Hudson Martin Ferrante Street Witten & DeMaria, PC v. David Alan Forsythe
Filing
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ORDER DENYING 8 DEFENDANT'S SPECIAL MOTION TO STRIKE COMPLAINT; AND DENYING PLAINTIFF'S REQUEST FOR ATTORNEYS' FEES. Signed by Judge Beth Labson Freeman on 4/7/2017.(blflc1S, COURT STAFF) (Filed on 4/7/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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HUDSON MARTIN FERRANTE STREET
WITTEN & DEMARIA, PC,
Plaintiff,
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v.
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DAVID ALAN FORSYTHE,
Defendant.
United States District Court
Northern District of California
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Case No. 16-cv-06551-BLF
ORDER DENYING DEFENDANT’S
SPECIAL MOTION TO STRIKE
COMPLAINT; AND DENYING
PLAINTIFF’S REQUEST FOR
ATTORNEYS’ FEES
[Re: ECF 8]
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Plaintiff Hudson Martin Ferrante Street Witten & Demaria, PC (“Hudson Martin” or “the
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firm”) claims that Defendant David Alan Forsythe (“Forsythe”) unlawfully accessed and used
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information stored on the firm’s computers in order to gain an advantage in his divorce from the
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firm’s managing partner, non-party Jeannette Witten (“Witten”). Forsythe has filed a special
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motion to strike the complaint under California Code of Civil Procedure § 425.16. Hudson Martin
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opposes the motion and requests that the Court award it statutory attorneys’ fees on the basis that
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the motion is frivolous. Both the motion and the request for attorneys’ fees are DENIED for the
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reasons discussed below.
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I.
BACKGROUND
Hudson Martin filed the complaint in this action on November 10, 2016, alleging the
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following facts. The firm is one of the oldest and most prestigious law firms in Monterey,
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California. Compl. ¶ 7, ECF 1. The firm’s managing partner, Witten, married Defendant Forsythe
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in 2006. Id. ¶ 8. Forsythe is a computer programmer and network integration specialist who
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works from home as an outside contractor for pharmaceutical companies. Id. ¶ 9. Beginning in
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2014, Forsythe began performing occasional IT services for Hudson Martin in exchange for use of
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office space at the firm. Id. ¶ 10.
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On March 16, 2015, Witten filed a divorce petition to commence what have become
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“[b]itter divorce proceedings.” Compl. ¶ 11. In June 2015, Hudson Martin revoked Forsythe’s
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office privileges and changed the firm’s locks to ensure that Forsythe would not have access. Id. ¶
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12. Shortly thereafter, on June 27, 2015, an unknown individual accessed the firm’s account at
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Wells Fargo Bank from a location outside of the firm. Id. ¶ 13. Hudson Martin immediately
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changed all of its financial passwords and user names, but an unknown user continued to access
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the Wells Fargo account. Id. ¶ 15. On July 24, 2015, Wells Fargo prohibited the firm from
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accessing its accounts online and suggested that the firm might be a victim of spyware. Id.
In August 2015, Hudson Martin discovered that an unknown individual had accessed the
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firm’s servers remotely and, in particular, had accessed Witten’s personal email correspondence
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United States District Court
Northern District of California
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regarding her divorce proceedings. Compl. ¶ 16. Hudson Martin immediately changed all of its
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firm passwords, after which there were dozens of failed login attempts. Id. ¶ 17. Hudson Martin
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had IT professionals search all its computers, which resulted in discovery of spyware on computer
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workstations at the firm and on Witten’s laptop computer which she used both at the firm and at
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home. Id. ¶ 18. The search also revealed that a remote login program had been installed on
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Witten’s laptop without her permission or knowledge. Id. ¶ 19. After the remote login program
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was removed from the laptop, the unauthorized login attempts to the firm’s Wells Fargo account
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stopped. Id. ¶ 20.
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In October 2016, Forsythe produced documents to Witten in the divorce proceedings
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which included images of Hudson Martin checks. Compl. ¶ 24. Hudson Martin determined that
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the images were cropped screenshots taken from the firm’s QuickBooks files. Id. The firm uses
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its QuickBook files as a client management system, and the files contain attorney-client protected
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material, including client lists; clients’ contact information and financial information; and
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employees’ contact information, social security numbers, paycheck information, and medical
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insurance information. Id. ¶ 22. Forsythe had attempted to obtain Hudson Martin’s QuickBook
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files for use in the divorce proceedings by means of subpoena, but after Hudson Martin objected to
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production, Forsythe dropped the issue and did not move to compel production. Id. ¶¶ 21-23. At
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no time was any Hudson Martin employee, or non-employee such as Forsythe, authorized to copy
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or remove the firm’s QuickBook files from the firm’s secure, firewalled server. Id. ¶ 25.
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Forsythe’s divorce attorney thereafter stated that Forsythe had copied Hudson Martin’s
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QuickBook files to his personal computer and that both Forsythe and his counsel were in
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possession of the QuickBook files. Id. ¶ 26.
Hudson Martin believes that Forsythe was the individual who remotely accessed the firm’s
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servers and the firm’s Wells Fargo account. Compl. ¶¶ 29-13. The firm also believes that
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Forsythe used that access to view Witten’s email correspondence with her divorce attorney. Id.
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Hudson Martin sues Forsythe for: (1) violation of the federal Computer Fraud and Abuse Act, 18
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U.S.C. § 1030 et seq.; (2) violation of California’s Comprehensive Computer Data Access and
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Fraud Act, California Penal Code § 502; and (3) conversion.
Forsythe asserts that Hudson Martin’s suit is a strategic lawsuit against public participation
United States District Court
Northern District of California
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(“SLAPP”), and he brings a special motion to strike the complaint under California’s anti-SLAPP
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statute, California Code of Civil Procedure § 425.16. Hudson Martin opposes the motion and
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seeks attorneys’ fees under a subsection of § 425.16 which provides for an award of fees where the
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special motion to strike is frivolous.
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II.
LEGAL STANDARD
“Under California’s anti-SLAPP statute, a defendant may bring a special motion to strike a
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cause of action arising from constitutionally protected speech or petitioning activity.” Barry v.
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State Bar of California, 2 Cal. 5th 318, 320 (2017) (citing Cal. Civ. P. Code § 425.16(b)(1)). A
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defendant in federal court may bring an anti-SLAPP motion with respect to California state law
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claims asserted under either diversity jurisdiction or supplemental jurisdiction. Jen v. City & Cty.
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of San Francisco, No. 15-CV-03834-HSG, 2016 WL 3669985, at *11 (N.D. Cal. July 11, 2016).
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The anti-SLAPP statute does not apply to claims asserted under federal law. Hilton v. Hallmark
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Cards, 599 F.3d 894, 901 (9th Cir. 2010).
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“The analysis of an anti-SLAPP motion proceeds in two steps: First, the court decides
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whether the defendant has made a threshold showing that the challenged cause of action is one
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arising from protected activity.” Barry, 2 Cal. 5th at 321 (internal quotation marks and citations
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omitted). When a claim is mixed, meaning that it is based on allegations of both protected and
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unprotected activity, the unprotected activity is disregarded at the first step. Baral v. Schnitt, 1
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Cal. 5th 376, 396 (2016).
“If the court determines that relief is sought based on allegations arising from activity
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protected by the statute, the second step is reached.” Baral, 1 Cal. 5th at 396. “There, the burden
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shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is
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legally sufficient and factually substantiated.” Id. “The court, without resolving evidentiary
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conflicts, must determine whether the plaintiff’s showing, if accepted by the trier of fact, would be
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sufficient to sustain a favorable judgment.” Id. “[T]hough the court does not weigh the credibility
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or comparative probative strength of competing evidence, it should grant the motion if, as a matter
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of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish
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United States District Court
Northern District of California
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evidentiary support for the claim.” Hilton, 599 F.3d at 903 (internal quotation marks and citations
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omitted) (brackets in original). If the plaintiff fails to meet its burden at the second step, the claim
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based on protected activity is stricken and “[a]llegations of protected activity supporting the
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stricken claim are eliminated from the complaint, unless they also support a distinct claim on
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which the plaintiff has shown a probability of prevailing.” Baral, 1 Cal. 5th at 396.
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III.
DISCUSSION
Forsythe moves to strike the “entire Complaint.” Amended Notice of Motion at 1, ECF
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16. As noted above, the anti-SLAPP statute does not apply to federal claims, and therefore does
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not apply to Claim 1 for violation of the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030
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et seq. See Hilton, 599 F.3d at 901. The Court’s analysis thus is limited to Claims 2 and 3, which
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are asserted under state law.
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At the first step of the analytical framework set forth above, the Court finds that Forsythe
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has made a threshold showing that Hudson Martin’s state law claims are based at least in part on
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allegations of protected activity. Claim 2 asserts violations of California Penal Code § 502, which
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enumerates multiple criminal offenses relating to unauthorized access, taking, and/or use of data
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stored on a computer, computer system, or computer network, and creates a private right of action
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for individuals who suffer injury as a result of conduct falling within the statute. Cal. Penal Code
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§ 502(c), (e). Hudson Martin alleges that Forsythe knowingly accessed and without permission
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took, copied, and/or used data from Hudson Martin’s computers, computer systems and/or
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computer network. Compl. ¶¶ 42-46. With respect to “use” of the data, Hudson Martin alleges
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that Forsythe “has used and seeks to use the information obtained to gain advantage, financial and
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otherwise, in his divorce proceedings.” Id. ¶¶ 36, 41.1 While Forsythe’s alleged conduct in
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accessing the firm’s computers and taking data may not constitute protected activity, his alleged
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conduct in using the data in his divorce proceedings certainly does. See Kolar v. Donahue,
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McIntosh & Hammerton, 145 Cal. App. 4th 1532, 1537 (2006) (“The anti-SLAPP protection for
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petitioning activities applies not only to the filing of lawsuits, but extends to conduct that relates to
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such litigation, including statements made in connection with or in preparation of litigation.”).
Claim 3 is for conversion under California common law. “The elements of a conversion
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United States District Court
Northern District of California
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claim are (1) the plaintiff’s ownership or right to possession of the property at the time of the
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conversion; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and
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(3) damages.” Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 601 (9th Cir. 2010). “It is
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necessary to show that the alleged converter has assumed control over the property or that the
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alleged converter has applied the property to his own use.” Id. (internal quotation marks and
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citation omitted) (emphasis added). Hudson Martin alleges specifically that Forsythe has applied
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the property to his own use, as the firm alleges that Forsythe used and seeks to use the information
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obtained from the firm’s computers in his divorce proceedings. Compl. ¶¶ 36, 51. As noted
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above, petitioning activities protected by the anti-SLAPP statute include litigation and conduct
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that relates to litigation. See Kolar, 145 Cal. App. 4th at 1537. Thus at least those the aspects of
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Hudson Martin’s conversion claim based on Forsythe’s alleged use of the firm’s information in his
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divorce proceedings are based upon protected activity.
Because Forsythe has made a threshold showing that Claims 2 and 3 arise at least in part
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from protected activity, the Court must move on to the second step of the anti-SLAPP analysis,
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which requires the Court to determine whether Hudson Martin has met its burden to show that
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The allegation regarding Forsythe’s use of the information in his divorce proceedings is set forth
in Claim 1 for violation of the federal Computer Fraud and Abuse Act, see Compl. ¶ 36, but it is
incorporated into the state law claims for violations of California Penal Code § 502 and for
conversion, see Compl. ¶¶ 41, 51.
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those claims are legally sufficient and factually substantiated. The Court concludes that Hudson
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Martin’s submission of Witten’s declaration is sufficient to meet its burden. Forsythe concedes in
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his own declaration submitted with his motion that he possessed the firm’s QuickBooks file; he
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states that he has turned over a thumb drive containing the file and has deleted the file from his
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computer. Forsythe Decl. at 1, ECF 8-2. Witten states that nobody, including Forsythe, “has ever
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been authorized to remove the QuickBooks file from the secure, firewalled server, particularly
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because the file contains such privileged and sensitive information.” Witten Decl. ¶ 10. She
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expands at length on that statement, stating specifically that Forsythe was never authorized to
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download, transfer, or copy the QuickBooks file; was never authorized to copy and possess the
QuickBooks file; and was never authorized to download the QuickBooks file to his personal
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United States District Court
Northern District of California
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computer. Id. ¶¶ 11-12, 27. Witten’s statements, if accepted by the trier of fact, would be
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sufficient to sustain a favorable judgment for Hudson Martin on its state law claims. See Baral, 1
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Cal. 5th at 396 (at the second step of anti-SLAPP analysis, court “must determine whether the
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plaintiff’s showing, if accepted by the trier of fact, would be sufficient to sustain a favorable
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judgment”).
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In his reply brief, Forsythe argues that even if he took the firm’s data, his actions were
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authorized. He argues that “Defendant, at the time he took actions related to the accounting
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information had a community property interest in the bookkeeping information of the firm, and
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had been given express authority to act in regard to those.” Reply at 11, ECF 19. Forsythe cites
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no authority for the proposition that the law entitled him to protect his interests in his divorce
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proceedings by means of self-help access to the confidential files of a third party, Hudson Martin.
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To the extent that Forsythe relies on his own declaration statements that he was authorized to
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access and download the firm’s QuickBooks file, see Forsythe Decl. at 2, those statements are
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contradicted by Witten’s declaration, see Witten Decl. ¶¶ 11-12, 27. In evaluating Hudson
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Martin’s showing at the second step of the anti-SLAPP analysis, the Court “does not weigh the
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credibility or comparative probative strength of competing evidence.” Hilton, 599 F.3d at 903.
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Where there is a conflict in the evidence, the Court may grant the anti-SLAPP motion only “if, as
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a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to
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establish evidentiary support for the claim.” Id. That is not the case here. To the contrary,
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Hudson Martin has demonstrated that its state law claims have “the requisite minimal merit” to
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defeat Forsythe’s motion. Navellier v. Sletten, 29 Cal. 4th 82, 94 (2002).
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Accordingly, Forsythe’s special motion to strike is DENIED.2 Although Forsythe has not
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prevailed on motion, the Court declines to find that the motion is frivolous, and therefore Hudson
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Martin’s request for attorneys’ fees likewise is DENIED. The firm seeks fees under a provision of
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§ 425.16 stating that “[i]f the court finds that a special motion to strike is frivolous or is solely
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intended to cause unnecessary delay, the court shall award costs and reasonable attorney’s fees to
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a plaintiff prevailing on the motion.” Cal. Civ. P. Code § 425.16(c)(1). Forsythe made the
requisite threshold showing that Hudson Martin’s state law claims are based at least in part on
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United States District Court
Northern District of California
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allegations of protected activity. The Court’s denial of his motion turns on the adequacy of
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Hudson Martin’s evidence submitted in opposition to the motion. Under those circumstances, the
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Court cannot say that the motion is frivolous.
IV.
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ORDER
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(1)
Defendant’s special motion to strike is DENIED; and
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(2)
Plaintiff’s request for attorneys’ fees is DENIED.
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Dated: April 7, 2017
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BETH LABSON FREEMAN
United States District Judge
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In light of the Court’s disposition of Forsythe’s motion on the grounds discussed above, the
Court need not reach Hudson Martin’s additional argument that the motion is premature or
Forsythe’s arguments regarding evidence not considered by the Court.
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