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Appel v. Wolf

United States District Court, S.D. California

September 18, 2019

HOWARD APPEL, Plaintiff,
v.
ROBERT S. WOLF, Defendant.

          ORDER DENYING DEFENDANT’S SPECIAL MOTION TO STRIKE [DOC. 5]

          Hon. M. James Lorenz United States District Judge

         Pending before the Court is the Special Motion to Strike filed under California’s Anti-SLAPP (Strategic Lawsuit Against Public Participation) statute by Defendant Robert S. Wolf (“Defendant”). See Doc. 5. The motion is fully briefed. The Court finds this motion suitable for disposition on the papers without oral argument under Civil Local Rule 7.1.d.1. For the reasons set forth below, Defendant’s Anti-SLAPP motion is DENIED.

         I. Background

         In June 2017, Plaintiff Howard Appel (“Plaintiff”) registered the highest bid for certain real property in Fiji in a luxury residential real property auction. However, a dispute subsequently arose between Plaintiff, the seller of the property, and the auctioneer (Concierge).

         In July 2017, Concierge initiated an arbitration proceeding in New York against the seller. Concierge engaged Defendant for representation in the dispute. In October 2017, Plaintiff initiated a separate arbitration proceeding against Concierge in New York, for which Defendant was also engaged. Subsequently, Plaintiff withdrew his arbitration demand and, on November 8, 2017, filed suit against Concierge in the United States District Court for the Southern District of California (the “SDCA lawsuit”). Concierge engaged Capobianco Law Offices, P.C. (“CLO”) to defend the SDCA lawsuit and file motions in efforts to have the action sent to arbitration in New York or the United States District Court for the Southern District of New York.

         On November 27, 2017 Defendant sent an email to Joseph Preis, Plaintiff’s principal counsel; four additional attorneys were copied on Defendant’s email, two from Preis’ law firm and two attorneys for Concierge. In the email, Defendant first asked Preis to engage in settlement discussions with Concierge concerning the SDCA lawsuit. Defendant went on to imply that he is familiar with Plaintiff from Defendant’s prior work, stating “[Plaintiff] had legal issues (securities fraud) along with Montrose Capital and Jonathan Winston who were also clients [of Defendant] at the time.” After asking Preis to send Plaintiff regards, Defendant expressed his intention to speak with Preis soon.

         As a result of Defendant’s email, on April 27, 2018, Plaintiff filed a Complaint against Defendant alleging libel per se. On two separate occasions, Plaintiff’s counsel asked Defendant to publish a retraction of the statement made in the email, but Defendant refused to do so and has not apologized for the false statement made in the email. On July 2, 2018, Defendant filed the instant motion. Briefing on this motion was stayed while the magistrate judge determined whether early discovery was needed before the motion could be considered. On December 27, 2018, Defendant declared, through his counsel, that he was abandoning the following challenges: (1) Plaintiff cannot satisfy his burden to present competent evidence establishing success on the merits; and (2) Plaintiff’s Complaint must be stricken unless Plaintiff establishes a probability that he will prevail by producing competent evidence in support of his claims. On January 25, 2019, the magistrate judge concluded that discovery was not required because the instant motion was a purely legal challenge grounded in the application of Federal Rule of Civil Procedure 12(b)(6). On April 10, 2018, the Court overruled Plaintiff’s objection to the magistrate judge’s order and set a briefing schedule for the instant motion. The motion is now fully briefed and ready for disposition.

         II. Legal Standard

         “California’s anti-SLAPP statute authorizes a ‘special motion to strike’ any ‘cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech . . . in connection with a public issue.’” Safari Club Int’l v. Rudolph, 862 F.3d 1113, 1119 (9th Cir. 2017) (quoting Cal. Civ. Proc. Code § 425.16(b)(1)). When evaluating an anti-SLAPP motion, a court first determines whether the defendant has shown the challenged claim “aris[es] from activity taken ‘in furtherance’ of the defendant’s right of petition or free speech.” Ibid. “If so, the burden shifts to the plaintiff to show ‘a [reasonable] probability of prevailing on the challenged claims.’” Safari Club Int’l, supra, (quoting Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 595 (9th Cir. 2010)).

         In ruling on an anti-SLAPP motion that challenges legal deficiencies in a complaint, the Court must apply the pleading standards applicable on a Rule 12(b)(6) motion to dismiss. Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828, 834 (9th Cir. 2018). Accordingly, the Court must assume the truth of all factual allegations and construe them most favorably to the nonmoving party. Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997, 999 n.3 (9th Cir. 2006). Even if doubtful in fact, factual allegations are assumed to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “A well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” Id. at 556 (internal quotation marks and citations omitted). On the other hand, legal conclusions need not be taken as true merely because they are couched as factual allegations. Id.; see also Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009).

         III. Discussion

         A. Cal. Civ. Proc. § 425.16

         “A defendant who files a special motion to strike bears the initial burden of demonstrating that the challenged cause of action arises from protected activity.” Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, 35 Cal.Rptr.3d 31, 38 (Cal.Ct.App. 2005) (citations omitted). “[T]he statutory phrase ‘cause of action . . . arising from’ means simply that the defendant’s act underlying the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech.” City of Coati v. Cashman, 29 Cal.4th 69, 78 (Cal. 2002) (citations omitted) (emphasis in original). Under California Code of Civil Procedure subsection 425.16(e), an “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue” 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, or (4) 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.

         Defendant contends his email was a protected communication protected under section 425.16(e) because it was, in part, an invitation to engage in settlement discussions of pending litigation. In reliance on GeneThera, Inc. v. Gould Prof’l Corp., 171 Cal.Rptr.3d 218, 222-23 (Cal.Ct.App. 2009), Defendant asserts that a settlement offer is protected activity. Defendant heavily relies on Dowling v. Zimmerman, 103 Cal.Rptr.2d 174, 190 (Cal.Ct.App. 2001) in contending that his challenged email falls within the scope of an attorney’s protected free speech and petitioning activities. In Dowling, Dowling’s complaint alleged that Zimmerman defamed Dowling by disparaging his reputation among landlord and tenant business communities through unspecified words and actions. Id. at 189. Dowling also alleged that Zimmerman knowingly misrepresented and concealed material facts while negotiating the stipulated settlement of Dowling’s third unlawful retainer action against Zimmerman’s clients. Ibid. Dowling also claimed emotional distress based on Zimmerman “publish[ing] a false ...


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