2017) 13 Cal.App.5th 76, 95; see Grenier v.
Taylor (2015) 234 Cal. App. 4th 471, 480; City of Costa Mesa v.
D’Alessio Investments, LLC (2013) 214 Cal. App. 4th 358, 376;
Paiva v. Nichols (2008) 168 Cal. App. 4th 1007, 1017.)
It is undisputed that defendants met their first-step
showing. The issue here is whether Monster Energy
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Opinion of the Court by Corrigan, J.
sufficiently established a probability of prevailing on its breach
of contract claim. That claim, in turn, hinges on whether
defendants were bound by the confidentiality provisions of the
Crossland settlement. “A settlement agreement is a contract,
and the legal principles which apply to contracts generally
apply to settlement contracts. [Citation.] An essential element
of any contract is ‘consent.’ [Citations.] The ‘consent’ must be
‘mutual.’ [Citations.] ‘Consent is not mutual, unless the
parties all agree upon the same thing in the same sense.’ (Civ.
Code, § 1580; see also Civ. Code, § 1636 . . . .)” (Weddington
Productions, Inc. v. Flick (1998) 60 Cal. App. 4th 793, 810-811;
see Civ. Code, § 1550 [essential elements of a contract].) “ ‘The
existence of mutual consent is determined by objective rather
than subjective criteria, the test being what the outward
manifestations of consent would lead a reasonable person to
believe. [Citation.] Accordingly, the primary focus in
determining the existence of mutual consent is upon the acts of
the parties involved.’ ” (T.M. Cobb Co. v. Superior Court (1984)
36 Cal. 3d 273, 282; see Civ. Code, § 1565 [essentials of
consent].)
There is no question that the language of the settlement
agreement generally, and the confidentiality provisions in
particular, purported to encompass not only the Crossland
parties but also their respective counsel. Further, counsel
could consent to be bound by the agreement’s provisions, and,
ordinarily, “[i]n the absence of fraud, mistake, or another
vitiating factor, a signature on a written contract is an
objective manifestation of assent to the terms set forth there.”
(Rodriguez v. Oto (2013) 212 Cal. App. 4th 1020, 1027.)
Defendants argue that Schechter’s signature on the settlement
agreement did not manifest his consent to be bound by its
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Opinion of the Court by Corrigan, J.
provisions because he signed under the notation “APPROVED
AS TO FORM AND CONTENT.” They urge his signature
conveyed only that defendants were approving the agreement
for their clients’ signatures. The Court of Appeal agreed,
relying on two cases construing similar notations: Freedman v.
Brutzkus (2010) 182 Cal. App. 4th 1065 (Freedman) and RSUI
Indem. Co. v. Bacon (Neb. 2011) 810 N.W.2d 666 (RSUI).
In Freedman, two companies, Teddi and CAI, entered
into a licensing agreement. During negotiations, attorney
Freedman represented Teddi while attorney Brutzkus
represented CAI. Because Freedman had performed legal
services for CAI in the past, CAI agreed to waive any conflict of
interest. The licensing agreement explicitly stated that
Freedman represented only Teddi’s interests. In addition to
the parties, the attorneys signed the licensing agreement with
the notation, “ ‘Approved as to Form and Content.’ ”
(Freedman, supra, 182 Cal.App.4th at p. 1068.) A dispute
arose and CAI sued Teddi, leading to the latter’s bankruptcy.
CAI also sued Freedman, alleging Freedman had represented
CAI during negotiations and that he made statements assuring
CAI that Teddi would fulfill its obligations. In the course of
this suit, Brutzkus testified at a deposition that CAI and its
owner “were relying on Freedman in connection with the
transaction on the basis of their ‘ “long standing professional
relationship,” ’ ” and Brutzkus “did not tell Freedman or
anyone else representing Teddi about that reliance on
Freedman, or that the conflict waiver provisions in the
agreement were inaccurate.” (Ibid.)
Freedman then sued Brutzkus, alleging tort claims.
Freedman asserted that “in approving the agreement, ‘as to
form and content,’ Brutzkus made an actionable representation
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Opinion of the Court by Corrigan, J.
. . . as to the accuracy of the agreement” that he knew was
false because the agreement included an inaccurate conflict of
interest waiver. (Freedman, supra, 182 Cal.App.4th at p.
1068.) The trial court granted Brutzkus’s demurrer and the
Court of Appeal affirmed, reasoning that “the only reasonable
meaning to be given to a recital that counsel approves the
agreement as to form and content, is that the attorney, in so
stating, asserts that he or she is the attorney for his or her
particular party, and that the document is in the proper form
and embodies the deal that was made between the parties.”
(Id. at p. 1070.) Freedman approved the trial court’s
characterization of the phrase as showing “that counsel has
read the agreement, that the recital formalizes counsel’s
involvement as attorney to one of the parties, . . . the recital
adds solemnity to the contract’s formation,” and “Brutzkus
gave this approval to his client.” (Ibid.) Freedman concluded
“that Brutzkus’s signature approving the document as to form
and content was not an actionable representation” to opposing
counsel. (Ibid.)
The Nebraska Supreme Court in RSUI applied similar
reasoning with respect to a breach of contract claim. Ronald
Bacon was injured while working on a construction site. He
sued Kiewit Construction, the general contractor, and Ridgetop
Holdings, the parent company of the subcontractor that
employed him. Kiewit and Bacon settled. The settlement
agreement included a provision that, in the event Bacon settles
with Ridgetop, “BACON and his attorneys” agree to pay Kiewit
a specified percentage of the settlement. (RSUI, supra, 810
N.W.2d at p. 670.) The attorneys for both parties signed the
agreement under the notation, “ ‘Agreed to in Form &
Substance.’ ” (Ibid.) Bacon subsequently settled with Ridgetop
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Opinion of the Court by Corrigan, J.
but refused to pay anything to Kiewit. Kiewit’s insurers sued
Bacon and his attorneys for breach of contract and obtained a
judgment. (Id. at p. 671.)
RSUI reversed the judgment as to Bacon’s attorneys,
concluding they had no personal liability. Although
acknowledging “the general rule that an agent, acting for a
disclosed principal, is not liable for the principal’s contract,”
the court observed that “an agent can become personally liable
if ‘the agent purports to bind himself or herself, or has
otherwise bound himself or herself, to performance of the
contract.’ ” (RSUI, supra, 810 N.W.2d at p. 671.) The court
held the attorneys did not so bind themselves. The signature
“under the legend ‘Agreed to in Form & Substance’
demonstrates only that he was Bacon’s attorney[5] and that ‘the
document [was] in the proper form and embodie[d] the deal
that was made between the parties.’ Nothing about the
signature indicates or implies an intent to incur personal
liability on the contract. Indeed, Kiewit’s attorney signed an
identical signature block even though no contractual language
could be construed to impose a personal obligation on Kiewit’s
attorney. In addition, the contractual language relied upon by
[the insurers] is ambiguous, but at most governs the manner
by which payment under the contract was to be made, not the
parties which were to be liable for such payment.” (Id. at p.
672, fn. omitted.)
The Court of Appeal here initially noted “that the
confidentiality provisions of the settlement agreement did at
least purport to bind the Attorneys.” (Monster Energy Co. v.
5
Only one of Bacon’s attorneys signed the agreement.
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Opinion of the Court by Corrigan, J.
Schechter, supra, 26 Cal.App.5th at p. 65.) However, the court
concluded defendant counsel were not bound by the agreement.
It first reasoned that counsel were not identified as parties to
the agreement and the parties could not bind them without
their consent. (Id. at pp. 66-67.) Second, relying on Freedman
and RSUI, the court reasoned that Schechter’s signature on
the agreement did not express an intent to be bound: “[T]he
language in the settlement agreement purporting to impose
obligations on the Attorneys was a nullity, unless and until the
Attorneys consented to it. And while Freedman is not precisely
on point, it does stand for the proposition that an attorney’s
signature under words such as ‘approved as to form and
content’ means only that the document has the attorney’s
professional thumbs-up. It follows that it does not objectively
manifest the attorney’s intent to be bound.” (Id. at p. 69.)
While acknowledging that “confidentiality is often a material
term of a settlement agreement” and a party may not be
inclined to settle if opposing counsel “is free to blab about it,”
the court suggested “[i]t seems easy enough, however, to draft
a settlement agreement that explicitly makes the attorneys
parties (even if only to the confidentiality provision) and
explicitly requires them to sign as such.” (Ibid.)
B. The Significance Of “Approved As To Form And
Content”
In light of the procedural posture here, the issue we
address is a narrow one. As noted, at the second anti-SLAPP
step, “ ‘a plaintiff responding to an anti-SLAPP motion must
“ ‘state[] and substantiate[] a legally sufficient claim.’ ”
[Citation.] Put another way, the plaintiff “must demonstrate
that the complaint is both legally sufficient and supported by a
sufficient prima facie showing of facts to sustain a favorable
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Opinion of the Court by Corrigan, J.
judgment if the evidence submitted by the plaintiff is
credited.” ’ [Citation.] ‘. . . However, we neither “weigh
credibility [nor] compare the weight of the evidence. Rather,
[we] accept as true the evidence favorable to the plaintiff
[citation] and evaluate the defendant’s evidence only to
determine if it has defeated that submitted by the plaintiff as a
matter of law.” ’ ” (Oasis West Realty, LLC v. Goldman (2011)
51 Cal. 4th 811, 820 (Oasis West).)
We agree with Freedman’s characterization of what the
notation “approved as to form and content” means. The
notation affirms that counsel has read the document, it
embodies the parties’ agreement, and counsel perceives no
impediment to his client signing it. (Freedman, supra, 182
Cal.App.4th at p. 1070; cf. In re Marriage of Hasso (1991) 229
Cal. App. 3d 1174, 1181.) A similar understanding of this
phrase is reflected in case law regarding orders signed by the
court and approved as to form and content by the parties’
attorneys. (See, e.g., Wagner v. Wagner (2008) 162 Cal. App. 4th
249, 254; In re Marriage of Walters (1990) 220 Cal. App. 3d
1062, 1069; In re Blaze (1969) 271 Cal. App. 2d 210, 213-217.)
Thus, there appears a general consensus that “approved as to
form and content” has a fixed meaning understood by the legal
community, and we do not suggest otherwise.
This does not end our inquiry, however. The legal
question is whether counsel’s signature approving an
agreement as to form and content for his clients’ signature
precludes, as a matter of law, a finding that he also intended to
be bound by the agreement. If, as in Freedman, the agreement
contains no provision purporting to bind counsel or otherwise
impose any obligation on him, the question is easily answered.
(See Freedman, supra, 182 Cal.App.4th at pp. 1068-1069.) In
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that circumstance, counsel’s signature that he approved the
agreement as to form and content could only mean he is
approving it for his client’s signature.
But that will not always be the case. An attorney’s
signature on an agreement containing substantive provisions
imposing duties on counsel may reflect an intent to be bound
even though counsel also approves the document for his client’s
signature. RSUI is, of course, not binding on this court, but its
reasoning is instructive in this regard. (See Episcopal Church
Cases (2009) 45 Cal. 4th 467, 490.) Concluding that counsel
there did not assume personal liability, the RSUI court did not
rely solely on the signature notation. Instead, it examined the
substance of the provisions at issue and reasoned that, at most,
the agreement “governs the manner by which payment under
the contract was to be made, not the parties which were to be
liable for such payment.” (RSUI, supra, 810 N.W.2d at p. 672.)
Thus, counsel’s signature that he approved the agreement as to
form and content did not reflect his intent to be personally
obligated to indemnify an opposing party if his client refused to
perform as the agreement required.
Here, a factfinder considering all the circumstances could
reasonably conclude Schechter agreed to be bound. (See
discussion post.) The confidentiality provisions are not only
extensive but repeatedly refer both to the parties and their
counsel. The agreement stated “Plaintiffs and their counsel
agree that they will keep completely confidential all of the
terms and contents of this Settlement Agreement, and the
negotiations leading thereto, and will not publicize or disclose
the amounts, conditions, terms, or contents of this Settlement
Agreement in any manner,” and “without limitation, Plaintiffs
and their counsel of record . . . agree and covenant, absolutely
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Opinion of the Court by Corrigan, J.
and without limitation, to not publicly disclose to any person or
entity” facts related to the settlement, specifically identifying
“Lawyers & Settlements” as an entity to whom counsel should
not disclose such facts. (Emphasis added.) The agreement also
required “the Parties and their attorneys” not to “make any
statement about the Action, each other party or Defendants’
products in relation to this Action, in the media,” and any
comment “shall be limited to the following, or words to their
effect: ‘This matter has been resolved.’ ” (Emphasis added.)
These extensive provisions regarding the specific conduct
of counsel stand in stark contrast to RSUI, where the
agreement only referenced counsel with respect to the
mechanics of payment under the parties’ agreement. Further,
RSUI involved a different procedural posture. The RSUI court
reversed the grant of summary judgment against the attorneys
after the trial court concluded the attorneys were liable under
the contract as a matter of law. By contrast, the trial court
here denied defendants’ anti-SLAPP motion, rejecting their
claim that they were not liable as a matter of law. It bears
emphasis that a plaintiff’s burden at the second anti-SLAPP
step is a low one, requiring only a showing that a cause of
action has at least “minimal merit within the meaning of the
anti-SLAPP statute.” (Oasis West, supra, 51 Cal.4th at p. 825.)
Our conclusion also recognizes the role that
confidentiality plays in facilitating settlement agreements.
“The privacy of a settlement is generally understood and
accepted in our legal system, which favors settlement and
therefore supports attendant needs for confidentiality.”
(Hinshaw, Winkler, Draa, Marsh & Still v. Superior Court
(1996) 51 Cal. App. 4th 233, 241.) Routine public disclosure of
private settlement terms would “chill the parties’ ability in
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many cases to settle the action before trial. Such a result runs
contrary to the strong public policy of this state favoring
settlement of actions.” (Board of Trustees of California State
University v. Superior Court (2005) 132 Cal. App. 4th 889, 899.)
There is little doubt here that “[c]onfidentiality was an
important term of that settlement” (Jalali v. Root (2003) 109
Cal. App. 4th 1768, 1784), and the agreement goes to great
lengths to ensure that virtually nothing would be publicly said
about the case other than that it had been resolved. Indeed,
Schechter acknowledged in a deposition that “Monster would
not settle the case if the party did not agree to keeping it
confidential.” As noted, the agreement stated it was “the
product of good faith negotiations.” (Ante, at p. 2, fn. 3.)
Excluding counsel from the scope of the confidentiality clause
would risk undermining an important term of the agreement.6
Defendants argue they could not be found to be bound by
the settlement because they were not identified as parties to
the agreement. It is true the agreement does not include
counsel in its definition of “Party.” However, that label does
not answer the question of whether Schechter, by signing an
agreement that included provisions purporting to bind him
individually, manifested his intent to be so bound. It is the
substance of the agreement that determines his status as a
party to the contract, as opposed to a party to the lawsuit. The
agreement clearly refers to others beside the Crossland parties.
6
During the pendency of the anti-SLAPP proceedings,
none of the parties have argued that enforcement of the
confidentiality provisions here is contrary to public policy (see,
e.g., Cariveau v. Halferty (2000) 83 Cal. App. 4th 126, 130-137),
and we do not address the question.
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(Cf. Sharp Image Gaming, Inc. v. Shingle Springs Band of
Miwok Indians (2017) 15 Cal.App.5th 391, 439 [contractual
labels not controlling]; Vons Companies, Inc. v. United States
Fire Ins. Co. (2000) 78 Cal. App. 4th 52, 62 [same].)7
7
Defendants assert, without citation to the record, “[t]here
is no evidence that Attorney Schechter even negotiated the
Settlement Agreement,” suggesting that the agreement was
negotiated by a different firm. Even if we were to accept that
assertion, it does not assist Schechter. Regardless of whether
he personally negotiated the settlement, an attorney
representing the Crossland plaintiffs negotiated the settlement
on their behalf. Schechter thereafter read and signed the
document. Our reasoning regarding the significance of his
signature, pertaining to the language of the agreement itself,
remains unchanged.
Defendants also argue that plaintiff “presented no
evidence of any objective outward manifestation of the
Attorneys’ consent to be bound by the confidentiality provisions
of the Settlement Agreement communicated to Monster
Energy.” This argument is premised on defendants’ position
that Schechter’s signature could not convey an intent to be
bound by the document he signed, which included provisions
specifically applicable to counsel. As the premise does not
hold, the argument necessarily fails. Similarly lacking merit is
defendants’ contention that the agreement violates the statute
of frauds because it was not “subscribed by” Schechter as a
party. (Civ. Code, § 1624, subd. (a).) As discussed, one may
reasonably conclude that Schechter’s signature evinced his
intent to be bound, thus rendering the agreement “subscribed
by” him. (Cf. In re Marriage of Benson (2005) 36 Cal. 4th 1096,
1108.)
The observations we make here relate only to an analysis
of the SLAPP question and a plaintiff’s low burden at the
second step. We do not express any opinion as to the facts that
may ultimately be adduced at trial. Nor by our rejection of
defendant’s legal argument in this regard do we intend to
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We conclude that an attorney’s signature on a document
with a notation that it is approved as to form and content does
not, as a matter of law, preclude a factual finding that the
attorney intended to be bound by the document’s terms. The
intent question requires an examination of the agreement as a
whole, including substantive provisions referring to counsel.
Ultimately, that question would be resolved by the trier of
fact.8
C. Consideration Of Evidence At The Second Anti-
SLAPP Step
Monster Energy argues the Court of Appeal “ignored”
evidence supportive of its position, including Schechter’s
statement to reporter Craig that he could not reveal the
amount of the settlement because “Monster wants the amount
to be sealed,” and his deposition testimony explaining his
signature. Monster contends this evidence showed Schechter
was aware that he was bound by the confidentiality provisions.
Defendants counter that the evidence was irrelevant to
establish an intent to be bound, arguing Schechter was merely
manifesting his ethical obligation to maintain client
confidences.
foreclose any defenses or inferences defendant may argue at
trial.
8
We do not suggest that counsel’s signature on a
settlement agreement approving it as to form and content will
always create a triable issue of fact with respect to counsel’s
intent to be bound by that agreement. A court may find as a
matter of law that counsel could not have so intended under
the circumstances where, for example, no substantive
provisions imposed obligations on counsel, as was the case in
Freedman.
17
MONSTER ENERGY CO. v. SCHECHTER
Opinion of the Court by Corrigan, J.
As discussed, at the second anti-SLAPP step, a court
“does not weigh the credibility or comparative probative
strength of competing evidence.” (Taus v. Loftus (2007) 40
Cal. 4th 683, 714.) It “accepts the plaintiff’s evidence as true,
and evaluates the defendant’s showing only to determine if it
defeats the plaintiff’s claim as a matter of law.” (Baral, supra,
1 Cal.5th at p. 385.) “[W]e resolve conflicts and inferences in
the record in favor of plaintiff.” (Armin v. Riverside
Community Hospital (2016) 5 Cal.App.5th 810, 815.) However,
speculative inferences not supported by the evidence proffered
need not be considered. (See Kashian v. Harriman (2002) 98
Cal. App. 4th 892, 931.)
Monster Energy is correct that properly submitted
admissible evidence should be considered, and a court
evaluating a probability of success should draw any non-
speculative inferences favorable to the plaintiff. (Sweetwater
Union High School Dist. v. Gilbane Building Co. (2019)
6 Cal.5th 931, 949; see Code Civ. Proc., § 425.16, subd. (b)(2).)
Here, the Court of Appeal had no occasion to consider the cited
evidence in light of its erroneous legal conclusion that a
signature with a notation that counsel approved the agreement
as to form and content precluded an inference that counsel also
intended to be bound by its terms. We review de novo the
probability of success and consider the evidence below.
(Sweetwater, at p. 940.)
D. Plaintiff Has Sufficiently Shown A Probability Of
Prevailing
On this record, plaintiff has shown a probability of
success sufficient to defeat defendant’s claim the suit lacks
even minimal merit. “The Legislature’s inclusion of a merits
prong to the statutory SLAPP definition . . . preserves
18
MONSTER ENERGY CO. v. SCHECHTER
Opinion of the Court by Corrigan, J.
appropriate remedies for breaches of contracts involving
speech by ensuring that claims with the requisite minimal
merit may proceed. [Citations.] Indeed, as the statute is
designed and as we have construed it, a defendant who in fact
has validly contracted not to speak or petition has in effect
‘waived’ the right to the anti-SLAPP statute’s protection in the
event he or she later breaches that contract.” (Navellier v.
Sletten (2002) 29 Cal. 4th 82, 94.)
Here, the settlement agreement makes numerous
references to counsel as one whose keeping of confidentiality is
assured. The wording can be understood to reflect an
expectation that the confidentiality provisions would apply to
counsel as well.9 Given this backdrop, it is reasonable to argue
that counsel’s signature on the document evinced an
understanding of the agreement’s terms and a willingness to
be bound by the terms that explicitly referred to him, which, in
turn, would appear consistent with the expectations of the
parties and their counsel. This understanding is also
supported by Schechter’s statement to reporter Craig that he
could not divulge the settlement amount because “ ‘Monster
wants the amount to be sealed,’ ” which, when viewed in the
light most favorable to plaintiff, could be interpreted as a tacit
acknowledgement that he was bound by the confidentiality
provisions. Further, assuming the confidentiality provisions
applied to him, sufficient evidence was presented that
Schechter violated them by making public comments about the
9
We have no occasion to decide if any terms of the
settlement agreement apply to entities other than the parties
and their respective counsel.
19
MONSTER ENERGY CO. v. SCHECHTER
Opinion of the Court by Corrigan, J.
settlement to a reporter from LawyersandSettlements.com. In
light of the nature and extent of provisions in the agreement
here purporting to bind counsel, and the other properly
submitted evidence, Monster Energy has met its burden of
showing its breach of contract claim has “minimal merit”
sufficient to defeat an anti-SLAPP motion. (Oasis West, supra,
51 Cal.4th at p. 825.)
III. DISPOSITION
The judgment of the Court of Appeal is reversed.
CORRIGAN, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
20
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Monster Energy Company v. Schechter
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 26 Cal.App.5th 54
Rehearing Granted
__________________________________________________________________________________
Opinion No. S251392
Date Filed: July 11, 2019
__________________________________________________________________________________
Court: Superior
County: Riverside
Judge: Daniel A. Ottolia
__________________________________________________________________________________
Counsel:
Bremer Whyte Brown & O’Meara, Keith G. Bremer, Jeremy S. Johnson, Benjamin L. Price; Grignon Law
Firm, Margaret M. Grignon and Anne M. Grignon for Defendants and Appellants.
Shook, Hardy & Bacon, Frank C. Rothrock, Gabriel S. Spooner and Victoria P. McLaughlin for Plaintiff
and Respondent.
Murchison & Cumming, Edmund G. Farrell, III; Walsh Pizzi O’Reilly Falanga, Peter J. Pizzi and
Katherine M. Romano for International Association of Defense Counsel as Amicus Curiae on behalf of
Plaintiff and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Margaret M. Grignon
Grignon Law Firm
6621 East Pacific Coast Highway, Suite 200
Long Beach, CA 90803
(562) 285-3171
Frank C. Rothrock
Shook, Hardy & Bacon
5 Park Plaza, Suite 1600
Irvine, CA 92614-2546
(949) 475-1500