IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
September 8, 2009
KELLY BARKER, INDIVIDUALLY AND ON BEHALF OF ALL THOSE SIMILARLY SITUATED; KATHY KENOLE, INDIVIDUALLY AND ON BEHALF OF ALL THOSE SIMILARLY SITUATED, PLAINTIFFS,
CHERYL C. KOFF; PHILIP B. AVILA; BORTON & PETRINI, LLP; CHERYL C. KOFF D.B.A. G.O.N.E., A SOLE PROPRIETORSHIP; CHRISTIAN P. HURST DBA G.O.N.E.; DAWN HARLEMAN; SHELLY PREHM; G.O.N.E., A SOLE PROPRIETORSHIP; GONE, INC.; COMPLEX; AND, DOES 1 THROUGH 50, INCLUSIVE, DEFENDANTS.
The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
Defendants Philip B. Avila and Borton Petrini LLP (collectively "Attorney Defendants") move to strike Plaintiffs' Complaint under California's "Anti-Strategic Lawsuit Against Public Participation (SLAPP)" statute, and the Attorney Defendants also seek to strike all individual claims on other grounds; however, only the Anti-SLAPP motion is considered since the Attorney Defendants have not shown that a motion to strike is "a proper way to procure the dismissal of all or a portion of [Plaintiffs'] complaint . . ." 5c Wright, Miller, & Kane, Federal Practice & Procedure, Civil 3d § 1380 p. 391 (West 2004); therefore, the balance of the motion to strike is denied.
Defendants Cheryl C. Koff, Christian P. Hurst, GONE Inc., Chelsea Van Petten, Dawn Harleman, and Shelly Prehm (collectively "GONE"), move to amend their Answer, for summary judgment on Plaintiffs' claims, for summary judgment on their res judicata affirmative defense, for summary judgment on affirmative defenses not yet pled, to include additional affirmative defenses in their Answer, and they seek to adopt the argument and authorities made by the Attorney Defendants in their Anti-SLAPP motion to strike. Plaintiffs Kelly Barker and Kathy Kenole (collectively "Plaintiffs") cross-move for summary judgment on all of Plaintiffs' claims. Each motion is opposed.
GONE's Motion to Amend and for Summary Judgment
GONE seeks to amend their Answer under Federal Rule of Civil Procedure ("Rule") 15 to set forth the following four affirmative defenses: 1) statute of limitations; 2) laches; 3) Rooker-Feldman doctrine; and 4) collateral estoppel and res judicata. Since the collateral estoppel and res judicata defenses are already in GONE's Answer, this portion of the motion is denied as moot. GONE's motion for summary judgment based on new defenses not yet pled in GONE's Answer is denied since the defenses are not yet issues in this case. However, GONE's motion to add these defenses to their Answer is granted, provided that the Amended Answer is filed and served no later than 10 days after this Order is filed.
Plaintiffs opposes GONE's res judicata summary judgment motion arguing "discovery would be needed" to oppose the motion. However, this issue need not be reached since this portion of GONE's motion is denied because the motion is based on state court claims which GONE has not shown are the same as the claims involved in this federal action. Cabrera v. City of Huntington Park, 159 F.3d 374, 381 (9th Cir. 1998) (stating an element of the res judicata defense is "identity of claims").
Plaintiffs' Motion for Summary Judgment
Plaintiffs' summary judgment motion is also denied since it is only supported by conclusory averments, which are insufficient to justify granting the motion. See Walker v. Sumner, 917 F.2d 382, 387 (9th Cir. 1990) (stating that movant's "conclusory assertions were wholly insufficient to sustain the [movant's] burden . . . .") Motion to Strike The Attorney Defendants argue Plaintiffs' Complaint should be stricken under California's Anti-SLAPP statute. However, the Attorney Defendants have not shown this statute applies to the federal claims against them. See Globetrotter Software, Inc., v. Elan Computer Group, Inc., 63 F. Supp. 2d 1127, 1130 (N.D. Cal. 1999) (concluding "the anti-SLAPP statute not applicable to the federal claims asserted by [Plaintiffs]"). Therefore, this portion of the motion is denied.
A two-step analytical process is involved when deciding Plaintiffs' Anti-SLAPP motion. "First, [the Attorney Defendants] must make an initial prima facie showing that the [P]laintiff[s'] suit arises from an act in furtherance of the [Attorney Defendants'] rights of petition . . . ." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1110 (9th Cir. 2003). "Second, once the [Attorney Defendants have] made a prima facie showing, "the burden shifts to the plaintiff to demonstrate a probability of prevailing on [each of their claims against the Attorney Defendants]." Id.
The Attorney Defendants argue Plaintiffs' Complaint in this federal action concerns the Attorney Defendants petitioning activity in state court; specifically, the protected activity under the Anti-SLAPP statute of filing a state court lawsuit on behalf of their clients. (Mot. at 2.) The Attorney Defendants filed claims in state court on behalf of their clients, and subsequently obtained default judgments against Plaintiffs on those claims. These "litigation activities" are protected under the Anti-SLAPP suit. Church of Scientology v. Wollersheim, 42 Cal.App.4th 628, 647-49 (1996)("A cause of action 'arising from' defendant's litigation activity may appropriately be the subject of a [California Code of Civil Procedure] section 425.16 motion to strike. California Code of Civil Procedure § 425.16(e) of the Anti-SLAPP statute prescribes "[A] writing made in . . . a judicial proceeding . . . ." is a protected activity for Anti-SLAPP purposes.
Plaintiffs counter that the Anti-SLAPP statute does not apply because the Attorney Defendants' committed the crime of perjury when litigating the state court action by "using false declarations wherein [the Attorney Defendants] falsely state they have personal knowledge of the facts giving rise to the . . . [state court] lawsuits , when, in fact, [they] have no such personal knowledge," and this perjury is not a protected activity under the Anti-SLAPP statute. (Compl. ¶ 8.) However, "conduct that would otherwise come within the scope of the Anti-SLAPP statute does not lose its coverage simply because it is alleged to have been unlawful or unethical." Lauter v. Anoufrieva, No. 07-6811, 2009 WL 2192362, at *33 (C.D. Cal. July 14, 2009) (citing Birkner v. Lam, 156 Cal. App. 4th 275, 285 (2007)). The "petition activity loses protection only if it is established through defendant's concession or by uncontroverted and conclusive evidence that the conduct was illegal as a matter of law." Id. (citing Flatley v. Mauro, 39 Cal. 4th 299, 320 (2006)). Plaintiffs have not satisfied this standard.
Plaintiffs also argue the Anti-SLAPP statute does not apply because this is an action brought on behalf of the public. Section 425.17 provides "§ 425.16 does not apply to any action brought solely in the public interest or on behalf of the general public if . . . the plaintiff does not seek any relief greater than or different from the relief sought for the general public . . . ." Since Plaintiffs seek the personal relief of setting aside the state default judgments entered against them, this exception does not apply. Accordingly, the Attorney Defendants have met their burden of demonstrating that they were engaged in protected activities under the Anti-SLAPP statute.
The Attorney Defendants argue Plaintiffs have not demonstrated a probability of prevailing on the merits of each state claim at issue. Plaintiffs allege the following claims against the Attorney Defendants: violations of the California Rosenthal Unfair Debt Collection Practices Act ("RFDCPA"); the Unlawful Business Practices Act; conspiracy to commit unlawful acts; state Due Process law; and the California Fair Credit Reporting Act.
The Attorney Defendants argue Plaintiffs have not demonstrated a probability of prevailing on their RFDCPA claims against the Attorney Defendants since Plaintiffs failed to provide evidence that they brought the action "within one year from the date on which the violation occurs." Cal. Civ. Code § 1788.30(f). The Attorney Defendants argue the "exhibits to the [C]omplaint demonstrate that the alleged acts occurred more than one-year prior to the filing of the [C]omplaint." (Attorney Defendants ['] Mot. at 2.) The Attorney Defendants are correct.
The Attorney Defendants also argue Plaintiffs have not demonstrated a probability of prevailing on the merits of their Unlawful Business Practices Act claim, which is alleged under Cal. Bus. & Prof. Code § 17200, because Plaintiffs failed to provide evidence indicating that Plaintiffs have standing to bring this claim. To allege standing, Plaintiffs must establish they have "suffered injury in fact and ha[ve] lost money or property." Walker v. Geico General Ins. Co., 558 F.3d 1025, 1027 (9th Cir. 2009) (citing Cal. Bus. & Prof. Code § 17204). Plaintiffs have not met this standard.
Further, the Attorney Defendants argue Plaintiffs have not demonstrated a probability of prevailing on the merits of their conspiracy to commit unlawful acts claim since "conspiracy does not give rise to a cause of action unless an independent civil wrong has been committed." Lyddon v. Rocha-Albertsen, No. 1:03-05502, 2006 WL 3086951, at *36 (citing Rusheen v. Cohen, 37 Cal. 4th 1048, 1062 (2006)). Plaintiffs failed to provide admissible evidence indicating that the Attorney Defendants committed an independent civil wrong.
The Attorney Defendants also argue Plaintiffs have not demonstrated a probability of prevailing on the merits of their state Due Process law violations premised are on Plaintiffs "not [being] provided with notice and an opportunity to be heard prior to the [state] court's entry of default . . . ." (Compl. ¶ 46). The Attorney Defendants argue this claim constitutes a de facto appeal of the underlying state court judgments and thus is barred by the Rooker-Feldman doctrine. "Under Rooker-Feldman, a federal district court does not have subject matter jurisdiction to hear a direct appeal from the final judgment of a state court." Noel v. Hall, 341 F.3d 1148, 1154 (9th Cir. 2003). Since Plaintiffs allege their state Due Process rights were violated based on erroneous state court decisions, this claim constitutes a de facto appeal of the state court judgment, and therefore is dismissed for lack of subject matter jurisdiction.
Finally, the Attorney Defendants argue Plaintiffs have not demonstrated a probability of prevailing on the merits of their claims alleged under the California Fair Credit Reporting Act. Plaintiffs allege in these claims that the Attorney Defendants "caused to be reported to third persons, including credit reporting agencies, false statements regarding the alleged debts [Plaintiffs] owed . . . ." (Compl. ¶ 26.) The Attorney Defendants argue Plaintiffs have presented no admissible evidence that the Attorney Defendants reported any credit information about Plaintiffs. The Attorney Defendants are correct. Therefore, the Attorney Defendants' Anti-SLAPP motion to strike Plaintiffs' state claims is granted.
Motion to Adopt the Argument and Authorities of the Attorney Defendants
GONE also filed an untimely motion to adopt the Attorney Defendants' Anti-SLAPP motion to which Plaintiffs object on the ground that the motion is untimely. Plaintiffs' objection is sustained. Therefore, GONE's untimely motion to adopt the Attorney Defendants' Anti-SLAPP motion is stricken.
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