71 Cal.App.5th 769
Cal. Ct. App.2021Background
- Neurelis and Aquestive are rival drug companies developing diazepam products for acute repetitive seizures (Valtoco — intranasal; Libervant — buccal strips). Neurelis was further along and held an issued patent and an NDA pending at the FDA.
- Aquestive allegedly sought to impede Neurelis’s approval by: making investor-facing representations about Libervant, threatening to file IPRs unless Neurelis waived orphan-drug exclusivity, filing three IPR petitions against Neurelis’s patent, and filing a citizen petition with the FDA challenging approval of Valtoco.
- Neurelis sued Aquestive for defamation, malicious prosecution (based on the IPRs), and unfair competition (UCL). Aquestive moved to strike under California’s anti-SLAPP statute (§ 425.16).
- The trial court granted the anti-SLAPP motion as to defamation but denied it as to the UCL and malicious prosecution claims; the parties cross-appealed and this court consolidated appeals.
- The Court of Appeal held: some investor statements are commercial speech exempt from anti-SLAPP; the citizen petition is protected petitioning (not within the commercial-speech exception) and allegations based on it must be struck; Neurelis failed to show probable cause was lacking for the IPRs, so the malicious-prosecution claim must be struck; mixed-claim allegations based on unprotected conduct survive.
Issues
| Issue | Plaintiff's Argument (Neurelis) | Defendant's Argument (Aquestive) | Held |
|---|---|---|---|
| Whether investor statements fall within the §425.17(c) commercial-speech exception | Investor statements were factual representations about Aquestive’s product and competitors, made to an audience that could influence future buyers; thus exception applies so anti-SLAPP should not protect them | Statements were made to investors (stock buyers), not product customers, so anti-SLAPP protection applies | Court: Investor statements qualify as commercial speech under §425.17(c) given context (statements about product development, made to audiences who could help bring the product to market) — exception applies |
| Whether the citizen petition to FDA is covered by the commercial-speech exception or is protected petitioning (litigation/Noerr-Pennington) | Petition raised factual misstatements about Valtoco and so should be treated as commercial speech/exception | Citizen petition is classic petitioning to a government agency; protected by anti-SLAPP and Noerr-Pennington (unless sham) | Court: Citizen petition is protected petitioning; commercial-speech exception does not apply; petitioning immunity (Noerr-Pennington) applies absent a proven sham |
| Whether allegations based on the citizen petition are privileged or a sham so they survive anti-SLAPP second-prong | The citizen petition was meritless and submitted to delay approval; thus anti-SLAPP should not protect it | The petition is a governmental petition; even if ultimately denied by FDA, that does not show objective baselessness | Court: Aquestive did not meet burden to show litigation privilege; Noerr-Pennington applies and Neurelis failed to show the petition was an objectively baseless sham — petition-based allegations must be struck only if plaintiff fails second-prong (here Neurelis did not show sham) |
| Whether malicious prosecution claim based on IPRs survives anti-SLAPP (probable cause / favorable termination) | IPR denials, combined with board rulings, show petitions were meritless and filed to extort waiver — no probable cause; two petitions denied supports malicious prosecution | Board denials do not equate to lack of probable cause; one IPR was instituted (and later invalidated the patent), and denial standards differ from probable cause | Court: Neurelis failed to present evidence that no reasonable attorney would have believed the IPRs tenable at filing; absence of probable cause not established — malicious prosecution cause must be struck |
Key Cases Cited
- Wilson v. Cable News Network, Inc., 7 Cal.5th 871 (2019) (anti-SLAPP two-step framework and public-interest speech analysis)
- Sweetwater Union High School Dist. v. Gilbane Building Co., 6 Cal.5th 931 (2019) (second-prong, summary-judgment-like anti-SLAPP standard)
- Baral v. Schnitt, 1 Cal.5th 376 (2016) (mixed claims and treatment under anti-SLAPP)
- Simpson Strong-Tie Co., Inc. v. Gore, 49 Cal.4th 12 (2010) (elements of §425.17(c) commercial-speech exception)
- Kasky v. Nike, Inc., 27 Cal.4th 939 (2002) (commercial-speech speaker/audience/content framework)
- FilmOn.com Inc. v. DoubleVerify Inc., 7 Cal.5th 133 (2019) (scope of §425.17 and that it covers only a subset of commercial speech)
- Silberg v. Anderson, 50 Cal.3d 205 (1990) (litigation privilege elements)
- California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972) (Noerr-Pennington doctrine — petitioning immunity)
- BE&K Construction Co. v. National Labor Relations Board, 536 U.S. 516 (2002) (sham exception to petitioning immunity — objective/subjective test)
- Jarrow Formulas, Inc. v. LaMarche, 31 Cal.4th 728 (2003) (malicious prosecution and anti-SLAPP interaction)