Cases...
ComputerXpress, Inc. v.
Jackson (2001) [ 93 Cal.App.4th 993 ]
Parallel Cite(s): 113 Cal.Rptr.2d 625
[No. E027841. Fourth Dist., Div. Two.Nov. 15, 2001.]
COMPUTERXPRESS, INC., Plaintiff and Respondent,
v.
LEE JACKSON et al., Defendants and Appellants.
(Superior Court of Riverside County, No. RIC341013,
Erik Michael Kaiser, Judge.)
(Opinion by Richli, J., with Ramirez, P.J., and Hollenhorst,
J., concurring.)
COUNSEL
Law offices of Yvonne M. Renfrew and Yvonne M. Renfrew
for Defendants and Appellants.
Best Best & Krieger, Douglas S. Phillips, G. Henry
Welles and James C. Turney for Plaintiff and Respondent.
OPINION
RICHLI, J. - Defendants appeal the denial of their motion,
pursuant to Code of Civil Procedure section 425.16 (section
425.16), to strike the complaint of ComputerXpress,
Inc. (ComputerXpress) as a “SLAPP” suit
(strategic lawsuit against public participation). The
trial court determined that none of ComputerXpress’s
claims was subject to section 425.16. Therefore, it
did not require ComputerXpress to establish a probability
of prevailing on its claims.
We agree that some of ComputerXpress’s claims
were not subject to section 425.16 and affirm the denial
of the motion to strike those claims. {Page 93 Cal.App.4th
998}However, we conclude that some of the claims were
subject to section 425.16. We further conclude ComputerXpress
did not show a probability of prevailing on those claims
and reverse the denial of the motion to strike those
claims. Finally, we conclude defendants are entitled
to recover attorney fees and costs incurred in moving
to strike the claims subject to section 425.16.
I PROCEDURAL BACKGROUND
The complaint, filed in March 2000, alleged: ComputerXpress
is a public company selling computer related products
to the public. In February 1999, when ComputerXpress
was considering a merger with businesses owned by defendants,
defendants falsely represented that their businesses
were profitable, causing ComputerXpress to incur expenses
and waste time pursuing the merger. Later, in May 1999,
defendants entered into a conspiracy to damage ComputerXpress’s
reputation and cause it economic harm. To that end,
beginning in about August 1999, defendants made numerous
false and disparaging statements about ComputerXpress
on the Internet and elsewhere to existing and potential
customers and investors, causing monetary damage to
ComputerXpress.
Based on these alleged facts, the complaint asserted
nine causes of action: (1) fraud; (2) negligent misrepresentation;
(3) negligence; (4) trade libel; (5) interference with
contractual relations; (6) interference with prospective
economic advantage; (7) abuse of process; (8) conspiracy;
and (9) injunctive relief.
On defendants’ motion to strike the complaint,
the court initially ruled the first three causes of
action were not within the scope of section 425.16,
but the remaining causes of action were. Later, however,
the court changed its mind and ruled that defendants
had not shown the remaining causes of action were within
the scope of section 425.16. Therefore, it denied defendants’
motion in its entirety, without ruling on whether ComputerXpress
had shown a probability of prevailing.
II DISCUSSION
A. Burden of Proof and Standard of Review
Section 425.16 applies to any cause of action arising
from an “‘act in furtherance of a person’s
right of petition or free speech under the United {Page
93 Cal.App.4th 999}States or California Constitution
in connection with a public issue.’” (section
425.16, subds. (b)(1), (e).) Such a claim “shall
be subject to a special motion to strike, unless the
court determines that the plaintiff has established
that there is a probability that the plaintiff will
prevail on the claim.” (Id., subd. (b)(1).) In
order to encourage participation in matters of public
significance, section 425.16 “shall be construed
broadly.” (Id., subd. (a).)
The defendant has the initial burden of making a prima
facie showing that the plaintiff’s claims are
subject to section 425.16. (Braun v. Chronicle Publishing
Co. (1997) 52 Cal.App.4th 1036, 1042 [61 Cal.Rptr.2d
58]; Dixon v. Superior Court (1994) 30 Cal.App.4th 733,
742 [36 Cal.Rptr.2d 687].) If the defendant makes that
showing, the burden shifts to the plaintiff to establish
a probability of prevailing, by making a prima facie
showing of facts which would, if proved, support a judgment
in the plaintiff’s favor. (Kyle v. Carmon (1999)
71 Cal.App.4th 901, 907 [84 Cal.Rptr.2d 303].) Whether
section 425.16 applies and whether the plaintiff has
shown a probability of prevailing are both reviewed
independently on appeal. (Mission Oaks Ranch, Ltd. v.
County of Santa Barbara (1998) 65 Cal.App.4th 713, 721
[77 Cal.Rptr.2d 1], disapproved on another point in
Briggs v. Eden Council for Hope & Opportunity (1999)
19 Cal.4th 1106, 1123, fn. 10; Monterey Plaza Hotel
v. Hotel Employees & Restaurant Employees (1999)
69 Cal.App.4th 1057, 1064 [82 Cal.Rptr.2d 10].)
B. Claims Subject to Section 425.16
As used in section 425.16, an act in furtherance of
a person’s right of petition or free speech includes:
“(1) any written or oral statement or writing
made before a legislative, executive, or judicial proceeding,
or any other official proceeding authorized by law;
(2) any written or oral statement or writing made in
connection with an issue under consideration or review
by a legislative, executive, or judicial body, or any
other official proceeding authorized by law; (3) any
written or oral statement or writing made in a place
open to the public or a public forum in connection with
an issue of public interest; (4) or any other 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.” (section425.16, subd. (e).)
We must first determine whether defendants met their
burden of showing that ComputerXpress’s claims
were subject to section 425.16.
1. First three and fifth causes of action
ComputerXpress’s first three causes of action,
for fraud, negligent misrepresentation, and negligence,
were based on defendants’ alleged false {Page
93 Cal.App.4th 1000} representations in February 1999
that they owned solvent, profitable businesses which
were appropriate for merger with ComputerXpress. ComputerXpress’s
fifth cause of action, for interference with contractual
relations, alleged that in February 2000 ComputerXpress
entered into a contract to sell computers to Cal Tech
Solutions and that defendants then contacted Cal Tech
and disparaged ComputerXpress and its officers and directors,
causing Cal Tech to cancel the contract.
There was no indication, either in the complaint or
in the evidence presented on the section 425.16 motion,
that the conduct alleged in these causes of action occurred
in connection with an official proceeding, concerned
a public issue or issue of public interest, or took
place in a public forum. However, defendants argue these
causes of action were still subject to section 425.16,
because (1) the complaint alleged a conspiracy covering
all causes of action, some of which did involve public
statements, and (2) in any event, section 425.16 applies
to any suit filed after the defendant’s exercise
of speech or petition rights, not only to claims which
are directly based on such conduct.
a. Conspiracy allegations
Defendants note the complaint included causes of action,
other than the first three and fifth, which alleged
conduct that did occur in an official or public context,
such as defendants’ filing of a complaint against
ComputerXpress with the Securities and Exchange Commission
(SEC) and posting messages on the Internet disparaging
ComputerXpress. They argue that, in deciding whether
section 425.16 applies, all of the acts alleged in all
of ComputerXpress’s causes of action must be considered
together. They contend this is so because the eighth
and ninth causes of action alleged that all of the alleged
acts were performed in furtherance of a single conspiracy
to interfere with ComputerXpress’s business.
The eighth cause of action did allege a conspiracy to
“interfere with Plaintiff’s business and
cause it substantial harm and damage.” Nowhere,
however, did it allege the conspiracy included the misrepresentations
alleged in the first three causes of action. The eighth
cause of action did not incorporate the allegations
of the first three causes of action. Moreover, the eighth
cause of action alleged the conspiracy occurred on or
about May 2, 1999, months after the February 1999 misrepresentations
alleged in the first three causes of action.
The ninth cause of action alleged a conspiracy to “damage
the business reputation of Plaintiff and to cause Plaintiff
as much economic harm as {Page 93 Cal.App.4th 1001}possible
. . . .” However, it alleged the conspiracy was
to be implemented “through the dissemination of
false and misleading information on the internet as
set forth in the above counts incorporated herein.”
The allegations of the first three causes of action
were not incorporated into the ninth cause of action,
nor was there any allegation that the acts undertaken
pursuant to the conspiracy included the misrepresentations
during the merger negotiations. And again, the conspiracy
was alleged to have begun on or about May 2, 1999, well
after the merger negotiations.
The fifth cause of action differs from the first three
in that the allegations contained in that cause of action
were incorporated into the ninth cause of action, and
the conduct alleged in the fifth cause of action occurred
after the inception of the conspiracy alleged in the
eighth and ninth causes of action. However, we are not
persuaded that this degree of arguable connection between
the fifth cause of action and the rest of the complaint
means the fifth cause of action is a claim “arising
from” the public speech and petition activity
alleged elsewhere in the complaint.
The phrase “arising from” in section 425.16,
subdivision (b)(1) has been interpreted to mean that
“the act underlying the plaintiff’s cause”
or “the act which forms the basis for the plaintiff’s
cause of action” must have been an act in furtherance
of the right of petition or free speech. (Braun v. Chronicle
Publishing Co., supra, 52 Cal.App.4th 1036, 1043; Dowling
v. Zimmerman (2001) 85 Cal.App.4th 1400, 1417 [103 Cal.Rptr.2d
174].) Even assuming, though the complaint did not so
allege, that defendants’ disparaging statements
to Cal Tech Solutions were made pursuant to the conspiracy
alleged in the eighth and ninth causes of action, it
does not follow that the speech and petition activity
alleged elsewhere in the complaint was part of “the
act underlying” or “the act which forms
the basis for” the fifth cause of action. That
cause of action did not attempt to rely on the speech
or petition activity as a basis for claiming interference.
Rather, it simply alleged a direct contact between defendants
and Cal Tech. There was no indication that any public
activity, such as the SEC complaint or Internet statements,
formed any part of the claim, nor that the alleged disparaging
statements related in any way to any public issue or
official proceeding.
Defendants note that the fifth cause of action did not
specify the content of the alleged statements to Cal
Tech, but merely described them as “disparaging
remarks regarding Plaintiff and its officers and directors
. . . .” Defendants suggest we therefore should
infer that the content of the statements was the same
as that of the SEC complaint and Internet statements
which, as we determine later in this opinion, concerned
issues of public interest. Making such an inference
would permit defendants to invoke {Page 93 Cal.App.4th
1002}the principle, discussed post, that even purely
private speech may be covered by section 425.16 if it
concerns a public issue. (Averill v. Superior Court
(1996) 42 Cal.App.4th 1170, 1174 [50 Cal.Rptr.2d 62].)
We believe that making the inference defendants suggest
would effectively relieve them of their burden to make
the initial showing that the claims they seek to strike
fall within section 425.16, contrary to the authority
discussed in part II.A., ante. We also note that, when
it ruled none of ComputerXpress’s causes of action
was subject to section 425.16, the court did not preclude
the possibility that defendants might later be able
to show the fourth through ninth causes of action were
subject to the statute. In fact, the court stated that
those causes of action “could very well involve
conduct described by the statute.” It merely ruled
that the papers submitted at that point were inadequate
to permit that determination. If subsequent developments
should reveal that the fifth cause of action was based
on statements which concerned a public issue, the court
may exercise its discretion, pursuant to section 425.16,
subdivision (f) to permit defendants to renew their
motion with respect to that cause of action.
b. Suit filed after speech or petition activity
Defendants also argue that a lawsuit is adequately shown
to be one “arising from” an act in furtherance
of the rights of petition or free speech as long as
suit was brought after the defendant engaged in such
an act, whether or not the purported basis for the suit
is that act itself. They rely on Church of Scientology
v. Wollersheim (1996) 42 Cal.App.4th 628 [49 Cal.Rptr.2d
620] (Wollersheim) and Averill v. Superior Court, supra,
42 Cal.App.4th 1170 (Averill). fn 1
Wollersheim was an action by the Church of Scientology
to set aside a judgment Wollersheim had obtained against
it in an earlier tort action. The court held section
425.16 applied to the action based, in part, on its
finding that the suit was part of an extended course
of oppressive litigation conduct designed to discourage
Wollersheim’s use of the courts. (Wollersheim,
supra, 42 Cal.App.4th at pp. 648-649.)
Wollersheim cannot be read to mean that any claim asserted
in an action which arguably was filed in retaliation
for the exercise of speech or petition rights falls
under section 425.16, whether or not the claim is based
on conduct in exercise of those rights. To the contrary,
Wollersheim specifically {Page 93 Cal.App.4th 1003}found
that the church’s suit was based on Wollersheim’s
exercise of such a right — it sought to set aside
the judgment obtained in his prior lawsuit against the
church, an exercise of his right of petition. (Wollersheim,
supra, 42 Cal.App.4th at pp. 647-648.)
In defendants’ other citation, Averill, supra,
42 Cal.App.4th 1170, a charitable organization sued
Averill after she made allegedly slanderous remarks
about the organization to her employer. The employer
was supporting the organization’s home for battered
women, which Averill had publicly opposed. As defendants
note, even though Averill’s remarks were made
in a private setting rather than publicly, the court
held the suit was subject to section 425.16. (Averill,
supra, at pp. 1175-1176.)
In Averill, however, the court stressed the fact that,
while the remarks were private, the subject of the remarks
— the home for battered women — had been
a topic of considerable public controversy, including
city council and planning commission hearings. It characterized
the issue as whether section 425.16 covered “private
conversations, regarding a public issue . . . .”
(Averill, supra, 42 Cal.App.4th at p. 1174, italics
added.) Thus, Averill cannot be read to mean that a
private statement is covered by section 425.16 regardless
of whether it concerns a public issue, simply because
the person who made the statement also made public statements
against the plaintiff at other times.
For these reasons, Wollersheim and Averill do not support
defendants’ contention that any suit filed after
the defendant’s exercise of its petition or free
speech rights automatically comes within section 425.16.
In each case, the conduct on which the suit was based
occurred in connection with an official proceeding (Wollersheim)
or related to a public issue (Averill). Therefore, these
decisions do not warrant a departure from the rule cited
ante, which requires that “the act underlying
the plaintiff’s cause” or “the act
which forms the basis for the plaintiff’s cause
of action” must itself have been an act in furtherance
of the right of petition or free speech. (Braun v. Chronicle
Publishing Co., supra, 52 Cal.App.4th 1036, 1043; Dowling
v. Zimmerman, supra, 85 Cal.App.4th 1400, 1417.) Under
that rule, the trial court properly found the first
three and fifth causes of action were not subject to
section 425.16.
ComputerXpress asserts this court must affirm the order
denying defendants’ SLAAP motion if it finds the
motion was properly denied as to any cause of action
in ComputerXpress’s complaint. Since we have concluded,
ante, that the motion was properly denied as to the
first, second, third, and fifth causes of action, acceptance
of ComputerXpress’s position would mean we should
affirm the order in its entirety. {Page 93 Cal.App.4th
1004}
ComputerXpress bases its position on this court’s
decision in M.G. v. Time Warner, Inc. (2001) 89 Cal.App.4th
623 [107 Cal.Rptr.2d 504] (M.G.). In M.G., this court
held that, where the plaintiffs had shown a probability
of prevailing on some of their causes of action, the
action as a whole could not be said to be without merit.
Therefore it was unnecessary to consider whether the
plaintiffs had shown they probably would prevail on
the remaining causes of action. Instead, all of the
causes of action should survive the defendants’
SLAPP motion. (Id., at p.637.)
Defendants point out that the Court of Appeal for the
Second District, Division Five, took the opposite view
in Shekhter v. Financial Indemnity Co. (2001) 89 Cal.App.4th
141 [106 Cal.Rptr.2d 843] (Shekhter), a case decided
shortly before M.G. In Shekhter, the court held that
the express language of section 425.16, subdivision
(b)(1) “allows a single cause of action to be
stricken. The fact that other claims remain does not
bar a trial judge from granting a section 425.16 special
motion to strike.” (Shekhter, supra, at p. 150.)
It is not necessary in this case to attempt to resolve
the conflicting holdings in M.G. and Shekhter. We conclude
that, no matter which decision is correct, the fact
the SLAPP motion was properly denied as to some of ComputerXpress’s
causes of action does not preclude granting the motion
as to the remaining causes of action. In M.G., all of
the causes of action were based on the same underlying
conduct. Indeed, the court found four of the six causes
of action to be, in reality, the same two causes of
action, based on four different legal theories. The
court also found the remaining two causes of action
to be “probably cumulative” of the other
four. (M.G., supra, 89 Cal.App.4th at p. 637.)
Under those circumstances, it can be said that, if one
cause of action survives a SLAPP motion, the rest should
too, because the causes of action are factually and
legally intertwined. And because the causes of action
are so closely related, even “cumulative,”
a probability of prevailing on one claim shows the rest
of the claims are not without merit.
Here, however, the claims are not factually or legally
intertwined. The causes of action we have concluded
are not subject to being stricken — the first
through third and fifth — are based on entirely
different conduct than the remaining causes of action.
Moreover, the reason we have concluded the first through
third and fifth causes of action should not be stricken
is not that ComputerXpress showed a probability of prevailing
on those claims, but that the claims are not subject
to the SLAPP statute and hence ComputerXpress was not
required to show a probability of prevailing. Therefore,
the rationale {Page 93 Cal.App.4th 1005}underlying M.G.’s
holding — that a showing of a probability of prevailing
as to one claim establishes that the lawsuit is not
meritless — does not apply here.
Accordingly, we consider whether ComputerXpress’s
remaining claims are subject to the SLAPP statute and,
if so, whether ComputerXpress showed a probability of
prevailing on those claims.
2. Remaining causes of action
ComputerXpress’s fourth cause of action, for trade
libel, alleged that beginning in August 1999 defendants
published to other persons false and disparaging statements
about ComputerXpress and its officers and directors.
The statements were published on the Internet and included
claims that ComputerXpress’s products were inferior,
the company was a stock scam and would be out of business
within 30 days, the officers and directors were illegally
conspiring to manipulate the value of its stock, and
one of the officers or directors had filed bankruptcy.
ComputerXpress’s sixth cause of action, for interference
with prospective economic advantage, alleged that beginning
in November 1999 defendants posted thousands of messages
on the Internet defaming ComputerXpress and its officers
and directors. As a result, potential investors failed
to invest in the company.
ComputerXpress’s seventh cause of action, for
abuse of process, alleged that in March 2000 defendants
filed a complaint with the SEC containing “false
allegations and accusations,” presumably against
ComputerXpress. Defendants then misused the legal process
by posting the complaint on the Internet, to discourage
potential investors.
ComputerXpress’s eighth cause of action, for conspiracy,
alleged that in May 1999 defendants conspired to file
the SEC complaint and take other action to damage ComputerXpress,
including creating a website and thousands of message
board postings.
ComputerXpress’s ninth cause of action, for injunctive
relief, alleged that beginning in May 1999 defendants
conspired to damage the business reputation of ComputerXpress.
ComputerXpress sought to enjoin defendants from publishing
false and/or disparaging remarks about the company and
to require them to withdraw remarks previously published.
As our recitation indicates, the conduct on which these
causes of action were based fell into two categories:
Internet postings and the SEC complaint. {Page 93 Cal.App.4th
1006}We must determine whether defendants met their
initial burden of making a prima facie showing that
these causes of action were subject to section 425.16.
a. Internet postings
The complaint alleged defendants published their disparaging
Internet statements on the message board of a Web site
known as “Raging Bull” and also on a site
they established known as “Ogravity99.”
Defendants contend these statements were made in a public
forum and concerned an issue of public interest, and
therefore they came within section 425.16, subdivision
(e)(3). ComputerXpress contends the postings simply
involved statements of one company regarding the conduct
and products of a competitor company, and therefore
they did not involve a public forum or issue of public
interest.
(1) Public forum
Cases construing the term “public forum”
as used in section 425.16 have noted that the term “is
traditionally defined as a place that is open to the
public where information is freely exchanged.”
(Damon v. Ocean Hills Journalism Club (2000) 85 Cal.App.4th
468, 475 [102 Cal.Rptr.2d 205].) “Under its plain
meaning, a public forum is not limited to a physical
setting, but also includes other forms of public communication.”
(Id., at p. 476.) Thus, the court in Damon v. Ocean
Hills Journalism Club held that a homeowners’
association newsletter was a public forum for purposes
of section 425.16, because it was “a vehicle for
open discussion of public issues and was widely distributed
to all interested parties . . . .” (Id., at p.
478.) fn 2
Eectronic communication media may also constitute public
forums. A federal court recently stated that a widely
disseminated television broadcast was “undoubtedly
a public forum” for purposes of section 425.16.
(Metabolife Internat., Inc. v. Wornick (S.D.Cal. 1999)
72 F.Supp.2d 1160, 1165.) Apropos to this case, though
not in the context of section 425.16, the court in Hatch
v. Superior Court (2000) 80 Cal.App.4th 170 [94 Cal.Rptr.2d
453] noted that Internet communications have been described
as “classical forum communications.” (Id.,
at p. 201, fn. omitted.) {Page 93 Cal.App.4th 1007}A
federal court recently described the Raging Bull Web
site as “a financial website that organizes individual
bulletin boards or ‘chat-rooms,’ each one
dedicated to a single publicly traded company. The chat-rooms
are open and free to anyone who wants to read the messages;
membership is also free and entitles the member to post
messages. . . . [] Unlike many traditional media, there
are no controls on the postings. Literally anyone who
has access to the Internet has access to the chat-rooms.”
(Global Telemedia International, Inc. v. Doe (C.D. Cal.
2001) 132 F.Supp.2d 1261, 1264.)
Defendant Tom Mitchell stated in a declaration in support
of defendants’ section 425.16 motion that the
Ogravity99 Web site is accessible free of charge to
any member of the public. Mitchell further stated the
site provides a forum where members of the public may
read the views and information posted, and post on the
site their own opinions.
Thus, both the Raging Bull and Ogravity99 sites satisfy
the criteria for a public forum set forth in Damon v.
Ocean Hills Journalism Club, supra, 85 Cal.App.4th 468:
“a place that is open to the public where information
is freely exchanged.” (Id., at p. 475.) In fact,
the Web sites in this case present even a stronger case
for qualification as public forums than did the newsletter
involved in Damon. While newspapers exercise editorial
control over access to their pages, that feature is
not shared by the Web sites involved here. We therefore
conclude defendants made a prima facie showing that
the Web sites involved in this case were public forums
for purposes of section 425.16.
(2) Public interest
Te remaining issue is whether defendants’ statements
on the Web sites were made “in connection with
an issue of public interest.” (section 425.16,
subd. (e)(3).) Global Telemedia International, Inc.
v. Doe, supra, 132 F.Supp.2d 1261 (Global Telemedia)
involved closely analogous facts. The plaintiff, a publicly
traded company, sued the defendants for trade libel
and interference with prospective economic advantage
based on messages the defendants posted on the Raging
Bull bulletin boards. The messages criticized the plaintiff
and its management.
The court held the messages concerned a public issue
for purposes of section 425.16. It noted the plaintiff
was a publicly traded company with as many as 18,000
investors and had inserted itself into the public arena
by means of numerous press releases. (Global Telemedia,
supra, 132 F.Supp.2d at p. 1264.) The court in Wollersheim
similarly stated, albeit in dictum, that examples of
matters of public interest may include activities of
private {Page 93 Cal.App.4th 1008}entities that may
impact the lives of many individuals, such as “product
liability suits, real estate or investment scams, etc.”
(Wollersheim, supra, 42 Cal.App.4th 628, 650.)
Here, like the plaintiff in Global Telemedia, ComputerXpress
is a publicly traded company. Although the record does
not appear to indicate how many shareholders it has,
indications of the number of ComputerXpress shares outstanding
vary from 12,000,000 to 24,000,000. ComputerXpress’s
allegation that it lost $10,000,000 as a result of failure
of potential investors to purchase its stock due to
defendants’ conduct further suggests its public
importance is at least comparable to that of the plaintiff
in Global Telemedia. We also note ComputerXpress apparently
made use of press releases in an effort to promote the
company.
ComputerXpress argues that statements of one company
regarding a competitor company do not fall within section
425.16, citing Globetrotter Software, Inc. v. Elan Computer
Group, Inc. (N.D. Cal. 1999) 63 F.Supp.2d 1127. The
court in Global Telemedia distinguished Globetrotter
Software on the basis that the defendants in Global
Telemedia were not in the plaintiff’s business
or a competing business and “were speaking not
as competitors, but simply as investors.” (Global
Telemedia, supra, 132 F.Supp.2d at p. 1266.) The same
appears to be true here. Although defendants at one
time contemplated a merger with ComputerXpress, the
record does not indicate the defendants who published
the Web site messages were in competition with ComputerXpress
when they made the postings. Further, the tenor of the
messages indicates defendants were speaking “as
investors” rather than competitors (ibid.), as
the comments in the messages appear to have been directed
at existing or potential shareholders rather than potential
customers.
For these reasons, we conclude the record contains adequate
prima facie evidence that defendants’ Internet
messages were made in connection with an issue of public
interest.
b. SEC complaint
Defendants’ papers in support of their motion
to strike showed that on March 12, 2000, defendants
Lee Jackson and Tom Mitchell sent to the SEC a letter
of complaint against the corporate predecessor to ComputerXpress
and its officers and directors. The complaint stated
the company had issued press releases which allegedly
distorted or exaggerated the facts, driving the stock
prices up. The complaint also stated the company president
had participated in Internet marketing letters that
were much like chain letters and had publicly promoted
a stock prior to the public release date. Finally, it
{Page 93 Cal.App.4th 1009}stated the authors believed
unrestricted stock had been issued to company principals
without proper disclosure.
Defendants contend their filing of the complaint with
the SEC, and subsequently posting the complaint on the
Internet, fell within section 425.16, subdivision (e)
as (1) a statement before an official proceeding, (2)
a statement in connection with an issue under consideration
in an official proceeding, (3) a statement in a public
forum in connection with an issue of public interest,
and/or (4) other conduct in furtherance of the right
of petition or free speech in connection with an issue
of public interest.
We have little difficulty concluding that the filing
of the complaint qualified at least as a statement before
an official proceeding. ComputerXpress contends defendants
failed to show the subject of their complaint was ever
“‘under consideration or review by’”
the SEC. However, the purpose of the complaint was to
solicit an SEC investigation. In the analogous context
of the privilege under Civil Code section 47 for a statement
in an official proceeding, the California Supreme Court
has observed that the term “official proceeding”
“has been interpreted broadly to protect communications
to or from governmental officials which may precede
the initiation of formal proceedings.” (Slaughter
v. Friedman (1982) 32 Cal.3d 149, 156 [185 Cal.Rptr.
244, 649 P.2d 886], second italics added.) Thus, “‘communication
to an official administrative agency . . . designed
to prompt action by that agency’” is “‘as
much a part of the “official proceeding”
as a communication made after the proceedings had commenced.’”
(Kim v. Walker (1989) 208 Cal.App.3d 375, 383 [256 Cal.Rptr.
223]; accord, Edwards v. Centex Real Estate Corp. (1997)
53 Cal.App.4th 15, 30 [61 Cal.Rptr.2d 518].)
ComputerXpress notes that investigations and, in some
cases, hearings conducted by the SEC are not public.
However, in Braun v. Chronicle Publishing Co., supra,
52 Cal.App.4th 1036 the court held an investigative
audit, conducted by the State Auditor, was an official
proceeding for purposes of section 425.16 even though
it was closed to the public. The court reasoned that
the audit was “an authorized, public proceeding”
because it was “government-sponsored and provided
for by statute.” (Braun, supra, at p. 1049.) The
same is true of SEC proceedings, whether or not they
are public.
ComputerXpress contends that, even if the filing of
the SEC complaint fell within section 425.16, the posting
of it on the Internet was not connected to any official
proceeding and therefore was not protected. For the
reasons set forth in part II.B.2.a., ante, with respect
to defendants’ other Internet postings concerning
ComputerXpress, we conclude the posting of the complaint
amounted to a statement in a public forum in connection
with an issue {Page 93 Cal.App.4th 1010}of public interest.
ComputerXpress’s possible securities law violations
qualified as an issue of public interest to the investing
public just as its management and performance did. The
posting of the complaint therefore also fell within
section 425.16.
C. Probability of Prevailing
As we have determined that the Internet postings and
SEC complaint fell within section 425.16, ComputerXpress’s
fourth and sixth through ninth causes of action based
on that conduct were subject to a motion to strike unless
ComputerXpress showed a probability of prevailing on
those claims. (section 425.16, subd. (b)(1).) To show
a probability of prevailing for purposes of section
425.16, a plaintiff must “‘“make a
prima facie showing of facts which would, if proved
at trial, support a judgment in plaintiff’s favor.”’”
(Kyle v. Carmon, supra, 71 Cal.App.4th 901, 907.) This
standard is “similar to the standard used in determining
motions for nonsuit, directed verdict, or summary judgment,”
in that the court cannot weigh the evidence. (Id., at
p. 907; accord, Wilcox v. Superior Court (1994) 27 Cal.App.4th
809, 827 [33 Cal.Rptr.2d 446].) However, the plaintiff
“cannot simply rely on the allegations in the
complaint” (Paul for Council v. Hanyecz (2001)
85 Cal.App.4th 1356, 1364, fn. 5 [102 Cal.Rptr.2d 864]),
but “must provide the court with sufficient evidence
to permit the court to determine whether ‘there
is a probability that the plaintiff will prevail on
the claim.’” (DuPont Merck Pharmaceutical
Co. v. Superior Court (2000) 78 Cal.App.4th 562, 568
[92 Cal.Rptr.2d 755], italics added.) We must determine
whether the evidence submitted by ComputerXpress satisfied
that standard. fn 3
1. Fourth cause of action — trade libel
Trade libel is the publication of matter disparaging
the quality of another’s property, which the publisher
should recognize is likely to cause pecuniary loss to
the owner. (Leonardini v. Shell Oil Co. (1989) 216 Cal.App.3d
547, 572 [264 Cal.Rptr. 883].) The tort encompasses
“all false statements concerning the quality of
services or product of a business which are intended
to cause that business financial harm and in fact do
so.” (Ibid.)
To constitute trade libel, a statement must be false.
(Leonardini v. Shell Oil Co., supra, 216 Cal.App.3d
547, 572.) Since mere opinions cannot by {Page 93 Cal.App.4th
1011}definition be false statements of fact, opinions
will not support a cause of action for trade libel.
(Hofmann Co. v. E. I. Du Pont De Nemours & Co. (1988)
202 Cal.App.3d 390, 397 [248 Cal.Rptr. 384].) In most
cases, whether a statement is fact or opinion is a question
of law. (Hofmann Co. v. E. I. Du Pont de Nemours &
Co., supra, 202 Cal.App.3d 390, 397.) To decide whether
a statement is fact or opinion, a court must put itself
in the place of an average reader and determine the
natural and probable effect of the statement, considering
both the language and the context. (Id., at p. 398.)
However, where a statement is ambiguous or susceptible
of an innocent meaning, it is incumbent upon the plaintiff
to plead the facts showing its defamatory meaning. (Nichols
v. Great American Ins. Companies (1985) 169 Cal.App.3d
766, 774 [215 Cal.Rptr. 416].)
ComputerXpress failed to demonstrate how defendants’
Internet postings, on which the fourth cause of action
is based, were false or defamatory. In fact, it has
not even identified which of the numerous postings included
in the record it contends were actionable. Instead,
ComputerXpress simply refers this court to the 131 pages
of Internet postings contained in the record, apparently
assuming it is the court’s obligation to determine
how they support ComputerXpress’s position.
This is a wholly unacceptable method of appellate advocacy.
Rule 15(a) of the California Rules of Court provides:
“The statement of any matter in the record shall
be supported by appropriate reference to the record.”
It is not the duty of a reviewing court to search the
record for evidence on a point raised by a party whose
brief makes no reference to the pages where the evidence
can be found. (Downey Savings & Loan Assn. v. Ohio
Casualty Ins. Co. (1987) 189 Cal.App.3d 1072, 1093 [234
Cal.Rptr. 835]; Metzenbaum v. Metzenbaum (1950) 96 Cal.App.2d
197, 199 [214 P.2d 603].)
Moreover, having reviewed them, we find nothing in the
Internet postings which would satisfy the requirements
for trade libel as discussed ante. The court in Global
Telemedia, supra, 132 F.Supp.2d 1261 granted a motion
to strike a trade libel claim pursuant to section 425.16
under closely analogous circumstances. The defendants
posted allegedly libelous statements about the plaintiff,
a publicly traded company, on the Raging Bull message
boards. The court concluded the company had not shown
a probability of prevailing, because “the general
tenor, the setting and the format” of the postings
strongly suggested they were opinion. The postings “were
part of an on-going, free-wheeling and highly animated
exchange” about the company and were “full
of hyperbole, invective, short-hand phrases and {Page
93 Cal.App.4th 1012}language not generally found in
fact-based documents, such as corporate press releases
or SEC filings.” Therefore, they lacked “the
formality and polish typically found in documents in
which a reader would expect to find facts.” (Global
Telemedia, supra, at p. 1267.)
Among the postings the Global Telemedia court found
not actionable were statements that: the company’s
public relations documents gave it the appearance of
being “‘high tech,’” but its
products were “‘slow or non-existent’”;
the company was steering a “‘sinking ship’”;
investors were “‘being manipulated by the
company so that they can fly the coop again’”;
shareholders had been “‘screwed out of your
hard earned money’” and it was “‘time
to talk about a lawsuit’”; and the principals
of the company were guilty of “‘blatant
mismanagement’” and would hold shareholders’
money and “‘dictate after they lie how it
will be used.’” (Global Telemedia, supra,
132 F.Supp.2d at pp. 1268-1269.) The court found these
statements would be seen by a reasonable reader as mere
invective of a disgruntled shareholder, “probably
not written by someone with authority or firm factual
foundations for his beliefs.” (Id., at p. 1269.)
Therefore, the statements could not have had the alleged
defamatory effect of causing the company’s stock
to lose value.
The Internet postings in this case were comparable in
tone and substance to those in Global Telemedia. Without
citing any specific postings, the complaint alleged
four defamatory statements: “that the computer
product featured on Plaintiff’s own website was
of inferior quality, that Plaintiff was merely a stock
‘scam’ certain to be out of business within
thirty days, that the officers and directors of Plaintiff
were illegally conspiring with marketmakers for the
company’s stock to manipulate its value, that
one of Plaintiff’s officers or directors had filed
bankruptcy, etc.” Our own review of the postings
indicates the following disparaging statements:
ComputerXpress’s stock fluctuated dramatically
because “they never have real substance behind
their news, IMO,” fn 4 so that “the suckers
jump in before verifying anything” and then “jump
out when they see it was more BS than PR.”
“[A]n officer/director (former?)” of ComputerXpress
had “declared recent bankruptcy.” Two days
later, this statement was clarified to state that a
corporation owned by the former president of ComputerXpress
had “filed for chapter 7 bankruptcy in October
of 1999.”
Investors were “either swallowing complete bull”
or “participating in what I think is a fraud”
and should not be surprised if the ComputerXpress {Page
93 Cal.App.4th 1013}promoters “try to continue
this for another 30 days (the time they have to comply
or revert to pink sheets) to suck out as much as they
can . . . .”
The ComputerXpress promoters acted as they did because
“greed set in; and a belief that they cou[l]d
‘operate under the radar’ and get away with
whatever they wanted to because there was not enough
official care to be concerned about. I firmly believe
that they care nothing about generating a genuine business,
and everything about selling the stock . . . .”
When ComputerXpress announced the intended merger with
defendants’ businesses to the public, it had already
filed a letter with the SEC promoting a different type
of affiliate program not mentioned to the public until
months later. “[I]s that fraud?”
“You guys really seem to think you can sucker
a lot of people all the time!”
“When the people who have . . . been duped into
this stock realize the scam they were coaxed into, my
guess is there will be hell to pay.”
“[W]ill someone please tell me why ANYONE would
believe ANYTHING these guys and their pump and dump
supporters say?”
As is apparent from this recitation, while the postings
certainly could be considered disparaging, their tone
and content identified them as statements of opinion
and not fact. Like the postings in Global Telemedia,
they were hyperbolic, informal, and lacked the characteristics
of typical fact-based documents. Moreover, they were
replete with explicit statements of opinion, such as
“IMO [in my opinion],” “what I think
is a fraud,” “I firmly believe,” “is
that fraud?” and “my guess is.”
Other statements, such as the asserted inconsistency
between ComputerXpress’s public relations releases
and its actual operations, or the assertion that its
promoters only cared about selling stock and not about
generating a genuine business, were too vague to be
taken as fact by a reasonable reader. In the few instances
in which the postings did contain apparent statements
of facts — such as the statement that a company
owned by the former president had filed for bankruptcy,
or that ComputerXpress had 30 days “to comply
or revert to pink sheets” — ComputerXpress
failed to present evidence that the statements were
false.
This court has observed that, because section 425.16’s
requirement that a plaintiff establish a probability
of prevailing “is intended to ‘provid[e]
a fast {Page 93 Cal.App.4th 1014}and inexpensive unmasking
and dismissal of SLAPP’s,’” a more
lenient standard would not be appropriate. (Ludwig v.
Superior Court (1995) 37 Cal.App.4th 8, 16 [43 Cal.Rptr.2d
350].) Although ComputerXpress’s displeasure at
the Internet postings involved here is understandable,
despite two opportunities to demonstrate that the postings
constituted false and defamatory statements of fact,
ComputerXpress failed to do so. ComputerXpress therefore
failed to establish a probability of prevailing on its
cause of action for trade libel.
2. Sixth cause of action — interference with prospective
economic advantage
ComputerXpress’s claim for interference with prospective
economic advantage, like its claim for trade libel,
was based on defendants’ Internet postings. Like
the tort of trade libel, interference with prospective
economic advantage requires false statements of fact.
“A person cannot incur liability for interfering
with contractual or economic relations by giving truthful
information to a third party.” (Savage v. Pacific
Gas & Electric Co. (1993) 21 Cal.App.4th 434, 449-450
[26 Cal.Rptr.2d 305].) Further, a plaintiff cannot state
a cause of action for interference with prospective
economic advantage based on “‘loose, figurative,
or hyperbolic language’” (Morningstar, Inc.
v. Superior Court (1994) 23 Cal.App.4th 676, 697 [29
Cal.Rptr.2d 547]) or mere opinions, unless shown to
be not genuinely held and advanced for the sole purpose
of harming the plaintiff. (Hofmann Co. v. E. I. Du Pont
de Nemours & Co., supra, 202 Cal.App.3d 390, 403.)
As we have concluded in part II.C.1., ante, that the
Internet postings were not actionable trade libel, they
also could not support a claim for interference with
prospective economic advantage. ComputerXpress failed
to establish a probability of prevailing on its sixth
cause of action.
3. Seventh cause of action — abuse of process
Abuse of process consists of “[t]he use of the
machinery of the legal system for an ulterior motive
. . . .” (Trear v. Sills (1999) 69 Cal.App.4th
1341, 1359 [82 Cal.Rptr.2d 281], italics added.) Because
the purpose of the tort is “to preserve the integrity
of the court,” it “requires misuse of a
judicial process . . . .” (Stolz v. Wong Communications
Limited Partnership (1994) 25 Cal.App.4th 1811, 1822-1823
[31 Cal.Rptr.2d 229].) The tort therefore does not extend
to misuse of administrative proceedings, even those
involving agencies with “‘quasi-judicial’
powers . . . .” (Id., at p. 1823 [misuse of administrative
process of Federal Communications Commission not abuse
of process].) {Page 93 Cal.App.4th 1015} ComputerXpress’s
seventh cause of action alleged defendants misused the
legal process by posting the SEC complaint on the Internet.
There was no allegation of any misuse of the judicial
process. ComputerXpress failed to establish a probability
of prevailing on its claim for abuse of process.
4. Eighth cause of action — conspiracy
A conspiracy cannot be alleged as a tort separate from
the underlying wrong it is organized to achieve.’”
(Applied Equipment Corp. v. Litton Saudi Arabia Ltd.
(1994) 7 Cal.4th 503, 513 [28 Cal.Rptr.2d 475, 869 P.2d
454].) Therefore, “conspiracy to commit a tort
is not a separate cause of action from the tort itself
. . . .” (Saunders v. Superior Court (1994) 27
Cal.App.4th 832, 845 [33 Cal.Rptr.2d 438].)
ComputerXpress’s conspiracy claim was based on
the Internet postings and the filing of the SEC complaint.
We have previously determined that the postings were
not actionable under any tort theory pled in ComputerXpress’s
complaint. The filing of the SEC complaint clearly was
absolutely privileged under Civil Code section 47, subdivision
(b), which as stated ante protects “‘communication
to an official administrative agency . . . designed
to prompt action by that agency . . . .’”
(Kim v. Walker, supra, 208 Cal.App.3d 375, 383; accord,
Slaughter v. Friedman, supra, 32 Cal.3d 149, 156; Edwards
v. Centex Real Estate Corp., supra, 53 Cal.App.4th 15,
30.) It follows that ComputerXpress failed to establish
a probability of prevailing on its conspiracy cause
of action.
5. Ninth cause of action — injunction
As ComputerXpress points out, injunctive relief is sometimes
available as a remedy for trade libel. (Leonardini v.
Shell Oil Co., supra, 216 Cal.App.3d 547, 579.) However,
while such relief is available “in the ordinary
case involving private disputes,” it is not available
to restrain debate about public issues, even where false
statements are involved. (Id., at pp. 578-579.) “‘The
concept that a statement on a public issue may be suppressed
because it is believed by a court to be untrue is entirely
inconsistent with constitutional guarantees and raises
the spectre of censorship in a most pernicious form.’”
(Id., at p. 578, quoting Wilson v. Superior Court (1975)
13 Cal.3d 652, 658-659 [119 Cal.Rptr. 468, 532 P.2d
116].)
We have previously determined that the statements ComputerXpress
sought to enjoin concerned a public issue, not a mere
private dispute. Even if that were not the case, as
discussed ante, the statements were not actionable as
trade libel. Accordingly, ComputerXpress failed to establish
a probability of prevailing on its injunction cause
of action. {Page 93 Cal.App.4th 1016}
D. Attorney Fees and Costs
The remaining question is whether defendants are entitled
to attorney fees and costs pursuant to section 425.16,
subdivision (c). That provision states in relevant part
that “a prevailing defendant on a special motion
to strike shall be entitled to recover his or her attorney’s
fees and costs.” Defendants contend this language
mandates an award of fees and costs to the defendant
any time a SLAPP motion is granted, even in part. ComputerXpress,
on the other hand, contends that, because we have concluded
defendants’ SLAPP motion properly was denied as
to four out of the nine causes of action of the complaint,
defendants should not be considered to have prevailed
on the motion for purposes of section 425.16.
Sction 425.16, subdivision (c) does not define the
term “prevailing defendant.” In particular,
it does not state whether a defendant is deemed to have
prevailed if its SLAPP motion is granted as to some
claims and denied as to others. Recently, the court
in Shekhter v. Financial Indemnity Company, supra, 89
Cal.App.4th 141 held that, where the defendants successfully
argued on appeal that their motion to strike one cause
of action as a SLAPP claim should have been granted,
they were entitled to attorney fees even though another
cause of action remained pending. (Id., at p. 154.)
However, the court did not specifically discuss the
issue whether the defendants could be considered the
prevailing parties under the circumstances.
In the context of contractual fee awards under Civil
Code section 1717, the rule is that in cases of “mixed”
results, where a party “‘receives only a
part of the relief sought,’” the court may
determine there is no prevailing party. (Hsu v. Abbara
(1995) 9 Cal.4th 863, 875 [39 Cal.Rptr.2d 824, 891 P.2d
804]; accord, Scott Co. v. Blount, Inc. (1999) 20 Cal.4th
1103, 1109 [86 Cal.Rptr.2d 614, 979 P.2d 974]; see also
Hilltop Investment Associates v. Leon (1994) 28 Cal.App.4th
462, 468 [33 Cal.Rptr.2d 552] [fees properly denied
where result is “‘good news and bad news
to each of the parties’”].) In deciding
whether there is a prevailing party, the court is to
“compare the relief awarded on the contract claim
or claims with the parties’ demands on those same
claims and their litigation objectives as disclosed
by the pleadings, trial briefs, opening statements,
and similar sources.” (Hsu, supra, at p. 876.)
The court has discretion to find there is no prevailing
party even though Civil Code section 1717, subdivision
(a) states that the prevailing party “shall”
be entitled to recover fees.
Civil Code section 1717, unlike section 425.16, expressly
provides that the court may determine there is no prevailing
party. (Civ. Code, section 1717, subd. (b)(1).) However,
courts in cases involving other {Page 93 Cal.App.4th
1017}statutes which provide that the prevailing party
“shall” recover attorney fees also have
concluded that a court has the discretion to find there
is no prevailing party, even though the statute does
not expressly say so. (See, e.g., Heather Farms Homeowners
Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574 [26
Cal.Rptr.2d 758] (Heather Farms) [Civ. Code, section
1354, subd. (f)]; Gilbert v. National Enquirer, Inc.
(1997) 55 Cal.App.4th 1273, 1277-1278 [64 Cal.Rptr.2d
659] (Gilbert) [Civ. Code, section 3344, subd. (a)];
Damian v. Tamondong (1998) 65 Cal.App.4th 1115, 1128-1130
[77 Cal.Rptr.2d 262] (Damian) [Civ. Code, section 2983.4].)
The determination of whether there is a prevailing party
is to be made “on a practical level” after
considering what each party accomplished via the litigation.
(Heather Farms, supra, at p. 1574; Gilbert, supra, at
p. 1277.) In Coltrain v. Shewalter (1998) 66 Cal.App.4th
94 [77 Cal.Rptr.2d 600] (Coltrain), this court adopted
the discretionary approach set forth in Heather Farms,
Gilbert, and Damian for purposes of awarding attorney
fees under the SLAPP statute, concluding that the critical
issue in determining which party has prevailed is “which
party realized its objectives in the litigation.”
(Id., at p. 107.)
These decisions, however, are of limited assistance
in considering the proper application of section 425.16,
subdivision (c) in this case. In each of the decisions
cited above, the litigation terminated without a court
determination of the merits of the suit. In Heather
Farms, Gilbert, Damian, the actions were dismissed without
prejudice prior to trial. (Heather Farms, supra, 21
Cal.App.4th 1568, 1570-1571; Gilbert, supra, 55 Cal.App.4th
1273, 1275; Damian, supra, 65 Cal.App.4th 1115, 1118.)
In Coltrain, similarly, the plaintiffs voluntarily dismissed
their complaint without prejudice before any ruling
on the defendants’ SLAPP motion. (Coltrain, supra,
66 Cal.App.4th 94, 100.) Absent a determination of the
merits, it may be difficult or impossible to decide
which party has prevailed as a practical matter, and
the court may appropriately find there is no prevailing
party.
Here, in contrast, we have determined the SLAPP motion
was meritorious as to five out of the nine causes of
action to which it was directed. As to those five causes
of action, at least, defendants clearly prevailed.
The decisions applying Civil Code section 1717 also
are of limited assistance in this case. The purpose
of section 1717 is “to establish mutuality of
remedy when a contract makes recovery of attorney fees
available only for one party and to prevent the oppressive
use of one-sided attorney fees provisions. [Citation.]”
(PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084,
1090-1091 [95 Cal.Rptr.2d 198, 997 P.2d 511].) The intent
of the Legislature, therefore, was to make attorney
fees equally available to both sides where they would
not have been equally available under the literal terms
of the agreement. {Page 93 Cal.App.4th 1018}Section
425.16, subdivision (c), however, evidences a legislative
intent to do more than make fees and costs equally available
to both sides. Instead, the statute reflects a clear
preference for awarding fees and costs to prevailing
defendants. Section 425.16, subdivision (c) provides
that a prevailing defendant on a SLAPP motion to strike
“shall be entitled to recover his or her attorney’s
fees and costs.” A prevailing plaintiff, however,
can only recover fees and costs “[i]f the court
finds that a special motion to strike is frivolous or
is solely intended to cause unnecessary delay . . .
.”
This differential standard for awarding fees and costs
is in keeping with the statement of legislative purpose
in section 425.16, subdivision (a). The Legislature
in that provision found “a disturbing increase
in lawsuits brought primarily to chill the valid exercise
of the constitutional rights of freedom of speech and
petition for the redress of grievances.” Accordingly,
“it is in the public interest to encourage continued
participation in matters of public significance,”
and to insure “that this participation [] not
be chilled through abuse of the judicial process.”
Code of Civil Procedure section 425.16, subdivision
(c)’s preference for awarding fees and costs to
defendants is analogous to the rule followed in cases
arising under the federal civil rights statutes. Title
42 United States Code section 1988 (section 1988) provides
that in such cases, “the court, in its discretion,
may allow the prevailing party, other than the United
States, a reasonable attorney’s fee as part of
the costs . . . .” Despite its seeming neutral
language, cases applying section 1988 hold that “[a]
prevailing defendant may recover an attorney’s
fee only where the suit was vexatious, frivolous, or
brought to harass or embarrass the defendant.”
(Hensley v. Eckerhart (1983) 461 U.S. 424, 429, fn.
2 [103 S.Ct. 1933, 76 L.Ed.2d 40] (Hensley); see also
Hughes v. Rowe (1980) 449 U.S. 5, 14-15 [101 S.Ct. 173,
66 L.Ed.2d 163].) In contrast, “a prevailing plaintiff
‘“should ordinarily recover an attorney’s
fee unless special circumstances would render such an
award unjust.”’” (Hensley, supra,
at p. 429 [103 S.Ct. at p. 1937].)
A defendant making a SLAPP motion and a plaintiff in
a civil rights action thus enjoy the same preference
for attorney fees if they are successful. Given this
similarity in approach between section 425.16, subdivision
(c) and section 1988, authority under section 1988 is
particularly helpful in applying section 425.16, subdivision
(c).
In Hensley the United States Supreme Court considered
the proper application of section 1988 where the plaintiff
prevails on some but not all of his {Page 93 Cal.App.4th
1019}or her claims. The court stated that, for purposes
of the threshold determination of whether the plaintiff
has prevailed at all, “‘plaintiffs may be
considered “prevailing parties” for attorney’s
fees purposes if they succeed on any significant issue
in litigation which achieves some of the benefit the
parties sought in bringing suit.’” (Hensley,
supra, 461 U.S. at p. 433 [103 S.Ct. at p. 1939].) However,
where the plaintiff in one lawsuit presents “distinctly
different claims for relief that are based on different
facts and legal theories,” he or she cannot recover
fees incurred in pursuing an unsuccessful claim. (Id.,
at pp. 434-435 [103 S.Ct. at p. 1940].) On the other
hand, if the plaintiff’s successful and unsuccessful
claims involve a common core of facts or related legal
theories, the court should determine “the significance
of the overall relief obtained by the plaintiff in relation
to the hours reasonably expended on the litigation.”
(Id., at p. 435 [103 S.Ct. at p. 1940].) “A reduced
fee award is appropriate if the relief, however significant,
is limited in comparison to the scope of the litigation
as a whole.” (Id., at p. 440 [103 S.Ct. at p.
1943].)
California courts applying the private attorney general
statute, Code of Civil Procedure section 1021.5, have
adopted the same approach. Thus, in cases under section
1021.5, the courts hold that “a party need not
prevail on every claim presented in an action in order
to be considered a successful party within the meaning
of the section. [Citations.]” (Wallace v. Consumers
Cooperative of Berkeley, Inc. (1985) 170 Cal.App.3d
836, 846 [216 Cal.Rptr. 649].) Rather, “when a
plaintiff is successful within the meaning of the section,
the fact that he or she has prevailed on some claims
but not on others is a factor to be considered in determining
the amount of the fee awarded.” (Id., at pp. 846-847,
citing Hensley, supra, 461 U.S. 424.)
Earlier this year, the court in Los Angeles Times v.
Alameda Corridor Transportation Authority (2001) 88
Cal.App.4th 1381 [107 Cal.Rptr.2d 29] (Los Angeles Times)
applied a similar approach in construing the California
Public Records Act. (Gov. Code, section 6250 et seq.)
Section 6259, subdivision (d) of that act, which provides
for attorney fees and costs, is closely analogous to
section 425.16, subdivision (c). Government Code section
6259, subdivision (d) provides that the court “shall
award court costs and reasonable attorney fees to the
plaintiff should the plaintiff prevail in litigation”
seeking disclosure of records from a public agency.
However, the court shall award fees and costs to the
public agency only if it finds “that the plaintiff’s
case is clearly frivolous . . . .” (Ibid.)
The court in Los Angeles Times held that a plaintiff
who sued to obtain disclosure of two documents, but
succeeded in obtaining only one, nonetheless was a prevailing
party entitled to attorney fees and costs under the
{Page 93 Cal.App.4th 1020}statute. The court acknowledged
the possibility that in some cases a plaintiff might
obtain documents that are so minimal or insignificant
as to justify a finding that it did not prevail. It
concluded, however, that absent such circumstances,
fees and costs should be awarded. To do otherwise would
be inconsistent with the express purpose of the statute,
“to broaden public access to public records,”
and “would chill efforts to enforce the public
right to information.” (Los Angeles Times, supra,
88 Cal.App.4th at p. 1392.)
These authorities support the conclusion that defendants
in this case should be considered prevailing parties,
and therefore should recover attorney fees and costs,
notwithstanding their partial success on their SLAPP
motion. As with the federal civil rights statutes and
the California Public Records Act, the differential
standard for awarding fees reflects a preference for
compensating parties who further the public policies
underlying the SLAPP statute through their litigation
efforts. The approach adopted in the cases applying
those analogous statutes, under which partial success
reduces but does not eliminate the entitlement to attorney
fees, therefore should be applied here.
As discussed previously, the causes of action we have
concluded are not subject to being stricken are based
on different conduct than the remaining causes of action.
Therefore, the problems alluded to in Hensley that may
arise where the successful and unsuccessful claims are
legally or factually related are not present. Defendants
consequently are entitled to recover attorney fees and
costs incurred in moving to strike the claims on which
they prevailed, but not fees and costs incurred in moving
to strike the remaining claims. The trial court may
determine the appropriate amount of fees and costs,
upon a proper application by defendants. (See Coltrain,
supra, 66 Cal.App.4th 94, 108.)
For the guidance of the trial court, we note in closing
that, as the parties seeking fees and costs, defendants
“bear[] the burden of establishing entitlement
to an award and documenting the appropriate hours expended
and hourly rates.” (Hensley, supra, 461 U.S. at
p. 437 [103 S.Ct. at p. 1941].) To that end, the court
may require defendants to produce records sufficient
to provide “‘a proper basis for determining
how much time was spent on particular claims.’”
(Id., at p. 437, fn. 12 [103 S.Ct. at p. 1941].) The
court also may properly reduce compensation on account
of any failure to maintain appropriate time records.
(Id., at p. 438, fn. 13 [103 S.Ct. at p. 1942].)
III DISPOSITION
The order denying the motion to strike is affirmed with
respect to the first, second, third, and fifth causes
of action and reversed as to the remaining {Page 93
Cal.App.4th 1021}causes of action. Upon an appropriate
motion and factual showing, defendants may recover attorney
fees and costs in connection with their SLAPP motion
and on appeal, under section 425.16, subdivision (c),
in an amount to be determined by the trial court.
Ramirez, P.J., and Hollenhorst, J., concurred.
FN 1. Defendants also cite Equilon Enterprises, LLC
v. Consumer Cause, Inc. (2000) 85 Cal.App.4th 654 [102
Cal.Rptr.2d 371]. However, after defendants filed their
opening brief, the Supreme Court granted review in that
case. (S094877, review granted April 11, 2001.)
FN 2. The court noted two previous decisions had concluded,
or suggested in dictum, that a newspaper was not a public
forum. (Zhao v. Wong (1996) 48 Cal.App.4th 1114 [55
Cal.Rptr.2d 909], overruled on other grounds in Briggs
v. Eden Council for Hope & Opportunity, supra, 19
Cal.4th at p. 1107; Lafayette Morehouse, Inc. v. Chronicle
Publishing Co. (1995) 37 Cal.App.4th 855, 863, fn. 5
[44 Cal.Rptr.2d 46] [dictum].) It disagreed with these
decisions, noting in part that they predated the amendment
to section 425.16 stating the statute is to be construed
broadly. (Damon v. Ocean Hills Journalism Club, supra,
85 Cal.App.4th at p. 478.)
FN 3. ComputerXpress filed two sets of papers presenting
evidence in opposition to defendants’ motion to
strike. The court refused to consider the second set,
which was filed late. We have reviewed the supplemental
papers and conclude that, even considering the evidence
there set forth, ComputerXpress failed to establish
a probability of prevailing on its fourth and sixth
through ninth causes of action. We therefore need not
decide whether the trial court should have considered
the papers.
FN 4. It is apparent from another posting that the abbreviation
“IMO,” which appears in many other postings
as well, stands for “in my opinion.”
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