In response, Defendants, pursuant to section 425.16 of the Code of Civil Procedure,
On appeal, Plaintiff argues that Defendants' alleged misconduct is not protected activity under the anti-SLAPP statute and, even if it were, Plaintiff presented the trial court with sufficient evidence to establish a probability of prevailing on the merits of its claims. In addition, Plaintiff argues that our decision in a prior appeal involving DAS's anti-SLAPP motion ( Optional v. DAS Corp. (2014)
BACKGROUND
Plaintiff is a Korean venture capital firm, whose investors included DAS. ( Optional I , supra , 222 Cal.App.4th at pp. 1392-1393,
I. The underlying lawsuits
A. THE STATE COURT ACTION
In May 2003, DAS sued the Kim parties and others in California state court (the state court action), alleging, among other things, fraud, breach of contract, and breach of fiduciary duty. ( Optional I , supra , 222 Cal.App.4th at pp. 1392-1393,
B. THE FEDERAL FORFEITURE ACTION
Beginning in 2004, the United States Government, based on the conduct of the Kim parties in running Optional, commenced a series of forfeiture proceedings in California federal district court that were later consolidated into one proceeding (the federal forfeiture action). ( Optional I , supra , 222 Cal.App.4th at pp. 1393-1394 & fn. 3,
In March 2007, the United States District Court granted the Kim parties' summary judgment motion against the United States government in the federal forfeiture action, a decision the Ninth Circuit affirmed in 2008, thereby extinguishing the United States government's forfeiture claim and the government freeze on the Credit Suisse account. ( Optional I , supra ,
In October 2009, the federal district court granted summary judgment in favor of the Kim parties on all remaining properties, resulting in the dismissal of DAS's and Plaintiff's claims. Both DAS and Plaintiff appealed.
C. PLAINTIFF'S FEDERAL COURT ACTION
In 2004, Plaintiff filed a lawsuit in federal district court in California against the Kim parties and Alexandria seeking damages for fraud and conversion based on the looting of Optional (Plaintiff's federal court action). ( Optional I , supra ,
In 2008, the jury returned a verdict in Plaintiff's federal court action, finding that the Kim parties and Alexandria converted approximately $15.5 million from Optional. ( Optional I , supra ,
In April 2007, after the Kim parties won their summary judgment motion against the United States government in the federal
E. A CONFLUENCE OF EVENTS IN 2010-2011
During the period 2010-2011, a number of events occurred in rapid succession in the underlying proceedings that would give rise to Plaintiff's claims below.
In November 2010, the parties to the state court action, through private mediation, reached a confidential settlement. ( Optional I , supra ,
In December 2010, funds became available to fund the settlement in the state court action. Shortly after the parties to the state court action had settled their dispute, the Swiss investigating magistrate was informed of the settlement. ( Optional I , supra ,
Also, in December 2010, the Ninth Circuit reversed and reinstated both DAS's and Plaintiff's claims in the federal forfeiture action. One month later, in January 2011, the Ninth Circuit reinstated Plaintiff's recovery on its conversion claim. ( Optional I , supra ,
In May 2011, with its restored judgment against the Kim parties, Plaintiff sought a contempt order against DAS and its counsel (attorneys from both Parker and Akin), arguing, among other things, that the settlement in the state court action was "designed to thwart [the federal district court's] jurisdiction and deprive Optional of its opportunity to pursue its claims" on the funds in the Credit Suisse account. Plaintiff asked the federal district court to order the return of the funds from Credit Suisse account.
In June 2011, the federal district court denied Plaintiff's requests. While the district court recognized that DAS's conduct had, in effect, "bypassed [its] in rem jurisdiction over the Credit Suisse accounts," neither DAS nor its
In November 2011, the district court, over Plaintiff's objection, dismissed DAS from the federal forfeiture action.
II. Plaintiffs' claims against Defendants
On December 1, 2011, Plaintiff filed its initial complaint in the action below. Plaintiff alleged that DAS, Defendants, and various other individuals and entities, including the United States government, "agreed on a common plan ... to fraudulently transfer 13 million dollars from the Credit Suisse Bank account to DAS and thereby hinder, delay or defraud OPTIONAL in recovering that property." Although Plaintiff did not provide any details about the formation and operation of the alleged conspiracy, it alleged that the DAS Freeze was a result of the conspiracy and that Parker had made misleading representations to the federal district court and to the Ninth Circuit.
The trial court granted DAS's anti-SLAPP motion and Plaintiff appealed. ( Optional I , supra , 222 Cal.App.4th at pp. 1396-1397,
In March 2014, following our decision in Optional I , supra ,
On May 28, 2014, Parker filed its anti-SLAPP motion. In its motion, Parker stressed that it was counsel of record for DAS in the federal forfeiture action and, as a result, it had nothing to do with the settlement in the state court action or with the Swiss proceedings connected with the DAS Freeze or with the transfer of funds from the Credit Suisse account to DAS. Moreover, as DAS's counsel in the federal forfeiture action, Parker argued that its actions were protected activity under the anti-SLAPP statute and that Plaintiff could not show a probability of prevailing on any of its claims due to, among other things, the litigation privilege. Parker's motion was supported by, inter alia, a declaration from one of the Parker attorneys who represented DAS in the federal forfeiture action.
On August 5, 2014, Akin, which Plaintiffs had brought back into the lawsuit, filed a second anti-SLAPP motion. Akin argued that Plaintiff's claims against it in the FAC were premised on Akin's provision of legal services to DAS in the state court action including the negotiated settlement of that action, actions which were protected by the anti-SLAPP statute and the litigation privilege, among other things. Although Akin's motion was not supported by a declaration from any of its attorneys who represented DAS in the state court action, Akin submitted court records from that case establishing that it was counsel of record for DAS in the state court action at or around the time of the settlement.
Parker and Akin joined in each other's motions.
IV. Plaintiffs' oppositions
Plaintiff opposed both motions. In opposition to Defendants' motions, Plaintiff argued that, based on our holding in
Consistent with its law of the case argument, Plaintiff relied on evidence that concerned its claims against DAS. For example, in the lone declaration filed in support of Plaintiff's oppositions, the evidentiary focus is on establishing Plaintiff's right to the funds in the Credit Suisse account, not on identifying Defendants' conduct in support of the alleged conspiracy. To the extent that Plaintiff identified any specific acts of alleged misconduct by the Defendants, it was limited to certain purported omissions and misrepresentations by Defendants in the federal forfeiture action. More specifically, Plaintiff submitted an order from the district court in the federal forfeiture
On January 27, 2015, the trial court granted both of Defendants' motions. However, based on certain comments made during the hearing on the motions, the judge was subsequently disqualified. As a result, the ruling in favor of the Defendants was vacated without prejudice to the parties re-litigating the motions.
In February 2016, after the case had been reassigned to a different judge, the Defendants rescheduled their motions. The Defendants also sought leave to file supplemental briefs addressing new case law. The new judge granted Defendants' request and granted Plaintiff the opportunity to fully brief its opposition to the motions to address the new authorities relied upon by Defendants.
In its supplemental oppositions, Plaintiff continued to argue, based on our prior holding, that because DAS's conduct was not protected under the anti-SLAPP statute neither was Defendants' conduct. And, as before, Plaintiff's evidence was devoted primarily to reproving its successful conversion claim in the federal court action and thereby its right to the funds in the Credit Suisse account. However, Plaintiff also augmented its prior evidentiary submissions about Defendants' purported failure to timely disclose to the district court overseeing the federal forfeiture action the state court settlement and resulting transfer of funds to DAS. For example, in addition to the district court's order denying the contempt motions, Plaintiff included
In April 2016, the trial court granted Defendants' motion, observing to Plaintiff, "You might allege all these things [conspiracy, etc.], but where is the evidence?" Plaintiff timely appealed from both orders.
DISCUSSION
I. Optional I , supra ,
Plaintiff contends on appeal, as it did below, that Optional I , supra ,
" 'The law of the case doctrine states that when, in deciding an appeal, an appellate court "states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout its subsequent progress, both in the lower court and upon subsequent appeal." ' " ( Quackenbush v. Superior Court (2000)
The law of the case doctrine does not apply here because our prior decision involved different parties and different issues. The core issue in Optional I , supra ,
II. The anti-SLAPP statute and applicable legal principles
A. SECTION 425.16
"A SLAPP is a civil lawsuit that is aimed at preventing citizens from exercising their political rights or punishing those who have done so. ' "While SLAPP suits masquerade as ordinary lawsuits such as defamation and interference with
"In 1992, out of concern over 'a disturbing increase' in these types of lawsuits, the Legislature enacted section 425.16, the anti-SLAPP statute. ( § 425.16, subd. (a).) The statute authorized the filing of a special motion to strike to expedite the early dismissal of these unmeritorious claims. ( § 425.16, subds. (b)(1), (f).) To encourage 'continued participation in matters of public significance' and to ensure 'that this participation should not be chilled through abuse of the judicial process,' the Legislature expressly provided that the anti-SLAPP statute 'shall be construed broadly.' ( § 425.16, subd. (a).)" ( Simpson , supra ,
The anti-SLAPP statute "provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity." ( Baral v. Schnitt (2016)
B. EVALUATING ANTI-SLAPP MOTIONS
In ruling on a motion under section 425.16, the trial court engages in what is now a familiar 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 required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success." ( Baral , supra ,
1. Step one: "arising from" protected activity
The moving party's burden at step one is to show "the challenged cause of action arises from protected activity." ( Rusheen v. Cohen (2006)
In other words, "it is not enough to establish that the action was filed in response to or in retaliation for a party's exercise of the right to petition. [Citations.] Rather, the claim must be based on the protected petitioning activity." ( Bergstein v. Stroock & Stroock & Lavan LLP (2015)
a. The principal thrust/ gravamen analysis
In determining whether a cause of action is based on protected activity, we "examine the principal thrust or gravamen of a plaintiff's cause of action to determine whether the anti-SLAPP statute applies." (
In determining "whether the challenged claims arise from acts in furtherance of the defendants' right of free speech or right of petition under one of the categories set forth in section 425.16, subdivision (e).... '[w]e examine the principal thrust or gravamen of a plaintiff's cause of action to determine whether the anti-SLAPP statute applies.' " ( Finton Construction, Inc. v. Bidna & Keys, APLC (2015)
Consequently, "[i]n deciding whether the 'arising from' requirement is met, a court considers 'the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.' ( § 425.16, subd. (b).)" ( City of Cotati v. Cashman , supra ,
A defendant's burden on the first prong is not an onerous one. A defendant need only make a prima facie showing that plaintiff's claims arise from defendant's constitutionally protected free speech or petition rights. (See ( Governor Gray Davis Com. v. American Taxpayers Alliance (2002)
2. Step two: probability of prevailing
"If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success." ( Baral , supra ,
This second step has been described as a " 'summary-judgment-like procedure.' " ( Baral , supra ,
C. STANDARD OF REVIEW
"On appeal, we review the trial court's decision de novo, engaging in the same two-step process to determine, as a matter of law, whether the defendant met its initial burden of showing the action is a SLAPP, and if so, whether the plaintiff met its evidentiary burden on the second step." ( Tuszynska v. Cunningham , supra , 199 Cal.App.4th at pp. 266-267,
III. The gravamen of Plaintiffs' claims
It is well established that the protection of the anti-SLAPP statute extends to lawyers and law firms engaged in litigation-related activity. As our Supreme Court explained, " 'Any act' " under section 425.16, subdivision (b)(1)"includes communicative conduct such as the filing, funding, and prosecution of a civil action. [Citation.] This includes qualifying acts committed by attorneys in representing clients in litigation." ( Rusheen v. Cohen , supra ,
In fact, courts have adopted "a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16." ( Kashian v. Harriman (2002)
As we observed previously, "conduct is not automatically protected merely because it is related to pending litigation; the conduct must arise from the litigation." ( Optional I , supra ,
Here, in contrast to Paul , supra ,
In short, the gravamen of Plaintiff's claims against Defendants is based on protected activity, namely Defendants' representation of DAS in litigation
IV. Plaintiff did not show a probability of prevailing on its claims
Defendants contend that Plaintiff cannot show a probability of success because its claims are barred by the litigation privilege of Civil Code section 47, which provides: "A privileged publication or broadcast is one made: [¶] ... [¶] (b) In any ... (2) judicial proceeding." The litigation privilege is "relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense a plaintiff must overcome to demonstrate a probability of prevailing." ( Flatley , supra ,
A. THE LITIGATION PRIVILEGE
"The principal purpose of the Civil Code section 47 litigation privilege ' "is to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions. [Citations.]" [Citation.] The privilege promotes effective judicial proceedings by encouraging " 'open channels of communication and the presentation of evidence' " without the external threat of liability.
The litigation privilege applies "to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action." ( Silberg v. Anderson (1990)
The scope of the litigation privilege is illustrated by a trio of relatively recent cases: Bergstein , supra ,
In Bergstein , supra ,
In Finton Construction , supra ,
In Contreras , supra ,
B. THE LITIGATION PRIVILEGE DEFEATS PLAINTIFF'S CLAIMS
Here, Defendants met their burden of showing that the litigation privilege applies because the communicative conduct at issue-as established by the pleadings and documents submitted in connection with motions-was made in judicial or quasi-judicial proceedings (i.e., the state court action, the federal forfeiture action, and the private mediation in the state court action) by attorneys for DAS to achieve the object of the proceedings and had some connection or logical relation to the action. As with the plaintiffs in Bergstein , supra ,
Plaintiff argues that, while all of the specific conduct at issue may have occurred in connection with judicial or quasi-judicial proceedings, a jury could infer Defendants' participation in an illegal conspiracy to convert Plaintiff's funds in the Credit Suisse account. For example, Plaintiff places considerable weight on the fact that while Parker learned of the state court settlement in November 2010 it did not disclose the settlement and the resulting transfer to DAS to the federal district court until several month later. According to Plaintiff, "an unbiased fact-finder could reasonably infer from Parker's conduct, relationship, interest and activities that once it learned of the plan [to transfer the funds from the Credit Suisse account to DAS], it not only tacitly consented and acquiesced in it but aided DAS and the Kims in the concealment of the transfer of the funds from Optional."
Plaintiff's argument is unpersuasive. As noted above, the court's analysis under the second step is a " 'summary-judgment-like procedure.' " ( Baral , supra ,
In short, " '[a]n anti-SLAPP motion is an evidentiary motion.' " ( Contreras , supra ,
Since the litigation privilege defeats Plaintiff's claims as a matter of law, we affirm the judgment below.
DISPOSITION
The orders are affirmed. The parties are to bear their own costs on appeal.
We concur:
CHANEY, Acting P.J.
LUI, J.
Notes
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
SLAPP is an acronym for "strategic lawsuit against public participation." (Equilon Enterprises v. Consumer Cause, Inc. (2002)
As we noted in our earlier opinion, "[t]his case involves an extremely tangled thicket of legal proceedings in both state and federal court, as well as Switzerland." (Optional I, supra,
Gravamen is generally understood to mean "the substantial point or essence of a claim, grievance or complaint." (Black's Law Dict. (10th ed. 2014) p. 817, col. 1; Garner, Dict. of Modern Legal Usage (2d ed. 1995) p. 391 ["the point of a complaint or grievance"].)
In the wake of Baral, supra,
First, Sheley's wholesale rejection of the principal thrust or gravamen analysis is based largely on an extrapolation from Baral, supra,
Second, Sheley's rejection appears to be based, in part, on an overbroad reading of Baral, supra,
To avoid confusion, our high court in Baral, supra,
Plaintiff, relying on Flatley v. Mauro(2006)
The litigation privilege applies not only to Plaintiff's claims for conversion and fraudulent transfer, but also to Plaintiff's third cause of action, violation of Penal Code section 496, because the gravamen of Plaintiff's claim against Defendants is based solely on their communicative conduct in ongoing litigation. (See Ribas v. Clark(1985)
In light of our holding with respect to the applicability and effect of the litigation privilege, we decline to address Defendants' other arguments for why Plaintiff could not show a probability of prevailing.