Baral v. Schnitt

Filed 8/1/16
IN THE SUPREME COURT OF CALIFORNIA
ROBERT C. BARAL, )
)
Plaintiff and Respondent, )
) S225090
v. )
) Ct.App. 2/1 B253620
DAVID SCHNITT, )
) Los Angeles County
Defendant and Appellant. ) Super. Ct. No. BC475350
____________________________________)
California‘s anti-SLAPP statute provides that ―[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 . . . shall be subject to a special motion to strike, unless the
court determines . . . there is a probability that the plaintiff will prevail on the
claim.‖ (Code Civ. Proc., § 425.16, subd. (b)(1).)1 This case raises a question that
has perplexed the Courts of Appeal: How does the special motion to strike operate
against a so-called ―mixed cause of action‖ that combines allegations of activity
protected by the statute with allegations of unprotected activity?
The difficulty arises from the statute‘s use of the term ―cause of action,‖
which has various meanings. It may refer to distinct claims for relief as pleaded in
1 ―SLAPP‖ is an acronym for ―strategic lawsuit against public participation.‖
(Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.) Further
statutory references are to the Code of Civil Procedure. Hereafter, we refer to
section 425.16, subdivision (b)(1) as section 425.16(b)(1).
1
a complaint. These are usually set out as ―first cause of action,‖ ―second cause of
action,‖ and so forth. But the term may also refer generally to a legal claim
possessed by an injured person, without reference to any pleading. A person may
have a cause of action for defamation or breach of contract even if no suit has been
filed. In theory, the right of an injured party to seek legal relief may be analyzed
in terms of the plaintiff‘s ― ‗primary right,‘ ‖ the defendant‘s ― ‗primary duty,‘ ‖
and a breach of that duty entitling the plaintiff to a remedy. (4 Witkin, Cal.
Procedure (5th ed. 2008) Pleading, § 34, p. 98.)
Typically, a pleaded cause of action states a legal ground for recovery
supported by specific allegations of conduct by the defendant on which the
plaintiff relies to establish a right to relief. If the supporting allegations include
conduct furthering the defendant‘s exercise of the constitutional rights of free
speech or petition, the pleaded cause of action ―aris[es] from‖ protected activity, at
least in part, and is subject to the special motion to strike authorized by section
425.16(b)(1). Some courts, including the Court of Appeal in this case, have held
that the motion lies only to strike an entire count as pleaded in the complaint.
However, this rule leads to anomalous results when the count is supported by
allegations of unprotected activity as well as protected activity.
Viewing the term in its statutory context, we conclude that the Legislature
used ―cause of action‖ in a particular way in section 425.16(b)(1), targeting only
claims that are based on the conduct protected by the statute. Section 425.16 is
not concerned with how a complaint is framed, or how the primary right theory
might define a cause of action. While an anti-SLAPP motion may challenge any
claim for relief founded on allegations of protected activity, it does not reach
claims based on unprotected activity.
It follows that ―mixed cause of action,‖ the term frequently used to
designate a count alleging both protected and unprotected activity, is not strictly
2
accurate. Section 425.16(b)(1) applies only to ―causes of action‖ that arise from
allegations of protected speech or petitioning. However, ―mixed cause of action‖
is a term in common usage, and we sometimes employ it for its customary
purpose. We also sometimes use ―cause of action‖ in its ordinary sense, to mean a
count as pleaded. To avoid confusion, we refer to the proper subject of a special
motion to strike as a ―claim,‖ a term that also appears in section 425.16(b)(1).2
The Court of Appeal below held that an anti-SLAPP motion must be
brought against a mixed cause of action in its entirety. It affirmed the denial of
defendant‘s motion because plaintiff established a probability of succeeding on
claims based on allegations of activity not protected by section 425.16. This
application of the anti-SLAPP statute unduly limits the relief contemplated by the
Legislature. Accordingly, we reverse.
I. BACKGROUND
We summarize the Court of Appeal‘s account of the litigation below, which
is essentially undisputed. Robert C. Baral and David Schnitt owned and managed
a company, IQ BackOffice LLC (IQ).3 Baral sued Schnitt for fraud and multiple
breaches of fiduciary duty. The original complaint alleged 16 counts supported by
allegations that Schnitt secretly negotiated to sell IQ on terms advantageous to him
and detrimental to Baral. It also included causes of action for libel and slander,
based on allegations that Schnitt unilaterally commissioned the accounting firm
2 A plaintiff must establish a probability of prevailing on any ―claim‖ that
arises from protected activity. (§ 425.16(b)(1).)
As we have observed on other occasions, despite the imprecision that may
result from the various connotations of the term ―cause of action,‖ its meaning is
generally evident in context. (Slater v. Blackwood (1975) 15 Cal.3d 791, 795-796;
Eichler Homes of San Mateo, Inc. v. Superior Court (1961) 55 Cal.2d 845, 847-
848.)
3 There were other co-owners, who are not parties to the lawsuit.
3
Moss Adams to investigate possible misappropriation of IQ assets. Baral
contended that Schnitt controlled the scope of the audit, knowingly gave Moss
Adams false information to discredit Baral, and told the firm not to interview him.
He claimed that because of Schnitt‘s falsehoods, Moss Adams incorrectly
concluded Baral had engaged in unauthorized transactions. The complaint alleged
that Schnitt refused to correct the false information in the report, which was
ultimately published to the potential purchaser and the other members of IQ.
Schnitt filed an anti-SLAPP motion. The court struck the defamation
counts. It concluded that, because those claims were based on communications in
a prelitigation fraud investigation, they were protected by the litigation privilege.
Baral filed a notice of appeal and a first amended complaint. Schnitt responded
with another motion to strike. At this point, Baral retained new counsel and
abandoned his appeal. By stipulation, the pending anti-SLAPP motion was
withdrawn and a second amended complaint was filed.
The second amended complaint is the pleading at issue here. It pleads four
causes of action: breach of fiduciary duty, constructive fraud, negligent
misrepresentation, and a claim for declaratory relief. In support of those counts,
Baral alleges as follows: Schnitt violated his fiduciary duties by usurping Baral‘s
ownership and management interests so that Schnitt could benefit from the sale of
IQ to LiveIt Investments, Ltd. (LiveIt). Schnitt sold a 72.6 percent interest in IQ
based on his representation that he was its sole member and manager, and
negotiated an employment position and ownership interest for himself without
Baral‘s knowledge or consent. Schnitt also excluded Baral from the Moss Adams
investigation in an effort to coerce his cooperation in the sale of the business.4
4 The second amended complaint explained that the audit was occasioned by
Schnitt‘s discovery that Baral‘s son, a bookkeeper for IQ, had misappropriated
(footnote continued on next page)
4
After the sale of IQ closed, Baral unsuccessfully renewed his efforts to provide
information to the Moss Adams auditors. The second amended complaint sought
an injunction to reopen the audit with Baral‘s participation, and to bar Schnitt from
interfering with any corrections Moss Adams might make to its report.
Schnitt filed another anti-SLAPP motion, seeking to strike all references to
the Moss Adams audit. The trial court denied the motion without deciding
whether the second amended complaint contained allegations of protected activity.
Instead, it ruled that the motion to strike applied only to entire causes of action as
pleaded in the complaint, or to the complaint as a whole, not to isolated allegations
within causes of action like the Moss Adams claims.
On Schnitt‘s appeal, the Court of Appeal affirmed. It held that the
allegations concerning the Moss Adams audit arose from protected activity.
Because Schnitt commissioned the audit with litigation in mind, he was acting ―in
furtherance of [his] right of petition.‖ (§ 425.16(b)(1).) Even so, the court agreed
with the trial judge that Schnitt‘s motion improperly sought to excise allegations
from ―mixed‖ causes of action. Schnitt conceded that Baral could make a prima
facie case supporting his claims based on the sale of IQ to LiveIt, and that only the
Moss Adams claims were vulnerable to the motion to strike. The court concluded
that anti-SLAPP relief was not available because no cause of action enumerated in
the second amended complaint would be eliminated if the allegations of protected
activity were stricken.
(footnote continued from previous page)
funds. When informed of this, Baral guaranteed that he would indemnify IQ for
any losses caused by his son. Ultimately, he did so.
5
The court recognized a split of authority in Court of Appeal cases dealing
with mixed causes of action. It sided with those holding that section 425.16
applies to such causes of action in their entirety, and may not be used to strike
particular allegations within them.
II. DISCUSSION
The anti-SLAPP statute does not insulate defendants from any liability for
claims arising from the protected rights of 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. (Taus v. Loftus (2007) 40 Cal.4th 683, 712 (Taus).)
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.‖ (Id. at
p. 714.)5 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. (Oasis West
Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 819-820 (Oasis).) ―[C]laims with
5 Anti-SLAPP motions differ from summary judgment motions in that they
are brought at an early stage of the litigation, ordinarily within 60 days after the
complaint is served. (§ 425.16, subd. (f).) Discovery is stayed, absent permission
from the court. (§ 425.16, subd. (g).) Thus, the defendant may test the sufficiency
of the plaintiff‘s claims before incurring the costs and disruptions of ordinary
pretrial proceedings.
6
the requisite minimal merit may proceed.‖ (Navellier v. Sletten (2002) 29 Cal.4th
82, 94 (Navellier).)
The question here arises at the second step of the analysis: What showing
is required of a plaintiff with respect to a pleaded cause of action that includes
allegations of both protected and unprotected activity?
A. The Court of Appeal Cases
The question was first squarely addressed in Mann v. Quality Old Time
Service, Inc. (2004) 120 Cal.App.4th 90 (Mann). The complaint in Mann included
causes of action for defamation and trade libel. Some of the factual allegations
supporting those counts involved protected activity, and some did not. (Id. at p.
105.) The Mann court declared: ―Where a cause of action refers to both protected
and unprotected activity and a plaintiff can show a probability of prevailing on any
part of its claim, the cause of action is not meritless and will not be subject to the
anti-SLAPP procedure. [¶] Stated differently, the anti-SLAPP procedure may not
be used like a motion to strike under section 436, eliminating those parts of a
cause of action that a plaintiff cannot substantiate. Rather, once a plaintiff shows a
probability of prevailing on any part of its claim, the plaintiff has established that
its cause of action has some merit and the entire cause of action stands. Thus, a
court need not engage in the time-consuming task of determining whether the
plaintiff can substantiate all theories presented within a single cause of action and
need not parse the cause of action so as to leave only those portions it has
determined have merit.‖ (Id. at p. 106.)
It is clear the Mann court thought an anti-SLAPP motion must defeat an
entire cause of action as it is pleaded in the complaint. It noted that a defendant
has other options for challenging allegations within a count. ―For example, a
defendant can file a motion to strike a particular claim under section 436
concurrently with its anti-SLAPP motion, or it can move for summary
7
adjudication of any distinct claim within a cause of action.‖ (Mann, supra, 120
Cal.App.4th at p. 106.) The court concluded that the defamation count before it
survived the special motion to strike because, the plaintiff showed a probability of
prevailing based solely on its allegations of unprotected activity. (Id. at p. 107.)
Thus, the ―Mann rule‖ encompasses the propositions that an anti-SLAPP motion
may not be used to attack particular claims within a cause of action as framed by
the plaintiff, and that the plaintiff can defeat the motion by showing a probability
of prevailing on any part of the count, including allegations of activity that is not
protected by section 425.16. The rule has received a mixed reception in the Courts
of Appeal, reflecting the complex analytical challenges posed by the Mann court‘s
doctrinal innovation.
A series of early opinions referred to the Mann rule with approbation but
did not fully apply it, because the courts did not reach the second anti-SLAPP step
and thus did not assess the plaintiffs‘ probability of success. (A.F. Brown
Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006) 137 Cal.App.4th
1118, 1124–1125; Platypus Wear, Inc. v. Goldberg (2008) 166 Cal.App.4th 772,
786; Haight Ashbury Free Clinics, Inc. v. Happening House Ventures (2010) 184
Cal.App.4th 1539 (Haight Ashbury).) In Haight Ashbury, however, one justice
wrote separately, taking strong exception to the Mann rule. (Haight Ashbury, at
pp. 1556-1557 (conc. & dis. opn. of Needham, J.).)
Subsequently, the author of the separate opinion in Haight Ashbury gained
a majority and criticized Mann at length, in Wallace v. McCubbin (2011) 196
Cal.App.4th 1169, 1196-1212 (Wallace). The Wallace majority made clear its
view that a plaintiff responding to an anti-SLAPP motion ―must show the
probability of prevailing on alleged claims of protected activity, and only those
claims.‖ (Id. at p. 1203.) However, it ultimately followed the Mann rule, after
reviewing two decisions from this court: Taus, supra, 40 Cal.4th 683, and Oasis,
8
supra, 51 Cal.4th 811. It is important to note that neither Taus nor Oasis involved
a mixed cause of action. However, both include discussions bearing tangentially
on whether an anti-SLAPP motion may challenge particular allegations within
causes of action as framed in the complaint.
The Wallace majority found Mann inconsistent with Taus, supra, 40
Cal.4th 683. There, we held that meritless assertions of liability should be stricken
―even though they comprised a part of what the plaintiff had called a ‗cause of
action.‘ ‖ (Wallace, supra, 196 Cal.App.4th at p. 1210; see Taus, at p. 742.)
However, the majority reluctantly concluded that we had subsequently approved
Mann in Oasis, supra, 51 Cal.4th 811. Oasis quoted the passages in Mann stating
that if ―a plaintiff can show a probability of prevailing on any part of its claim, the
cause of action is not meritless,‖ and that ―once a plaintiff shows a probability of
prevailing on any part of its claim, the plaintiff has established that its cause of
action has some merit and the entire cause of action stands.‖ (Mann, supra, 120
Cal.App.4th at p. 106; see Oasis, at p. 820; Wallace, at p. 1212.) The concurring
justice in Wallace declined to join the majority‘s criticism of the Mann rule,
considering it ―settled law.‖ (Wallace, at p. 1216 (conc. opn. of Jones, P. J.).) In
the concurrence‘s view, a mixed cause of action having any merit should not be
stricken under the anti-SLAPP statute. (Id. at pp. 1217-1218.)
There was another split of opinion in City of Colton v. Singletary (2012)
206 Cal.App.4th 751 (Colton). The majority relied on Taus and Wallace to hold
that allegations of protected activity may be stricken from a mixed cause of action
without affecting the allegations of unprotected activity. (Colton, at pp. 772-774.)
The dissenting justice argued that section 425.16 only authorizes courts to strike
an entire ―cause of action,‖ not particular supporting allegations. (Colton, at p.
792 (conc. & dis. opn. of Richli, Acting P. J.).) The dissent did not find Taus on
9
point. In any event, it noted, Wallace concluded that Taus had been implicitly
overruled by Oasis. (Colton, at pp. 793-794.)
In M.F. Farming Co. v. Couch Distributing Co., Inc. (2012) 207
Cal.App.4th 180, 198, the court referred to the Oasis quotation of the Mann rule.
It held that the plaintiff had established a probability of succeeding on a mixed
cause of action for injunctive relief, evidently basing its conclusion on the
allegations as a whole. (M.F. Farming, at pp. 197, 201-202.) In Burrill v. Nair
(2013) 217 Cal.App.4th 357, 379, the court also relied on the passage in Oasis
restating the Mann rule.6
In Cho v. Chang (2013) 219 Cal.App.4th 521 (Cho), the court observed that
―[a]ppellate courts have wrestled with the application of the anti-SLAPP law‖
when allegations of protected and unprotected activity are combined. (Id. at p.
526.) After surveying the divergent case law, the court pointed out that neither
Taus nor Oasis involved a mixed cause of action. It declined to read Oasis as
broadly endorsing the Mann rule. ―Instead, the guiding principle in applying the
anti-SLAPP statute to a mixed cause of action case is that ‗a plaintiff cannot
frustrate the purposes of the SLAPP statute through a pleading tactic of combining
allegations of protected and nonprotected activity under the label of one ―cause of
action.‖ ‘ (Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294,
308.‖ (Cho, at p. 527.)7
6 No allegations of unprotected activity were involved in Burrill, but the
defendant cited Wallace and Taus in arguing that the court could strike meritless
portions of a defamation claim even if the plaintiff established a probability of
prevailing on other portions. (Burrill v. Nair, supra, 217 Cal.App.4th at p. 379.)
The Burrill court disagreed, noting that Wallace itself had followed the Mann rule.
(Burrill, at p. 380.)
7 In Fox Searchlight Pictures, Inc. v. Paladino, supra, 89 Cal.App.4th 294,
the court touched only briefly on the topic of mixed causes of action, rejecting the
(footnote continued on next page)
10
Cho concluded: ―It would make little sense if the anti-SLAPP law could be
defeated by a pleading, such as the one in this case, in which several claims are
combined into a single cause of action, [with some claims] alleging protected
activity and some not. Striking the entire cause of action would plainly be
inconsistent with the purposes of the statute. Striking the claims that invoke
protected activity but allowing those alleging nonprotected activity to remain
would defeat none of them. Doing so also is consonant with the historic effect of
a motion to strike: ‗to reach certain kinds of defects in a pleading that are not
subject to demurrer.‘ (See 5 Witkin, Cal. Procedure, [supra,] Pleading, § 1008, p.
420.) [¶] That is what the trial court did in this case. Its ruling makes sense, and
renders justice to both sides.‖ (Cho, supra, 219 Cal.App.4th at p. 527.)
In the case now before us, the Court of Appeal acknowledged Cho but
―[came] out on the side of those cases holding that, if the nonmoving party
demonstrates a prima facie case of prevailing on any part of a mixed cause of
action, the anti-SLAPP motion fails.‖ The court reasoned that (1) section
425.16(b)(1) expressly refers to a ―cause of action,‖ and the Legislature has not
altered that terminology; (2) the core purpose of the anti-SLAPP statute is to
dispose of meritless litigation, not to strike particular allegations, however small a
part of the case they may be; and (3) the benefits of striking mere allegations do
not justify the significant effects of an anti-SLAPP motion, which include a stay of
discovery, a bar against amendment of the complaint, an early test of the
(footnote continued from previous page)
plaintiff‘s first-step argument that section 425.16 did not apply because each of its
causes of action included an allegation of unprotected activity. (Fox Searchlight,
at p. 308.) In its second-step analysis, the court focused on the allegations of
protected activity. (Id. at pp. 308-317.)
11
plaintiff‘s proof without the ordinary benefits of discovery, an award of attorney
fees if the moving party prevails, and an appeal if the motion is denied.
The court concluded: ―For a defendant to get the benefit of these
extraordinary consequences merely by filing a motion aimed at some allegations
would encourage . . . an anti-SLAPP motion to excise allegations — no matter
how minimal in relation to the remainder of the cause of action — merely to stop
discovery and force plaintiff to show plaintiff‘s evidentiary hand early on, with
further delay if the motion is denied and there is an appeal. Trial courts,
moreover, would be burdened with more prolix motions with little commensurate
savings in trial time.‖
B. Taus and Oasis
Clearly, our decisions in Taus and Oasis have occasioned some confusion
in the Courts of Appeal. We briefly review and clarify those opinions before
turning to the merits here. The plaintiff in Taus was the subject of a scholarly
article on repressed memories of child abuse. She sued the authors and publishers
of subsequent articles that questioned the premise of the original case study.
(Taus, supra, 40 Cal.4th at p. 689.) The complaint pleaded four causes of action:
negligent infliction of emotional distress, invasion of privacy, fraud, and
defamation. (Id. at pp. 701-702.) The defendants filed an anti-SLAPP motion.
The trial court struck the fraud claim against one defendant but not another, struck
the defamation claim against one defendant but not another, and otherwise denied
the motion. Only the defendants appealed. (Id. at pp. 702-703.)
The Taus Court of Appeal held that all the claims arose from protected acts
in furtherance of the defendants‘ right of free speech. (Taus, supra, 40 Cal.4th at
p. 704.) Regarding the plaintiff‘s probability of success, the court analyzed the
invasion of privacy claim in terms of two distinct potential torts: improper
disclosure of private facts and improper intrusion into private matters, each of
12
which was supported by allegations detailing three different incidents. (Id. at pp.
705-706.) With respect to the defamation cause of action, the court examined five
alleged statements by defendants. (Id. at p. 708.) It concluded that the action
could go forward on two claims for improper disclosure of private facts, two for
improper intrusion into private matters, and one for defamation. (Id. at p. 711.)
Again, only the defendants sought review. We noted, ―the only issues
before us are whether the Court of Appeal properly concluded that dismissal under
the anti-SLAPP statute was improper‖ with regard to the surviving claims. (Taus,
supra, 40 Cal.4th at p. 711.) The alleged conduct underlying these claims ―plainly
fell within the scope of the anti-SLAPP statute.‖ (Id. at p. 713.) We stated that
―in order to avoid dismissal of each claim under section 425.16, plaintiff bore the
burden of demonstrating a probability that she would prevail on the particular
claim.‖ (Ibid.) We closely examined the allegations, evidence, and controlling
law as to each claim. (Id. at pp. 717-741.)
Taus held that the Court of Appeal erred by finding the plaintiff‘s showing
sufficient as to three alleged incidents, but that one claim of improper intrusion
into private matters could properly proceed based on another alleged incident.
(Taus, supra, 40 Cal.4th at p. 742.) We concluded, ―defendants‘ motion to strike
the complaint pursuant to the anti-SLAPP statute properly was denied as to one
facet of one of the numerous causes of action alleged in the complaint.‖ (Ibid.)
However, ―the overwhelming majority of plaintiff‘s claims properly should have
been struck in the trial court.‖ (Ibid.)
The approach we took in Taus does not conform with the Mann rule. (See
Wallace, supra, 196 Cal.App.4th at p. 1210; Colton, supra, 206 Cal.App.4th at p.
774.) Far from searching for ―a probability of prevailing on any part‖ of the
various claims before us, our review accomplished what the Mann court said the
anti-SLAPP procedure may not be used for: ―eliminating those parts of a cause of
13
action that a plaintiff cannot substantiate.‖ (Mann, supra, 120 Cal.App.4th at p.
106.) Under the Mann rule, if Taus could have made the requisite showing of
likely success on any part of her invasion of privacy cause of action, the entire
claim would have survived. But we accepted the Court of Appeal‘s division of the
claim into two separate theories of recovery, examined whether particular alleged
actions would support liability under either of those theories, and concluded that
only ―one facet‖ of the invasion of privacy cause of action was viable. (Taus,
supra, 40 Cal.4th at p. 742.)
It is true, as the dissenting justice in Colton observed, that we were not
asked in Taus to consider the propriety of striking particular allegations within the
various causes of action pleaded in the complaint. (Colton, supra, 206
Cal.App.4th at p. 793 (conc. & dis. opn.).) However, we would not have
undertaken such an exhaustive analysis of alternate theories of liability, and their
application to particular instances of alleged tortious behavior, if we thought the
anti-SLAPP statute operates as described in Mann.
Nevertheless, we quoted from Mann in Oasis. There, a real estate
development company sued its former attorney and his firm. After his
representation of the plaintiff ended, the attorney campaigned to stop the same
development project he had been retained to promote. He joined a citizens‘ group
opposing it and solicited signatures for a petition to abrogate its approval. The
complaint stated causes of action for breach of fiduciary duty, professional
negligence, and breach of contract. (Oasis, supra, 51 Cal.4th at pp. 816-818.)
The Court of Appeal reversed the denial of the defendants‘ anti-SLAPP motion.
(Id. at p. 819.)
This court noted that at the second step of the anti-SLAPP analysis, the
plaintiff‘s burden is to state and substantiate a legally sufficient claim. (Oasis,
supra, 51 Cal.4th at p. 820.) We then quoted from Mann, but significantly omitted
14
its reference to a mixed cause of action: ―If the plaintiff ‗can show a probability of
prevailing on any part of its claim, the cause of action is not meritless‘ and will
not be stricken; ‗once a plaintiff shows a probability of prevailing on any part of
its claim, the plaintiff has established that its cause of action has some merit and
the entire cause of action stands.‘ ‖ (Ibid., quoting Mann, supra, 120 Cal.App.4th
at p. 106, with Mann‘s italics.)
We considered ―the causes of action for breach of fiduciary duty,
professional negligence, and breach of contract together, [because] all three claims
are based on [the attorney‘s] alleged breach of his duties as former counsel.‖
(Oasis, supra, 51 Cal.4th at p. 820.) We reasoned that ―[t]he complaint identifies
a number of acts of alleged misconduct and theories of recovery, but for purposes
of reviewing the ruling on an anti-SLAPP motion, it is sufficient to focus on just
one.‖ (Id. at p. 821.) Our focus was on the claim that the attorney had acquired
confidential information about the plaintiff‘s project while acting as its counsel,
and subsequently used that information to oppose the project as a private citizen.
(Id. at pp. 821-822.) Based on the undisputed facts and reasonable inferences
related to that ground for recovery, we concluded the plaintiff had ―demonstrated a
likelihood of prevailing on each of its three causes of action.‖ (Id. at p. 822.)
Responding to the defendants‘ assertion that a categorical bar on attorney
speech would have dire consequences, we explained: ―we are not announcing a
broad categorical bar here . . . . Our task is solely to determine whether any
portion of [the plaintiff‘s] causes of action has even minimal merit within the
meaning of the anti-SLAPP statute. A claim that [the attorney] used confidential
information acquired during his representation of [the plaintiff] in active and overt
support of a referendum to overturn the city council‘s approval of the . . . project,
where the council‘s approval of the project was the explicit objective of the prior
representation, meets that low standard.‖ (Oasis, supra, 51 Cal.4th at p. 825.)
15
It is wrong to suggest, as have some Courts of Appeal, that Oasis amounts
to an implicit disapproval of Taus. (See Colton, supra, 206 Cal.App.4th at p. 794
(conc. & dis. opn.); Burrill v. Nair, supra, 217 Cal.App.4th at p. 380; Wallace,
supra, 196 Cal.App.4th at p. 1212.) Oasis did not mention Taus, and no holding
in Taus is affected by anything we said in Oasis. The second-step analyses in the
two opinions are certainly quite different. However, the differences flow from the
way the parties framed the issues. In Taus, the defendants disputed the Court of
Appeal‘s rulings on the viability of claims arising from discrete allegations of
wrongdoing. In Oasis, the defendants made no such particular arguments. In the
trial court, they sought to strike the entire complaint based on the assertion that the
attorney defendant had breached no duty owed to his former client. In this court,
they sought to preserve their victory in the Court of Appeal on the same broad
theory, arguing that the plaintiff had failed to show any breach. In that context, it
was sufficient to determine whether any of the attorney‘s alleged acts could be
said to violate his fiduciary obligations.
As the Cho court noted, neither Taus nor Oasis involved a mixed cause of
action. (Cho, supra, 219 Cal.App.4th at p. 527.) Thus, we had no occasion to
consider the Mann rule and its implications. Nevertheless, the approach taken in
Taus is consistent with the terms and purposes of the anti-SLAPP statute, and the
Mann rule is not. Our quotation from Mann in Oasis must be understood as
limited to the circumstances there presented. As discussed next, it is not the
general rule that a plaintiff may defeat an anti-SLAPP motion by establishing a
probability of prevailing on any part of a pleaded cause of action. Rather, the
plaintiff must make the requisite showing as to each challenged claim that is based
on allegations of protected activity. How the plaintiff does that will vary from
case to case, depending on the nature of the complaint and the thrust of the
motion. But when the defendant seeks to strike particular claims supported by
16
allegations of protected activity that appear alongside other claims within a single
cause of action, the motion cannot be defeated by showing a likelihood of success
on the claims arising from unprotected activity.
C. Analysis
The Mann court‘s reading of section 425.16(b) does not withstand scrutiny.
Its refusal to permit anti-SLAPP motions to reach distinct claims within pleaded
counts undermines the central purpose of the statute: screening out meritless
claims that arise from protected activity, before the defendant is required to
undergo the expense and intrusion of discovery. Mann suggested that summary
adjudication and conventional motions to strike offer alternative means ―to
eliminate theories within a cause of action.‖ (Mann, supra, 120 Cal.App.4th at p.
106.) However, neither of those procedures allows a defendant, at the early stage
contemplated by section 425.16, to test the evidentiary sufficiency of claims
arising from the kinds of activity given special protection by the anti-SLAPP
statute.
Several Courts of Appeal have pointed out that the Mann rule permits artful
pleading to evade the reach of the anti-SLAPP statute. By mixing allegations of
protected and unprotected activity, the pleader may avoid scrutiny of the claims
involving protected activity, as happened in Mann. (Mann, supra, 120
Cal.App.4th at p. 107; see Cho, supra, 219 Cal.App.4th at p. 527; Colton, supra,
206 Cal.App.4th at p. 774; Wallace, supra, 196 Cal.App.4th at p. 1202.) We agree
that the application of section 425.16 cannot reasonably turn on how the
challenged pleading is organized. Had the Mann complaint stated its defamation
claim in two counts, one based on the protected statements and another on the
unprotected statements, the plaintiff would have been required to establish a
probability of prevailing on the claim arising from the protected speech. (See
Mann, at p. 105; Shively v. Bozanich (2003) 31 Cal.4th 1230, 1242 [each separate
17
defamatory statement gives rise to a new cause of action].) It is arbitrary to hold
that the same claim, supported by allegations of protected and unprotected activity
in a single cause of action, escapes review if the plaintiff shows a probability of
prevailing on the allegations that are not covered by the anti-SLAPP statute.
The result in Mann cannot be squared with the language or the intent of
section 425.16(b)(1). The statute provides: ―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 . . . shall be subject to a special motion to strike, unless the court
determines . . . there is a probability that the plaintiff will prevail on the claim.‖
(Ibid., italics added.) These terms express the Legislature‘s desire to require
plaintiffs to show a probability of prevailing on ―the claim‖ arising from protected
activity, not another claim that is based on activity that is beyond the scope of the
anti-SLAPP statute but that happens to be included in the same count. (See
Wallace, supra, 196 Cal.App.4th at pp. 1199-1200.) 8 As we noted in Navellier,
―[t]he anti-SLAPP statute‘s definitional focus is not the form of the plaintiff‘s
cause of action but, rather, the defendant‘s activity that gives rise to his or her
asserted liability — and whether that activity constitutes protected speech or
petitioning.‖ (Navellier, supra, 29 Cal.4th at p. 92.) And in City of Cotati v.
Cashman (2002) 29 Cal.4th 69, 78, we observed that ―the statutory phrase ‗cause
of action . . . arising from‘ means simply that 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.‖
8 The Wallace court noted that the legislative history of section 425.16 is
silent with regard to mixed causes of action, but provides no indication that anti-
SLAPP motions were meant to apply to claims that do not arise from speech or
petitioning activity. (Wallace, supra, 196 Cal.App.4th at pp. 1200-1202.)
18
The anti-SLAPP procedures are designed to shield a defendant‘s
constitutionally protected conduct from the undue burden of frivolous litigation. It
follows, then, that courts may rule on plaintiffs‘ specific claims of protected
activity, rather than reward artful pleading by ignoring such claims if they are
mixed with assertions of unprotected activity.
We agree with the Cho and Wallace courts that the Legislature‘s choice of
the term ―motion to strike‖ reflects the understanding that an anti-SLAPP motion,
like a conventional motion to strike, may be used to attack parts of a count as
pleaded. (§ 425.16(b)(1); Cho, supra, 219 Cal.App.4th at p. 527; Wallace, supra,
196 Cal.App.4th at p. 1205, fn. 19; see § 435, subd. (b)(1) [motion to strike applies
to ―the whole or any part‖ of a pleading]; § 436, subd. (a) [court may ―[s]trike out
any irrelevant, false, or improper matter‖]; PH II, Inc. v. Superior Court (1995) 33
Cal.App.4th 1680, 1682 [defective portion of a cause of action is subject to a
conventional motion to strike].) The bench and bar are used to thinking of
motions to strike as a way of challenging particular allegations within a pleading.
(See 5 Witkin, Cal. Procedure, supra, Pleading, §§ 1009, 1012, pp. 420-421, 423;
Weil et al., Cal. Practice Guide, Civil Procedure Before Trial (The Rutter Group
2016) ¶ 7:156, p. 7(I)-70.) The drafters of the anti-SLAPP statute were surely
familiar with this understanding.
The Court of Appeal below was concerned about allowing defendants to
target fragmentary allegations, no matter how insignificant. The concern was
misplaced. Assertions that are ―merely incidental‖ or ―collateral‖ are not subject
to section 425.16. (Wallace, supra, 196 Cal.App.4th at p. 1187; Peregrine
Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133
Cal.App.4th 658, 672-673; see Episcopal Church Cases (2009) 45 Cal.4th 467,
477–478.) Allegations of protected activity that merely provide context, without
supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute.
19
Schnitt, the appellant here, argues that a ―cause of action‖ arising from
protected activity should be defined in terms of the primary right theory.
(§ 425.16(b)(1).) ―The primary right theory . . . provides that a ‗cause of action‘ is
comprised of a ‗primary right‘ of the plaintiff, a corresponding ‗primary duty‘ of
the defendant, and a wrongful act by the defendant constituting a breach of that
duty. [Citation.] The most salient characteristic of a primary right is that it is
indivisible: the violation of a single primary right gives rise to but a single cause
of action.‖ (Crowley v. Katleman (1994) 8 Cal.4th 666, 681.) Schnitt reasons that
anti-SLAPP motions must be directed against causes of action in this theoretical
sense, without regard to how the pleading in question is framed. We are not
persuaded, for several reasons.
Restricting anti-SLAPP motions to indivisible ―causes of action‖ as
determined by primary right theory would be inconsistent with the Legislature‘s
use of the term ―special motion to strike.‖ (§ 425.16(b)(1).) As noted, the
conventional motion to strike, which long preceded the anti-SLAPP statute, is well
understood as a way to challenge particular allegations. Schnitt‘s suggested
approach would also distort the anti-SLAPP statute‘s focus on claims of protected
speech or petitioning activity. A single cause of action defined in terms of the
plaintiff‘s primary right may include more than one instance of alleged
wrongdoing. (See, e.g., Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual
Ins. Co. (1993) 5 Cal.4th 854, 860-861.) Thus, the ―mixed cause of action‖
problem would remain, because the same primary right may be violated by both
protected and unprotected activity.
Further, the primary right theory is notoriously uncertain in application.
―Despite the flat acceptance of the . . . theory . . . by California decisions, the
meaning of ‗cause of action‘ remains elusive and subject to frequent dispute and
misconception.‖ (4 Witkin, Cal. Procedure, supra, Pleading, § 35, p. 100.)
20
Dispute and misconception over the scope of the anti-SLAPP statute are to be
avoided. We have observed that the ―primary right theory has a fairly narrow field
of application. It is invoked most often when a plaintiff attempts to divide a
primary right and enforce it in two suits.‖ (Crowley v. Katleman, supra, 8 Cal.4th
at p. 682.) The theory is ill-suited to the anti-SLAPP context, where the
Legislature authorized a special motion to strike only claims that arise from
protected speech or petitioning activity.
The scope of the term ―cause of action‖ in section 425.16(b)(1) is evident
from its statutory context. When the Legislature declared that a ―cause of action‖
arising from activity furthering the rights of petition or free speech may be
stricken unless the plaintiff establishes a probability of prevailing, it had in mind
allegations of protected activity that are asserted as grounds for relief. The
targeted claim must amount to a ―cause of action‖ in the sense that it is alleged to
justify a remedy. By referring to a ―cause of action against a person arising from
any act of that person in furtherance of‖ the protected rights of petition and
speech, the Legislature indicated that particular alleged acts giving rise to a claim
for relief may be the object of an anti-SLAPP motion. (§ 425.16(b)(1), italics
added.) Thus, in cases involving allegations of both protected and unprotected
activity, the plaintiff is required to establish a probability of prevailing on any
claim for relief based on allegations of protected activity. Unless the plaintiff can
do so, the claim and its corresponding allegations must be stricken. Neither the
form of the complaint nor the primary right at stake is determinative.
Respondent Baral offers little in the way of support for the Mann rule. He
relies on Oasis, supra, 51 Cal.4th 811, and the Court of Appeal opinions that have
found in it an endorsement of Mann. (See pt. II.A., ante.) We have explained that
this interpretation reads too much into Oasis. (Pt. II.B., ante.) Baral also notes
that section 425.16 has been amended six times, yet the Legislature has not seen fit
21
to provide that the statute applies to anything less than a ―cause of action.‖9 He
contends the Legislature intended to restrict the scope of the statute to causes of
action that are completely meritless, and argues that it is inconsistent with that
intent to permit a motion to strike specific allegations from otherwise meritorious
claims. Our reading of the term ―cause of action‖ in the anti-SLAPP statute is
fully consistent with the legislative intent discerned by Baral. The term refers to
claims for relief that are based on allegations of protected activity. Such claims
may be stricken only if they lack any merit.10
For all the reasons stated above, we disapprove the Mann rule.11
Although the issue arose here at the second step of the anti-SLAPP
procedure, identification of causes of action arising from protected activity
ordinarily occurs at the first step. For the benefit of litigants and courts involved
9 Three of the amendments came after the decision in Mann, supra, 120
Cal.App.4th 90. (Stats. 2005, ch. 535, § 1, p. 4120; Stats. 2010, ch. 328, § 34;
Stats. 2014, ch. 71, § 17.) Baral does not make a legislative acquiescence
argument, as did the concurring and dissenting opinion in Wallace, supra, 196
Cal.App.4th at pages 1219-1220. In any event, the weak reed of legislative
inaction provides little support for the Mann rule. (See Ornelas v. Randolph
(1993) 4 Cal.4th 1095, 1108.) The rule has not been widely accepted, and in such
a circumstance the Legislature is apt to trust the courts to correct their own errors.
(See People v. Whitmer (2014) 59 Cal.4th 733, 741.)
10 Baral raises a number of arguments with respect to the first-stage analysis
of his claims. The Court of Appeal did not reach all the first-stage issues before it
because it ruled that Schnitt‘s motion improperly targeted particular allegations
within mixed causes of action. It is appropriate for the court to consider the matter
anew upon remand, in light of our contrary holding.
11 Mann v. Quality Old Time Service, Inc., supra, 120 Cal.App.4th 90, is
overruled to the extent it is inconsistent with this opinion. Burrill v. Nair, supra,
217 Cal.App.4th 357, M.F. Farming Co. v. Couch Distributing Co., Inc., supra,207 Cal.App.4th 180, and Wallace v. McCubbin, supra, 196 Cal.App.4th 1169, are
disapproved insofar as they read Oasis, supra, 51 Cal.4th 811, as an endorsement
of the Mann rule.
22
in this sometimes difficult area of pretrial procedure, we provide a brief summary
of the showings and findings required by section 425.16(b). 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. When relief is sought based
on allegations of both protected and unprotected activity, the unprotected activity
is disregarded at this stage. If the court determines that relief is sought based on
allegations arising from activity protected by the statute, the second step is
reached. There, the burden shifts to the plaintiff to demonstrate that each
challenged claim based on protected activity is legally sufficient and factually
substantiated. The court, without resolving evidentiary conflicts, must determine
whether the plaintiff‘s showing, if accepted by the trier of fact, would be sufficient
to sustain a favorable judgment. If not, the claim is stricken. Allegations of
protected activity supporting the stricken claim are eliminated from the complaint,
unless they also support a distinct claim on which the plaintiff has shown a
probability of prevailing.
III. DISPOSITION
We reverse the Court of Appeal‘s judgment and remand for further
proceedings consistent with this opinion.
CORRIGAN, J.
WE CONCUR:
CANTIL-SAKAUYE, C. J.
WERDEGAR, J.
CHIN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
23
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Baral v. Schnitt
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 233 Cal.App.4th 1423Rehearing Granted
__________________________________________________________________________________
Opinion No. S225090
Date Filed: August 1, 2016
__________________________________________________________________________________
Court: Superior
County: Los Angeles
Judge: Maureen Duffy-Lewis
__________________________________________________________________________________
Counsel:
Kerr & Wagstaffe, James M. Wagstafffe, Kevin B. Clune; Ervin Cohen & Jessup, Michael C. Lieb and
Leemore L. Kushner for Defendant and Appellant.
Davis Wright Tremaine, Thomas R. Burke, Rochelle L. Wilcox and John D. Freed for Los Angeles Times
Communications LLC, Reporters Committee for Freedom of the Press, California Newspaper Publishers
Association, Californians Aware, The First Amendment Coalition, The McClatchy Company, First Look
Media, Inc., The Associated Press, News Corporation, Dow Jones & Co., Inc., The New York Times
Company, Cable News Network, Inc., ABC, Inc., The Hearst Corporation, Bloomberg, L.P. and CBS
Broadcasting, Inc., as Amici Curiae on behalf of Defendant and Appellant,
Sauer & Wagner, Gerald L. Sauer and Amir A. Torkamani for Plaintiff and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):
James M. Wagstafffe
Kerr & Wagstaffe
101 Mission Street, 18th Floor
San Francisco, CA 94105
(415) 371-8500
Gerald L. Sauer
Sauer & Wagner
1801 Century Park East, Suite 1150
Los Angeles, CA 90067
(310) 712-8100