Raining Data Corp. v. Barrenechea

• Decision Date: 26 June 2009
• Docket Number: No. G040902.,G040902.
• Citation: 97 Cal. Rptr. 3d 196,175 Cal.App.4th 1363
• Court: California Court of Appeals Court of Appeals
• Parties: RAINING DATA CORPORATION, Plaintiff and Respondent, v. MARIO BARRENECHEA, Defendant and Appellant.

175 Cal.App.4th 1363

97 Cal. Rptr. 3d 196

RAINING DATA CORPORATION, Plaintiff and Respondent, v. MARIO BARRENECHEA, Defendant and Appellant.

No. G040902.

Court of Appeals of California, Fourth District, Division Three.

June 26, 2009.

[175 Cal.App.4th 1366]

The Walker Law Firm, Joseph A. Walker and Jason Matthew Lamb for Defendant and Appellant.

Wilson, Sonsini, Goodrich & Rosati, Ulrico S. Rosales and Michael J. Nader for Plaintiff and Respondent.

OPINION

FYBEL, J.—

INTRODUCTION

Raining Data Corporation sued Mario Barrenechea, Soheil Raissi, and Adevnet, LLC (collectively referred to as defendants), for misappropriation of trade secrets. Defendants responded with a cross-complaint against Raining Data Corporation and its president and chief executive officer, Carlton Baab. (For simplicity, Raining Data Corporation and Baab will be referred to collectively as Raining Data.¹) Raining Data filed a motion to strike all causes of action in the cross-complaint, pursuant to Code of Civil Procedure section 425.16 (the anti-SLAPP [strategic lawsuit against public participation] motion). (All further statutory references are to the Code of Civil Procedure, unless otherwise specified.) The trial court granted the anti-SLAPP motion, and struck the entirety of the cross-complaint. All three defendants appealed from the order. The appeals of Raissi and Adevnet have been dismissed.

Having reviewed de novo the pleadings and the declarations filed in support of and in opposition to the anti-SLAPP motion, we conclude as follows: (1) Raining Data met its burden of demonstrating the acts underlying the cross-complaint arose from protected activity; any unprotected activity alleged in the cross-complaint was merely incidental to the principal thrust of the cross-complaint, which was that defendants were harmed by the filing of Raining Data's complaint; (2) Barrenechea failed to meet his burden of establishing a probability he would prevail on the cross-complaint, a finding which is not challenged on appeal; and (3) Barrenechea's argument that a cross-complaint cannot be challenged by means of an anti-SLAPP motion, which is raised for the first time on appeal, has been waived; in any event, the argument is meritless. We affirm the order granting the anti-SLAPP motion.

Barrenechea also appeals from an order granting a motion for attorney fees, filed by Raining Data, pursuant to section 425.16, subdivision (c). We conclude the trial court did not abuse its discretion in granting the motion. The declarations of Raining Data's counsel were sufficient to meet the burden of establishing the reasonableness of the fees incurred, without the need to produce copies of counsel's detailed billing statements. Barrenechea's contention that the case was overstaffed with two law firms, making the fees incurred unreasonable and duplicative, was unsupported. We affirm the award of attorney fees to Raining Data.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

On December 8, 2006, Raining Data Corporation sued defendants for injunctive relief for misappropriation of trade secrets. The complaint alleged Barrenechea and Raissi were former employees of Raining Data Corporation, and Adevnet was a consulting company owned by Barrenechea and Raissi. The complaint further alleged Barrenechea and Raissi, individually and acting as Adevnet, had used, disclosed, or threatened to use or disclose Raining Data Corporation's trade secrets.

Defendants filed an answer and a cross-complaint on January 10, 2007. In the cross-complaint, defendants asserted claims against Raining Data for unfair business practices, violation of civil rights, intentional and negligent interference with prospective economic advantage, malicious prosecution, abuse of process, negligence, and conspiracy, and requested injunctive relief.

Raining Data filed an anti-SLAPP motion on March 16, 2007. The trial court granted defendants' request for limited discovery. After a series of continuances, the anti-SLAPP motion was finally heard on June 27, 2008. Following the hearing, the court granted the anti-SLAPP motion. Raining Data filed a motion for attorney fees. After briefing and a hearing, the trial court granted Raining Data's motion, awarding it $112,353.75. Defendants timely filed notices of appeal of both orders.

During the pendency of the appeal, Adevnet was cancelled by its members, and its appeal has been dismissed. Raissi voluntarily dismissed his appeal, leaving only Barrenechea as an appellant.

DISCUSSION

I. ANTI-SLAPP ORDER

We review the trial court's order granting the anti-SLAPP motion de novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325-326 [46 Cal.Rptr.3d 606 139 P.3d 2].) "`We consider "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.]' [Citation.]" (Id. at p. 326.)

(1) "Section 425.16, subdivision (b)(1) requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken `in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue,' as defined in the statute. [Citation.] If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. Under section 425.16, subdivision (b)(2), the trial court in making these determinations 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 [124 Cal.Rptr.2d 507, 52 P.3d 685].)

A. Raining Data met its burden of demonstrating the acts underlying the cross-complaint arose from protected activity.

The claims in the cross-complaint were based on Raining Data's acts of (1) filing the complaint, and (2) communicating with Adevnet's customers and potential customers. Raining Data's "act of filing the complaint in the underlying action squarely falls within section 425.16, subdivision (e)(1)." (Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1055 .) To the extent Raining Data's communications with Adevnet's customers constituted a litigation update, describing the parties' contentions and court rulings, and were directed toward those persons with some involvement in the litigation, they would be protected activity under section 425.16, subdivision (e)(2). (Contemporary Services Corp. v. Staff Pro Inc., supra, 152 Cal.App.4th at p. 1055.) Neither the cross-complaint nor the parties' submissions in connection with the anti-SLAPP motion clearly define when the communications occurred, or what their nature was.

(2) Two of the causes of action in the cross-complaint—for malicious prosecution and abuse of process—by definition arise from the protected activity of Raining Data's filing of its complaint. The remaining causes of action present a classic case of mixed claims of protected and nonprotected activity. "[W]here a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is `merely incidental' to the unprotected conduct [citations] ...." (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 103 .) "[I]t is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAP[P] statute applies." (Scott v. Metabolife Internat., Inc. (2004) 115 Cal.App.4th 404, 414 .) "`[A] plaintiff cannot frustrate the purposes of the SLAPP statute through a pleading tactic of combining allegations of protected and nonprotected activity under the label of one "cause of action."' [Citation.] Conversely, a defendant in an ordinary private dispute cannot take advantage of the anti-SLAPP statute simply because the complaint contains some references to speech or petitioning activity by the defendant. [Citation.] We conclude it is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies [citation], and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute." (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188 .)

Next, we examine what the cross-complaint alleged Raining Data actually did (or failed to do) in order to determine the gravamen of the cross-claims. In each of the cross-claims, defendants alleged that "in doing the acts herein alleged," Raining Data caused damage and harm to them. Defendants alleged Raining Data caused them damage and harm by making false statements, committing trade libel, engaging in predatory tactics, harassment, intimidation, interfering with prospective economic advantage, filing frivolous lawsuits, intercepting confidential communications, invading their privacy, attempting to discredit defendants' reputations, committing business sabotage, and interfering with defendants' rights of free speech and association. But the cross-complaint alleged very little in terms of specific acts on the part of Raining Data that could form a basis for any cause of action. We set forth here all the specific allegations of Raining Data's conduct or statements causing harm...