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Weiland Sliding Doors and Windows, Inc v. Panda Windows and Doors

August 29, 2011

WEILAND SLIDING DOORS AND WINDOWS, INC., PLAINTIFF,
v.
PANDA WINDOWS AND DOORS, LLC,
DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER (1) DENYING WEILAND'S RULE 12(b)(6) MOTION TO DISMISS (ECF No. 70.)

(2) WEILAND'S SPECIAL MOTION TO DISMISS AND GRANTING

This action began on March 30, 2010, when Weiland Sliding Doors and Windows, Inc. filed a patent infringement suit against Panda Windows and Doors, LLC. Panda soon struck back with a counterclaim for intentional interference with prospective business advantage. (Amended Counterclaim, ECF No. 59.)

Panda's counterclaim is based on three sets of communications. First is a communication between Weiland and a company called Kolbe. The communication took place in June 2007, and the two allegedly discussed Panda's patent issues. The second communication is a press release that Weiland allegedly posted on its website and distributed. The last set of communications is several oral communications Weiland had with potential Panda customers.

Presently before the Court is Weiland's special motion to dismiss Panda's amended counterclaim pursuant to C.C.P. § 425.16, or in the alternative, F.R.C.P. Rule 12(b)(6) motion to dismiss. (MTD, ECF No. 70.) Also before the Court is Panda's opposition, (Opp'n, ECF No. 86), and Weiland's reply, (Reply, ECF No. 89). After consideration, the Court DENIES Weiland's special motion to dismissand GRANTS Weiland's Rule 12(b)(6) motion to dismiss.

ANALYSIS

Panda asserts a claim for intentional interference with prospective business advantage. Panda bases its claim on three sets of communications: (1) Counter-Defendant Weiland's communication with Kolbe in 2007; (2) Weiland's press release; and (3) Weiland's oral communications with potential Panda customers.

Weiland moves to dismiss Panda's complaint on two separate grounds. First, Weiland argues that Panda's intentional interference claim should be dismissed under California's anti-SLAPP statute insofar as the claim is based on Weiland's press release and Weiland's oral communications with potential Panda customers. Alternatively, Weiland argues that Panda's counterclaim based on all three sets of communications should be dismissed under Rule 12(b)(6). The Court discusses each argument separately.

1. Anti-SLAPP Motion to Dismiss

Weiland moves to dismiss Panda's intentional interference with prospective business advantage claim pursuant to California Civil Procedure Code § 425.16. Weiland argues that Panda's claim should be dismissed insofar as it is based on Weiland's Press Release and Weiland's oral communications with Panda's customers.

A. Legal Standard

1. Anti-SLAPP Generally

California Civil Procedure Code § 425.16 allows a defendant to gain early dismissal of causes of action aimed at chilling the valid exercise of the constitutional rights of freedom of speech and petition for redress of grievances. Cal. Civ. Proc. Code § 425.16(a); Varian Med. Sys., Inc. v. Delfino, 106 P.3d 958, 966 (Cal. 2005). These suits are often referred to as "strategic lawsuits against public participation" or "SLAPP" suits; hence § 425.16 is often referred to as the "anti-SLAPP statute." See Balzaga v. Fox News Network, LLC, 93 Cal. Rptr. 3d 782, 786 n.3 (Cal. Ct. App. 2009).

"A court considering a motion to strike under the anti-SLAPP statute must engage in a two-part inquiry." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1110 (9th Cir. 2003). First, the defendant must make an initial prima facie showing "that the challenged cause of action is one arising from protected activity." Navellier v. Sletten, 52 P.3d 703, 708 (Cal. 2002). "A defendant meets this burden by demonstrating that the act underlying the plaintiff's cause fits one of the categories spelled out in section 425.15, subdivision (e)." Id. (quoting Braun v. Chronicle Publ'g Co., 61 Cal. Rptr. 2d 58, 61 (Cal. Ct. App. 1997)) (internal quotation marks omitted).

Second, once the defendant has made a prima facie showing of a protected activity, the court "must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim." Id. A plaintiff has a probability of prevailing if "the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited." Wilson v. Partker, Covert & Chidester, 50 P.3d 733, 739 (Cal. 2002) (quoting Matson v. Dvorak, 46 Cal. Rptr. 2d 880, 886 (Cal. Ct. App. 1995)) (internal quotation marks omitted). "The plaintiff's showing of facts must consist of evidence that would be admissible at trial." Hall v. Time Warner, Inc., 63 Cal. Rptr. 3d 798, 804 (Cal. Ct. App. 2007). Indeed, "[t]he plaintiff may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence." Paiva v. Nichols, 85 Cal. Rptr. 3d 838, 847 (Cal. Ct. App. 2008).

Only when a defendant shows that a claim is based on protected conduct and the plaintiff fails to show a likelihood of success on that claim is it subject to dismissal. Varian Med. Sys., 106 P.3d at 966.

2. Commercial Speech Exception

California Civil Procedure Code § 425.17 lays out several exemptions from anti-SLAPP liability. Among them is § 425.17(c), the "commercial speech exemption." TYR Sport Inc. v. Warnaco Swimwear Inc., 679 F. Supp. 2d 1120, 1142 (C.D. Cal. 2009). Under this exemption, causes of action arising from commercial speech are exempt from the anti-SLAPP law when:

(1) the cause of action is against a person primarily engaged in the business of selling or leasing goods or services;

(2) the cause of action arises from a statement or conduct by that person consisting of representations of fact about that person's or a business competitor's business operations, goods, or services;

(3) the statement or conduct was made either for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services or in the course of delivering the person's goods or services; and

(4) the intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an ...


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