ANIMAL LEGAL DEFENSE FUND, Plaintiff and Respondent, v. LT NAPA PARTNERS LLC et al., Defendants and Appellants.
No. A139625
First Dist., Div. Five.
Mar. 5, 2015.
234 Cal. App. 4th 1270
Greenwald & Hoffman, Paul A. Hoffman, Paul Evan Greenwald; Law Offices of Manuel S. Klausner, Manuel S. Klausner; The Michael Tenenbaum Law Firm and Michael Tenenbaum for Defendants and Appellants.
Animal Legal Defense Fund, Matthew Liebman, Christopher A. Berry; Fenwick & West and William R. Skinner for Plaintiffs and Respondents.
Drinker Biddle & Reath, Sheldon Eisenberg and Erin E. McCracken for John L. Burton as Amicus Curiae on behalf of Plaintiffs and Respondents.
OPINION
SIMONS, J.—Plaintiff and respondent Animal Legal Defense Fund (plaintiff) filed an action against defendants and appellants LT Napa Partners LLC
BACKGROUND
In 2004, the Legislature enacted Section 25982, banning the sale of foie gras effective July 1, 2012. (See
After the ban went into effect, plaintiff paid an investigator to dine at La Toque on three occasions in September 2012, October 2012, and March 2013. On each occasion he requested foie gras and was told that if he ordered an expensive tasting menu he would receive foie gras. On two of the occasions it was described as a “gift” from the chef. He ordered the tasting menus and was served foie gras. He was not told he was served foie gras in protest against the foie gras ban and was not provided information about defendant Frank‘s opposition to the foie gras ban.4
Defendants brought a special motion to strike plaintiff‘s action as a SLAPP under Section 425.16. The trial court denied the motion, concluding defendants had failed to show plaintiff‘s cause of action arose from protected activity and concluding plaintiff had shown a probability of prevailing on the merits. This appeal followed.5
DISCUSSION
I. The Anti-SLAPP Law
“In 1992, the Legislature enacted [S]ection 425.16 in an effort to curtail lawsuits brought primarily ‘to chill the valid exercise of... freedom of speech and petition for redress of grievances’ and ‘to encourage continued participation in matters of public significance.’ (
II. We Assume for Purposes of Appeal That Plaintiff‘s Lawsuit Arises out of Defendants’ Conduct in Furtherance of Protected Speech
A defendant can meet its burden of making a threshold showing that a cause of action is one arising from protected activity by demonstrating the act underlying the plaintiff‘s cause of action falls within one of the four categories identified in Section 425.16, subdivision (e). (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78 [124 Cal.Rptr.2d 519, 52 P.3d 695].) Among other things, defendants contend plaintiff‘s UCL claim arises out of “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.” (
III. Plaintiff Has Demonstrated a Probability of Prevailing
In order to establish a probability of prevailing for purposes of Section 425.16, subdivision (b)(1), ” ‘the plaintiff “must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” ’ ” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89 [124 Cal.Rptr.2d 530, 52 P.3d 703].) However, a defendant that advances an affirmative defense to the plaintiff‘s claims bears the burden of proof on the defense. (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 676 [35 Cal.Rptr.3d 31].)
On appeal, defendants contend plaintiff failed to demonstrate a probability of prevailing because plaintiff lacks standing, there is no basis for liability against defendant Frank, and plaintiff‘s evidence fails to show defendants sold foie gras within the meaning of
A. Plaintiff Has Shown a Probability of Prevailing on the Standing Issue
1. Legal Background
In Kwikset, supra, 51 Cal.4th 310, the California Supreme Court examined the standing requirements of the UCL in light of the 2004 approval of Proposition 64. The court explained that, “While the substantive reach of [the UCL] remains expansive, the electorate has materially curtailed the universe of those who may enforce [its] provisions. . . . ‘In 2004, the electorate substantially revised the UCL‘s standing requirement; where once private suits could be brought by “any person acting for the interests of itself, its members or the general public” [citation], now private standing is limited to any “person who has suffered injury in fact and has lost money or property” as a result of unfair competition [citations]. The intent of this change was to confine standing to those actually injured by a defendant‘s business practices and to curtail the prior practice of filing suits on behalf of “clients who have not used the defendant‘s product or service, viewed the defendant‘s advertising, or had any other business dealing with the defendant . . . .” ’ [Citation.] [] While the voters clearly intended to restrict UCL standing, they just as plainly preserved standing for those who had had business dealings with a defendant and had lost money or property as a result of the defendant‘s unfair business practices.” (Kwikset, supra, 51 Cal.4th at pp. 320-321.)6
“[P]roof of injury in fact will in many instances overlap with proof of” loss of “money or property,” as also required by Proposition 64. (Kwikset, supra, 51 Cal.4th at p. 323.) Kwikset noted that such “economic injury... is itself a classic form of injury in fact,” and “the quantum of lost money or property necessary to show standing is only so much as would suffice to establish injury in fact....” (Id., at pp. 323-324.) “However, because economic injury is but one among many types of injury in fact, the Proposition 64 requirement that injury be economic renders standing under [Business and Professions Code] section 17204 substantially narrower than federal standing under article III, section 2 of the United States Constitution, which may be predicated on a broader range of injuries.” (Kwikset, at p. 324.) Nevertheless, injury in fact is “not a substantial or insurmountable hurdle“; it suffices “to ’ “allege[] some specific, ‘identifiable trifle’ of injury.” ’ ” (Ibid.) “If a party has alleged or proven a personal, individualized loss of money or property in any nontrivial amount, he or she has also alleged or proven injury in fact.” (Id. at p. 325.)
Finally, “Proposition 64 requires that a plaintiff‘s economic injury come ‘as a result of the unfair competition . . . .’ [Citations.] ‘The phrase “as a result of” in its plain and ordinary sense means “caused by” and requires a showing of a causal connection or reliance....’ ” (Kwikset, supra, 51 Cal.4th at p. 326.)
2. Analysis
In the present case, plaintiff contends it suffered injury in fact and lost money as a result of defendants’ conduct in serving foie gras because it “has
Plaintiff points out that, although Kwikset declined to “supply an exhaustive list of the ways in which unfair competition may cause economic harm,” the court did note that a plaintiff “required to enter into a transaction, costing money or property, that would otherwise have been unnecessary” would have standing under the UCL. (Kwikset, supra, 51 Cal.4th at pp. 323-324.) Plaintiff contends its expenditure of resources in investigating defendants’ alleged sales of foie gras and attempting to persuade the Napa authorities to prosecute were such transactions. Kwikset cited Hall v. Time Inc. (2008) 158 Cal.App.4th 847, 854-855 [70 Cal.Rptr.3d 466], as a case “cataloguing some of the various forms of economic injury.” (Kwikset, at p. 323.) Hall had cited Southern California Housing v. Los Feliz Towers Homeowners (C.D.Cal. 2005) 426 F.Supp.2d 1061, 1069 (Southern Cal. Housing), as an example of a case where a plaintiff “expended money due to the defendant‘s acts of unfair competition,” with the parenthetical “housing rights center lost financial resources and diverted staff time investigating case against defendants.” (Hall, at p. 854.) In Southern Cal. Housing, the federal district court held that a housing advocacy organization met the Proposition 64 standing requirement by “present[ing] evidence of actual injury based on loss of financial resources in investigating [a] claim and diversion of staff time from other cases to
Cases addressing the federal standing requirement—which are relevant as explained in Kwikset, supra, 51 Cal.4th at page 322—also support the proposition that the plaintiff‘s claimed diversion of resources can constitute injury in fact. For example, in Havens Realty Corp. v. Coleman (1982) 455 U.S. 363 [71 L.Ed.2d 214, 102 S.Ct. 1114] (Havens), a Fair Housing Act (
Defendants rely on Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th 798 [66 Cal.Rptr.3d 543] (Buckland), disapproved on other grounds in Kwikset, supra, 51 Cal.4th 310, in arguing that plaintiff does not have standing. But the reasoning of that case supports plaintiff‘s position that it has established a prima facie case. In Buckland, a women‘s rights advocate bought skin creams that were allegedly sold by the defendants in violation of federal marketing laws. (Buckland, at pp. 804–805.) The plaintiff in Buckland acknowledged she had incurred ” ‘the cost of purchasing each of these products in order to meet the letter of the law to have economic damages that provide standing under the statutes by which I am proceeding in the case.’ ” (Id. at p. 805.) In considering whether the plaintiff had standing under the UCL, Buckland surveyed the post-Havens federal case law and concluded the federal circuits were divided on “whether the costs an organization incurs to pursue litigation are sufficient, in themselves, to establish an injury in fact.” (Buckland, at p. 815.) Buckland adopted the rule of the majority of the circuits that, ” ’ [a]n organization cannot manufacture the injury necessary to maintain a suit from its expenditure of resources on that very suit.’ ” (Ibid., quoting Spann v. Colonial Village, Inc. (D.C. Cir. 1990) 283 U.S. App.D.C. 216 [899 F.2d 24, 27] (Spann).) Buckland concluded its plaintiff did not have standing under that rule “[b]ecause the costs were incurred solely to facilitate her litigation . . . [and] to hold otherwise would gut the injury in fact requirement.” (Buckland, at p. 816.)
Accepting, as we must, the truth of the averments in Mr. Wells‘s declaration (Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 444 [122 Cal.Rptr.3d 73]), we conclude the present case is like Havens and Southern Cal. Housing and unlike Buckland. The declaration indicates plaintiff spent months on the effort to persuade Napa authorities to take action based on the alleged violations of Section 25982. Thus, plaintiff has presented evidence its investigatory expenditures, as well as the resources spent in attempting to persuade the authorities, had a purpose independent of the current litigation and might have rendered such litigation unnecessary.7 Moreover, Mr. Wells‘s declaration indicates that, in addition to general advocacy against foie gras, plaintiff specifically advocated for passage of the California ban on the sale of foie gras and has expended resources on educating the public about the ban, including immediately before the statute‘s July 2012 effective date. Plaintiff, thus, has presented evidence of a genuine and long-standing interest in the effective enforcement of the statute and in exposing those who violate it. Plaintiff‘s evidence provides a basis to conclude that defendants’ alleged violations of the statute tended to frustrate plaintiff‘s advocacy for an effective ban on the sale of foie gras in California, and tended to impede plaintiff‘s ability to shift its focus on advocacy efforts in, for example, other states and at the federal level. (See Havens, supra, 455 U.S. at p. 379 [the plaintiff alleged the defendants’ racial steering
Defendants argue that a recent decision from this district‘s Division Four, Two Jinn, Inc. v. Government Payment Service, Inc. (2015) 233 Cal.App.4th 1321 (Two Jinn), demonstrates plaintiff‘s lack of standing. There, a licensed bail agent brought a UCL action to enjoin the defendant from engaging in bail agent activities in violation of legal requirements. (Two Jinn, at p. 1326.) The plaintiff, like plaintiff in this case, argued it had standing because ” ‘[w]ell before any litigation was considered,’ it expended significant time and resources investigating and documenting [the defendant‘s] activities in order to assist government regulators and convince them to uniformly enforce the law.” (Id. at p. 1336.) The Two Jinn court assumed that under Buckland such a showing would demonstrate that the plaintiff‘s investigation “was conducted independently of [the] lawsuit,” but the court held that the plaintiff had failed to present any evidence in support of its argument. (Id. at p. 1336.) “Indeed, [plaintiff‘s general counsel] expressly conceded that [its] investigation constituted ‘pre[-]litigation activities.’ ” (Ibid.) The court noted that the plaintiff had shared its evidence with California‘s Department of Insurance, but “it did so as part of this litigation in order to support its petition for a writ of mandate.” (Ibid.) Here, Mr. Wells‘s declaration, which avers the investigation and enforcement efforts with Napa authorities had a purpose independent of the lawsuit, as well as harm from the diversion of resources and the frustration of plaintiff‘s advocacy efforts, provides the evidence absent in Two Jinn and establishes a prima facie case of standing.
We also reject defendants’ contention that plaintiff failed to make a prima facie showing that its economic injury was “caused by” defendants’ conduct (see Kwikset, supra, 51 Cal.4th at p. 326), because the “purpose of [plaintiff‘s] existence is to invest [its] resources in litigation activities.” That the expenditure of resources in investigating defendants’ alleged lawbreaking was wholly consistent with plaintiff‘s mission does not mean the resources were not in fact diverted from other activities as a result of defendants’ conduct. Where the economic injury is diversion of resources, the proper focus of the inquiry is not the “voluntariness or involuntariness” of the expenditures. (Equal Rights Center v. Post Properties, Inc. (D.C. Cir. 2011) 394 U.S. App.D.C. 239 [633 F.3d 1136, 1140] (Equal Rights Center).) Instead, the proper focus is on whether the plaintiff “undertook the expenditures in response to, and to counteract, the effects of the defendants’ alleged
B. Plaintiff Has Shown a Probability of Prevailing on Its Claim That Defendants Unlawfully Sold Foie Gras
1. Plaintiff Has Shown a Basis for Liability Against Defendant Frank
Defendants contend plaintiff has not shown a basis for liability against defendant Frank because there is no evidence that Frank himself directly served foie gras to any patron of La Toque. However, the complaint alleges, “[d]efendants, by themselves and through agents, routinely sell foie gras in violation of” Section 25982. (Italics added.) The evidence in the record shows Frank is the “managing member” of LT Napa (the owner of La Toque) and has worked as the restaurant‘s “head chef” since 1976. Moreover, there is evidence Frank is personally responsible for the restaurant‘s policy regarding serving foie gras. His own declaration states, “In the exercise of my constitutionally protected right of petition and free speech, my restaurant, La Toque, is protesting the law, not breaking it, by giving away foie gras to customers I choose to give it to. I give away a much smaller amount of foie gras than I did before July 1, 2012, when Section 25982 went into effect. However, what I do give away to customers is my way of dumping tea in the harbor, so to speak.” If the serving of foie gras at La Toque violates Section 25982, plaintiff has shown a basis for its claim that Frank is personally liable for the violation.9
2. Plaintiff Has Shown a Probability of Prevailing on Its Claim Defendants Unlawfully “Sold” Foie Gras
“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces ’ “anything that can properly be called a business practice and that at the same time is forbidden by law.” ’ ” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 [131 Cal.Rptr.2d 29, 63 P.3d 937], fn. omitted.) “[Business and Professions Code] [s]ection 17200 ‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices. [Citation.]” (Korea Supply, at p. 1143.) At issue in the present case are Health and
“As with all questions of statutory interpretation, we attempt to discern the Legislature‘s intent, ‘being careful to give the statute‘s words their plain, commonsense meaning. [Citation.] If the language of the statute is not ambiguous, the plain meaning controls and resort to extrinsic sources to determine the Legislature‘s intent is unnecessary.’ ” (Ste. Marie v. Riverside County Regional Park & Open-Space Dist. (2009) 46 Cal.4th 282, 288 [93 Cal.Rptr.3d 369, 206 P.3d 739].) If terms used in a statute “are not specifically defined, a court may also consider evidence of legislative history in ascertaining the statute‘s meaning.” (Metropolitan Water Dist. v. Imperial Irrigation Dist. (2000) 80 Cal.App.4th 1403, 1425 [96 Cal.Rptr.2d 314].)
At the outset, we reject defendants’ contention that Section 25982 is a statute “imposing criminal penalties” that must be construed narrowly. In People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294 [58 Cal.Rptr.2d 855, 926 P.2d 1042] (Lungren), the California Supreme Court rejected the proposition that “all statutes with civil monetary penalties should . . . be strictly construed.” (Lungren, at p. 313.) The court interpreted “dictum” in Hale v. Morgan (1978) 22 Cal.3d 388 [149 Cal.Rptr. 375, 584 P.2d 512]—upon which defendants here rely—as possibly supporting narrow construction of a statute‘s ” ‘penalty clause.’ ” (Lungren, at p. 314.) But Hale “did not purport to alter the general rule that civil statutes for the protection of the public are, generally, broadly construed in favor of that protective purpose.” (Lungren, at p. 313; accord, Smith v. Superior Court (2006) 39 Cal.4th 77, 92 [45 Cal.Rptr.3d 394, 137 P.3d 218].) In particular, that rule of broad construction applies to the interpretation of statutes “that define[] the conduct proscribed by the Act, and the scope of the government‘s authority to enjoin and prohibit that conduct, rather than the method of assessing the amount of penalty for transgressing the proscription.” (Lungren, at p. 314.) That is what is at issue in the present case: we construe the language of Section 25982 defining what conduct is prohibited, rather than a penalty clause related to the prohibition. Because defendants do not deny that
On the merits, defendants do not dispute that the foie gras served at La Toque was produced through force-feeding. The sole issue regarding the applicability of Section 25982 is whether defendants’ conduct in serving foie gras at La Toque constituted “sales” prohibited under the statute. In opposing defendants’ anti-SLAPP motion, plaintiff presented a declaration from its investigator, who averred that on three occasions he was told he would obtain foie gras if he purchased a tasting menu at La Toque. On two of the occasions the foie gras was characterized as a “gift,” apparently foie gras was not listed in the description of the tasting menu, and apparently a separate amount was not charged for the item. Defendants quote section 2106, subdivision (1) of the California Uniform Commercial Code for the proposition that “[a] ‘sale’ consists in the passing of title from the seller to the buyer for a price.” Although that definition expressly applies only to the California Uniform Commercial Code, both parties agree it is a reasonable general definition. (See Merriam-Webster‘s Collegiate Dict. (10th ed. 2001) p. 1028 [defining a “sale” as “the transfer of ownership of and title to property from one person to another for a price“].) Employing that definition, defendants assert that plaintiff‘s evidence does not show that foie gras was provided for a price.
We find guidance in the California Supreme Court‘s recent decision in Ennabe v. Manosa (2014) 58 Cal.4th 697 [168 Cal.Rptr.3d 440, 319 P.3d 201]. There, the court applied
In interpreting the statute, Ennabe noted it was unclear whether a rule of liberal or strict construction was applicable, because both rules applied under different principles of statutory interpretation. (Ennabe, supra, 58 Cal.4th at pp. 713-714Ennabe stated, the “broad definition of a sale shows the Legislature intended the law to cover a wide range of transactions involving alcoholic beverages: a qualifying sale includes ‘any transaction’ in which title to an alcoholic beverage is passed for ‘any consideration.’ (Italics added.) Use of the term ‘any’ to modify the words ‘transaction’ and ‘consideration’ demonstrates the Legislature intended the law to have a broad sweep and thus include both indirect as well as direct transactions.” (Ennabe, at p. 714Ennabe, at p. 715.)
Ennabe cited with approval a 1985 Attorney General opinion that is more analogous to the present case. (Ennabe, supra, 58 Cal.4th at pp. 716-717.) In that opinion, the California Attorney General interpreted liquor licensing laws with respect to commercial enterprises that offer “complimentary” alcoholic beverages to paying customers who purchase another good or service. (Offer of “Complimentary” Alcoholic Beverage is “Sale,” 68 Ops.Cal.Atty. Gen. 263 (1985) (Opinion No. 85-701).) The Attorney General was asked, “May the operator of a commercial enterprise who does not have an alcoholic beverage license legally offer and provide ‘complimentary’ alcoholic beverages to any interested adult guest, customer or passenger of the business or service, without specific charge while at the same time charging for the product provided or the services rendered?” (Id. at p. 263.) Considering analogous out-of-state authority, the Attorney General concluded that “complimentary” alcohol is in fact “sold,” even though the operators do not charge additional amounts to customers who elect to consume alcohol. (Id. at pp. 265–267.) As the opinion explained, ” ‘It is wholly immaterial that no specific price is attached to those articles separately.‘... [T]he furnishing of the beverages, although denominated ‘complimentary‘, are for a consideration and constitute a sale within the meaning of California‘s Alcoholic Beverage Control Act.”
Under Ennabe and Opinion No. 85-701, La Toque‘s serving of foie gras as part of a tasting menu constituted a sale of foie gras. Plaintiff‘s investigator‘s decision to order and agreement to pay the specified price for the tasting menu was the consideration offered for the entirety of the food served, including the foie gras. (H. S. Crocker Co., Inc. v. McFaddin (1957) 148 Cal.App.2d 639, 644 [307 P.2d 429] (H. S. Crocker Co.) [“The ‘price’ is the consideration passing from the buyer to the seller for the latter‘s interest in the thing sold.“].) Under the investigator‘s averments, the foie gras served as part of the menu was “sold” to him as much as any other part of the tasting menu. Defendants present no reason in logic or the law why we should conclude otherwise. Defendants assert that “giving free foie gras to customers who purchased specific meals at the normal price was not a ‘sale.’ ” It appears they contend not all of the patrons who ordered the tasting menu received foie gras, despite paying the same amount as the investigator. However, regardless of whether other patrons paid the same amount without receiving foie gras, the investigator‘s averments show the receipt of foie gras was part of the tasting menu offered to him prior to his decision to order it. Thus, the foie gras was part of the property he was offered for the price he agreed to pay. Regardless of whether other patrons received foie gras on a random basis without a prior agreement, the investigator‘s averments show he was “sold” foie gras as part of the tasting menu. Neither does the server‘s characterization of the foie gras as a “gift” on two of the occasions change the analysis, when the investigator was led to understand that he could only obtain the “gift” by purchasing the tasting menu. As in Ennabe and Opinion No. 85-701, it is ” ’ “immaterial that no specific” and separate price was attached to the foie gras; the furnishing of the foie gras, even if characterized as a gift, was ‘for a consideration and constitute[d] a sale within the meaning of’ Section 25982. (Ennabe, supra, 58 Cal.4th at p. 717.)12
By analogy to Ennabe, supra, 58 Cal.4th 697, and Opinion No. 85-701,13 we construe the term “sold” in Section 25982 to encompass serving foie gras as part of a tasting menu, regardless of whether there is a separate charge for the foie gras, whether it is listed on the menu, and whether it is characterized as a “gift” by the restaurant. Plaintiff has shown a probability of prevailing on its UCL claim based on violation of Section 25982.
DISPOSITION
The trial court‘s order is affirmed. Costs on appeal are awarded to respondents.
Jones, P. J., and Bruiniers, J., concurred.
Appellants’ petition for review by the Supreme Court was denied June 10, 2015, S225790.