Biomedical v. Nunez

• Decision Date: 09 October 2014
• Docket Number: C/w B246602,B243205
• Citation: 178 Cal.Rptr.3d 784,230 Cal.App.4th 459
• Court: California Court of Appeals Court of Appeals
• Parties: LUNADA BIOMEDICAL, Plaintiff and Appellant, v. Laura NUNEZ et al., Defendants and Respondents.

230 Cal.App.4th 459

178 Cal.Rptr.3d 784

LUNADA BIOMEDICAL, Plaintiff and Appellant

v.Laura NUNEZ et al., Defendants and Respondents.

B243205

C/w B246602

Court of Appeal, Second District, Division 5, California.

Filed October 9, 2014

The Hicks Law Group, James B. Hicks for Plaintiff and Appellant.

Milstein Adelman, Gillian L. Wade, Mayo L. Makarczyk, Sara D. Avila, Santa Monica; Erich D. Schiefelbine for Defendants and Respondents.

MOSK, J.

INTRODUCTION

Attorneys for a consumer served on a company a notice required for damages under the Consumers Legal Remedies Act, Civil Code section 1750 et seq. (CLRA), setting forth alleged violations of the CLRA and demanding action. The company then brought a declaratory relief action against the consumer and her attorneys seeking a declaration that it had not violated the CLRA. The consumer and the attorneys moved to strike the complaint under Code of Civil Procedure section 425.16¹ (anti-SLAPP statute² ), which motions the trial court granted. In affirming, we hold that the declaratory relief action is subject to the anti-SLAPP statute as it arose out of protected activity provided by that statute, and that the trial court properly granted the special motions to strike because the company's declaratory relief action had no probability of success. In this connection, we hold that under the reasoning of Filarsky v. Superior Court (2002) 28 Cal.4th 419, 121 Cal.Rptr.2d 844, 49 P.3d 194 (Filarsky ), a potential defendant in a CLRA damages action after receiving the statutory notice may not maintain a declaratory relief action to establish that there was no violation of the CLRA. We therefore affirm the order striking the complaint. We also affirm the award of attorney fees.

FACTUAL AND PROCEDURAL BACKGROUND

Laura Nunez (Nunez) retained two law firms, Newport Trial Group (Newport) and Wasserman, Comden, Casselman & Esensten, LPP (Wasserman),³ to represent her in an anticipated consumer class action under the CLRA. Newport served Lunada Biomedical (plaintiff) with a one-page notice and demand, pursuant to Civil Code section 1782 of the CLRA (CLRA Notice), via certified mail, return receipt requested, contending that plaintiff's dietary supplement, “Amberen,” was being marketed falsely and misleadingly as a “natural remedy for Menopausal symptom relief,” in violation of the CLRA. The CLRA Notice was served on behalf of an unnamed Californian individual and a class of similarly situated persons. It requested that plaintiff “irrevocably stop all false, misleading, and/or unsubstantiated advertising and labeling claims, and provide all consumers who have purchased Amberen with a full refund.” Plaintiff's counsel responded by letter to the CLRA Notice, denying its contentions, and claiming in detail that scientific evidence supported plaintiff's advertising claims concerning Amberen.

Thereafter, plaintiff's counsel sent an e-mail to Wasserman confirming their telephone conversation that occurred a few days previously, stating that he disagreed with Wasserman's claims for the reasons set forth in plaintiff's earlier reply letter, and stating, “[A]s I mentioned, I almost always consider settlement issues before litigation, so I asked you to propose a settlement offer. ... There's no rush, we can talk whenever you are ready.” Later that afternoon, an attorney from Wasserman sent an e-mail to plaintiff's counsel, stating, “Given the upcoming holidays, I have not had a chance to talk to all interested parties, much less put together a ‘settlement offer.’ ” The e-mail also stated that Wasserman needed information regarding the sale of Amberen before it could propose a settlement demand, but that it would provide plaintiff's counsel with an outline of the injunctive relief concerning “labeling and advertising changes” that “we” would demand as part of any settlement.

A little over a month later, the attorney from Wasserman sent an 11-page letter to plaintiff's counsel via e-mail and United States mail thanking him for responding to “our [CLRA Notice] on behalf of our client, ... Nunez ... regarding her potential class action claims related to Amberen... .” The letter stated, “In accordance with our November 18th telephone conversation and subsequent email communications, this letter will discuss possible ways to resolve the current dispute concerning our client's false and misleading advertising claims against [plaintiff]. I will not attempt to further address the merits of [Nunez's] claims in this letter. Instead, I will simply outline briefly potential settlement approaches and structures.” It set forth possible “ALTERNATIVE SETTLEMENT STRUCTURES,” and detailed matters subject to injunctive relief consisting of “PROPOSED ADVERTISING AND MARKETING MODIFICATIONS.” The proposed advertising and marketing modifications were matters that, according to Wasserman, plaintiff should “permanently cease” from representing to current and potential purchasers of Amberen, “delete” from all Amberen advertising and labeling, and include in all future Amberen advertising and labeling.

Within two weeks, plaintiff filed a complaint alleging a single cause of action for declaratory relief against defendants. Plaintiff sought a determination regarding “the accuracy and legality” of plaintiff's advertising of Amberen. Plaintiff alleged in its complaint that “[t]his action is being filed because Defendants threaten to file a lawsuit claiming that Plaintiff's advertising violates California's consumer protection statutes, including ... [the CLRA]. However, Defendants' threatened suit lacks any basis... .” Plaintiff alleged in the complaint that “[t]his dispute was originally raised in a [CLRA Notice] claiming that [plaintiff's] advertising for Amberen supposedly violated the CLRA... .” Plaintiff also referred to in the complaint various additional communications the parties had regarding settlement, including Wasserman's letter. Plaintiff also included in the complaint responses to the matters contained in Wasserman's letter.

Nunez and Newport filed an anti-SLAPP motion, in which Wasserman joined. The motions were made on the grounds that plaintiff's claim arose from protected activity—“defendants' CLRA [N]otice regarding plaintiff's deceptive advertising claims about its product Amberen, and related settlement communications”— and that plaintiff could not establish a probability of prevailing on its claim.

Plaintiff opposed defendants' anti-SLAPP motions. In support of that opposition, plaintiff provided substantial evidence in support of its contention that its advertising of Amberen was not false and misleading. Specifically, plaintiff submitted a declaration attaching plaintiff's counsel's letter setting forth scientific evidence that supported plaintiff's advertising claims concerning Amberen and declarations of a professor in biology from the department of life sciences at Santa Monica College and of a deputy director and head of the laboratory of the Institute of Theoretical and Experimental Biophysics of the Russian Academy of Science, both of which declarations asserted in detail that scientific evidence supported plaintiff's advertising claims concerning Amberen. Defendants objected to plaintiff's evidence.⁴

The trial court issued a tentative ruling granting the special motions to strike the complaint, determining that defendants met their burden that plaintiff's claim arose from protected activity; plaintiff could not establish a probability of prevailing on its declaratory relief claim because “defendants' notification letter” was absolutely privileged by the litigation privilege of Civil Code section 47 ; and “in the absence of the notification letter, plaintiff has no evidence that an ‘actual controversy’ exists between [it] and defendants... .” At the conclusion of the hearing on defendants' motions, the trial court adopted its tentative ruling as its final ruling.

Defendants filed motions to recover their attorney fees under section 425.16, subdivision (c). The trial court awarded $104,293.75 in attorney fees to Nunez and Newport, and $57,765.63 in attorney fees to Wasserman. Plaintiff appeals from the orders granting the special motions to strike and awarding attorney fees, asserting that the anti-SLAPP statute did not apply to its declaratory relief claim and challenging the amount of the attorney fees awards.

DISCUSSION

A. Anti-SLAPP Motion

1. Legal Principles

(a) Anti-SLAPP Statute and Standard of Review

Section 425.16 provides that a cause of action arising from a defendant's conduct in furtherance of constitutionally protected rights of free speech or petitioning may be stricken unless the plaintiff has a probability of prevailing on the merits. (§ 425.16, subd. (b)(1).) In ruling on a special motion to strike under section 425.16, the trial court employs a two-prong analysis. Initially, under the first prong, the trial court determines “ ‘whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. ... If the court finds such a showing has been made, it then determines [under the second prong] whether the plaintiff has demonstrated a probability of prevailing on the claim.’ [Citation.]” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733, 3 Cal.Rptr.3d 636, 74 P.3d 737.)

To satisfy the second prong-the probability of prevailing-the plaintiff must demonstrate that the complaint is legally sufficient and supported by a prima facie showing of facts to support a favorable judgment if the evidence submitted by the plaintiff is accepted. The trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant. Although “ ‘the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant's evidence supporting the motion defeats the plaintiff's attempt to establish evidentiary support for the claim. [Citatio...