Anheuser-Busch Companies, LLC et al v. Clark

Filing 35

ORDER signed by Judge Garland E. Burrell, Jr on 7/18/13: For the stated reasons, Plaintiffs' return of personal property claim is DISMISSED with prejudice. Defendants anti-SLAPP 14 Motion to Strike is DENIED. (Meuleman, A)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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ANHEUSER-BUSCH COMPANIES, LLC, a
Delaware limited liability
company, and ANHEUSER-BUSCH,
LLC, a Missouri limited
liability company,
Plaintiffs,

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v.

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JAMES ALAN CLARK, an individual,

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Defendant.
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2:13-cv-00415-GEB-CKD
ORDER GRANTING MOTION TO
DISMISS AND DENYING SPECIAL
MOTION TO STRIKE

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Defendant moves for dismissal of Plaintiffs’ return of

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personal property claim and seeks to strike Plaintiffs’ lawsuit under

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California’s

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Plaintiffs oppose the motions.2

anti-SLAPP

statute,

Cal.

Civ.

Proc.

Code

§

425.16.1

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1

23
24

“SLAPP” is an acronym for a strategic lawsuit against public
participation. Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 815 n.1
(2011).
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26
27
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Plaintiffs also request oral argument or leave to file a surreply
to point out what they characterize as “clearly erroneous statements of
facts and law” in Defendant’s reply brief. (Pls.’ Req. for Oral Arg.,
ECF No. 31, 1:20.) This request is denied since it is unnecessary to
disposition of the pending motions. See Guidiville Band of Pomo Indians
v. NGV Gaming, Ltd., 531 F.3d 767, 787 (9th Cir. 2008) (Smith, J.,
dissenting) (approving district court’s refusal to allow surreply deemed
(continued...)
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I. FACTUAL ALLEGATIONS

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Plaintiffs allege in their complaint that Defendant left

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Plaintiffs’

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misappropriated, disclosed, disseminated, and/or used [Plaintiffs’]

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confidential, proprietary, and/or trade secret information, prior to the

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termination

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employment.” (Id. ¶ 21.) On February 8, 2013, Plaintiffs “invoked the

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certification provision of [Defendant’s] Confidentiality Agreements due

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to [their] belief that [Defendant] violated the[se] provisions . . . by

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improperly using or disclosing [Plaintiffs’] confidential, propriety

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[sic], and/or trade secret information.” (Id. ¶ 22.) Defendant “refused

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to

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required by his Confidentiality Agreements. (Id. ¶¶ 22, 23.)

provide

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15

employ

of

the

his

in

June

2012,

employment,

written

and

(Compl.

since

[non-disclosure]

¶

the

2),

and

“wrongfully

termination

certification

of

under

his

oath”

II. DISCUSSION
A.

Supersession by the California Uniform Trade Secrets Act

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Defendant argues Plaintiffs’ return of personal property claim

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should be dismissed because it is superseded by the California Uniform

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Trade Secrets Act (“CUTSA”),3 which was enacted to “make uniform the law”

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concerning trade secrets. Cal. Civ. Code § 3426.8. Although CUTSA lacks

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21

2

(...continued)
unnecessary to the disposition).

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3

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Both parties use the word “preempt” instead of the word
“supersede” when discussing CUTSA’s effect on Plaintiffs’ return of
personal property claim. (E.g., Def.’s Mot. to Dismiss 1:26; Pls.’ Opp’n
to Mot. to Dismiss 1:3.) However, in California, “preemption concerns
whether a federal law has superseded a state law or a state law has
superseded a local law, not whether one provision of state law has
displaced other provisions of state law.” Zengen, Inc. v. Comerica Bank,
41 Cal. 4th 239, 247 n.5 (2007). Accordingly, since CUTSA itself employs
the term “supersede” to describe its effect on other California laws,
see Cal. Civ. Code § 3426.7(a), the term “supersede” is employed here
throughout. See Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210,
232 n.14 (2010) (adopting the term “supersede” in this context).
2

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an explicit supersession provision, it implicitly supersedes all claims

2

not covered by its savings clauses, which exempt from supersession

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“contractual remedies,” “criminal remedies,” and “other civil remedies

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that are not based upon misappropriation of a trade secret.” Cal. Civ.

5

Code §

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Operations, Inc., 171 Cal. App. 4th 939, 954 (2009). Defendant argues

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that Plaintiffs’ return of personal property claim is subject to CUTSA’s

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implicit supersession since it is not covered by any of CUTSA’s savings

9

clauses.

3426.7(b);4

K.C.

Plaintiffs

Multimedia,

counter

that

Inc.

v.

their

Bank

claim

of

is

Am.

Tech. &

exempted

from

10

supersession under § 3426.7(b)(2) because the claim is “not based” in

11

full “upon misappropriation of a trade secret.” (See Pls.’ Opp’n to Mot.

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to Dismiss, ECF No. 18, 3:8—10 (asserting that “[t]o the extent that the

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return

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misappropriation of trade secrets, it is not subject to preemption”).)

15

Plaintiffs

also

16

“premature”

since

17

alternate theories,” and their return of personal property claim is “in

18

addition

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misappropriation claim. (Id. 1:16—17, 3:5.)

of

personal

to”

or

property

argue

that

Plaintiffs

“an

claim

is

not

Defendant’s
are

“entitled

alternative

to”

based

solely

supersession
to

their

plead

CUTSA

on

the

motion

is

multiple

and

trade

secrets

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The parties advance—and courts have employed—three distinct

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approaches when defining the scope of Cal. Civ. Code § 3426.7(b)(2)’s

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exemption from supersession for “other civil remedies that are not based

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26
27
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CUTSA’s savings clauses state in full: “This title does not affect
(1) contractual remedies, whether or not based upon misappropriation of
a trade secret, (2) other civil remedies that are not based upon
misappropriation of a trade secret, or (3) criminal remedies, whether or
not based upon misappropriation of a trade secret.” Cal. Civ. Code §
3426.7(b).
3

1

upon misappropriation of a trade secret.”5 Under one approach a claim has

2

been found exempt from supersession by § 3426.7(b)(2) so long as the

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claim requires the allegation of “something more” than just CUTSA trade

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secrets misappropriation. E.g., Leatt Corp. v. Innovative Safety Tech.,

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LLC, No. 09-CV-1301-IEG (POR), 2010 WL 2803947, at *6 (S.D. Cal. July

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15,

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plaintiffs “base their injury not only the theft of their trade secrets,

8

but also on other ‘confidential’ and/or ‘proprietary’ information”)

9

(emphases added); PostX Corp. v. Secure Data in Motion, Inc., No. C 02-

10

04483 SI, 2004 WL 2663518, at *3 (N.D. Cal. Nov. 20, 2004) (denying

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CUTSA supersession since plaintiff’s common law and CUTSA claims “are

12

not based on precisely the same nucleus of facts,” but involve “new

13

facts” as well) (emphases added). Another approach has found a claim

14

exempt from supersession under § 3426.7(b)(2) unless it is based on the

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taking of information that is ultimately adjudged to be a trade secret.

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E.g., Ali v. Fasteneres for Retail, Inc., 544 F. Supp. 2d 1064, 1072

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(E.D. Cal. 2008) (denying CUTSA supersession dismissal motion since “at

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this

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misappropriated information was a trade secret”). Under this approach,

20

since designation of information as a trade secret involves a “largely

21

factual” inquiry that can rarely be conducted via a dismissal motion,

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K.C. Multimedia, Inc., 171 Cal. App. 4th at 954, dismissal motions are

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typically denied as “premature,” Ali, 544 F. Supp. 2d at 1072, or

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“inappropriate for resolution at th[e dismissal] stage.”

2010)

(rejecting

point,

it

is

CUTSA

still

supersession

unclear

how

since

much

in

of

their

the

complaint

allegedly

Strayfield

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28

5

Because CUTSA explicitly exempts contractual and criminal remedies
from supersession, Cal. Civ. Code § 3426.7(b)(1), (3), contractual and
criminal remedies are not discussed here. Thus all references to
supersession of claims under CUTSA concern only civil noncontractual
claims.
4

1

Ltd. v. RF Biocidics, Inc., No. CIV. S-11-2613 LKK/GGH, 2012 WL 170180,

2

at *1 (E.D. Cal. 2011). Other courts have found § 3426.7(b)(2) only

3

saves a claim from supersession if a plaintiff “assert[s] some other

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basis” beside trade secrets law for a property right in the information

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at issue. E.g., Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210,

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237—39 & n.22 (2010), disapproved of on other grounds by Kwikset Corp.

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v. Superior Court, 51 Cal. 4th 310, 337 (2011) (setting forth this

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approach and rejecting the alternative CUTSA supersession approaches,

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referenced herein as the “premature” and “something more” approaches);

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K.C.

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“something more” approach). See generally Roger M. Milgrim, Milgrim on

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Trade Secrets, § 1.01[3][a], at 1.240.14(73)—(75), 1.240.14(78)(a)—(82)

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(discussing these divergent approaches to supersession generally and

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noting that courts remain divided on the issue).

Multimedia,

Inc.,

171

Cal.

App.

4th

at

958

(rejecting

the

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Here, the success of Defendant’s dismissal motion depends on

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which approach is employed when determining the CUTSA supersession

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issue.6 Plaintiffs urge the Court to adopt either the “something more”

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or the “premature” approach, arguing that either of these approaches

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warrants denial of Defendant’s dismissal motion. (See Pls.’ Opp’n to

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Mot. to Dismiss 4:24, 3:8—10 (asserting Defendant’s “motion to dismiss

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Plaintiffs’ claim for return of personal property is based
essentially on the allegation that Defendant took Plaintiffs’
“confidential, proprietary, and/or trade secret information.” (Compl. ¶¶
21, 22, 43, 44.) No further detail is alleged in the complaint about the
information taken, and no “personal property” other than the referenced
“information” was allegedly taken. Cf., e.g., Ikon Office Solutions,
Inc. v. Rezente, No. CIV. 2:10-1704 WBS EFB, 2011 WL 1402882, at *3
(E.D. Cal. Apr. 13, 2011) (denying CUTSA supersession motion without
deciding the scope of § 3426.7(b)(2) since plaintiff’s non-CUTSA claim
could be pled without reference to the taking of valuable information);
Aversan USA, Inc. v. Jones, No. 2:09-cv-00132-MCE-KJM, 2009 WL 1810010,
at *3—5 (E.D. Cal. June 24, 2009) (same).
5

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is premature” and “[t]o the extent that the return of personal property

2

claim is not based solely on the misappropriation of trade secrets, it

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is not subject to preemption”).) Defendant counters that the Silvaco

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Data Systems approach governs and requires dismissal of Plaintiffs’

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return of personal property claim. (Def.’s Reply in Supp. of Mot. to

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Dismiss 1:23—2:12 (arguing Plaintiffs misstate the law and urge the

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wrong result by omitting reference to Silvaco Data Systems—the leading

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California

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supersession unless Plaintiffs assert some other basis beside trade

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Court

of

Appeals

opinion

on

the

issue

that

requires

secrets law for a property right in the taken information).)

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Plaintiffs argue that supersession is “premature” since they

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are “entitled to plead multiple and alternate theories” in the complaint

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while “await[ing] the development of evidence in discovery.” (Pls.’

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Opp’n to Mot. to Dismiss 4:24, 1:16—17, 1:8—9.) Rule 8(d)(2) authorizes

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“[a] party [to] state as many separate claims . . . as it has,

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regardless

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preemption in a motion to dismiss.” Johnson v. Armored Transp. of Cal.,

18

Inc., 813 F.2d 1041, 1043 (9th Cir. 1987); e.g., Menchaca v. CNA Grp.

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Life Assur. Co., 331 Fed. App’x 298, 304 (5th Cir. 2009) (finding “no

20

merit”

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alternative pursuant to Federal Rule of Civil Procedure 8 and thus not

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subject to preemption” under ERISA); SunPower Corp. v. SolarCity Corp.,

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No. 12-CV-00694-LHK, 2012 WL 6160472, at *14 (N.D. Cal. Dec. 11, 2012)

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(considering and rejecting plaintiff’s argument “that it would be

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‘premature’ to address the question of [CUTSA] supersession at the

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motion to dismiss stage”); Atrium Grp. De Ediciones Y Publicaciones,

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S.L. v. Harry N. Abrams, Inc., 565 F. Supp. 2d 505, 510 (S.D.N.Y. 2008)

in

of

consistency.”

plaintiff’s

However,

argument

that

28
6

“[l]itigants

his

“claims

ordinarily

are

pled

argue

in

the

1

(concluding that “Rule 8(d)(2) of the Federal Rules of Civil Procedure

2

does not purport to override § 301 preemption” under the Copyright Act).

3

Decision

on

Defendant’s

dismissal

motion

thus

requires

4

determination of the scope of supersession under CUTSA § 3426.7(b)(2).

5

CUTSA is modeled on the Uniform Trade Secrets Act (“UTSA”) and codified

6

in California Civil Code § 3426 through § 3426.11. It is comprehensive

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in its structure and breadth. K.C. Multimedia, Inc., 171 Cal. App. 4th

8

at 957; accord Hat World, Inc. v. Kelly, No. CIV. S-12-01591 LKK/EFB,

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2012 WL 3283486, at *4 (E.D. Cal. Aug. 10, 2012). CUTSA’s provisions

10

contain

11

injunctive relief for actual or threatened misappropriation, damages,

12

attorney fees, methods for preserving the secrecy of trade secrets, the

13

limitations period, the effect of the title on other statutes or

14

remedies, statutory construction, severability,’” and other aspects of

15

trade secrets law. K.C. Multimedia, Inc., 171 Cal. App. 4th at 954

16

(quoting AccuImage Diagnostics Corp. v. Terarecon, Inc., 260 F. Supp. 2d

17

941, 953 (N.D. Cal. 2003)) (describing Cal. Civ. Code §§ 3426.1—.11).

18

“CUTSA’s ‘comprehensive structure and breadth’ suggests a legislative

19

intent to occupy the field.” K.C. Multimedia, Inc., 171 Cal. App. 4th at

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957; see also Silvaco Data Sys., 184 Cal. App. 4th at 234 (“[T]he act as

21

a whole[] manifest[s] a Legislative intent to occupy the field of trade

22

secret liability to the exclusion of other civil remedies.”); see

23

generally Rojo v. Kliger, 52 Cal. 3d 65, 80 (1990) (explaining that

24

“general

25

legislative intent).

26

“‘the

and

definition

comprehensive

of

misappropriation

legislation”

and

indicates

trade

a

secret,

supersessive

Further, CUTSA’s stated purpose is “to make uniform the law.”

27

Cal. Civ. Code § 3426.8. Its goal, as explained in UTSA, is the

28

“substitution of unitary definitions of trade secret and trade secret
7

1

misappropriation . . . for the various property, quasi-contractual, and

2

violation of fiduciary relationship theories of noncontractual liability

3

utilized at common law.” Unif. Trade Secrets Act prefatory note, 14

4

U.L.A. 531 (2005). Its terms are to “be applied and construed to

5

effectuate [this] general purpose.” Cal. Civ. Code § 3426.8; see also

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Unif. Trade Secrets Act § 8, 14 U.L.A. 656 (2005). In light of CUTSA’s

7

scope and purpose, permitting Plaintiffs to proceed with both their

8

CUTSA and return of personal property claims would prevent the intended

9

“substitution of unitary definitions for the . . . various theories

10

. . . of noncontractual liability” utilized before CUTSA’s adoption and

11

thus

12

prefatory note; see Silvaco Data Sys., 184 Cal. App. 4th at 233—34

13

(“[CUTSA’s]

14

supplementary

15

governing trade secret liability. The central purpose of the act was

16

precisely to displace that web with a relatively uniform and consistent

17

set of rules defining—and thereby limiting—liability.”).

contravene

CUTSA’s

purpose
to

stated

could

the

not

purpose.

be

notoriously

Unif.

served

by

haphazard

Trade

merely

web

of

Secrets

Act

making

[it]

disparate

laws

18

Further, the effect of supersession under CUTSA is facially

19

broader than what exists under UTSA. The Uniform Trade Secrets Act

20

states that it “displaces conflicting . . . law,” Unif. Trade Secrets

21

Act § 7(a), 14 U.L.A. 651 (2005), meaning in multiple jurisdictions that

22

it

23

provisions.” K.C. Multimedia, Inc., 171 Cal. App. 4th at 956 (quotation

24

omitted).

25

however. See Fairbanks v. Superior Court, 46 Cal. 4th 56, 61 (2009)

26

(noting the Legislature’s omission of provision from proposed national

27

model

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supersession clause, and instead contains savings clauses exempting

“only

law

preempts

California

common

law

claims

intentionally

“indicat[es]

its

rejected

intent”).

8

that

CUTSA

‘conflict’

this

omits

portion

UTSA’s

with

of

its

UTSA,

explicit

1

certain remedies from supersession, including “other civil remedies that

2

are not based upon misappropriation of a trade secret.” Cal. Civ. Code

3

§ 3426.7(b)(2). CUTSA thus implicitly supersedes all remedies not

4

covered by its savings clauses. Silvaco Data Sys., 184 Cal. App. 4th at

5

234; K.C. Multimedia, Inc., 171 Cal. App. 4th at 954. CUTSA’s implicit

6

general

7

provision displacing just “conflicting” law. Nonetheless, most courts

8

interpreting UTSA’s narrower preemption provision have found that, in

9

light of UTSA’s “history, purpose, and . . . statutory scheme,” it

10

supersedes other claims based on the taking of valuable information.

11

E.g., Robbins v. Supermarket Equip. Sales, LLC, 722 S.E. 2d 55, 58 (Ga.

12

2012) (finding UTSA supersedes every “lesser and alternate theory” based

13

on the taking of valuable information); BlueEarth Biofuels, LLC v. Haw.

14

Elec. Co., Inc., 235 P.3d 310, 321 (Haw. 2010) (noting the “majority of

15

the courts” interpreting UTSA have reached this conclusion); Mortg.

16

Specialists, Inc. v. Davey, 904 A.2d 652, 663 (N.H. 2006) (recognizing

17

that the “weight of authority” has held the same). Given CUTSA’s

18

intentionally broader wording, CUTSA supersedes those claims typically

19

displaced under the narrower UTSA provision, which California rejected.

20

Given CUTSA’s breadth and structure, its purpose of promoting

21

uniformity, and the broad superseding effect of narrower uniform trade

22

secrets acts, the approach outlined in Silvaco Data Systems is adopted,

23

and

24

“assert[s] some other basis” beside trade secrets law for a property

25

right in taken information. Silvaco Data Sys., 184 Cal. App. 4th at 238.

26

Accordingly, since Plaintiffs’ return of personal property

27

claim is based on the taking of “confidential, proprietary, and/or trade

28

secret information,” (Compl. ¶ 21), and since it is not exempted from

supersession

therefore

§

is

facially

3426.7(b)(2)

is

broader

than

inapplicable

9

UTSA’s

unless

preemption

a

plaintiff

1

supersession by § 3426.7(b), Plaintiffs’ return of personal property

2

claim is dismissed with prejudice. See Swartz v. KPMG LLP, 476 F.3d 756,

3

761 (9th Cir. 2007) (affirming dismissal with prejudice where statute

4

made amendment futile).

5

B.

Anti-SLAPP Special Motion to Strike

6

Defendant seeks to strike Plaintiffs’ remaining claims under

7

California’s anti-SLAPP statute, arguing that Plaintiffs’ claims are “an

8

attempt to punish [Defendant] for exercising his constitutional rights

9

of petition and free speech in connection with class action litigation

10

filed against [Plaintiffs by Defendant] exactly one week prior to this

11

action.” (Def.’s Special Mot. to Strike, (“Def.’s Mot.”), ECF No. 14,

12

1:2—4.)

13

[Defendant]

14

misappropriating confidential and trade secret information,” (Pls.’

15

Opp’n to Special Mot. to Strike (“Pls.’ Opp’n”) ECF No. 20, 10:19—21),

16

not on the class action.

Plaintiffs

respond

breaching

that

his

their

claims

are

Confidentiality

“premised

Agreements

on
and

17

“A SLAPP is a civil lawsuit that is aimed at preventing

18

citizens from exercising their political rights or punishing those who

19

have done so.” Simpson Strong-Tie Co., Inc. v. Gore, 49 Cal. 4th 12, 21

20

(2010). “SLAPP suits masquerade as ordinary lawsuits,” but “they are

21

generally meritless suits brought primarily to chill the exercise of

22

free

23

sanctions against the defendant.” Id. (quotation omitted); accord Hilton

24

v. Hallmark Cards, 599 F.3d 894, 902 (9th Cir. 2009). California’s anti-

25

SLAPP statute, Cal. Civ. Proc. Code § 425.16, was enacted to vindicate

26

free speech and petition rights due to concern over “‘a disturbing

27

increase’” in such suits. Oasis W. Realty, LLC, 51 Cal. 4th at 815 n.1

28

(2011) (quoting Cal. Civ. Proc. Code § 425.16(a)); accord DC Comics v.

speech

or

petition

rights

by

10

the

threat

of

severe

economic

1

Pac. Pictures Corp., 706 F.3d 1009, 1015—16 (9th Cir. 2013). Under the

2

statute, a defendant subjected to a SLAPP may file a special motion to

3

strike in state or federal court to expedite the early dismissal of the

4

plaintiff’s unmeritorious SLAPP claims. Price v. Stossel, 620 F.3d 992,

5

999 (9th Cir. 2010); Simpson Strong-Tie Co., 49 Cal. 4th at 21; see also

6

Makaeff v. Trump Univ., LLC, 715 F.3d 254, 272—75 (9th Cir. 2013)

7

(Kozinski, J., concurring) (recognizing the same, but calling for en

8

banc reconsideration of the federal application of the anti-SLAPP

9

statute).

10

When assessing an anti-SLAPP motion, the court considers the

11

pleadings and supporting and opposing affidavits to determine the facts

12

upon which liability is based. Cal. Civ. Proc. Code § 425.16(b)(2);

13

United States ex rel. Newsham v. Lockheed Missiles & Space Co., Inc.,

14

190 F.3d 963, 971 (9th Cir. 1999). Further, evidence favorable to

15

Plaintiffs

16

credibility of the evidence is assessed. Soukup v. Law Offices of

17

Herbert Hafif, 39 Cal. 4th 260, 269 n.3 (2006).

18

is

accepted

as

true,

and

neither

the

weight

nor

the

To prevail on his anti-SLAPP motion, Defendant must make a

19

threshold

20

Defendant’s “protected activity.” In re Episcopal Church Cases, 45 Cal.

21

4th 467, 477 (2009); accord DC Comics v. Pac. Pictures Corp., 706 F.3d

22

at 1013. If Defendant makes this initial showing, the burden shifts to

23

Plaintiffs to establish “a probability of prevailing on the claim[s].”

24

Oasis W. Realty, LLC, 51 Cal. 4th at 819—20; accord Vess v. Ciba-Geigy

25

Corp. USA, 317 F.3d 1097, 1110 (9th Cir. 2003).

showing

that

each

of

Plaintiffs’

claims

“arises

from”

26

Defendant’s threshold showing is “objective” and “strictly”

27

limited. Equilon Enters. v. Consumer Cause, Inc., 29 Cal. 4th 53, 65, 59

28

(2002). Defendant need not establish Plaintiffs’ subjective intent to
11

1

chill his speech or petition rights. Id. at 58—67. Nor need he show that

2

Plaintiffs’ actions actually engendered a chilling effect. City of

3

Cotati v. Cashman, 29 Cal. 4th 69, 75—76 (2002); accord Vess, 317 F.3d

4

at 1110. Instead, Defendant must simply demonstrate that he engaged in

5

“protected activity” and that each of Plaintiffs’ claims against him

6

“arises from” that protected activity. Navellier v. Sletten, 29 Cal. 4th

7

82, 89 (2002); accord Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 595

8

(9th Cir. 2010).

9

1. Protected Activity

10

Defendant argues he engaged in protected activity under §

11

425.16 by prosecuting a class action against Plaintiffs and by conveying

12

information to class counsel in advance of that litigation. (Clark

13

Decl., ECF No. 14—3, ¶ 4.) The anti-SLAPP statute specifically protects

14

“any written or oral statement or writing made before a

15

proceeding

16

consideration or review by a

17

Filing suit in federal court is “indisputably” a protected activity

18

under § 425.16. Navellier, 29 Cal. 4th at 90. Likewise, “communications

19

preparatory to or in anticipation of the bringing of an action . . . are

20

equally entitled to the benefits of section 425.16.” Briggs v. Eden

21

Council for Hope & Opportunity, 19 Cal. 4th 1106, 1115 (1999) (finding

22

defendant’s

23

litigation” that was initiated later and therefore constituted protected

24

activity under the statute); Flatley v. Mauro, 39 Cal. 4th 299, 322 n.11

25

(recognizing that “prelitigation conduct” falls within the ambit of §

26

425.16);

27

(collecting cases finding the same). Since Defendant filed a lawsuit in

28

federal court—a context specifically and “indisputably” protected by the

.

.

.

[or]

counseling

Siam

v.

made

in

connection

with

. . . judicial

an

issue

under

. . . judicial body.” § 415.16(e)(1), (2).

of

Kizilbash,

third

130

party

Cal.

12

was

App.

“in

4th

anticipation

1563,

1570

of

(2005)

1

anti-SLAPP

2

anticipation of [that] litigation,” his actions facially qualify as

3

protected activity under § 425.16.

statute—and

made

“communications

preparatory

to

or

in

4

However, Plaintiffs argue that Defendant’s conduct is not

5

protected activity under § 425.16 because it constitutes illegal theft

6

and theft of trade secrets under Cal. Penal Code §§ 484, 499c, and

7

illegal criminal activity is not protected by the anti-SLAPP statute.

8

(Pls.’ Opp’n 8:1—10:4.) Defendant counters that he did not engage in any

9

illegal activity, and addresses Plaintiffs’ factual illegality arguments

10

in turn. (Def.’s Reply in Supp. of Mot. to Strike (“Def.’s Reply”) ECF

11

No. 28, 10:3—14:26 (contending that Defendant regularly downloaded an

12

allegedly confidential document called Page 13 as part of his job, that

13

his visit to the website topclassactions.com was neither illegal nor

14

surprising,

15

Plaintiffs did not attempt to maintain the secrecy of Page 13).)

that

he

never

illegally

received

Page

13,

and

that

16

By its very terms, the anti-SLAPP statute protects only “the

17

valid exercise of the constitutional rights of freedom of speech and

18

petition.” Cal. Civ. Proc. Code § 425.16(a); Flatley, 39 Cal. 4th at 313

19

(recognizing

20

statement. . . not all speech or petition activity is protected by

21

section 425.16.” Flatley, 39 Cal. 4th at 313. If “either the defendant

22

concedes, or the [uncontroverted] evidence conclusively establishes,

23

that the assertedly protected speech or petition activity was illegal as

24

a matter of law, the defendant is precluded from using the anti-SLAPP

25

statute to strike the plaintiff’s action.” Id. at 320. However, there is

26

no

27

illegally, but instead strenuously opposes Plaintiffs’ arguments about

28

the illegality of his conduct. (See Def.’s Reply 10:3—14:26.) Nor has it

such

the

showing

same).

here.

“As

a

Defendant

13

necessary

does

not

corollary

concede

that

to

he

this

acted

1

been established with “uncontroverted and conclusive evidence” that

2

Defendant engaged in illegal theft and theft of trade secrets. Flatley,

3

39 Cal. 4th at 320.7 Since “there is a factual dispute as to the

4

illegality of [D]efendant’s conduct, [] the court cannot conclude that

5

the conduct was illegal as a matter of law.” Fremont Reorganizing Corp.

6

v. Faigin, 198 Cal. App. 4th 1153, 1168 (2011); see also Flatley, 39

7

Cal. 4th at 316. Accordingly, Defendant has established the first

8

portion of his threshold showing.

9

2. Arising From

10

Under the second portion of his threshold showing, Defendant

11

argues Plaintiffs’ lawsuit “arises from” his protected activity under §

12

425.16 since Plaintiffs: (1) filed this action one week after Defendant

13

helped initiate the class action, (Clark Decl. ¶¶ 4, 8 & Ex. A); (2)

14

offered to dismiss this action if Defendant supplied Plaintiffs with the

15

information provided to class counsel by Defendant and Plaintiffs’

16

current and former employees, (Carichoff Decl., ECF No. 14—5, ¶ 6 & Ex.

17

F); (3) stated that Defendant “improperly used and misrepresented our

18

confidential information to instigate these [class action] lawsuits,”

19

(Suppl. Carichoff Decl., ECF No. 28, ¶ 2 & Ex. G); and (4) referenced

20

expenses defending against the class action as damages in this action.

21

(Topel Decl., ECF No. 25, ¶ 12.) Plaintiffs counter that their claims do

22

not “arise from” Defendant’s protected activity since “protected speech

23

is

not

the

gravamen

of

the

claims,”

which

are

instead

based

on

24
7

25
26
27
28

For example, whereas Plaintiffs submit evidence that Defendant
gave a copy of Page 13 to class counsel, (Topel Decl., ECF No. 25, ¶ 11)
and aver that Plaintiffs attempted to protect the secrecy of Page 13
(Skinner Decl., ECF No. 21, ¶ 4), Defendant submits evidence that Page
13 was not reasonably protected as confidential or trade secret
information (Supp. Clark Decl. ¶ 11, ECF No. 28-2), and argues he was
entitled to supply Page 13 to class counsel because he believed
Plaintiffs’ actions violated California law. (Def.’s Reply 13:22—14:26.)
14

1

Defendant’s “(a) misappropriating [Plaintiffs’] beer specifications

2

document; (b) wrongfully obtaining the beer specifications document from

3

[a current employee] after leaving [the Company]; (c) providing that

4

document to [class counsel]; and, (d) refusing to sign the certification

5

required by the Confidentiality Agreements.” (Pls.’ Opp’n 10:21—25.)

6

To sustain the second portion of his threshold showing,

7

Defendant must demonstrate that Plaintiffs’ claims “arise from” his

8

protected

9

consideration” in § 425.16 “arising from” determinations is whether a

10

claim “is based on the defendant’s protected free speech or petitioning

11

activity.” Id. (emphasis added); Briggs, 19 Cal. 4th at 1114 (equating

12

“arising from” and “based upon” in this context). When a claim involves

13

both

14

Plaintiffs’ claims do, the “principal thrust or gravamen” of each claim

15

determines whether the anti-SLAPP statute applies. Club Members for an

16

Honest Election v. Sierra Club, 45 Cal. 4th 309, 319 (2008); accord In

17

re Episcopal Church Cases, 45 Cal. 4th at 477 (applying “the gravamen or

18

principal thrust” test in “arising from” determination). The fact that

19

Plaintiffs’ claims were “filed after” or “triggered by” Defendant’s

20

protected action is insufficient to demonstrate that Plaintiffs’ claims

21

“arose from” Defendant’s protected activity. Navellier, 29 Cal. 4th at

22

89. Nor is it enough for Plaintiffs’ claims to be “in response to” or

23

“in retaliation for” Defendant’s protected activity. City of Cotati, 29

24

Cal. 4th at 78; see also Navellier, 29 Cal. 4th at 90 (finding claims

25

“arose from” defendant’s protected activity since “but for [defendant’s

26

protected litigation], plaintiffs’ present claims would have no basis”).

27

Here, Defendant presents evidence that Plaintiffs filed this

28

action because of Defendant’s protected activity. However, Plaintiffs’

activity.

protected

and

Navellier,

29

nonprotected

15

Cal.

4th

activity,

at

as

89.

The

“critical

Defendant

argues

1

“subjective intent . . . is not relevant under the anti-SLAPP statute.”

2

City of Cotati, 29 Cal. 4th at 78. Even an “oppressive” claim filed “in

3

retaliation for . . . litigation is not subject to the anti-SLAPP

4

statute simply” for that reason. Id. Accordingly, Defendant’s evidence

5

of Plaintiffs’ motivation does not establish that Plaintiffs’ claims

6

arose from Defendant’s protected activity. See In re Episcopal Church

7

Cases, 45 Cal. 4th at 478 (“The . . . fact that protected activity may

8

lurk in the background—and may explain why the rift between the parties

9

arose in the first place—does not transform a . . . dispute into a SLAPP

10

suit.”).

11

Nor

is

Defendant’s

argument

persuasive

that

in

similar

12

contexts

13

Plaintiffs’ argument that their claims are premised on Defendant’s

14

nonprotected misappropriation and breach of contract, not on Defendant’s

15

protected litigation activity. (See Def.’s Reply 9:14—24 (citing Fox

16

Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 294, 304-08

17

(2001)).) In Fox Searchlight, on which Defendant relies, former in-house

18

counsel for Fox sued Fox for wrongful termination, and Fox sued the

19

former counsel for disclosing confidential information in the course of

20

prosecuting the wrongful termination action. Id. at 298—99. The court

21

held that “in—house counsel may disclose ostensible employer—client

22

confidences to her own attorneys to the extent they may be relevant to

23

the preparation and prosecution of her wrongful termination action

24

against her former client—employer.” Id. at 310. Defendant’s argument

25

here depends on “[d]ictum in Fox Searchlight suggest[ing that] ‘a

26

plaintiff cannot frustrate the purposes of the SLAPP statute through a

27

pleading tactic of combining allegations of protected and nonprotected

28

activity

California

under

the

appellate

label

of

courts

one
16

cause

have

of

“expressly

action.’”

rejected”

Martinez

v.

1

Metabolife Int’l, Inc., 113 Cal. App. 4th 181, 188 (2003) (quoting Fox

2

Searchlight, 89 Cal. App. 4th at 308)). However, Fox Searchlight was

3

issued before the California Supreme Court explained the statute’s “not

4

always easily met” requirement that a SLAPP must itself be “based on”

5

Defendant’s protected activity, Equilon Enters., 29 Cal. 4th at 66, and

6

it resulted in a “specific and limited” holding confined to the in—house

7

counsel and wrongful termination context. Castleman v. Sagaser, 216 Cal.

8

App. 4th 481, 501 (2013). Defendant “cannot take advantage of the

9

anti-SLAPP statute simply because the complaint [or submitted evidence]

10

contains

11

[D]efendant.” Martinez, 113 Cal. App. 4th at 188.

12

some

references

to

speech

or

petitioning

activity

by

In this case, Defendant’s protected activity, unmentioned in

13

the

14

nonprotected wrongdoing, is “merely incidental” to each of Plaintiffs’

15

claims, making Plaintiffs claims beyond the scope of the anti-SLAPP

16

motion to strike. See Peregrine Funding, Inc. v. Sheppard Mullin, 133

17

Cal. App. 4th 658, 672 (2005) (describing the “apparently unanimous

18

conclusion of published [California] appellate cases” that the anti-

19

SLAPP

20

activity); see also

21

this test); M.F. Farming, Co. v. Couch Distrib. Co., 207 Cal. App. 4th

22

180, 197 (2012) (collecting cases employing the “merely incidental”

23

test);

24

(defining an incidental act as an “act [that] is not alleged to be the

25

basis

26

“breach[ed]

27

confidential information” stand alone, (Pls.’ Opp’n 10:19—21), stating

28

a claim for breach of contract and misappropriation of trade secrets

complaint

statute

Wallace

for

and

is

v.

referenced

inapplicable

to

as

evidence

“merely

of

Defendant’s

incidental”

protected

Mindys Cosmetics, Inc., 611 F.3d at 598 (applying

McCubbin,

liability”).
his

only

196

Here,

Confidentiality

Cal.

App.

Plaintiffs’
Agreements

17

4th

1169,

claims
and

1183

that

(2011)

Defendant

misappropriat[ed]

1

without reference to Defendant’s protected litigation. Since Defendant’s

2

“activity that gives rise to his [] asserted liability” does not

3

constitute “protected speech or petitioning,” Plaintiffs’ claims are

4

outside the “definitional focus” of the anti-SLAPP statute. Navellier,

5

29 Cal. 4th at 92. Accordingly, Defendant has not shown that Plaintiffs’

6

claims arise from his protected activity, and Defendant’s special motion

7

to strike Plaintiffs’ claims is denied.

8

III. CONCLUSION

9

For

the

stated

reasons,

Plaintiffs’

return

of

personal

10

property claim is dismissed with prejudice. Defendant’s anti-SLAPP

11

motion is denied.

12

Dated:

July 18, 2013

13
14
15

GARLAND E. BURRELL, JR.
Senior United States District Judge

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