Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 30-2009-00121019, Linda Shelton, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.)
Alan Freisleben, in pro. per.; Alan Freisleben and Mark C. Raskoff for Plaintiffs and Appellants.
P. K. Schrieffer, Paul K. Schrieffer and Mitchell J. Freedman for Defendants and Respondents Mark Dennis Peterson and Cates Peterson.
Reback, McAndrews, Kjar, Warford & Stockalper, James J. Kjar and Cindy A. Shapiro for Defendants and Respondents David Alan Van Riper and Van Riper Law.
OPINION
RYLAARSDAM, ACTING P. J.
Plaintiffs Alan Freisleben and Lily Chow appeal from a judgment of dismissal entered after the trial court granted a special motion to strike (Code Civ. Proc. § 425.16; anti-SLAPP motion; all further statutory references are to this code unless otherwise stated.) They argue the conduct of defendants Mark Dennis Peterson and Cates Peterson, LLP, and their attorneys, defendants David Alan Van Riper and Van Riper Law (collectively Van Riper), in subpoenaing and reviewing their financial records was illegal and thus not protected by the anti-SLAPP statute and that they have shown a probability of prevailing on their claims. They also contend that when the original judge in the case recused himself, his staff attorney, Linda Shelton, who by stipulation became the judge hearing the motion, should have done so as well. Finding no error, we affirm.
FACTS AND PROCEDURAL BACKGROUND
After resigning from his law partnership Peterson, Picker, Chow & Friesleben in 2003, Peterson demanded an accounting and payment of monies owed him under the partnership agreement, which was denied. When Freisleben sued him, Peterson retained Van Riper, who demanded arbitration on his behalf under the agreement.
In August 2008, the arbitrator found in Peterson’s favor and issued a final arbitrator’s award of almost $300,000. On Peterson’s behalf, Van Riper served a petition to confirm the award the next month with a hearing date scheduled for late October. Peterson’s new law firm, Cates Peterson (CP), was neither a party nor an attorney acting for him in either proceeding.
While the petition was pending, Van Riper issued deposition subpoenas, including one to Citibank, for the financial records of the former partnership Peterson, Picker, Chow & Freisleben, the successor law firm of Picker, Chow & Freisleben (PCF), and that’s firm’s successor, Chow & Freisleben, Inc. (C&F). Plaintiffs objected on behalf of themselves and C&F. PCF did not object and none sought to quash the subpoenas.
Citibank responded to the subpoenas and produced records. On the day set for production of documents, PCF declared bankruptcy and the next day sought a stay of the proceedings to confirm the arbitration award.
In April 2009, plaintiffs sued defendants for abuse of process, invasion of privacy, deceit, negligence, and injunctive relief, alleging defendants improperly accessed and used the information contained in the documents produced by Citibank pursuant to the subpoenas. The court ordered the action related to Peterson’s petition to confirm the arbitration award and assigned the cases to Judge Frederick P. Horn.
Defendants filed special motions to strike plaintiffs’ complaint under section 425.16. On the day of the hearing, Judge Horn notified counsel by letter he was not available to hear the case but that he had worked closely with Shelton who was familiar with the case and his anticipated ruling. He gave the parties a choice whether to stipulate to allow Shelton to hear the case or continue the hearing. All parties stipulated to having the motion heard by Shelton, who took the matter under submission after argument by counsel. The next month, Judge Horn recused himself and the case was reassigned to another judge.
A few weeks later, Shelton granted the special motions to strike. She found defendants carried their initial burden by showing their “issuance of the deposition subpoena for plaintiffs’ financial and business records was a writing made against... plaintiffs in connection with a judicial proceeding -... Peterson’s [p]etition to [c]onfirm [a]rbitration [a]ward, ” and that plaintiffs failed to establish a probability of prevailing on the merits because the action was barred by the litigation privilege under Civil Code section 47, subdivision (b)(2).
DISCUSSION
1. Anti-SLAPP Motion
a. Introduction
Section 425.16, subdivision (b)(1) provides a party may bring a special motion to strike any “cause of action against [that party] arising from any act [the party commits] in furtherance of the... right of petition or free speech under the United States Constitution or California Constitution in connection with a public issue....” The court conducts a two-step analysis under this section. First it must determine whether the moving party has met its burden to show “that the challenged cause of action is one arising from protected activity.” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733.) If so, the burden shifts to the opposing party to show the likelihood of prevailing on the claim. (Ibid.)
We review an order granting an anti-SLAPP motion de novo (Flatley v. Mauro (2006) 39 Cal.4th 299, 325-326 (Flatley), considering “‘“the pleadings, and supporting and opposing affidavits... upon which the liability or defense is based.” [Citation.] However, we neither “weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.” [Citation.]’ [Citations.]” (Nygard, Inc. v. Uusi-Kerttula (2008) 159 Cal.App.4th 1027, 1036.) The intent of the statute is to prevent “chill[ing] the valid exercise of... freedom of speech and petition... through abuse of the judicial process” and to that “end, th[e] section [is to] be construed broadly.” (§ 425.16, subd. (a).)
b. Protected Speech
An “‘act in furtherance of a person’s right of... free speech under the United States or the California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a... judicial proceeding..., [and] (2) any written or oral statement or writing made in connection with an issue under consideration or review by a... judicial body....” (§ 425.16, subd. (e)(1), (2).) “‘A defendant meets [its initial] burden by demonstrating that the act underlying the plaintiff’s cause fits one of the[se] categories....’” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88.)
“‘A cause of action “arising from” defendant’s litigation activity may appropriately be the subject of a section 425.16 motion to strike.’ [Citations.]” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.) The protection under section 425.16 “extends to conduct that relates to... litigation....” (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1537.) “[C]ourts have adopted ‘a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16.’ [Citation.]” (Ibid.) Thus, a petition to confirm an arbitration award “is in the nature of a complaint in a civil action” and commences the action. (Walter v. National Indem. Co, (1970) 3 Cal.App.3d 630, 634.) It is therefore protected activity, as is the “pursuit of arbitration proceedings....” (Freeman v. Schack (2007) 154 Cal.App.4th 719, 730.)
Despite these principles, plaintiffs contend defendants’ issuance of the subpoenas before the arbitration award was confirmed was not protected under the statute because it was illegal and unethical. We disagree.
The anti-SLAPP statute “cannot be invoked by a defendant whose assertedly protected activity is illegal as a matter of law and, for that reason, not protected by constitutional guarantees of free speech and petition.” (Flatley, supra, 39 Cal.4th at p. 317.) Thus, section 425.16 does not apply where “either the defendant concedes, or the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law....” (Flatley, supra, 39 Cal.4th at p. 320.) Because defendants have not conceded illegal activity, plaintiffs had the burden of conclusively establishing illegality: “‘[C]onduct 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.’ [Citations.]” (Birkner v. Lam (2007) 156 Cal.App.4th 275, 285.)
Plaintiffs argue defendants’ conduct in issuing the subpoenas was illegal because “first, the arbitration award had not been confirmed as a judgment; and second, because there is no right to such discovery under the California Civil Discovery Act for discovery from a judgment debtor.” But assuming without deciding the subpoenas were unauthorized by any statute as plaintiffs claim, that does not make them “illegal” as a matter of law within the meaning of the anti-SLAPP statute.
A defendant’s protected speech or petitioning activity will be found illegal as a matter of law only under “narrow circumstances” and in “rare cases.” (Flatley, supra, 39 Cal.4th at pp. 315, 320.) Thus, courts have found protected activities to be illegal as a matter of law, and therefore outside the anti-SLAPP statute, where they have involved extortion (id. at pp. 326-333); violence, vandalism and extreme harassment (Novartis Vaccines & Diagnostics, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2006) 143 Cal.App.4th 1284, 1289-1291, 1296); illegal money laundering (Paul for Council v. Hanyecz (2001) 85 Cal.App.4th 1356, 1363, 1365-1367, disapproved on another ground in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5); and arson (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 820, disapproved on another ground in Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at p. 68, fn. 5). Issuing subpoenas without statutory authority are not akin to any of these illegal activities.
Recently, Mendoza v. ADP Screening & Selection Services, Inc. (2010) 182 Cal.App.4th 1644 held Flatley’s “use of the phrase ‘illegal’ was intended to mean criminal, and not merely violative of a statute. First, the court in Flatley discussed the attorney’s underlying conduct in the context of the Penal Code’s criminalization of extortion. Second, a reading of Flatley to push any statutory violation outside the reach of the anti-SLAPP statute would greatly weaken the constitutional interests which the statute is designed to protect.... [A] plaintiff’s complaint always alleges a defendant engaged in illegal conduct in that it violated some common law standard of conduct or statutory prohibition, giving rise to liability, and we decline to give plaintiffs a tool for avoiding the application of the anti-SLAPP statute merely by showing any statutory violation.” (Id. at p. 1654.) Here, plaintiffs do not claim defendants committed a criminal act.
Plaintiffs cite Benasra v. Mitchell, Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, Freeman v. Schack, supra, 154 Cal.App.4th 719, and Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264 in support of their claim section 425.16 does not apply to unethical conduct. None are apposite. All involved breach of loyalty and fiduciary duty claims by a former client against an attorney. The holding in each was that the case arose from the lawyer’s act in either accepting a concurrent or subsequent representation of an adverse party (Benasra v. Mitchell, Silberberg & Knupp LLP, supra, 123 Cal.App.4th at 1189; Freeman v. Schack, supra, 154 Cal.App.4th at p. 732), or attempting to extract an excessive fee (Hylton v. Frank E. Rogozienski, Inc., supra, 177 Cal.App.4th at p. 1272), and not the attorney’s litigation activities. This case does not involve a malpractice case by a client and arises directly out of litigation activity by defendants.
Plaintiffs maintain “Peterson’s access and review of what were, essentially, purploined [sic] bank records... demonstrate an egregious failure to comply with legal and ethical obligations, and cannot be within a legitimate exercise of constitutional right.” But they fail to identify any case where a non-client has been successful in establishing that an attorney’s non-criminal litigation conduct fell outside the scope of the anti-SLAPP statute. Pacific-Union Club v. Superior Court (1991) 232 Cal.App.3d 60, 79-80, Wood v. Superior Court (1985) 166 Cal.App.3d 1138, 1148-1150, and Board of Medical Quality Assurance v. Gherardini (1979) 93 Cal.App.3d 669, 681 all predate the enactment of section 425.16 and neither Monarch Healthcare v. Superior Court (2000) 78 Cal.App.4th 1282, Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, nor Rico v. Mitsubishi Motors Corp. (2007) 42 Cal.4th 807 involve the anti-SLAPP statute.
On the other hand, several cases have affirmed orders granting attorneys’ special motions to strike in the above situation. In Cabral v. Martins (2009) 177 Cal.App.4th 471, a former wife’s action against her former husband’s attorney was held to have been properly dismissed under section 425.16 because the attorney’s activities that allegedly helped the husband evade a child support judgment “were neither inherently criminal nor otherwise outside the scope of normal, routine legal services. Even if the attorney respondents’ actions had the effect of defeating or forestalling [the ex-wife’s] ability to execute her judgment for child support, thereby (according to [her]) violating the child support evasion statutes, this is not the kind of illegality involved in Flatley....” (Cabral v. Martins, supra, 177 Cal.App.4th at p. 481.)
Similarly, this court recently held the Flatley exclusion inapplicable to an attorney’s purported violation of California Rules of Court, rule 1.20, in failing to redact certain personal information from an opposing party’s credit reports before filing them in court. (G.R. v. Intelligator (2010) 185 Cal.App.4th 606.) The attorney admitted the rule violation but the court found the reasoning in Cabral persuasive in holding that the rule violation “is not the type of criminal activity addressed in... Flatley, supra, 39 Cal.4th 299....” (G.R. v. Intelligator, supra, 185 Cal.App.4th at p. 616.)
We apply the reasoning of Flatley, Cabral, Mendoza, and G.R. to conclude that the illegality exclusion does not apply to defendants’ alleged breaches of ethical rules or discovery statutes.
During oral argument, plaintiffs argued the recent cases of Grewal v. Jammu (2011) 191 Cal.App.4th 977 and No Doubt v. Activision Publishing, Inc. (2011) ___ Cal.App.4th ___ [2011 WL 507479] bolstered their position the anti-SLAPP statute was inapplicable. But neither case arose out of litigation activity nor involved section 425.16, subdivision (e)(1) and (2); instead both concerned whether the purportedly protected activity was “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.” (§ 425.16, subdivision (e)(4).)
Plaintiffs maintain No Doubt held “that even if conduct [was] within [the] exercise of First Amendment rights, [the] anti-SLAPP statute could not be used to defeat a claim for misappropriation/exploitation claims.” During oral argument they asserted this defeats defendants’ claim that only unlawful conduct precludes application of the anti-SLAPP statute. But No Doubt did not determine section 425.16 was inapplicable based solely on the label given to the cause of action asserted. Rather, it concluded the plaintiff had satisfied its burden to show a probability of success on the merits because the defendants’ sole argument that the plaintiff’s action was barred by the First Amendment lacked merit. (No Doubt v. Activision Publishing, Inc., supra, ___ Cal.App.4th at p. ___ [2011 WL 507479, pp. 6, 11.)
Grewal is likewise distinguishable in that it proceeded straight to the second step in the anti-SLAPP analysis, without determining whether the defendants’ publications “concerned ‘an issue of public interest, ’” and concluded the plaintiff had demonstrated the requisite probability of prevailing on his claims. (Grewal v. Jammu, supra, 191 Cal.App.4th at p. 989.) In doing so, it pointed out that “nothing in [the] defendants’ briefs... raise[] any question [that plaintiff met that burden]. Nothing.” (Id. at p. 992.) It then proceeded to address the defendants’ briefs “to demonstrate just how burdensome a misguided anti-SLAPP motion can be” (ibid.) and in that context “[c]riticized [the] broad application of [the] anti-SLAPP statute to circumstances beyond [the] contemplated legislative scope, ” as plaintiffs assert. (See id. at pp. 995-999.) That criticism has no application here as defendants have shown the action against them arose from protected activity and, as we explain in the next section, plaintiffs have failed to meet their burden under the second step.
c. Probability of Prevailing
Given our conclusion defendants met their burden of showing the action arose from protected activity, plaintiffs were required to demonstrate a probability of prevailing on their claims. (Equilon Enterprises v. Consumer Cause, Inc., supra, 29 Cal.4th at p. 67.) The trial court ruled plaintiffs failed to do that because the causes of action alleged conduct protected by California’s litigation privilege. (See Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467, 1485 [“The litigation privilege is ‘relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense a plaintiff must overcome to demonstrate a probability of prevailing’”].) We agree.
Civil Code section 47, subdivision (b) defines a “privileged publication” as including one made “[i]n any... judicial proceeding....” “[T]he privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have [sic ] some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) “The purposes of section 47, subdivision (b), are to afford litigants and witnesses free access to the courts without fear of being harassed subsequently by derivative tort actions, to encourage open channels of communication and zealous advocacy, to promote complete and truthful testimony, to give finality to judgments, and to avoid unending litigation.” (Rusheen v. Cohen, supra, 37 Cal.4th at p. 1063.) “To further these purposes, the privilege has been broadly applied. It is absolute and applies regardless of malice. [Citations.]” (Jacob B. v. County of Shasta (2007) 40 Cal.4th 948, 955 (Jacob B.).) Aside from malicious prosecution, the privilege bars all tort cause of action, including “the constitutional right to privacy.” (Id. at p. 952.)
In Foothill Federal Credit Union v. Superior Court (2007) 155 Cal.App.4th 632, the plaintiffs alleged claims for invasion of privacy and intentional infliction of emotional distress against defendant Foothill Federal Credit Union (FFCU) on the ground that FFCU’s production of consumer records in response to a subpoena included personal financial records that had been expressly removed from the scope of the subpoena. The Court of Appeal issued a peremptory writ of mandate directing the trial court to sustain a demurrer to the two causes of action, reasoning the litigation privilege applied. First, the disclosure of the records was a communication made in the course of judicial proceedings, as “in the context of the pending litigation, the counsel of record for a party issued a subpoena duces tecum requiring FFCU to produce documents.” (Id. at p. 635.) Second, “FFCU was a participant authorized by law, as it was brought into the proceedings by the issuance of the subpoena ordering it to produce the specified documents. [Citation.]” (Id. at pp. 635-636.) Third, responding to the subpoena was a communication made to achieve the objects of the litigation, given that “[t]he documents were produced to provide the party who subpoenaed them with potential evidence in the litigation.” (Id. at p. 636.) Finally, the subpoenaed records bore some relation to the action, as they were sought as part of a probate proceeding to support an allegation of elder financial abuse. (Ibid.)
Similarly here the Citibank records were subpoenaed and reviewed in the course of the pending petition to confirm the arbitration award, by participants authorized by law, to achieve the objects of the action. (See Mallard v. Progressive Choice Ins. Co. (2010) 188 Cal.App.4th 531, 544 [use of “subpoenas... issued ‘to achieve the objects of the litigation’ and [having] ‘some connection or logical relation to the action’... constituted privileged conduct”].)
Citing Flatley, plaintiffs argue the privilege does not “protect[] illegal activity connected with litigation.” But as we have previously determined, defendants’ conduct was not “illegal” within Flatley’s meaning.
Furthermore, it is the “category of publication permitted by the law” that determines whether the privilege applies, not “that the specific publication must be permitted.” (Jacob B., supra, 40 Cal.4th at pp. 958-959.) For example, “[a] notice of lis pendens, as a category, is permitted by law and, hence, is privileged, even if a specific notice, being perjurious, might be considered not permitted by law. The same would be true of courtroom testimony, which obviously is a category permitted by law. One may readily acknowledge that perjured testimony is not permitted, but the privilege extends even to such testimony because testimony in general is permitted by law. Another example is... that the privilege extends to ‘filing allegedly false declarations of service to obtain a default judgment....’ [Citation.] Obviously, the law does not permit false declarations, but declarations of service to obtain a default judgment are a category of publication permitted by law. Hence, the litigation privilege protects all such declarations.” (Id. at p. 959.) Thus, even if the documents were subpoenaed improperly as plaintiffs’ claim, an issue we do not decide, that does not preclude application of the privilege because the law permits subpoenas as a category.
Plaintiffs rely on Susan S. v. Israels (1997) 55 Cal.App.4th 1290 (Susan S.) to support their contention that defendants’ conduct in unlawfully reviewing confidential records was not protected activity. There, the court held that a crime victim has a cause of action for invasion of her right to privacy against a defense attorney who, without authorization, read and disseminated the victim’s confidential mental health records. The defense attorney had subpoenaed her records, which mistakenly were sent directly to him rather than to the court as required in criminal cases. Then despite knowing of their confidential nature, he read them, sent them to his defense psychiatrist and used them in cross-examining the victim, sidestepping an approved court procedure to discover information from the victim’s mental health records in criminal cases. The Court of Appeal held the invasion of privacy occurred when the defense attorney read the records and transmitted them to the defense psychiatrist. (Id. at p. 1299.)
Susan S. is distinguishable because the defendant there knowingly utilized personal mental health records sent to him in error that were not relevant or admissible because the victim “did not place her mental health in issue by charging [the criminal defendant] with sexual battery.” (Susan S., supra, 55 Cal.App.4th at p. 1297.) Here, in contrast, the financial records were relevant, having been placed at issue during Freisleben’s initial action against Peterson that resulted in the arbitration award against plaintiffs and the petition to confirm the award. Also unlike in Susan S., plaintiffs do not claim the records were inadmissible, asserting instead that the disclosure of the records was premature because the arbitration award had not been confirmed and defendants did not wait for a court to resolve their objections. (See Moskowitz v. Superior Court (1982) 137 Cal.App.3d 313, 319 [constitutional right of privacy in personal financial information waived to the extent related to lawsuit for use by party having “legitimate interest”].)
Moreover, subsequent to Susan S., the Supreme Court has held that although the litigation privilege does not protect against non-communicative acts, “‘if the gravamen of the action is communicative, the litigation privilege extends to non[-]communicative acts that are necessarily related to the communicative conduct.... Stated another way, unless it is demonstrated that an independent, non[-]communicative, wrongful act was the gravamen of the action, the litigation privilege applies.’ [Citation.]” (Jacob B., supra, 40 Cal.4th at p. 957.) Plaintiffs have not made that showing. Rather, their complaint alleged defendants improperly issued subpoenas to obtain their financial and business records, made false representations they had returned the information to Citibank, and reviewed and disclosed the information to the public domain. Any non-communicative review of the records was necessarily integral to defendants’ communicative conduct in issuing the subpoenas, making representations, and disclosing the information. (Jacob B., supra, 40 Cal.4th at p. 957.)
2. Recusal of Staff Attorney
Plaintiffs contend that Judge Horn’s recusal required Shelton’s recusal as well. We are not persuaded.
Plaintiffs stipulated to allow Shelton to hear the anti-SLAPP motion. It was not until a month after oral argument and the matter had been taken under submission that Judge Horn recused himself. Although Shelton did not issue her ruling for another three weeks, plaintiffs never filed an objection to her ability to decide the matter during that time. Nor did they move to disqualify her under section 170.3, subdivision (c)(1) or otherwise “mak[e] the heightened showing of a probability, rather than the mere appearance, of actual bias [required] to prevail” on a due process claim. (People v. Freeman (2010) 47 Cal.4th 993, 1006.) The contention is forfeited.
DISPOSITION
The judgment is affirmed. Respondents are entitled to costs on appeal.
WE CONCUR: MOORE, J., ARONSON, J.