Renewable Res. Coal., Inc. v. Pebble Mines Corp.

• Decision Date: 30 October 2013
• Docket Number: B234347 consolidated w/ B236218
• Parties: RENEWABLE RESOURCES COALITION, INC., Plaintiff and Appellant, v. PEBBLE MINES CORPORATION et al., Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

218 Cal.App.4th 384

159 Cal.Rptr.3d 901

RENEWABLE RESOURCES COALITION, INC., Plaintiff and Appellant,

v.PEBBLE MINES CORPORATION et al., Defendants and Appellants.

B234347 consolidated w/ B236218

Court of Appeal,

Second District, Division 3, California.

Filed July 30, 2013

Review Denied October 30, 2013

See 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 1025 et seq.

APPEALS from an order and judgment of the Superior Court of Los Angeles County, Terry A. Green, Judge. Reversed and remanded with directions. (Los Angeles County Super. Ct. No. BC456803)

Nielsen, Haley & Abbott, Stephen W. Cusick, James C. Nielsen, San Rafael, and Christine B. Cusick for Plaintiff and Appellant.

Keker & Van Nest, Susan J. Harriman, Steven A. Hirsch, San Francisco, and C. Eli Ewing for Defendants and Respondents.

KLEIN, P.J.

Plaintiff and appellant Renewable Resources Coalition, Inc. (Coalition) appeals an order granting a special motion to strike (Code Civ. Proc., § 425.16) brought by defendants and respondents Pebble Mines Corporation (Pebble Inc.), Pebble Limited Partnership (Pebble LP), and their attorneys, Jermain, Dunnagan & Owens, P.C. (Jermain) (collectively, the Pebble defendants).¹

The Pebble defendants cross-appeal, contending the trial court abused its discretion in awarding them merely $30,000 in attorney fees after they prevailed on their special motion to strike.

By way of background, the Pebble defendants obtained the Coalition's documents from the Coalition's former fundraiser and used those documents to prosecute a complaint against the Coalition before the Alaska Public Offices Commission (APOC) for alleged election law violations. In this action, the Coalition sued the Pebble defendants, alleging they knowingly purchased the Coalition's confidential documents from the former fundraiser for $50,000. The Pebble defendants successfully brought a special motion to strike. We reverse.

To determine the applicability of section 425.16, the anti-SLAPP statute, we look to the gravamen of the instant action. Rather than focusing on the gravamen of this action, which was that the Pebble defendants allegedly purchased the Coalition's confidential documents, the trial court focused on the injury to the Coalition, which was forced to defend itself in the APOC proceeding. However, the gravamen of an action is the allegedly wrongful and injury-producing conduct, not the damage which flows from said conduct. Here, the gravamen of the Coalition's action is the allegation that the Pebble defendants wrongfully purchased its confidential documents. Said purchase was not an act by defendants in furtherance of their right of petition or free speech. Therefore, the trial court erred in granting the special motion to strike.

As for the cross-appeal, our reversal of the order granting the special motion to strike moots the issues raised by the Pebble defendants on their cross-appeal. In view of the reversal of the order granting the special motion to strike, the Pebble defendants are not prevailing parties at this juncture and thus are not entitled to attorney fees in any amount.

FACTUAL AND PROCEDURAL BACKGROUND

1. Pleadings.

The Coalition commenced this action on March 11, 2011, and filed the operative first amended complaint on March 22, naming the three Pebble defendants as well as Robert L. Kaplan (Kaplan) (not a party to this appeal).

The complaint pled in pertinent part:

Pebble Mine is a proposed open-pit mine for copper, gold and other metals in Southwest Alaska, in the headwaters of Bristol Bay. Pebble LP is an Alaska limited partnership undertaking the mine's development. Pebble Inc. is an Alaska corporation operating as the general partner of the limited partnership. The Jermain law firm, located in Anchorage, represented clients Pebble Inc. and Pebble LP.

The Coalition is an Alaska nonprofit corporation which opposed the mine project and seeks to preserve Alaska's fishing and hunting resources, including the land and waters that the fishing and hunting stock need to survive.

In 2008, opposition to Pebble Mine coalesced in the Alaska Clean Water ballot initiative, Ballot Measure 4, which would have impeded or blocked the mine's development.

In April 2008, the Coalition contracted with Fund Raising, Inc. (FRI), a California corporation, which is in the business of raising money for political campaigns. Kaplan is the principal and sole shareholder of FRI. As a professional fundraiser, Kaplan knew his clients considered their communications confidential, and that his clients relied on him not to disclose their internal, confidential communications related to the political campaign.

In September 2008, after the defeat of Ballot Measure 4, the Coalition terminated its contract with FRI. A dispute then arose concerning what amounts, if any were still due to FRI under the contract.

Although the contract called for the fee dispute to be resolved by arbitration in California, Kaplan contacted the Alaska attorneys who had represented the Pebble Mine interests in the recently concluded election campaign. Kaplan's intent in doing so was twofold: he did so as part of a plan to threaten the Coalition with disclosure of its confidential campaign correspondence to the Coalition's opponents in the event the Coalition failed to pay FRI all amounts that Kaplan considered due under the contract; and he did so with the intent of selling his client's confidential campaign communications to the Coalition's opponents, in order to raise funds with which to sue his clients for amounts Kaplan considered due under the contract.

In early 2009, Attorney Matthew Singer of the Jermain firm met with Kaplan in Los Angeles under the guise of considering whether to have Jermain represent FRI in its fee dispute with the Coalition. Jermain declined to represent FRI in the matter. However, Kaplan gave Jermain copies of confidential communications between Kaplan and the Coalition, and Jermain gave Kaplan a check for $50,000, drawn on the law firm's bank account.

A few weeks after obtaining the confidential documents, Jermain used those documents to prepare and file a formal complaint with the APOC. Jermain brought the complaint on behalf of its clients, Pebble Inc. and Pebble LP. The APOC complaint alleged the Coalition and other nonprofits had violated Alaskan election law, primarily, that the nonprofits were used to shield from public view the fact that substantial contributions in support of the ballot initiative were being made by one individual, Robert Gillam (Gillam).

The actions of Jermain and its clients in bringing the APOC complaint achieved their aim of undermining the Coalition. For example, the Moore Foundation advised the Coalition that due to bad publicity surrounding the APOC proceeding, it would not renew an intended annual grant of $1.8 million.

In the APOC proceeding, the Coalition admitted it had failed to report as campaign expenditures the cost of sending emails to members urging them to vote yes on the ballot measure, and the cost of making space available for campaign materials on the Coalition's folding table at the Alaska State Fair. The Coalition disputed all other charges.

The APOC complaint was ultimately settled in early 2010 with no finding of liability against Gillam, the Coalition or the other nonprofits. APOC staff explicitly acknowledged the respondents to its complaint had asserted their positions in good faith, and that substantial evidence showed the respondents “ ‘took substantial efforts to obtain and rely on proper advice in order to comply with the requirements of Alaska law.’ ” The APOC complaint was settled for a payment of $100,000, which was about half of what APOC spent to prosecute the matter and much less than the expense of having to defend the matter at trial.

Based on the above, the Coalition's superior court complaint pled causes of action against Kaplan for breach of fiduciary duty, breach of professional duty, negligence, interference with prospective economic advantage, and unjust enrichment.

As against the Pebble defendants, the complaint asserted two causes of action: interference with contract (fourth cause of action), and interference with prospective economic advantage (sixth cause of action). The Coalition pled:

Jermain was aware of the Coalition's contract with FRI, and Jermain was given a copy of the contract, which restricted FRI's ability to disclose confidential communications. Notwithstanding its knowledge of the Coalition/FRI agreement, Jermain induced FRI to breach the contract by offering to pay, and paying, $50,000 in exchange for FRI's delivery of confidential communications between Kaplan and the Coalition. In doing so, Jermain acted as counsel and agent for its clients, Pebble Inc. and Pebble LP. As a result of the sale of the Coalition's confidential documents to its opponents, the Coalition was damaged by having, at substantial expense, to defend the APOC proceeding to a finding of no liability. The Coalition also suffered a dramatic drop in contributions and grant money resulting from adverse publicity triggered by the Pebble defendants' use of the confidential documents to wage a smear campaign in the press to the effect that (1) the Coalition and the entire opposition to Pebble Mine were pawns of one wealthy supporter; and (2) the Coalition was violating Alaska law by shielding the identity of supporters, which was not the case.

2. Special motion to strike.

On April 4, 2011, a mere 24 days after the commencement of the action,² the Pebble defendants filed a special motion to strike the only two causes of action in which they were named, i.e., the fourth cause of action for interference with contract and the sixth cause of action for interference with prospective economic advantage.

The moving papers asserted the Coalition's claims against the Pebble defendants arose from protected conduct, that is to say, activities in furtherance of their right of petition or free...