eGumball v. Merrick Bank Corp. CA4/3, G062863M

eGumball, Inc. is a business in the search engine optimization industry that processed credit card transactions through Merrick Bank, its acquiring bank.
In June 2021, Merrick and related defendants placed a hold on eGumball’s account, alleging eGumball was engaged in transaction laundering related to illegal pharmaceuticals, based on some pharmacy website transactions allegedly tied to eGumball.
Merrick terminated eGumball’s merchant account, kept over $130,000 in funds, reported eGumball as a money launderer to the confidential Mastercard MATCH system, and fined eGumball $50,000.
As a result, eGumball’s ability to process payments ended, employees resigned, and clients canceled their accounts. eGumball denied any wrongdoing and claimed saboteur activity or fraudulent applications by a third party.
eGumball sued for trade libel, defamation, unfair business practices, and more. Merrick moved to strike under California’s anti-SLAPP statute, arguing its reporting was a protected act in connection with a public issue.
The trial court denied Merrick’s anti-SLAPP motion, finding the MATCH report was not connected to public debate due to its confidentiality. Merrick appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether reporting eGumball to the MATCH system for laundering qualifies as protected activity under anti-SLAPP statute	Reporting was business-to-business, not public contribution; no public debate involved	Reporting furthered public interest in credit card security; protects consumers; relates to public issue	MATCH is a confidential system, not contributing to public discussion; not protected speech under anti-SLAPP
Probability of eGumball prevailing on the merits	Sufficient evidence supports claims; Merrick’s actions caused harm and were unsubstantiated	Actions were contractually protected, true, and/or privileged; eGumball consented to reporting	Not addressed, as the conduct was not protected activity
Impact of confidentiality and limited audience of MATCH reporting	Confidential database, so no public issue implicated	Confidential reporting to banks serves public interest in security	Confidentiality and business purpose undermined anti-SLAPP protection
Motions to seal appellate records	Some documents require sealing for confidentiality	Proprietary info and business practices justify sealing	Sealing granted in part without prejudice; some docs unsealed

Geiser v. Kuhns, 13 Cal.5th 1238 (Cal. 2022) (Anti-SLAPP relevance and two-step test)
FilmOn.com Inc. v. DoubleVerify Inc., 7 Cal.5th 133 (Cal. 2019) (Confidential business communications not protected under anti-SLAPP unless they contribute to public debate)
Navellier v. Sletten, 29 Cal.4th 82 (Cal. 2002) (Definition of protected activity for anti-SLAPP analysis)
Baral v. Schnitt, 1 Cal.5th 376 (Cal. 2016) (Early stage dismissal framework for SLAPP claims)
Park v. Board of Trustees of California State University, 2 Cal.5th 1057 (Cal. 2017) (Two-step test for anti-SLAPP motions)