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31 Cal. App. 5th 585
Cal. Ct. App. 5th
2019
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Background

  • Tang Energy (Jenevein) and AVIC USA (Zhang) were parties to a Soaring Wind LLC operating agreement with an arbitration clause covering disputes about breaches of the agreement, including exclusivity.
  • Jenevein secretly recorded (1) an in-person restaurant conversation and (2) a multi‑party conference call with Zhang, preparing evidence for anticipated arbitration over alleged competing subsidiaries.
  • Tang Energy introduced the recordings in arbitration; the arbitrators awarded Tang Energy and Soaring Wind over $65 million, and a federal district court later affirmed the award.
  • After the arbitration, Zhang and AVIC USA sued Jenevein for invasion of privacy and violations of Penal Code §§ 632 and 637.2 for secretly recording confidential communications.
  • Jenevein moved to strike under California’s anti‑SLAPP statute (Code Civ. Proc. § 425.16), arguing the recordings and their use in arbitration were protected petitioning/free‑speech activity; the trial court denied the motion.
  • The court of appeal affirmed, holding private contractual arbitration is not a judicial or other "official proceeding authorized by law" for § 425.16 purposes, so the recordings/use were not protected activity under the anti‑SLAPP statute.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether recording private communications and using them in arbitration is protected activity under § 425.16 Zhang: The claims do not arise from protected activity because arbitration is not a judicial/official proceeding; recordings were wrongful acts, not petitioning Jenevein: Recording and using the tapes in arbitration were acts in connection with a judicial/official proceeding (petition) and thus anti‑SLAPP protected Held: Contractual arbitration is not a judicial or "official proceeding authorized by law" under § 425.16, so the acts were not protected; anti‑SLAPP motion properly denied
Whether the litigation privilege or related doctrines convert arbitration‑connected acts into protected activity Zhang: Litigation privilege differs from anti‑SLAPP protection; privilege does not automatically make conduct protected under § 425.16 Jenevein: The litigation privilege language overlaps and should support anti‑SLAPP protection for arbitration‑related statements/use Held: Litigation privilege and anti‑SLAPP statute serve different purposes; privilege does not expand § 425.16 protection to private arbitration acts

Key Cases Cited

  • Century 21 Chamberlain & Assocs. v. Haberman, 173 Cal.App.4th 1 (2009) (private contractual arbitration is not a judicial or official proceeding for anti‑SLAPP purposes)
  • Mission Beverage Co. v. Pabst Brewing Co., LLC, 15 Cal.App.5th 686 (2017) (contractual arbitration generally is not an "official proceeding authorized by law")
  • MMM Holdings, Inc. v. Reich, 21 Cal.App.5th 167 (2018) (arbitrator is not a judicial body; arbitration not covered by § 425.16 subdivisions at issue)
  • Park v. Board of Trustees of California State University, 2 Cal.5th 1057 (2017) (explaining the two‑step anti‑SLAPP burden and review standard)
  • Richey v. AutoNation, Inc., 60 Cal.4th 909 (2015) (arbitration is an alternative that bypasses judicial proceedings)
Read the full case

Case Details

Case Name: Zhang v. Jenevein
Court Name: California Court of Appeal, 5th District
Date Published: Jan 2, 2019
Citations: 31 Cal. App. 5th 585; 242 Cal. Rptr. 3d 800; B280047
Docket Number: B280047
Court Abbreviation: Cal. Ct. App. 5th
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    Zhang v. Jenevein, 31 Cal. App. 5th 585