Six4Three v. FacebookSix4Three v. Facebook
In this consolidated appeal, Six4Three challenges the trial court‘s orders granting defendants’ anti-SLAPP motions,2 as well as its award of $683,417.50 in attorney fees to defendants as the prevailing parties on the anti-SLAPP motions.
Six4Three argues that the trial court (1) abused its discretion in considering Facebook‘s untimely anti-SLAPP motion; (2) erred in finding the commercial speech exception inapplicable; (3) erred in finding Six4Three had failed to carry its burden of showing a probability of prevailing on its claims; (4) erred in denying Six4Three‘s discovery motion; and (5) abused its discretion in awarding attorney fees for time billed outside of the anti-SLAPP motions. We disagree and affirm.
BACKGROUND
We begin with a general overview of the factual and procedural background of this case. Additional background relevant to each of Six4Three‘s specific arguments is contained in the respective discussion sections, post.
This Action
Six4Three filed an action against Facebook alone in April 2015. Instead of filing an anti-SLAPP motion, however, Facebook demurred to the complaint. Six4Three responded by filing an amended complaint adding a cause of action. Facebook again demurred, and the trial court sustained the demurrer with leave to amend. Six4Three filed a second amended complaint and
Six4Three then moved for leave to file a third amended complaint adding new causes of action and naming individual defendants. The trial court granted leave as to the new causes of action, but not the new defendants. Six4Three proceeded to file a third amended complaint, but also petitioned this court for a writ of mandate regarding the addition of individual defendants. Facebook demurred to the third amended complaint, which was sustained only as to some of the causes of action. Facebook moved for summary adjudication on limitation of damages, which was granted as to some causes of action.
Fourth Amended Complaint
Six4Three filed its fourth amended complaint in November 2017. It asserted eight causes of action against Facebook: (1) violation of California‘s unfair competition law (UCL) (
The fourth amended complaint alleged as follows: Facebook operates a social network that enables users to connect and share information with their friends and family. In 2007, Facebook launched “Facebook Platform,” which made application program interfaces (APIs) available for developers to build apps that used Facebook data. Facebook and its CEO Mark Zuckerberg made various statements regarding Facebook Platform related to developer integration with Facebook data and the opportunity for developers to build apps for Facebook users.
In 2010, Facebook introduced “Graph API,” which “streamlined and formalized” developer access to Facebook data. Graph API permitted developers to build apps that could access Facebook data from not only users who downloaded the app, but also from those users’ friends (unless their privacy settings were set to block such access).
In 2012, Six4Three developed Pikinis using image recognition technology to allow its users to search for photos posted on Facebook of people in bathing suits. Pikinis required use of Facebook‘s Graph API, as it enabled users to “reduce time” spent searching by “automatically finding” bathing suit photos accessible from friends through Facebook‘s network. According to
Six4Three engaged contractors to develop a list of prospective customers, mostly students on college campuses. It also purchased advertising from Facebook to “test” various advertising campaigns. Six4Three conducted a “soft launch” or “trial period” for Pikinis, and ultimately received some paid subscriptions. According to Six4Three, however, Facebook engaged in a “bait-and-switch” scheme by deciding to restrict access to Graph API data by “potentially competitive” apps in order to grow Facebook‘s business and advertising revenue.
In January 2015, Facebook sent an email to Six4Three stating that Facebook would be ending “third-party access to the full friends list and friends permissions,” including access to friend photos. Six4Three alleged that Pikinis could not function without such access. In April 2015, Facebook restricted developer access to Graph API data, including photos data.
The fourth amended complaint sought damages, declaratory relief regarding Facebook‘s conduct, a permanent injunction prohibiting Facebook‘s interference with Six4Three‘s contracts or prospective economic relations, and a “permanent injunction requiring Facebook to restore Developer access to the Graph API data, including reading the full friends list, friends permissions and newsfeed APIs, and all other data and APIs available prior to Facebook‘s removal of the data on April 30, 2015.”
Facebook‘s Anti-SLAPP Motion
Facebook filed an anti-SLAPP motion to strike the fourth amended complaint. While this motion was pending, we issued a writ of mandate compelling the trial court to grant Six4Three leave to add the six individual defendants.
Fifth Amended Complaint
The fifth amended complaint asserted seven causes of action against the individual defendants—the same claims asserted against Facebook in the fourth amended complaint, except for the breach of contract claim. The fifth amended complaint also largely repeated the allegations of the fourth amended complaint, but added allegations regarding conspiracy by the individual defendants to direct and participate in Facebook‘s “bait-and-switch” scheme to restrict access to its Graph API data.
Trial Court‘s Initial Rulings
The trial court initially denied Facebook‘s anti-SLAPP motion as untimely, declining to exercise its discretion to consider the merits. But the trial court granted the individual defendants’ anti-SLAPP motion, treating it as unopposed because Six4Three had incorporated by reference its briefs opposing Facebook‘s motion in violation of the 15-page limit under California Rules of Court, rule 3.1113, subdivision (d).
Facebook and Six4Three appealed.
Prior Appeal
We affirmed in part but reversed in part, concluding the trial court acted within its discretion in declining to consider Facebook‘s untimely motion but abused its discretion in granting the individual defendants’ motion based on Six4Three‘s violation of the page-limit rule. (Six4Three, LLC v. Facebook, Inc. (Sept. 30, 2019, A154890, A155334) [nonpub. opn.].)
We explicitly stated that if the trial court granted the individual defendants’ anti-SLAPP motion on remand, it was not precluded from reconsidering its denial of Facebook‘s motion. (Six4Three, LLC v. Facebook, Inc., supra, A154890, A155334.)
Trial Court‘s Subsequent Rulings
After remand, the trial court granted the individual defendants’ anti-SLAPP motion and, upon reconsideration, granted Facebook‘s motion. It found that defendants had met their initial burden to demonstrate the causes of action arose from protected activity, and Six4Three had failed to sustain its ensuing burden to demonstrate a probability of prevailing on its claims. The trial court also denied Six4Three‘s motion for certain discovery under the anti-SLAPP statute.
Six4Three appealed the orders granting both anti-SLAPP motions.
Attorney Fee Award
Defendants’ anti-SLAPP motions requested an order awarding them attorney fees under
DISCUSSION
The anti-SLAPP statute is “designed to protect defendants from meritless lawsuits that might chill the exercise of their rights to speak and petition on matters of public concern.” (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 883–884.) Under the statute, a defendant may file a special motion to strike claims “arising from any act of that person in furtherance of the person‘s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue . . . .” (
Resolution of an anti-SLAPP motion requires the court to engage in the now familiar two-step process. “First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) If the court finds a showing has been made under the first step, “it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Ibid.)
Six4Three presents five challenges to the trial court‘s rulings in this appeal. First, it argues that the trial court abused its discretion in considering Facebook‘s untimely anti-SLAPP motion. Second, Six4Three argues that the trial court erred on the first step of the anti-SLAPP analysis in finding inapplicable the commercial speech exception to protected activity. Third, it argues the trial court erred on the second step of the anti-SLAPP analysis in finding that Six4Three failed its burden to show a probability of prevailing on its claims. Fourth, it argues that the trial court erred in denying its motion for discovery under the anti-SLAPP statute. Fifth, Six4Three argues that the trial court abused its discretion in awarding attorney fees for time billed outside of the anti-SLAPP motions. We address, and reject, each argument in turn.
I. Consideration of Untimely Anti-SLAPP Motion
A. Additional background
There is no dispute that Facebook‘s anti-SLAPP motion was filed after the statutory deadline. And, as detailed above, the trial court initially declined to consider the untimely motion.
On remand, after the trial court found the individual defendants had met their burden to demonstrate protected activity and Six4Three had not sustained its burden of demonstrating a probability of prevailing on the merits of its claims, the trial court stated: “In light of the foregoing and in its discretion, the Court will reconsider, sua sponte, its order denying Defendant Facebook‘s Inc.‘s Special Motion to Strike . . . and will set the matter for a hearing on the merits.” It then quoted the statement in our opinion regarding reconsideration.
B. Analysis
First, Six4Three contends that the trial court “offered no explanation at all” for its decision. The record refutes this contention. In granting the individual defendants’ anti-SLAPP motion, the trial court made clear why it was exercising its discretion to address Facebook‘s motion on the merits: it found the individual defendants had met their threshold burden as to protected activity and that Six4Three failed its subsequent burden to establish the
Second, Six4Three relies on Platypus Wear to argue that the trial court exceeded the bounds of its discretion because Facebook filed its anti-SLAPP motion years after the action was filed, and after Facebook elected to respond to the original and amended complaints by demurrers and a motion for summary adjudication. Platypus Wear is distinguishable on its facts.
In that case, the plaintiff filed a complaint in 2004 and the defendant answered the complaint two months later. (Platypus Wear, supra, 166 Cal.App.4th at p. 776.) The matter proceeded and in late 2006, the trial court set discovery cut-off and trial dates. (Id. at p. 777.) The parties completed a “substantial amount” of discovery. (Id. at p. 784.) Three months before the trial date, the defendant filed an ex parte application to allow him to file an anti-SLAPP motion and continue the trial. (Id. at p. 777.) Platypus Wear held that the trial court abused its discretion in granting the application. (Id. at p. 780.) It explained that, because the discovery cut-off date had already passed and trial was scheduled to begin a week after the hearing on the anti-SLAPP motion, “one of the basic purposes of the anti-SLAPP statute—to allow for the prompt resolution of disputes before significant pretrial discovery expenses are incurred—could not be met in this case.” (Id. at p. 784.)
Here, unlike Platypus Wear, Facebook did not file its motion after the discovery cut-off or on the cusp of trial. More importantly, the trial court exercised its discretion to consider Facebook‘s untimely motion after it had granted the individual defendants’ timely motion based on largely the same allegations and same causes of action. That decision served “both judicial economy and the public policy behind the anti-SLAPP statute.” (Platypus Wear, supra, 166 Cal.App.4th at p. 784.)
II. Anti-SLAPP First Step: Protected Activity
A. Additional background
The first step of the anti-SLAPP analysis required defendants to demonstrate that the causes of action in the fourth and fifth amended complaints arose from activity protected by the anti-SLAPP statute. (Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at p. 67.) Here, however, Six4Three does not challenge defendants’ showing on this initial burden. Instead, Six4Three argues that the trial court erred in rejecting application of the “commercial speech” exception to defendants’ asserted protected activity.
B. Analysis
In 2013, the Legislature enacted section 425.17 to exempt certain actions from the anti-SLAPP statute, in light of concerns with “a disturbing abuse” of the law. (
The commercial speech exception has four elements: “(1) the cause of action is against a person primarily engaged in the business of selling or leasing goods or services; (2) the cause of action arises from a statement or conduct by that person consisting of representations of fact about that person‘s or a business competitor‘s business operations, goods, or services; (3) the statement or conduct was made either for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person‘s goods or services or in the course of delivering the person‘s goods or services; and (4) the intended audience for the
1. The Parties’ Preliminary Contentions
Six4Three asserts that the trial court erred by requiring Six4Three to present evidence of the elements of the commercial speech exception, rather than allowing Six4Three to rely on its allegations. We disagree. Simpson Strong-Tie makes clear that Six4Three has the burden to prove, not just allege, applicability of the commercial speech exception. (Simpson Strong-Tie, supra, 49 Cal.4th at p. 23.) The California Supreme Court explained that because the commercial speech exception is “essential” to opposing an anti-SLAPP motion,
None of the cases on which Six4Three relies supports a contrary conclusion. Those cases simply confirm that the commercial speech exception relates to whether activity is protected (the first anti-SLAPP step), and not whether a plaintiff is likely to prevail on the merits of its claims (the second anti-SLAPP step). (Neurelis, Inc. v. Aquestive Therapeutics, Inc. (2021) 71 Cal.App.5th 769, 786; JAMS, Inc. v. Superior Court (2016) 1 Cal.App.5th 984, 993 (JAMS).) And although the appellate court in Xu v. Huang (2021) 73 Cal.App.5th 802, 815–816, considered some allegations in analyzing the third element of the commercial speech exception (purpose of the statement or conduct), that decision does not undermine the California Supreme Court‘s direction that Six4Three bears the burden of establishing the four elements with evidence, not allegations alone. (Simpson Strong-Tie, supra, 49 Cal.4th at p. 26.)
Facebook, for its part, attempts to characterize the commercial speech exception as a “comparative advertising” exception. In FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, 147 (FilmOn), the California Supreme Court stated that section 425.17, subdivision (c) “exempts ‘only a subset of commercial speech‘—specifically, comparative advertising.” But in FilmOn, the parties agreed that the speech at issue did not fall within 425.17, subdivision (c) and in commenting on the commercial speech exception, the court was simply clarifying that not all “commercially oriented statements” fall within section 425.17, subdivision (c) (and therefore outside the reach of the anti-SLAPP statute). (FilmOn, at pp. 147–148 & fn. 4.) Rather than narrowing application of the exception to the single context of comparative advertising, given “the Legislature‘s decision to explicitly require consideration of certain contextual factors—like speaker, audience, and purpose,” application of the exception should be directed by its four statutory elements. (Id. at p. 148; Neurelis, Inc. v. Aquestive Therapeutics, Inc., supra, 71 Cal.App.5th at pp. 787–788 & fn. 5 [rejecting argument that commercial speech exception applies only to comparative advertising and noting that FilmOn “was not considering whether certain speech fell under subdivision (c)” when it mentioned comparative advertising in the context of “interpreting the ‘catchall’ provision of section 425.16, subdivision (e)(4)“].) We therefore reject Facebook‘s “comparative advertising” gloss on the commercial speech exception and instead, in subsequent sections of this opinion, focus on the elements of the exception as set forth in Simpson Strong-Tie, supra, 49 Cal.4th at page 30.
We do, however, agree with Facebook‘s preliminary contention that Six4Three has forfeited any argument that evidence regarding Facebook‘s business can be imputed to the individual defendants for the purpose of establishing the elements of the commercial speech exception as to these individuals. Six4Three failed to include any such argument or authority in its opening appellate brief, instead including a single conclusory sentence that the evidence and arguments as to Facebook “fully apply” to the individual defendants. (Cal. Rules of Court, rule 8.204(a)(1)(B) [each brief must support each point with argument and, if possible, citation of authority]; OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 844, fn. 3 [contentions in opening appellate brief forfeited for failure to present argument and appropriate legal authorities].)
While the plain text of section 425.17, subdivision (c) makes clear that the commercial speech exception can apply to an individual “person,” not just a business entity, it also requires that the commercial speech be ”about that person‘s or a business competitor‘s business.” (
In any event, even if Six4Three had not forfeited the argument, we are not persuaded that the commercial speech exception is applicable to the individual defendants based on Six4Three‘s showing as to Facebook because, as explained below, we conclude that Six4Three failed to meet its burden on the second element of the exception. Because failure on this element is dispositive, we need not address the other elements of the exception.
2. Element Two – Representations of Fact
The second element of the commercial speech exception required Six4Three to demonstrate that its causes of action “aris[e] from” statements or conduct that consist of “representations of fact” about Facebook‘s business operations or services. (
We agree that these are representations of fact about Facebook‘s business, but the remaining question is whether Six4Three has demonstrated that each of its claims “aris[es] from” such representations. (
This question focuses on whether a defendant‘s activity ” ‘gives rise to his or her asserted liability.’ ” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1063, quoting Navellier v. Sletten (2002) 29 Cal.4th 82, 92.) As the California Supreme Court has explained, the only means to satisfy this “arising from” requirement is ” ‘to demonstrate that the defendant‘s conduct by which plaintiff claims to have been injured falls within one of the [statutory] categories.’ ” (Park, at p. 1063.) Our Supreme Court has applied this principle to the “arising from” language in section 425.17, subdivision (c). (See Simpson Strong-Tie, supra, 49 Cal.4th at p. 30 [claims alleging liability and harm based on statements in lawyer advertisement “impl[ying] that [plaintiff‘s products] are defective” and stating that a lawyer would investigate potential claims do not satisfy “arising from” requirement for commercial speech exception].)
Here, Six4Three repeatedly alleged that Facebook engaged in a “bait-and-switch” scheme—initially providing developer access to Facebook data, and later restricting that access—but its allegations of liability and harm rely
In its appellate briefing, Six4Three relied exclusively on Demetriades v. Yelp, Inc. (2014) 228 Cal.App.4th 294 (Demetriades) to argue otherwise. That case involved a restaurant operator who sued Yelp based on its allegedly false and misleading statements about its proprietary filter for customer reviews: that the filter gave consumers ” ‘the most trusted reviews,’ ” that it was ” ‘remarkable’ ” because it ” ‘takes the reviews that are the most trustworthy’ ” and ” ‘keeps the less trustworthy reviews out,’ ” and that Yelp was doing ” ‘as good a job as possible’ ” to show ” ‘the most trustworthy and useful content out there.’ ” (Id. at pp. 298–301.)
The restaurant operator alleged that these statements were misleading or untrue because Yelp‘s filter in fact suppressed trustworthy reviews and did not filter out the untrustworthy ones, and thus its filter failed to do what Yelp had represented it could do. (Demetriades, supra, 228 Cal.App.4th at pp. 299, 301.) Demetriades correctly concluded that these claims arose from “representations of fact” about Yelp‘s business. (Id. at p. 311.) But those representations were “bait” statements—there was no subsequent “switch” by Yelp. Here, unlike Demetriades, Six4Three‘s claims were not based on alleged “bait” misrepresentations about the contemporaneous accuracy or accessibility of Facebook‘s data, but on the purported “switch“: Facebook‘s later decision to restrict access to its users’ data.
At oral argument, Six4Three cited JAMS for its position that a representation of fact need not be “an affirmative or positive representation,” but can also be “an omission or half-truth.” (JAMS, supra, 1 Cal.App.5th at p. 995.) Regardless of how Six4Three attempts to characterize the alleged representations of fact here, it has still failed to demonstrate that
its causes of action arise from such representations. (
Here, unlike JAMS, the fourth amended complaint recited statements and conduct by Facebook not for their allegedly false factual assertions, but for what they allegedly promised about the future. It alleged, for example, that Facebook‘s Platform announcement in 2007 promised that developers “would have access to the ‘social graph.‘” It also alleged that Facebook‘s creation of a fund for developers in 2007 “implies a specific promise that it will support developers’ opportunity to build a compelling business on Facebook Platform” and that it is committed long-term to the stability of Facebook Platform.” But as the California Supreme Court has explained, a “promise” of what a party will do “is not a representation of fact, but an agreement to take certain actions in the future” and thus doesnot satisfy the second element of the commercial speech exception. (Simpson Strong-Tie, supra, 49 Cal.4th at p. 31.)
Nor are we persuaded by any argument that Six4Three‘s claims arise from a representation of fact by Facebook that was an “omission” or “half-truth.” (JAMS, supra, 1 Cal.App.5th at p. 995.) Again, the fourth amended complaint alleged that Facebook made various statements in 2007 regarding developer access to Facebook Platform. It alleged that Facebook released a document in 2009 describing “success stories” of applications developed on Facebook Platform. Then, in 2010, Facebook‘s Graph API permitted developers to build apps that could access Facebook data from not only users who downloaded the app, but also from those users’ friends. Six4Three also alleged that Zuckerberg made certain statements in 2011 regarding the graph and developer access.
But nothing in the fourth amended complaint suggests that these representations about developer access were omissions or half-truths when made. On the contrary, Six4Three relied on this access to develop Pikinis in 2012. Between that time and Facebook‘s decision in 2015 to restrict such access, the fourth amended complaint alleges that Facebook had internal discussions and meetings about the restriction. Six4Three has not alleged, let alone proven, any representations of fact that satisfy this element.
III. Anti-SLAPP Second Step: Probability of Prevailing on Claims
A. Additional background
The second step of the anti-SLAPP analysis required Six4Three to demonstrate a probability of prevailing on its claims in the fourth (as to Facebook) and fifth (as to the individual defendants) amended complaints. (Baral v. Schnitt (2016) 1 Cal.5th 376, 384.)
Defendants first argue that Six4Three was unable to meet this burden because its claims were barred by the Communications Decency Act (
Defendants alternatively argue that, even if section 230 did not bar the claims against them, Six4Three nonetheless failed to show a probability of prevailing on those claims. Six4Three‘s breach of contract cause of action against Facebook, for example, was based on the 2012 SRR.Section 9 of the 2012 SRR is titled “Special Provisions Applicable to Developers/Operators of Applications and Websites.” It begins: “If you are a developer or operator of a Platform application or website, the following additional terms apply to you.” It continues: “Your access to and use of data you receive from Facebook, will be limited as follows.” It lists ten provisions, one of which states: “We can limit your access to data.” Section 9 next includes various limitations regarding user content, customer support, and third party advertising. It then states: “We give you all rights necessary to use the code, APIs, data, and tools you receive from us.” Section 14 of the 2012 SRR is titled “Amendments.” It provides: “Your continued use of Facebook following changes to our terms constitutes your acceptance of our amended terms.”
Facebook revised its SRR in January 2015. It no longer included the above provisions for developers and operators of the Facebook Platform. It did,
B. Analysis
We independently review the trial court‘s ruling on the second step of the anti-SLAPP framework. (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699.) Our determination follows a “summary-judgment-like procedure,” where we consider the pleadings as well as supporting andopposing affidavits stating the facts upon which the liability or defense is based. (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192;