People v. Health Laboratories Of North America

• Decision Date: 30 January 2001
• Citation: 104 Cal.Rptr.2d 618
• Court: California Court of Appeals Court of Appeals
• Parties: (Cal.App. 1 Dist. 2001) THE PEOPLE, Plaintiff and Respondent, v. HEALTH LABORATORIES OF NORTH AMERICA, INC., et al., Defendants and Appellants. A089749 Filed

104 Cal.Rptr.2d 618 (Cal.App. 1 Dist. 2001)

THE PEOPLE, Plaintiff and Respondent, v. HEALTH LABORATORIES OF NORTH AMERICA, INC., et al., Defendants and Appellants.

A089749

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE

Filed 1/30/01; pub. order 2/28/01 (see end of opn.)

(Napa County Super. Ct. No. 26-05137 )

Trial court: Napa County Superior Court, Trial Judge: Hon. W. Scott Snowden, Counsel for plaintiff and respondent: Gary Lieberstein, District Attorney, Daryl Arthur Roberts, Deputy District Attorney, J. Michael Mullins, District Attorney, David B. Copenhaver, Deputy District Attorney Counsel for amicus on behalf of respondent: Bill Lockyer, Attorney General, Richard M. Frank, Chief Assistant Attorney General, Herschel T. Elkins, Senior Assistant Attorney General, Ronald A. Reiter, Deputy Attorney General Counsel for defendants and appellants: Michael P. Verna, David W. Trotter, Donald A. Velez, Bowles & Verna Sheldon S. Lustigman, The Lustigman Firm, P.C.

Jones, P.J.

Health Laboratories of North America, Inc., and its officer, Marc J. Kaplan, appeal an order denying their motion pursuant to the anti-SLAPP statute (Code Civ. Proc., 425.16)¹ to strike the People's action for a permanent injunction enjoining them from making unsubstantiated advertising claims and for civil penalties for having made false or misleading advertisements. Appellants contend the statute's provision exempting public prosecutors from its strictures violates the equal protection clauses of the United States and California Constitutions. (U.S. Const., Amend. XIV, 1; Cal. Const., art. I, 7.)

BACKGROUND

Appellants manufacture a weight loss product called Berry Trim Plus. In conjunction with this product, the District Attorneys of Napa and Sonoma Counties, on behalf of the People, brought an action against appellants for violation of various statutes governing false or misleading advertising and unfair competition. (Bus. & Prof. Code 17200, 17500, 17508.) As amended, the complaint sought an injunction against appellants' advertising claims, civil penalties for each of their acts of unfair competition and each false or misleading statement, and an order for restitution to all victims of appellants' acts of unfair competition. (Bus. & Prof. Code, 17203, 17206, 17536.)

Asserting that the People brought the action to chill their valid exercise of free speech through an abuse of the judicial process, appellants filed a special motion to strike the amended complaint under section 425.16, the anti-SLAPP statute. Appellants acknowledged that the statute states that it "shall not apply to any enforcement action brought in the name of the people of the State of California by the Attorney General, district attorney, or city attorney, acting as a public prosecutor" ( 425.16, subd. (d); hereafter, subdivision (d)), but contended that subdivision (d) is unconstitutional. They argued that subdivision (d) arbitrarily discriminated against them and violated their right to equal protection of the law because private plaintiffs who sue a defendant for conduct which is in furtherance of the defendant's free speech rights are subject to the anti-SLAPP statute but public prosecutors are not.

The trial court denied appellants' special motion, concluding that under either rational basis or strict scrutiny analysis, subdivision (d) is constitutional.

DISCUSSION

I. Standard of Review

The interpretation of a statute and the determination of its constitutionality are questions of law. In such cases, appellate courts apply a de novo standard of review. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799-801.)

II. The Anti-SLAPP Statute

Section 425.16 was enacted in response to a legislative concern that "there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process." ( 425.16, subd. (a).) Section 425.16 addresses this concern by providing that a cause of action against a person arising from any act of that person in furtherance of his constitutional right of petition or free speech in connection with a public issue shall be subject to a special motion to strike, unless the person asserting the cause of action establishes by pleading and affidavit a probability that he will prevail. ( 425.16, subd. (b)(1).)

For purposes of the anti-SLAPP statute, acts in furtherance of a defendant's constitutional rights of petition and free speech in connection with a public issue include "any written or oral statement or writing made in a place open to the public . . . in connection with an issue of public interest" and any "other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest." ( 425.16, subd. (e)(3) & (4).) The People do not dispute that advertisements for a product to treat a medical condition that affects a large number of people may be the kind of act that can satisfy the statutory definition of an act in furtherance of the manufacturer's right of free speech. (See DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 567.)

The history of the anti-SLAPP statute reflects the Legislature's concern that, while there was a critical need to prevent suits brought only to chill the exercise of the defendant's First Amendment rights, any such protection should not be at the expense of a public prosecutor's ability to enforce consumer protection laws.

In the 1990 legislative session, an anti-SLAPP bill was introduced to the Senate (Sen. Bill No. 2313 (1989-1990 Reg. Sess.)). It closely resembled the present anti-SLAPP statute, by establishing a procedure for early dismissal of an action brought against a person arising from any act of that person in furtherance of his or her free speech rights. However, it did not contain any exemption for public prosecutors. The bill analysis by its sponsoring Senate Judiciary Committee noted that the state Attorney General, although not opposed to the bill, was concerned that it could have "the unintended consequence of hindering enforcement of certain consumer protections laws by state and local agencies, e.g., enforcement of new commercial fundraiser for charitable purpose law; enforcement of law prohibiting false, misleading or deceptive advertising." The bill, as passed by the Legislature, was not amended to address this concern. In September 1990, the governor vetoed the bill.

In the 1991 legislative session, another anti-SLAPP bill (Sen. Bill No. 10, 1991-1992 Reg. Sess.) was introduced, again without addressing the Attorney General's concerns. Following introduction of Senate Bill 10, the California District Attorneys Association wrote its sponsoring senator to object to it because it "will seriously inhibit or prevent prosecutions for consumer or environmental violations." The Association gave as a specific example the preclusion by the district attorney from initially filing a civil suit in a consumer action for false advertising. Thereafter, Senate Bill 10 was amended to add a provision that it "shall not apply to any action brought in the name of the people of the State of California by the Attorney General, any district attorney, or any city attorney acting as a public prosecutor." Senate Bill 10 was subsequently incorporated into Senate Bill 341, which was passed by the Legislature but vetoed by the governor.

In the 1992 legislative session a third anti-SLAPP bill was introduced. (Sen. Bill No. 1264 (1991-1992 Reg. Sess.).) This bill contains the present subdivision (d) language, which differs from Senate Bill 341 of 1991 only by adding the modifier "enforcement" before action, i.e., the statute shall not apply to any "enforcement" action brought by the Attorney General or other public prosecutor. This bill was approved by the governor (Stats. 1992, ch. 726, 2) and, together with subsequent amendments, is the present section 425.16.

III. The Equal Protection Clause

"The Equal Protection Clause of the Fourteenth Amendment commands that no state shall 'deny to any person within its jurisdiction the equal protection of the laws,' which is essentially a direction that all persons similarly situated should be treated alike. [Citation.]" (Cleburne v. Cleburne Living Center, Inc. (1985) 473 U.S. 432, 439 (Cleburne).) Although most statutes differentiate somehow between classes of people, the equal protection clause does not forbid classifications. (Nordlinger v. Hahn (1992) 505 U.S. 1, 10.) So long as the classification is not arbitrary but is based on some difference in the classes having a substantial relation to a legitimate object to be accomplished, Legislatures may make reasonable classifications of persons, businesses and activities. (8 Witkin, Summary of Cal. Law (9th ed.), Constitutional Law, 599, p. 61, & citations therein.)

The equal protection clause of the California Constitution similarly states that a person "may not be denied equal protection of laws" (Cal. Const., art. I, 7), and statutory classifications challenged thereunder are analyzed by the same rules applicable to challenges to the Fourteenth Amendment. (Board of Supervisors v. Local Agency Formation Com. (1992) 3 Cal.4th 903, 913 (Board); Graham v. Kirkwood Meadows Pub. Util. Dist. (1994) 21 Cal.App.4th 1631, 1642.)

Legislative classifications are presumed valid and will be sustained if the classification is rationally related to a legitimate state interest. Most statutes challenged on equal protection grounds are tested by this rational basis standard. (Cleburne, supra, 473 U.S. at p. 440.) Only...