Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Los Angeles County No. SC099035, Superior Court, John Kronstadt, Judge.
Blakely Law Group and Brent H. Blakely for Plaintiffs and Appellants.
Hadsell Stormer Keeny Richardson & Renick, Randy Renick and Natalie Nardecchia, for Defendant and Respondent Martin Withrow.
Law Offices of Carol L. Newman and Carol L. Newman for Defendant and Respondent Jeffrey S. Thomas.
JOHNSON, J.
Plaintiffs, appellants and cross-defendants Richard and Laurie Lynn Stark sued a former employee and his attorney for extortion following a series of communications between the attorney and the Starks regarding a dispute about the employee’s summary dismissal. The employee and attorney filed special motions to strike the complaint, arguing the communications were prelitigation settlement offers and that the complaint arose from defendants’ exercise of constitutionally protected rights of speech or petition. The trial court agreed, and granted the motions.
The Starks contend the trial court erred in granting the motions to strike because the communications at issue constitute unlawful extortion which is not entitled to constitutional protection. The Starks also insist the court erred in finding they failed to make a sufficient showing they were likely to prevail on the merits of their claims, and that defendants’ communications were protected by the litigation privilege. (Civ. Code, § 47, subd. (b).) None of the Starks’ contentions has merit. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The Starks own cross-defendant Chrome Hearts, LLC (Chrome Hearts), a company engaged primarily in the design, manufacture and sale of leather goods, apparel, jewelry and accessories. Chrome Hearts’s fashions, once viewed primarily as the style of “outlaw motorcyclists,” have become popular in “upper most fashion circles.” Numerous celebrities have been photographed or have appeared in the media wearing the company’s apparel and accessories. The Starks, whose company has collaborated with Karl Lagerfeld, the Robert Mapplethorpe Estate and the Rolling Stones rock band to design and market apparel and accessories, have received considerable attention from the media as a result of their personal and professional relationships.
Defendant, respondent and cross-complainant Martin Withrow began working as Chrome Hearts’s art director in January 2002. Withrow, who is gay, claims that, from the inception of his employment, the Starks persistently subjected him to sexual harassment and to harassment based on his sexual orientation. Withrow also alleges that during his employment he was forced to endure a near constant barrage of racist, sexist and homophobic epithets and jokes by the Starks.
In August 2006, Mr. Stark made some particularly offensive comments during a meeting Withrow was conducting. Later, Withrow wrote an e-mail to Mr. Stark complaining that he found his conduct at the meeting deeply offensive, and believed it had belittled Withrow in front of his subordinates. In response, Mr. Stark told Withrow that although he uses the words “fag” and “faggot” all the time, he “does not mean anything” by them. Stark reassured Withrow he was “part of the family” and had a “big part” to play in Chrome Hearts as the business moved forward. Withrow claims that throughout the course of his employment with Chrome Hearts, the Starks made repeated representations and conducted themselves in such a manner as to reasonably lead him to believe his job was secure, and that he would not be terminated absent good cause. At several instances in 2006 and 2007, each Stark implored Withrow to remain at Chrome Hearts, and sought his assurance that he would do so. The Starks told Withrow “we love you and want you to stay,” and periodically paid him bonuses so he would not leave. Notwithstanding the Starks’ job assurances, Withrow alleges he continued to be subjected to derogatory comments and harassment throughout the course of his employment.
Withrow’s employment was summarily terminated on May 5, 2008, ostensibly for insubordination and poor output of work. At the time of his termination, Withrow met with Mario Lejtman, Chrome Hearts’s Chief Financial Officer, who presented him with a proposed “Separation Agreement.” In that agreement, the company offered to pay Withrow $50,000 in exchange for his agreement to release all claims against Chrome Hearts and the Starks.
Withrow did not sign the proposed agreement. Instead, he retained an employment law practitioner, defendant and respondent Jeffrey Thomas, to represent him in connection with a potential lawsuit against Chrome Hearts. This dispute arose out of three communications between Thomas and Chrome Hearts (Lejtman).
On May 15, 2008, Thomas wrote to Lejtman on Withrow’s behalf, purportedly to “offer Chrome Hearts the opportunity to resolve this matter privately and outside a course of litigation and other public attention.” In that letter Thomas detailed some of the allegedly racist, sexist, sexual and homophobic conduct in which the Starks were alleged to have engaged during Withrow’s employment. Thomas outlined his legal argument that Withrow was not an at-will employee, but a long-term member of the Chrome Hearts “family” who could not be fired without good cause. Thomas offered to settle the matter if, among other things, Chrome Hearts agreed to pay Withrow $190,000.
Withrow’s annual salary in 2007, including bonuses, was approximately $145,000, plus benefits.
On May 22, 2008, Thomas spoke with Lejtman on the telephone. In that call, Lejtman claims, Thomas “threatened that if Lori and Richard Stark did not pay Martin Withrow $190,000, Withrow would divulge information to the public that would be both embarrassing and damaging to the Starks.” Thomas has a different recollection of that conversation. He insists he never intended to blackmail the Starks, and that no threat was made to divulge damaging or embarrassing information to the public if the Starks failed to pay Withrow $190,000. Rather, the purpose of the call “was to settle Mr. Withrow’s claims,” and “the largest part of the conversation consisted of [Thomas] listening to Mr. Lejtman’s perspective on the case.” Chrome Hearts increased its settlement offer to $55,000 during that call; Thomas claims he and Lejtman expressly agreed their conversation was part of a course of ongoing settlement discussions.
The third and final communication at issue is a letter Thomas sent to Lejtman on June 6, 2008. The letter began with Thomas’s observation that the Starks had apparently underestimated “the extent of their exposure.” Thomas then proceeded to illustrate the company’s potential liability, as well as “the types of issues, evidence and witnesses” the case would likely elicit should litigation ensue. Thomas provided extensive detail regarding the evidentiary bases for Withrow’s claim that for six years the Starks expressly and impliedly led him to believe his job was secure, and that he and Chrome Hearts were parties to an implied-in-fact contract by which Withrow’s employment could not be terminated absent good cause. In addition to listing several express assurances the Starks made to Withrow that his job was secure, Thomas’s letter identified several sensitive bits of information that he opined the Starks would not have entrusted to Withrow had they not considered him a key employee. Such confidences included specific details about the Starks’ purported tax fraud and efforts to defraud a famous business partner, Ms. Stark’s strategic planning for divorce and marital infidelity, and the couple’s illegal drug use. The letter noted that if the matter proceeded to litigation, news of the Starks’ unlawful sale of products to a wide roster of high-profile clients could become public, as would information about Ms. Stark’s drug use with at least one celebrity friend. In closing, Thomas rejected Chrome Hearts’s increased ($55,000) settlement offer, made a counter-offer to settle for $185,000, and noted the letter was a privileged, inadmissible communication, written in the course of settlement negotiations. (Evid. Code, §§ 1152, 1154.)
In July 2008, the Starks filed the instant action against Withrow and Thomas. Their unverified complaint alleges causes of action for extortion, slander, intentional infliction of emotional distress, and wrongful interference with prospective economic advantage.
Withrow responded by filing a cross-complaint against Chrome Hearts and the Starks, alleging three statutory causes of action for discrimination on the basis of sexual orientation, sexual harassment and retaliation, in violation of the Fair Employment and Housing Act, Government Code section 12940 et seq. (FEHA), and four common law claims for wrongful termination in violation of public policy, breach of the covenant of good faith and fair dealing, intentional infliction of emotional distress, and breach of an implied-in-fact contract.
Withrow also filed a SLAPP (Strategic Lawsuit Against Public Participation) motion. (Code Civ. Proc., § 425.16.) Thomas joined Withrow’s SLAPP motion, and filed a SLAPP motion of his own. The SLAPP motions argued the complaint should be stricken because it arose from defendants’ constitutionally protected activity, the complaint was legally insufficient and the Starks had failed to demonstrate a probability they would prevail on the merits of their claims. The motions were supported by declarations from Withrow and Thomas.
Withrow also filed a demurrer, which Thomas joined. Thomas filed a second motion to strike the complaint for the Starks’ failure to comply with the pre-filing requirements of Civil Code section 1714.10 (which governs an action against an attorney alleging a civil conspiracy with a client arising out of attempts to contest or compromise a claim). The demurrer and Thomas’s motion to strike under Civil Code section 1714.10 were rendered moot by the ruling on the SLAPP motions; neither is at issue here.
The Starks filed an opposition to the SLAPP motions, supported by a declaration from Lejtman. They argued their pleading was adequate and that in any event, the “threats” made in Thomas’s communications constituted criminal extortion, conduct which is constitutionally unprotected as a matter of law.
Defendants replied. The motions were argued and granted. The trial court found defendants had satisfied their burden to show the conduct at issue arose out of constitutionally protected activity, and the Starks had failed to demonstrate a probability of prevailing on the merits. The court also found the disputed communications were protected by the litigation privilege. (Civ. Code, § 47, subd. (b).) This appeal followed.
DISCUSSION
1. The trial court’s order granting the SLAPP motion is subject to de novo review.
Code of Civil Procedure section 425.16 (section 425.16) sets forth the procedure for bringing a special motion to strike in lawsuits filed primarily to “chill” the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. (§ 425.16, subd. (a); Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192, 197.) The statute provides: “A 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 under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) An “‘act in furtherance of a person’s right of petition or free speech’” includes any written or oral statement made before a legislative, executive, or judicial body, or any other official proceeding authorized by law, or in connection with an issue under consideration by such body or in such proceeding. (§ 425.16, subd. (e)(1), (2).) If this showing is made, the movant need not separately demonstrate the statement also concerns an issue of public significance. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123.)
Judicial evaluation of the merits of a SLAPP motion involves a two-step process. First, a complaint is subject to a special motion to strike only if the court finds the defendant “has made a threshold showing that the challenged cause of action is one arising from protected activity.” (Taus v. Loftus (2007) 40 Cal.4th 683, 712 (Taus); Taheri Law Group v. Evans (2008) 160 Cal.App.4th 482, 488 (Taheri).) If the defendant fails to satisfy this burden, the complaint is not subject to a motion to strike and the analysis ends. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76.) In analyzing defendant’s burden under the first prong of the SLAPP analysis, “the critical consideration is whether the cause of action is based on the defendant’s protected free speech or petitioning activity.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.) If the defendant makes that showing, the trial court must then determine whether the plaintiff can demonstrate a probability of prevailing on the claim. (Taheri, supra, 160 Cal.App.4th at p. 488.) In making these determinations under section 425.16, subdivision (b)(2), the trial court considers the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.)
“Review of an order granting or denying a motion to strike under section 425.16 is de novo.” (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3 (Soukup).) Like the trial court, we “consider ‘the pleadings, and supporting and opposing affidavits... upon which the liability or defense is based.’ (§ 425.16, subd. (b)(2).) 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.’” (Ibid., quoting HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.)
2. Defendants’ conduct arose out of constitutionally protected activity.
It is well-established that an attorney’s prelitigation settlement demand letter falls within the parameters of a writing “made in connection with an issue under consideration or review by a... judicial body.” (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1259(Neville); cf. Rohde v. Wolf (2007) 154 Cal.App.4th 28, 36–37 [oral communication] (Rohde).) Here, the trial court determined that the communications which gave rise to this action were routine prelitigation settlement discussions. Accordingly, the court determined that defendants satisfied their threshold burden of showing the complaint arose from protected activity. (Taus, supra, 40 Cal.4th at p. 712.)
No “official proceeding” need actually have been initiated for section 425.16 to apply to prelitigation communications. (See Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 784 (Dove) [finding letter to celebrities participating in charitable event to be protected under SLAPP statute, even though it was sent in preparation of lodging of complaint].)
The Starks take issue with that determination. Relying almost exclusively on the decision in Flatley v. Mauro (2006) 39 Cal.4th 299 (Flatley), they maintain Thomas’s threats to “go public” with details about the Starks’ alleged tax fraud, drug abuse and infidelities—implicating their celebrity friends and clients in the process—constitute classic instances of criminal and constitutionally unprotected extortion or, in popular parlance, blackmail.
“Extortion is the obtaining of property from another, with his consent... induced by a wrongful use of force or fear.... (Pen. Code, § 518.) “Fear” for purposes of constituting extortion, may be induced by a threat to, among other things, accuse the threatened individual, or a member of his or her family, of a crime; to expose or impute to him, her or them any disgrace or crime; or to expose any secret affecting him, her or them. (Pen. Code, § 519, subds. (2)–(4).) No actual threat is necessary. On the contrary, anyone “who, with intent to extort any money... from another, sends... to any person any letter... expressing or implying... any threat such as is specified in Section 519, is punishable in the same manner as if such money... were actually obtained by means of such threat.” (Pen. Code, § 523.)
Therein lies the fatal flaw in the Starks’ contention: the June 6, 2008 letter from Thomas (on behalf of Withrow) to Lejtman stated only an intention to present these details in a court of law. The June 6 letter never stated an intention to publish this information to or through any other media. Unarguably, Thomas made clear that the sole means by which he intended to publicize the subject information was through the judicial process. The third paragraph of the first page stated:
“As the purpose of this letter is limited, this letter addresses only Chrome Hearts’ liability for breach of implied-in-fact promise, not Chrome Hearts’ liability for harassment and discrimination on grounds of sexual orientation and for wrongfully firing Mr. Withrow in retaliation for his complaining of unlawful working conditions. Suit will be filed, if this matter is not promptly resolved, on all grounds of Chrome Hearts’ liability.”
In the second paragraph of page 7, Thomas observed: “Obviously, such events and the persons involved will be the subject of depositions and other discovery and trial testimony in this matter.” In the final paragraph of the June 6 letter, at page 8, Thomas emphasized that he intended the letter as a privileged settlement communication pursuant to Evidence Code sections 1152 and 1154.
In Neville, Division Five of this Courtemphasized that while Civil Code section 47, subdivision (b) (section 47) and Code of Civil Procedure section 425.16 “are not coextensive,” the “two statutes serve similar policy interests, and courts ‘look[] to the litigation privilege [Civ. Code, § 47] as an aid in construing the scope of section 425.16, subdivision [(e)(2)] with respect to the first step of the two-step anti-SLAPP inquiry.... ’” (Neville, supra, 160 Cal.App.4th at p. 1263, quoting Flatley, supra, 39 Cal.4th at p. 323.) Accordingly, as in Neville, whether the June 6 letter “might be protected by section 47 thus informs our analysis, but does not resolve whether the [subject communication] is a protected activity under section 425.16, subdivision (e)(2).” (Neville, supra, 160 Cal.App.4th at p. 1263.) “Section 425.16, subdivision (e)(2) protects ‘any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body....’ (§ 425.16, subd. (e)(2), italics added.)... [Further,] communications in connection with anticipated litigation are considered to be ‘“‘under consideration or review by a... judicial body’”’” (Ibid., quoting Flatley, supra, 39 Cal.4th at p. 319).
The Neville court cites multiple authorities for this proposition: “(Flatley v. Mauro (2006) 39 Cal.4th 299, 323... [‘Notwithstanding [the] relationship between the litigation privilege and the anti-SLAPP statute... the two statutes are not substantively the same’] (Flatley); Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728...; Garretson v. Post (2007) 156 Cal.App.4th 1508... [‘Although the interpretation of language in Civil Code section 47 has been used to interpret similar language in the anti-SLAPP statute [citation], we reject the broad conclusion that conduct deemed communicative for purposes of Civil Code section 47 automatically qualifies as constitutionally protected speech under section 425.16]; Birkner v. Lam (2007) 156 Cal.App.4th 275, 284...; but see Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, 1467 , fn. 3... [decided prior to Flatley]).” (Neville, supra,160 Cal.App.4th at p. 1263.)
Thus, the critical issue is whether the June 6 letter was a writing made in connection with the anticipated litigation between Withrow and the Starks. Neville concludes that “a statement is ‘in connection with’ litigation under section 425.16, subdivision (e)(2) if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation.” (Neville, supra, at p. 1266.) Neville also establishes that the “in connection with” standard for section 425.16, subdivision (e)(2) approximates the reasonable relevancy requirement of Civil Code section 47: “To be privileged under section 47, a statement must be ‘reasonably relevant to pending or contemplated litigation. (See Silberg v. Anderson (1990) 50 Cal.3d 205, 220... [communication must have some ‘reasonable relevancy to the subject matter of the action’]; Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1058... [litigation privilege protects ‘prelitigation communications involving the subject matter of the ultimate litigation’].... The reasonable relevancy requirement of section 47 is analogous to the ‘in connection with’ standard of section 425.16, subdivision (e)(2).” (Neville, supra, 160 Cal.App.4th at p. 1266.)
In the case at bar, the challenged statements meet the threshold of being “in connection with” the contemplated litigation. Withrow asserted that he should not have been terminated as an at-will employee; he believed that the manner in which he had been treated by the Starks over the course of his employment and the secrets they had shared with him or to which they had made him privy demonstrated the existence of an implied-in-fact employment contract under which he “would not be terminated absent good and sufficient cause. Above and beyond express assurances of job security, which were repeated and ample, the Starks regularly entrusted Mr. Withrow with many of their most sensitive business and personal confidences, furthering Mr. Withrow’s understanding that they considered him a secure, key employee.” Importantly, Thomas did not share or threaten to share these confidences with the news media: to the contrary, his letters were directed to the Chief Financial Officer of Chrome Hearts, Withrow’s former employer. The June 6 letter made clear that Thomas intended to use this information in court to support his legal theory in the event a settlement could not be achieved.
It is important to note that by recognizing a “connection” or even a “reasonable relevancy” between the statements in the June 6 letter and Withrow’s contemplated litigation based on his perceived wrongful termination and his implied-in-fact contract theory, we do not and need not assess whether the statements in the June 6 letter would ever have been actually admitted into evidence. Such is not the standard to qualify for the protection of either section 425.16 or Civil Code 47.
Here, because Withrow and Thomas remained exclusively within the judicial process in their presentation and use of the challenged allegations, their conduct would necessarily avoid any taint of illegality, as it would be absolutely privileged under Civil Code section 47. Moreover, since defendants’ conduct was absolutely protected by Civil Code section 47, the statements in the June 6 letter cannot be construed to constitute an illegality—that is, extortion as a matter of law. (Pen. Code, § 518 [“Extortion is the obtaining of property from another, with his consent, or the obtaining of an official act of a public officer, induced by a wrongful use of force or fear, or under color of official right.” (Italics added.)].) This court cannot find that a privileged act in the context of judicial proceedings is wrongful.
3. The Starks’ invocation of Flatley disregards critical factual differences between that case and the instant case.
In Flatley, a well-known entertainer (the creator, producer and director of The Lord of the Dance), sued an attorney (Mauro) for extortion and related claims. The action was based on a demand letter Mauro sent to Flatley on behalf of his client, a woman who claimed Flatley had raped her, and on subsequent phone calls Mauro made to Flatley’s attorneys, demanding a seven-figure payment to settle the claims. (39 Cal.4th at pp. 305, 307–311, and appen. A.) Mauro filed a SLAPP motion, arguing his letter and phone calls were prelitigation settlement offers, and that Flatley’s complaint therefore arose from Mauro’s constitutionally protected right of petition. (Ibid.) The California Supreme Court found otherwise.
Flatley did not deny having had a sexual encounter with the woman; he claimed it was consensual. (Flatley, supra, 39 Cal.4th at p. 307.)
The court first discussed why section 425.16 does not apply to activity that can conceivably be characterized as “in furtherance” of a defendant’s protected right of speech or to petition if that activity is either concededly illegal or conclusively established as illegal as a matter of law and, by reason of that illegality, not constitutionally protected. “The purpose of section 425.16 is to protect the valid exercise of constitutional rights of free speech and petition from the abuse of the judicial process [citation], by allowing a defendant to bring a motion to strike any action that arises from any activity by the defendant in furtherance of those rights. (§ 425.16, subd. (b)(1).) By necessary implication, the statute does not protect activity that, because it is illegal, is not in furtherance of constitutionally protected speech or petition rights.” (Flatley, supra, 39 Cal.4th at p. 324, italics added.)
Second, the court found there was no question Mauro’s conduct constituted criminal extortion as a matter of law, based on the “uncontroverted evidence,” and “the specific and extreme circumstances of [that] case.” (Flatley, supra, 39 Cal.4th at pp. 629-630, 632, fn.16.) The pivotal purpose of Mauro’s letter was to threaten public revelation of Flatley’s alleged rape of Mauro’s client unless Flatley paid handsomely for her silence, and to impute to Flatley other unspecified criminal violations involving immigration, tax and Social Security laws. (Id. at p. 329.) Mauro’s letter implied he had information that Flatley had committed other criminal violations Mauro would disclose, and threatened “the media worldwide [would] enjoy what they find.” (Id. at p. 330.) Mauro also claimed he had “ample evidence” to substantiate claims of defamation and civil conspiracy against Flatley. He told Flatley’s attorneys this information was “just the beginning,” and that if Flatley failed to pay an acceptable amount he would “go public,” following Flatley wherever his dance troupes performed and would “ruin him.” (Id. at p. 329–330.) Moreover, despite Mauro’s protestations to the contrary, the court found it clear that he had never intended to engage in settlement negotiations, and had no legitimate intention ever to bring a lawsuit. He made an initial demand for at least $1 million. In subsequent calls to Flatley’s counsel, which Mauro began placing within a week of the date he sent his letter, Mauro never discussed any particulars of his client’s case. Instead, he focused entirely on his serious and persistent threats to “go public” if Flatley failed to make a sufficient (i.e., seven-figure) offer of money within the very narrow window of time Mauro left open for him to do so. (Id. at pp. 329–332.) On these facts, the Supreme Court had no difficulty concluding that Mauro’s conduct constituted criminal extortion as a matter of law, in violation of Penal Code sections 518, 519 and 523. (Id. at p. 332.)
Whether or not Flatley committed such crimes is irrelevant. (See People v. Goldstein (1948) 84 Cal.App.2d 581, 587 [for purposes of extortion, a “false accusation of crime is often as harmful as one that is true”].) Similarly, it was of no import that Mauro failed to specify the other crimes Flatley allegedly committed. “‘[T]he accusations need only be such as to put the intended victim of the extortion in fear of being accused of some crime.’ [Citation.]” (Flatley, supra, 39 Cal.4th at p. 331.)
Such threats “to impute... disgrace” also constitute extortion. (Pen. Code, § 519, subd. (3).)
Turning to the record in this matter, our de novo review reveals the trial court was correct: Thomas’s conduct did not constitute extortion as a matter of law.
First, in Flatley, there was no legitimate underlying dispute. Rather, Mauro employed threats and intimidation to coerce Flatley to pay money on a claim Mauro never intended to pursue and which the Court deemed a sham. (Flatley, supra, 39 Cal.4th at pp. 330–332.) Here, in significant contrast, there can be no question the underlying dispute is legitimate. Withrow was summarily fired after working for Chrome Hearts for six years, purportedly for his poor performance and insubordination. The record contains evidence Withrow was a trusted and valued employee, and that each Stark exerted some effort to ensure he stayed with the company during various periods of turmoil. There is also evidence that Withrow received very different and hostile treatment after he complained about what he perceived as discriminatory and degrading treatment by a company principal. And, it is undisputed that when Withrow was fired, Chrome Hearts offered him $50,000 in exchange for his silence. Irrespective of the merits of the parties’ dispute, it is clear the Starks were concerned Withrow’s termination might cause them or their company problems which they hoped to avoid by making a preemptive offer to settle. After Withrow rejected that offer, the Starks tried again, and increased the offer to $55,000.
The Starks claim the level of threats in Thomas’s letters equates with Mauro’s constitutionally unprotected threats in Flatley. They are mistaken. The fact that Thomas’s letters “threatened” to file suit on behalf of Withrow if the case could not be resolved does not remove the communications from the category of conduct protected by section 425.16.
As stated above, it is well-established that a prelitigation settlement demand falls within the parameters of a writing “made in connection with an issue under consideration or review by a... judicial body.” (Neville, supra,160 Cal.App.4th at p. 1259.) In Neville, an attorney wrote to a client’s customers accusing the client’s former employee of misappropriating trade secrets and breach of contract, and urged the customers not to do business with the former employee in order to avoid litigation and the need to testify. (Ibid.) The court found the letter was a writing made “in connection with an issue under consideration or review by a... judicial body,” and covered by the SLAPP statute. It related directly to the employer’s substantive claims against the former employee, against whom the employer was seriously and in good faith contemplating litigation, and was directed to persons with an interest in the litigation. (Id. at pp. 1259, 1264.)
A similar conclusion was reached in Rohde, supra,154 Cal.App.4th 28. There, an attorney, whose client was involved in a dispute with his sister, left a voicemail message with the sister’s real estate agent before any litigation was filed. The attorney accused the sister and her agent of conspiring to defraud his client, and said he intended “to take ‘appropriate action.’” (Id. at p. 36.) The sister sued for defamation, and the attorney filed a SLAPP motion. The court found the voicemail messages concerned the subject of a dispute and that considered in context, the attorney’s threats to take “appropriate action” had to have been in anticipation of litigation which the attorney “contemplated in good faith and under serious consideration.” (Id. at pp. 36–37.) Accordingly, the attorney satisfied the threshold step of the SLAPP analysis by establishing that his conduct was protected activity under section 425.16. (Ibid.)
The same result was reached under similar circumstances in Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467, 1481 [finding that landlords’ prelitigation threats of legal action against tenants who failed to agree to pay market rates were “communications in connection with an ongoing dispute and in anticipation of litigation,” and within the meaning of section 425.16], and Salma v. Capon (2008) 161 Cal.App.4th 1275, 1287 [communications “made to prepare for good faith litigation, which is under serious consideration at the time of the communications, are protected by section 425.16”].)
So too here. The communications which form the bases of this dispute are no different. We agree with the trial court that Thomas’s first letter was a “routine settlement discussion arising out of Withrow’s termination,” and contained “the kinds of things that are routinely presented as lawyers communicate about the possibility of litigation and/or its resolution.” The second letter was markedly more strident. Nevertheless, Thomas’s stated purpose in setting forth the details of the Starks’ alleged tax and business fraud, infidelity and drug abuse, among other things, was to illustrate the bases underlying Withrow’s claim that he had been a key, long-term and trusted employee, who understood that his job was secure by virtue of an implied-in-fact contract.
Again, unlike Mauro’s letter in Flatley, Thomas did not threaten to “ruin” the Starks with widespread media exposure of their activities. On the contrary, the letter explicitly referred to Withrow’s intention to sue (not merely to disclose scurrilous accusations to the media) if the matter could not be resolved, and noted the fallout from such a lawsuit could be public disclosure of sensitive information. It discussed the particulars of Withrow’s contract claim and, in contrast to the unsubstantiated seven-figure demand made in Flatley, the amount of Thomas’s settlement demand was not inconsistent with Withrow’s annual salary and benefits. After retaining new counsel (necessitated as result of the Starks’ suit against Thomas), and exhausting his administrative remedies, Withrow did in fact file a lawsuit on the implied contract, discrimination and other claims. In short, the threatened but legitimate litigation, and the promise of concomitant publicity that would likely ensue as a result of the fact that public figures are involved or implicated in this dispute, fell far short of the “shake down” Mauro attempted in Flatley. Indeed, in an admonition that might have been aimed directly at this case, the Court in Flatley emphasized that its conclusion that Mauro’s communications constituted criminal extortion as a matter of law, was strictly limited to the specific and extreme facts of that case, and “should not be read to imply that rude, aggressive, or even belligerent prelitigation negotiations, whether verbal or written, that may include threats to file a lawsuit, report criminal behavior to authorities or publicize allegations of wrongdoing, necessarily constitute extortion.” (Flatley, supra, 39 Cal.4th at p. 332, fn. 16.)
Accordingly, because the record contains evidence to support defendants’ claim that they were acting in furtherance of their rights of speech and petition by placing non-extortionate pressures on a potential litigation adversary, we find they met their initial burden on the threshold issue of the SLAPP analysis. (Taus, supra,40 Cal.4th at p. 712.) We turn now to the second prong question to determine whether the Starks can demonstrate a probability of prevailing.
4. Plaintiffs failed to demonstrate a probability they will prevail at trial.
Once the party moving to strike has met its burden to show the complaint alleges acts arising from protected activity, the burden shifts to the plaintiff to make a prima facie showing of facts which, if proven, would support a judgment in the plaintiff’s favor. (Taus, supra, 40 Cal.4th at p. 712.) To satisfy this burden, plaintiffs cannot simply rely on the allegations in their pleading. Rather, they must provide the court with sufficient evidence to permit the court to determine whether there is a probability they will prevail on the claim. (Soukup, supra,39 Cal.4th at p. 261; Gilbert v. Sykes (2007) 147 Cal.App.4th 13, 26.) They must adduce competent, admissible evidence, and testimony based on personal knowledge. (Christian Research Institute v. Alnor (2007) 148 Cal.App.4th 71, 80; Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 613–614 (Roberts).) In this sense, in assessing the probability that a plaintiff will prevail, a court looks to evidence that would be presented at trial, as it would in reviewing a summary judgment motion. (Roberts, supra,105 Cal.App.4th at pp. 613–614; see also HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at p. 212 [“In opposing an anti-SLAPP motion, the plaintiff cannot rely on the allegations of the complaint, but must produce evidence that would be admissible at trial”].)
Here, Plaintiffs proffered nothing beyond the allegations of their unverified complaint and Lejtman’s four paragraph, conclusory declaration, to support their opposition to the motions to strike. Their failure to prevail on the argument above that Thomas’s communications constituted unlawful blackmail, coupled with their failure to present virtually any evidence that would be admissible at trial is fatal to their ability to establish a prima facie probability of obtaining a favorable judgment at trial. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 [to meet its second prong burden on a SLAPP motion, the plaintiff “‘must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment....’ [Citation.]”].) The Starks failed to meet their burden to demonstrate a probability of prevailing at trial.
Three paragraphs of Lejtman’s declaration are devoted, respectively, to establishing his position as Chrome Hearts’s CFO, and his receipt of Thomas’s two letters. The sole substantive paragraph, tracks the allegations of the complaint verbatim and states only that, during their telephone conversation, Thomas threatened “Withrow would divulge information to the public that would be both embarrassing and damaging” to the Starks, if they failed to pay him $190,000.
5. As the subject communications were protected by the litigation privilege, the Starks—even had they made a more substantial presentation at step two—could not demonstrate a probability of prevailing on the merits of their extortion claim.
Our conclusion that the Starks failed to meet their burden of demonstrating their complaint was supported by a prima facie showing of facts sufficient to sustain a favorable judgment is also independently supported by our conclusion that the communications at issue are absolutely protected by the litigation privilege. (Civ. Code, § 47, subd. (b).)
“‘The usual formulation [of the litigation privilege] is that [it] 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 some connection or logical relation to the action.’ [Citation.] [¶] The litigation privilege is absolute; it applies, if at all, regardless whether the communication was made with malice or the intent to harm. [Citation.] [T]he privilege has been extended to... all torts other than malicious prosecution. [Citations.]... [¶] If there is no dispute as to the operative facts, the applicability of the litigation privilege is a question of law. [Citation.] Any doubt about whether the privilege applies is resolved in favor of applying it. [Citation.]” (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 912–913 (Kashian).) The privilege, which is both absolute and broadly construed, has been held to apply to statements made in connection with proposed litigation that is “contemplated in good faith and under serious consideration.” (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1251; Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 919.) It applies to demand letters and attorneys’ prelitigation communications. (Dove, supra,47 Cal.App.4th at p. 781.) And, so long as the communication is connected to or bears a logical relationship with proposed litigation, it applies without regard to “motives, morals, ethics or intent.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 220; Kashian, supra, 98 Cal.App.4th at p. 913 [privilege applies “regardless [of] whether the communication was made with malice or the intent to harm”].)
The statements made by Thomas on behalf of his clients in the course of prelitigation settlement discussions fall within the litigation privilege. (See Kashian, supra,98 Cal.App.4th at pp. 926–927; Dove, supra, 47 Cal.App.4th at p. 781.) For this reason and the reasons detailed above, the SLAPP motion was properly granted. (See Feldman v. 1100 Park Lane Associates, supra, 160 Cal.App.4th at 1491 [granting SLAPP motion based on litigation privilege]; Rohde, supra, 154 Cal.App.4th at pp. 36–37 [holding that attorney’s messages accusing plaintiff of “conspiring to defraud” were encompassed by litigation privilege and, as a consequence, the plaintiff could not carry his burden on SLAPP motion].)
DISPOSITION
The judgment is affirmed. Withrow and Thomas are entitled to their costs of appeal.
I concur: MALLANO, P. J.
ROTHSCHILD, J., Dissenting.
I respectfully dissent. In my view, Thomas’s settlement demand on behalf of Withrow constituted extortion as a matter of law. Accordingly, the Starks’ cause of action based on that demand could not be challenged under the anti-SLAPP statute because “the purpose of [Code of Civil Procedure] section 425.16 is to protect the valid exercise of constitutional rights of free speech and petition” and “[e]xtortion is not a constitutionally protected form of speech.” (Flatley v. Mauro (2006) 39 Cal.4th 299, 324, 328 (Flatley); italics added.) The anti-SLAPP motion should have been denied on that ground. (Id. at p. 320 [if “the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law, the defendant is precluded from using the anti-SLAPP statute to strike the plaintiff’s action”].)
In Flatley, the entertainer Michael Flatley brought an action for civil extortion and other torts against an attorney, Mauro, based on Mauro’s letter and subsequent telephone calls to Flatley and his attorneys alleging Flatley had raped Mauro’s client and demanding a seven figure payment to settle her claims. (Flatley, supra, 39 Cal.4th at p. 305.) Mauro’s letter included threats to publicly accuse Flatley of rape and other criminal offenses including violation of tax and immigration laws and the Social Security Act unless he “settled” by paying a “minimum” of $1 million. (Id. at pp. 329-330.)
Mauro responded to Flatley’s lawsuit by filing a motion to strike the complaint under the anti-SLAPP statute, Code of Civil Procedure section 425.16. The trial court denied the motion and the Court of Appeal affirmed. Our Supreme Court granted review and affirmed the lower courts’ rulings. The high court concluded that “consistent with the legislative intent underlying the anti-SLAPP statute as revealed by the statutory language, and consistent with our existing anti-SLAPP jurisprudence, a defendant whose assertedly protected speech or petitioning activity was illegal as a matter of law, and therefore unprotected by constitutional guarantees of free speech and petition, cannot use the anti-SLAPP statute to strike the plaintiff’s complaint.” (Flatley, supra, 39 Cal.4th at p. 305; italics added.) The Court determined that Mauro’s demand letter and subsequent telephone calls constituted criminal extortion as a matter of law, citing Penal Code section 519, subdivisions 2 and 3. (Flatley, supra, 39 Cal.4th at p. 330.)
Evaluating Thomas’s demand letters in this case, I conclude that taken together they amounted to extortion. In his first letter, Thomas stated that the purpose of the letter was to offer the Starks “the opportunity to resolve this matter privately and outside a course of litigation and other public attention.” (Italics added.) In his second letter, Thomas described in rich detail the Starks’ conduct that he would expose if the case went to litigation. This conduct included the Starks’ alleged tax fraud and cheating of a business partner, Laurie Stark’s plans to divorce Richard, her sexual relationship with an employee her cocaine use and Richard’s addiction to pain killers. The criminal, salacious and embarrassing conduct that Thomas threatened to publicly disclose was entirely unrelated to any alleged injury suffered by Thomas’s client. (Cf. Flatley, supra, 39 Cal.4th at pp. 330-331 [“the threat to disclose criminal activity entirely unrelated to any injury suffered by [the client]... is itself evidence of extortion.”]
Thomas attempts to draw a fig leaf over his extortion by contending evidence that the Starks divulged their “most sensitive business and personal confidences” to Withrow would be admissible to prove that they considered Withrow a “secure, key employee” terminable only for cause, not an at-will employee as they contend. Thomas conceded at oral argument that he had no authority to support this contention, and I have found none. This letter was nothing more than a thinly veiled threat to publicly expose alleged criminal and embarrassing facts about his employers, to burden their celebrity clients by taking their depositions, and to publicly enmesh those celebrity clients in the employers’ claimed tax fraud.
That Thomas’s communications to the plaintiffs “would be absolutely privileged under Civil Code section 47,” (the “litigation privilege”) is not dispositive of whether his speech is subject to the anti-SLAPP statute. Speech constituting extortion is illegal. (Pen. Code, § 518.) The litigation privilege does not make illegal speech legal; it only protects the speaker from civil liability. If Thomas’s speech was extortion as a matter of law, it is “not constitutionally protected activity for purposes of [Code of Civil Procedure] section 425.16.” (Flatley, supra, 39 Cal.4th at p. 333.) This is so regardless of whether Thomas may eventually escape civil liability for his speech under the litigation privilege. As the Court in Flatley stated: “Assuming without deciding that the litigation privilege may apply to [Mauro’s] threats, we conclude that they are nonetheless not protected under the anti-SLAPP statute because the litigation privilege and the anti-SLAPP statute are substantively different statutes that serve quite different purposes, and it is not consistent with the language or the purpose of the anti-SLAPP statute to protect such threats.” (Id. at p. 322.) The point is not merely academic. If a plaintiff’s case is dismissed under the anti-SLAPP statute, the plaintiff is liable for the defendant’s attorney fees. If instead, it is later dismissed on some other ground, the plaintiff would ordinarily not be liable to pay such fees
For the reasons stated above, the defendants’ SLAPP motion should have been denied.