Sweetflower Pasadena v. City of Pasadena CA2/7

Filed 5/19/22 Sweetflower Pasadena v. City of Pasadena CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
SWEETFLOWER PASADENA, B308645
LLC,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No.
20STCP01048)
v.
CITY OF PASADENA,
Defendant,
HARVEST OF PASADENA,
LLC,
Real Party in Interest
and Appellant.
APPEAL from an order of the Superior Court of
Los Angeles County, Mitchell L. Beckloff, Judge. Affirmed.
Gordon Rees Scully Mansukhani, Douglas Smurr,
Charles V. Berwanger and Reid E. Dammann for Real Party in
Interest and Appellant.
No appearance for Defendant.
Nossaman, Artin N. Shaverdian, Gabriela S. Pérez,
Gregory W. Sanders and John J. Flynn III for Plaintiff and
Respondent.
______________________
SweetFlower Pasadena, LLC filed a verified petition for
writ of mandate and complaint seeking to compel the City of
Pasadena to set aside a conditional use permit the City had
granted to SweetFlower’s competitor, Harvest of Pasadena, LLC,
and to obtain a judicial declaration that Harvest’s conditional use
permit was invalid, making Harvest ineligible to obtain the
additional permits required to open and operate a retail cannabis
store in the City. Harvest, named in SweetFlower’s
petition/complaint as real party in interest, filed a special motion
to strike all or part of the petition/complaint pursuant to Code of
1
Civil Procedure section 425.16. The trial court denied Harvest’s
motion, concluding none of SweetFlower’s claims arose from
protected speech or petitioning activity. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. SweetFlower’s Petition and Complaint
According to SweetFlower’s petition/complaint, in June
2018 City voters approved two initiative measures to legalize and
regulate commercial cannabis businesses within City boundaries.
(See Pas. Mun. Code, §§ 5.28.010 et seq., 5.78.010 et seq.,
8.11.010 et seq., 17.50.066.) The approved ordinances authorized
the operation of up to six retail cannabis businesses within City
limits; included zoning restrictions that required the businesses
1
Statutory references are to this code unless otherwise
stated.
2
to be at least 1,000 feet from any other cannabis retailer or
cultivation site and 600 feet from specified “sensitive uses,” such
as any school, park or childcare center; and limited cannabis
retailers to one per city council district. The initiative measures
authorized the City’s manager or his or her designee to
promulgate the rules and procedures governing the application
2
process for the necessary City permits.
a. SweetFlower’s application for a use permit
After a detailed vetting process the City selected
SweetFlower, Harvest and four other candidates to apply for a
retail cannabis conditional use permit. Because zoning
restrictions and other limitations in the initiative measures
meant that fewer than six cannabis retail stores could operate
simultaneously in the City, the City adopted a first-in-line
selection procedure for the six eligible candidates to apply for a
conditional use permit. Under those rules permit applications
would be processed in the order received, with the first completed
application for a permit to operate in a specified council district
able to “lock in” the available spot for that district. Any changes
to a submitted application would void the previous application,
sending the applicant to the back of the line.
SweetFlower was the first candidate to submit its
conditional use permit application on June 12, 2019. On June 27,
2019 the City notified SweetFlower its application was
incomplete and would not be processed because the location map
2
Some provisions of the initiative measures, codified in the
Pasadena Municipal Code in 2018, were amended by the City in
November 2021. Those amendments are not at issue in this
appeal.
3
SweetFlower included had not been prepared by a licensed
surveyor, a rule SweetFlower alleged the City adopted after
SweetFlower submitted its application. On June 27, 2019
SweetFlower submitted a second application, this time including
a certification that its location map had been reviewed by a
licensed surveyor. The City rejected the second application,
explaining “reviewed by” a licensed surveyor was not the same as
“prepared by” a licensed surveyor. When SweetFlower submitted
its third application on July 3, 2019, the City refused to process it
because the City had already approved applications of two of
SweetFlower’s competitors, including Harvest.
b. SweetFlower’s petition/complaint
SweetFlower filed this lawsuit for a writ of mandate
pursuant to sections 1085 and/or 1094.5 to compel the City to set
3
aside Harvest’s conditional use permit. SweetFlower alleged the
3
In addition to this lawsuit, SweetFlower filed at least
three other petitions for writs of mandate involving the City’s
cannabis-related conditional use permit decisions. (See Super.
Ct. L.A. County, no. 20STCP00038 [challenging the City’s denial
of SweetFlower’s own conditional use permit application]
(SweetFlower’s permit action); Super Ct. L.A. County,
no. 20STCP01456 [challenging the City’s approval of a
conditional use permit for Integral Associates Dena, LLC, a
SweetFlower competitor])(the Integral action); Super. Ct. L.A.
County, no. 20STCP03212 [challenging the City’s rejection of
SweetFlower’s request that Integral’s conditional use permit be
set aside based on a material change of control at Integral] (the
change-of-control action).
SweetFlower dismissed its appeal from the judgment
entered against it in its permit action (case no. B312571).
Integral has appealed from the trial court’s orders denying the
4
City had arbitrarily enforced its own rules by interpreting its
application requirements liberally for Harvest and strictly for
SweetFlower. In particular, SweetFlower alleged the City
“deemed Harvest’s application ‘complete’ even though it was
missing the same location map ‘prepared by a licensed surveyor,’
the lack of which spelled doom for SweetFlower’s application.
Harvest’s application was also missing a signed master
application form, master lease, and the written consent of the
property owner of Harvest’s proposed location,” all of which City
rules required. “The City also violated its own rules by
permitting Harvest to supplement its purportedly ‘complete’
application with a signed master application form without
requiring Harvest to forfeit its place in line for processing, while
refusing SweetFlower the same opportunity.” And, SweetFlower
alleged, “the City approved Harvest’s [conditional use permit] for
a location that does not meet the sensitive receptors distance
requirement” of the initiative ordinances. SweetFlower asserted
essentially the same allegations to support its claim for a judicial
declaration that Harvest’s conditional use permit was wrongfully
approved.
SweetFlower sought (1) a peremptory writ of mandate
ordering the City to set aside its grant of a conditional use permit
to Harvest; (2) an injunction prohibiting Harvest from taking any
further action in reliance on the invalid conditional use permit
and prohibiting the City from taking any action to process
applications by Harvest for additional permits based on the
noncompliant conditional use permit; and (3) a judicial
special motions to strike filed in the Integral action (case
no. B308897) and the change-of-control action (case no. B312412).
5
declaration that Harvest is ineligible to apply for additional
permits premised on its noncompliant, and thus invalid,
conditional use permit.
2. Harvest’s Special Motion To Strike
Harvest filed a special motion to strike the
petition/complaint under section 425.16. Harvest argued the
alleged deficiencies in its permit application and statements by
City officials in administrative hearings discussing the City’s
4
permit application requirements were protected activities within
the meaning of section 425.16, subdivision (e)(1) and (e)(2), and
SweetFlower’s “claims against Harvest,” a request for a judicial
declaration that Harvest’s conditional use permit was invalid and
an injunction barring Harvest from relying on that permit, arose
from those protected activities. Harvest also argued SweetFlower
could not demonstrate any of its claims against Harvest had
minimal merit.
In its opposition to Harvest’s motion SweetFlower argued
every claim in its petition/complaint was directed to the City’s
arbitrary decision to apply its amendment rules more liberally for
Harvest and more strictly for SweetFlower. Although the
petition/complaint included a prayer for an injunction barring
4
The petition/complaint quoted (1) the City’s planning
director in a zoning board hearing on SweetFlower’s
administrative appeal explaining what the requirement,
“prepared by a licensed surveyor,” meant; (2) the chair of the
zoning board questioning at the same hearing whether other
applications by SweetFlower’s competitors, including Harvest,
were incomplete under this standard; and (3) members of the city
council cautioning the same “strict standards” should apply to all
applications, not just SweetFlower’s.
6
Harvest from relying on its conditional use permit to obtain
further cannabis-related permits from the City, that request, like
its request for a judicial declaration that the use permit was
invalid, was not a separate claim against Harvest, but a prayer
for relief aimed at the City’s actions in issuing the initial permit
and any further permits based on the invalid conditional use
permit. The statements by City officials and allegations
concerning Harvest’s application were included in the
petition/complaint as context—evidence of the City’s arbitrary
conduct—not the basis for any claim of liability against Harvest.
The trial court denied Harvest’s special motion to strike.
The court ruled that, while statements by government officials
certainly constituted protected activity under section 425.16,
subdivision (e)(1), and Harvest’s application for a permit,
protected activity under section 425.16, subdivision (e)(2), the
only bases for liability alleged were the City’s decisions to
approve and deny use permits, unprotected acts of governance.
Because Harvest failed to carry its threshold burden to
demonstrate any claims against it arose from protected speech or
petitioning activity, the court denied Harvest’s special motion to
strike without addressing whether SweetFlower could
demonstrate its claims had minimal merit.
Harvest filed a timely notice of appeal from the order
denying its special motion to strike.
DISCUSSION
1. Governing Law and Standard of Review
Section 425.16, commonly known as the anti-SLAPP
statute, makes available a special motion to strike certain
meritless claims early in the litigation: “A cause of action against
a person arising from any act of that person in furtherance of a
7
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 there is a
probability that the plaintiff will prevail on the claim.” (§ 425.16,
subd. (b)(1); see Rand Resources, LLC v. City of Carson (2019)
6 Cal.5th 610, 619-620 [“[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”].)
Pursuant to section 425.16, subdivision (e), 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’ includes: (1) any written or oral statement or
writing made before a legislative, executive, or judicial
proceeding, or any other official proceeding authorized by law,
(2) 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, (3) any written or oral statement or writing
made in a place open to the public or a public forum in connection
with an issue of public interest, or (4) any other conduct in
furtherance of the exercise of the constitutional right of petition
or the constitutional right of free speech in connection with a
public issue or an issue of public interest.”
In ruling on a motion under section 425.16, the trial court
engages in a two-step process. “First, the defendant must
establish that the challenged claim arises from activity protected
by section 425.16. [Citation.] If the defendant makes the
8
required showing, the burden shifts to the plaintiff to
demonstrate the merit of the claim by establishing a probability
of success.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral);
accord, Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995,
1009 (Bonni); Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1061 (Park).) If the moving
party fails to demonstrate that any of the challenged claims for
relief arise from protected activity (the first step), the court
properly denies the motion to strike without addressing the
probability of success (the second step). (City of Cotati v.
Cashman (2002) 29 Cal.4th 69, 80-81; Verceles v. Los Angeles
United School Dist. (2021) 63 Cal.App.5th 776, 784.)
“A claim arises from protected activity when that activity
underlies or forms the basis for the claim.” (Park, supra,
2 Cal.5th at pp. 1062-1063; accord, Bonni, supra, 11 Cal.5th at
p. 1009.) Thus, “[t]he defendant’s first-step burden is to identify
the activity each challenged claim rests on and demonstrate that
that activity is protected by the anti-SLAPP statute. A ‘claim
may be struck only if the speech or petitioning activity itself is
the wrong complained of, and not just evidence of liability or a
step leading to some different act for which liability is asserted.’”
(Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884
(Wilson); see Bonni, at p. 1009 [“[t]he defendant’s burden is to
identify what acts each challenged claim rests on and to show
how those acts are protected under a statutorily defined category
of protected activity”]; Park, at p. 1060 [same].)
A motion pursuant to section 425.16 need not challenge an
entire cause of action as pleaded in the complaint. (Bonni, supra,
11 Cal.5th at p. 1010; Baral, supra, 1 Cal.5th at p. 382.) Rather,
“courts should analyze each claim for relief—each act or set of
9
acts supplying a basis for relief, of which there may be several in
a single pleaded cause of action—to determine whether the acts
are protected and, if so, whether the claim they give rise to has
the requisite degree of merit to survive the motion.” (Bonni, at
p. 1010; accord, Baral, at p. 395; Musero v. Creative Artists
Agency, LLC (2021) 72 Cal.App.5th 802, 815; see Park, supra,
2 Cal.5th at p. 1063 [in determining whether a claim arises from
protected activity, “courts should consider the elements of the
challenged claim and what actions by the defendant supply those
elements and consequently form the basis for liability”].)
We review do novo an order granting or denying a special
motion to strike under section 425.16. (Wilson, supra, 7 Cal.5th
at p. 884; Park, supra, 2 Cal.5th at p. 1067.)
2. The Court Properly Concluded SweetFlower’s Claims
Did Not Arise From Protected Speech or Petitioning
Activity
SweetFlower’s petition for writ of mandate alleged the City
violated its own rules when it (1) allowed Harvest to amend its
application without losing its place in line and then (2) approved
Harvest’s conditional use permit application despite similar
deficiencies that caused the City to deny SweetFlower’s
application and send it to the back of the line. As Harvest
acknowledges in its appellate briefs, those claims against the
City for its permit-related decisions are based on the City’s acts of
governance, not the City’s protected speech or petitioning
activity. (See Shahbazian v. City of Rancho Palos Verdes (2017)
17 Cal.App.5th 823, 835 [petition/complaint challenging a city’s
decision to deny plaintiff a permit while granting one to his
neighbor did not arise from protected activity within meaning of
section 425.16; acts of governance were the basis for liability, not
10
the city’s statements]; Graffiti Protective Coatings, Inc. v. City of
Pico Rivera (2010) 181 Cal.App.4th 1207, 1211 [petition for writ
of mandate alleging a city violated its own rules by awarding a
government contract to the plaintiff’s competitor without
requiring the competitor to undergo a competitive bidding process
did not arise from protected activity within the meaning of
section 425.16; the statements by government officials quoted in
the complaint “assist in telling the story”; the claims are not
based on those statements but on “state and municipal laws
requiring” the City of Pico Rivera to award certain contracts
through competitive bidding]; see also Park, supra, 2 Cal.5th at
p. 1068.)
Harvest contends, however, that the “key to [its anti-
SLAPP] motion and this appeal” is that the petition/complaint
did not just assert claims against the City for the City’s conduct.
It also alleged claims against Harvest—a request for a judicial
declaration Harvest’s conditional use permit was invalid and an
injunction preventing Harvest from relying on the invalid
5
conditional use permit as a basis for obtaining further permits.
5
SweetFlower’s petition/complaint requested an injunction
to prohibit “Harvest from taking any further action or incurring
any further costs in reliance on the invalid CUP [conditional use
permit] (including, but not limited to, expenses related to
obtaining the additional permits required by the City for
operation of a Cannabis retail store . . . and/or undertaking
development of the 169 West Colorado Boulevard location for
which the CUP was unlawfully granted), and prohibiting the City
from taking any action to process any applications by Harvest for
any of the aforementioned permits, or to issue any such permits
to Harvest.”
11
These claims, Harvest argues, were based on, and thus arose
from, Harvest’s statements in its permit application and the
City’s statements during official hearings, protected activity
within the meaning of section 425.16, subdivision (e)(1)
and (e)(2).
When considering whether a claim arises from protected
speech or petitioning activity within the meaning of
section 425.16, the focus is on the “‘“acts on which liability is
based”’” (Bonni, supra, 11 Cal.5th at p. 1012, italics omitted), not
the damages suffered (Renewable Resources Coalition, Inc. v.
Pebble Mines Corp. (2013) 218 Cal.App.4th 384, 396) or any other
type of remedy sought, including an injunction (see Guessous v.
Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187 [anti-
SLAPP motion is properly directed to a cause of action, not the
relief sought; “‘injunction relief is a remedy, not a cause of
action’”]; Marlin v. Aimco Venezia, LLC (2007) 154 Cal.App.4th
6
154, 162 [same]). Here, the only basis for liability is the City’s
approval of Harvest’s application, either in violation of its own
rules or arbitrarily, in contravention of the strict standard it
6
Although Guessous v. Chrome Hearts LLC, supra,
179 Cal.App.4th 1177, and this division’s opinion in Marlin v.
Aimco, supra, 254 Cal.App.4th 154, were decided before Baral,
supra, 1 Cal.5th 376, the distinction in those cases between the
wrong alleged and the remedy sought remains valid post-Baral:
It is the claim, not the remedy, to which an anti-SLAPP motion is
properly directed. (See Baral, at p. 395 [anti-SLAPP motion is
properly directed to “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,” italics omitted].)
12
applied to SweetFlower. There are no allegations of Harvest’s
liability alleged anywhere in the petition/complaint. Put simply,
Harvest’s undisputed engagement in protected speech and
petitioning activity—including submission of its permit
application, deficient or not—is not the wrong alleged.
Dicta in Rudisill v. California Coastal Com. (2019)
35 Cal.App.5th 1062, a case decided by Division Two of this court,
on which Harvest relies to support its argument SweetFlower’s
request for an injunction is dispositive on the question, are not
persuasive. In Rudisill petitioners sought a writ of mandate
directed to the City of Los Angeles and the California Coastal
Commission, challenging various permit decisions and naming
several real property developers as real parties in interests. The
developers filed special motions to strike pursuant to section
425.16. The superior court denied the motion, ruling the petition
for writ of mandate was directed to government decisionmaking,
not the protected activity of the developers in seeking permits.
The superior court also sanctioned the developers for filing a
frivolous anti-SLAPP motion, concluding any reasonable attorney
would have recognized the writ petition concerned government
decisionmaking, not the protected activities of the developers.
(Id. at p. 1069.)
In their appeal from the sanctions order (the developers did
not appeal the order denying their anti-SLAPP motion), the
developers argued their special motion to strike was not frivolous
because they reasonably believed, based on some of the
allegations in the petition relating to their piecemeal methods to
obtain approvals, the mandamus action had asserted a claim
against them for their protected conduct. The Rudisill court held
the motion was not frivolous, the only issue before it. In dicta
13
supporting the superior court’s ruling denying the special motion
to strike, the Rudisill court also observed, in the language
Harvest emphasizes, that the petitions for writ of mandate did
not seek an order directly affecting the developers’ participation
in the government process “such as, for example, an order
precluding [the developers] from submitting any further
permits[].” (Rudisill, supra, 35 Cal.App.5th at p. 1075.)
Harvest argues that, by seeking an injunction barring
Harvest from obtaining additional permits, SweetFlower has
alleged the very claim the Rudisill court suggested would be
subject to a special motion to strike. Harvest reads too much into
language that simply recognizes claims directed to blocking
petitioning activity could be subject to a special motion to strike.
Here, as discussed, there was no claim asserted against Harvest.
Even if the remedy sought in a petition or complaint were
properly considered part of the section 425.16 analysis of the
elements of the claim, it does not supplant the requirement that
the protected activity be the basis for liability. There were no
7
allegations of wrongdoing asserted against Harvest.
Finally, quoting from the court’s order denying its special
motion to strike, Harvest contends the trial court improperly
7
SweetFlower’s request for injunctive relief, to the extent it
encompasses Harvest’s activities without any concomitant
allegations of Harvest’s wrongdoing, is certainly questionable and
may well be an appropriate target of a traditional motion to
strike by Harvest. However, the possible overbreadth of
SweetFlower’s remedial request, without more, does not create a
claim where there is otherwise none, let alone make the
petition/complaint, or any aspect of it, subject to a special motion
to strike under section 425.16.
14
focused on the gravamen of the action, rather than the claims
8
included within each cause of action, as Baral requires. Harvest
made the same argument in the trial court. Addressing language
in the court’s tentative ruling, Harvest’s counsel tactfully
suggested the court’s analysis disregarded Supreme Court
pronouncements in Baral, Wilson, and Park. In response the
court explained, consistent with those cases, it had looked within
the causes of action to the wrongs alleged and found only acts of
governance by the City: “The speech is not the wrong. The
9
petitioning activity is not the wrong.” The trial court’s use of the
term “gravamen” did not inform its analysis. (See Bonni, supra,
8
In its tentative ruling, which the court adopted as its final
order, the trial court stated in the introduction to the governing
law section, “‘[I]n the anti-SLAPP context, the critical point is
whether the plaintiff’s cause of action itself was based on an act
in furtherance of the defendant’s right of petition or free speech.’
(City of Cotati v. Cashman, supra, 29 Cal.4th at [p.] 78.) ‘[I]t is
the principal thrust or gravamen of the plaintiff’s cause of action
that determines whether the anti-SLAPP statute applies.’”
9
In its analysis the trial court quoted extensively from Park:
“As discussed in Park v. Board of Trustees of California State
University[, supra,] 2 Cal.5th [at p. 1060]: [¶] ‘[A] claim is not
subject to a motion to strike simply because it contests an action
or decision that was arrived at following speech or petitioning
activity, or that was thereafter communicated by means of speech
or petitioning activity. Rather, a claim may be struck only if the
speech or petitioning activity is the wrong complained of, and not
just evidence of liability or a step leading to some different act for
which liability is asserted.’” “Petitioner does not attack the
deliberations, discussions or vote. Thus, Petitioner’s claims are
not based on speech but on non-protected ‘acts of governance.’”
15
11 Cal.5th at p. 1012 [“[W]e do not suggest that every court that
has continued to label its approach a gravamen test even after
Baral has erred. Some courts have invoked the term not in the
way [defendant] suggests—to determine the essence or gist of a
so-called mixed cause of action—but instead to determine
whether particular acts alleged within the cause of action supply
the elements of a claim [citation] or instead are incidental
10
background”].) More importantly, it is not the basis of ours.
In sum, Harvest did not carry its threshold burden to
demonstrate SweetFlower’s claims arose from protected activity
under section 425.16. Accordingly, the trial court did not err in
denying the special motion to strike.
10
Harvest’s request for judicial notice of successful anti-
SLAPP motions it has filed in unrelated actions (Harvest’s first
request for judicial notice) is denied as irrelevant. Harvest’s
request for judicial notice of SweetFlower’s dismissal of its appeal
in a related case (Harvest’s second request for judicial notice) is
denied as unnecessary.
16
DISPOSITION
The trial court’s order denying Harvest’s special motion to
strike is affirmed. SweetFlower is to recover its costs on appeal.
PERLUSS, P. J.
We concur:
SEGAL, J.
FEUER, J.
17