Metabolic Research, Inc. v. Ferrell

• Decision Date: 18 June 2012
• Docket Number: No. 10–16209.,10–16209.
• Citation: 693 F.3d 795
• Parties: METABOLIC RESEARCH, INC., Plaintiff–Appellee, v. Scott J. FERRELL; Michael A. Campos; Thomas Hess; Sara Jordan, Defendants–Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

693 F.3d 795

2012 Daily Journal D.A.R. 8054

METABOLIC RESEARCH, INC., Plaintiff–Appellee,

v.Scott J. FERRELL; Michael A. Campos; Thomas Hess; Sara Jordan, Defendants–Appellants.

No. 10–16209.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted June 17, 2011.

Filed June 18, 2012.

Bevin E. Allen, Khorrami Pollard & Abir LLP, Los Angeles, CA, for the appellants.

Beverly Salhanick, Las Vegas, NV, for the appellee.

Appeal from the United States District Court for the District of Nevada, James C. Mahan, District Judge, Presiding. D.C. No. 2:09–cv–02453–JCM–PAL.

Before: JAY S. BYBEE and MARY H. MURGUIA, Circuit Judges, and JAMES K. SINGLETON, Senior District Judge.^*

ORDER

The opinion filed on February 9, 2012, appearing at 668 F.3d 1100, is withdrawn.

OPINION

SINGLETON, District Judge:

In this decision, we determine whether an order denying a pretrial special motion to dismiss under Nevada's anti-SLAPP statute,¹Nev.Rev.Stat. §§ 41.635–670, is immediately appealable under the collateral order doctrine first recognized in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546–47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). We previously considered related issues under Oregon law in Englert v. MacDonell, 551 F.3d 1099, 1103–07 (9th Cir.2009), and California law in Batzel v. Smith, 333 F.3d 1018, 1025–26 (9th Cir.2003). We find that Nevada's statute is similar to Oregon's at the time we decided Englert, and dismiss the appeal for lack of jurisdiction.

I. FACTUAL AND PROCEDURAL HISTORY

On October 20, 2009, Scott J. Ferrell, an attorney practicing law in Orange County California, sent “demand letters” to Metabolic Research, Inc. (“Metabolic”), at its address in Las Vegas, Nevada, and to General Nutrition Centers, Inc. (“GNC”), at its address in Pittsburgh, Pennsylvania. The demand letters purported to notify the recipients that they had violated California Civil Code §§ 1750–1756, the California Consumer Legal Remedies Act (“CLRA”), by falsely advertising the properties and potential benefits of a product named Stemulite, which they marketed as a natural fitness supplement. Ferrell represented that he was acting on behalf of Michael Campos, Thomas Hess, and Sarah Jordan, all of whom he alleged purchased Stemulite in California, in reliance on the supposed false advertising, and had not received the purported benefits. Ferrell further claimed that he was acting on behalf of a purported class of similarly-situated persons. In this decision, Ferrell, his clients, and his prospective clients will be collectively referred to as “Ferrell,” unless otherwise indicated.

In his demand letters, Ferrell set out what he contended were representative false claims and summarized what he contended constituted violations of the CLRA. Ferrell demanded that Metabolic and GNC cease their false advertising of Stemulite, identify all consumers who purchased Stemulite within the applicable limitations period, and provide each of these consumers with an appropriate refund. In addition, Ferrell demanded that Metabolic and GNC disgorge all revenues from sales of Stemulite for consumers who could not be identified and implement “an appropriate corrective advertising campaign,” including a labeling “disclaimer.”

Ferrell concluded the letters with an offer to compromise and allowed Metabolic and GNC thirty days from the date of his letters to agree to an injunction “that include[d] an appropriate disclaimer” in which case, Ferrell agreed to take no further action, except to enforce the injunction. However, if Metabolic and GNC chose not to accept the offer, Ferrell stated that he would file a lawsuit (presumably in California) and seek all available relief. ²

On November 19, 2009, Metabolic filed a lawsuit in Nevada State Court against Ferrell, his putative class action plaintiffs, and various “Does,” all identified as California residents, charging extortion. SeeNev.Rev.Stat. § 207.470 (allowing treble damages for racketeering in aid of extortion). ³ Metabolic's complaint further charged racketeering based upon multiple publications of the demand letter (to Metabolic, to GNC and to GNC principals), conspiracy to engage in racketeering, civil extortion, tortious interference with contract, and tortious interference with prospective economic relations, i.e., interfering with the agreement between Metabolic and GNC. Metabolic sought declaratory relief and punitive damages. Metabolic's lawsuit directly referenced Ferrell's demand letter, which Metabolic characterized as an accusation of mail fraud, in violation of 18 U.S.C. §§ 1341, 1343. Metabolic, in apparent anticipation of an anti-SLAPP motion by Ferrell, expressly relied upon Flatley v. Mauro, which Metabolic characterized as holding that pre-litigation communications are not “privileged” under California's analogous anti-SLAPP statute, if the demands constitute extortion or blackmail as a matter of law.

On December 30, 2009, Ferrell removed the case to the United States District Court for the District of Nevada based on complete diversity of citizenship. Ferrell filed an answer on January 5, 2010, and on January 27, 2010, Ferrell filed a special motion to dismiss based upon Nevada's anti-SLAPP statute. Nev.Rev.Stat. § 41.660; John, 219 P.3d at 1280–82.⁴

Metabolic filed a response to Ferrell's special motion to dismiss, and the district court held a hearing on April 21, 2010. At the conclusion of the hearing, the district court denied the motion and directed Metabolic to prepare an appropriate order.

In its order dismissing Ferrell's motion, the district court found that Ferrell had not established that the demand letter to Metabolic constituted a good-faith communication in furtherance of the right to petition because it concluded that Nevada's anti-SLAPP legislation only protected communications made directly to a governmental agency and did not protect a demand letter sent to a potential defendant in litigation. This appeal followed.

II. DISCUSSION

Our jurisdiction is typically limited to “final decisions.” 28 U.S.C. § 1291; see also In re Korean Air Lines Co., 642 F.3d 685, 689 (9th Cir.2011). Generally, a final judgment is entered at the end of a case, permitting a single appeal to address all issues. See Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994). However, there is a narrow class of decisions—termed collateral orders—that do not terminate the litigation, but must “in the interest of achieving a healthy legal system nonetheless be treated as final.” Id. at 867, 114 S.Ct. 1992 (citation omitted) (internal quotation marks omitted). In Cohen v. Beneficial Industrial Loan Corp., the Supreme Court promulgated the collateral order doctrine, recognizing that such orders should be subject to immediate appeal. 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Whether the district court's order qualifies as an appealable collateral order under Cohen will determine our subject-matter jurisdiction. Digital Equip., 511 U.S. at 869 n. 3, 114 S.Ct. 1992. We consider our jurisdiction de novo. Andersen v. United States, 298 F.3d 804, 807 n. 2 (9th Cir.2002).

A party pursuing an interlocutory appeal under the collateral order doctrine must show that the order being appealed meets three criteria. It must “[1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment.” Will v. Hallock, 546 U.S. 345, 349, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006) (internal quotation marks omitted). These requirements are applied strictly, in order to avoid the collateral order doctrine swallowing up the final judgment rule. See id. at 350, 126 S.Ct. 952 (“[A]lthough the Court has been asked many times to expand the ‘small class' of collaterally appealable orders, we have insteadkept it narrow and selective in its membership.”); Digital Equip., 511 U.S. at 868, 114 S.Ct. 1992 (“[T]he ‘narrow’ exception should stay that way and never be allowed to swallow the general rule that a party is entitled to a single appeal, to be deferred until final judgment has been entered ....” (citation omitted)). Additionally, we do not limit our consideration to the single case before us. We must instead identify the category of cases to which our case belongs and consider a rule that will work for all cases in the category, regardless of whether the order in question is correct. Digital Equip., 511 U.S. at 868, 114 S.Ct. 1992 (“[T]he issue of appealability under § 1291 is to be determined for the entire category to which a claim belongs, without regard to the chance that the litigation at hand might be speeded, or a particular injustice averted by a prompt appellate court decision.” (citation omitted) (internal quotation marks omitted)).

Applying this protocol, we must first identify the category of cases which must be considered in determining the need for immediate appeal. It might have been possible to look at all the cases dealing with anti-SLAPP litigation within this circuit as constituting a single “category.” Indeed, it appears that all of the anti-SLAPP statutes adopted by the states in the Ninth Circuit have many components in common. However, deeper inspection has persuaded us that, while all of the statutes have common elements, there are significant differences as well, so that each state's statutory scheme must be evaluated separately. Accordingly, we have reached different conclusions with respect to the applicability of the collateral order doctrine after examining Oregon law in Englert v. MacDonell, 551 F.3d 1099, 1106–07 (9th Cir.2009) (denying an immediate appeal of an anti-SLAPP motion to dismiss as a collateral order),⁵ and California law in Batzel v. Smith, 333 F.3d 1018, 1025 (9th Cir.2003) (granting an immediate appeal of an anti-SLAPP motion to dismiss as a collateral order). Therefore, we consider...