Scheuplein v. City of West Covina, B206203 (Cal. App. 9/29/2009), B206203

CourtCalifornia Court of Appeals
Writing for the CourtSuzukawa
PartiesJOHN SCHEUPLEIN, Plaintiff and Appellant, v. CITY OF WEST COVINA et al., Defendants and Respondents.
Decision Date29 September 2009
Docket NumberB206203

Page 1

JOHN SCHEUPLEIN, Plaintiff and Appellant,
v.
CITY OF WEST COVINA et al., Defendants and Respondents.
B206203
Court of Appeals of California, Second Appellate District, Division Four
September 29, 2009
Not to be Published in the Official Reports

Appeal from a judgment and order of the Superior Court of Los Angeles County, No. KC048977, Dan Oki, Judge. Affirmed.

Oldman, Cooley, Sallus, Gold, Birnberg & Coleman, Ronald Gold, Jamie N. Gonzalez, and Julia S. Berkus; Law Offices of Norman Hoffman and Norman Hoffman; Capital Advocates and Ravinder Mehta for Plaintiff and Appellant.

Alvarez-Glasman & Colvin, Arnold M. Alvarez-Glasman, City Attorney (West Covina), and Matthew M. Gorman, Deputy City Attorney; Squire, Sanders & Dempsey, Stephen T. Owens, James H. Broderick, Jr., and Stacie D. Yee for Defendants and Respondents City of West Covina, City of West Covina Community Development Commission, Steve Herfert, Shelley Sanderson, and Sherri Lane.

Jackson, DeMarco, Tidus & Peckenpaugh, Michael L. Tidus, M. Alim Malik, and Kathryn M. Casey for Defendant and Respondent Michael Touhey.

SUZUKAWA, J.


Appellant John Scheuplein sued respondents City of West Covina (city), City of West Covina Community Development Commission (commission), and city council members Michael Touhey, Steven Herfert, Shelley Sanderson, and Sherri Lane (council members) "for injunctive relief from violations of Political Reform Act."1 The trial court granted respondents' special motion to strike the complaint under Code of Civil Procedure section 425.16, the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute, and dismissed the complaint.2 In this appeal from the judgment of dismissal and order awarding attorney fees and costs, we reject Scheuplein's contentions and affirm.

BACKGROUND

At the outset, we note that Scheuplein's complaint is virtually indistinguishable from the cross-complaint filed by Ziad Alhassen in the city's tax collection action against Alhassen and his related business entities. (City of West Covina v. Hassen Imports Partnership (Super. Ct. L.A. County, No. KC048157 (Hassen Imports)).3 Alhassen filed the cross-complaint against all of the respondents herein except Councilmember Lane. The cross-complaint alleged that the three cross-defendant council members had voted to file the Hassen Imports action in violation of the conflict of interest provisions of the Political Reform Act, and sought to enjoin the action as a violation of the Act. After the cross-defendants successfully moved to strike Alhassen's cross-complaint under the anti-SLAPP statute, Alhassen appealed from the resulting judgment of dismissal and attorney fee award, which we affirmed in a prior appeal. (City of West Covina v. Hassen Imports Partnership (Mar. 27, 2008, B195660) [nonpub. opn.], hereinafter B195660.)4

In the present action, Scheuplein's complaint, which was drafted by Alhassen's attorneys, is almost identical to Alhassen's dismissed cross-complaint. It alleges the same conflict of interest violations against the same defendants (plus Councilmember Lane), and also seeks injunctive relief to dismiss the Hassen Imports action against Alhassen.

The same trial court that dismissed Alhassen's cross-complaint also dismissed Scheuplein's complaint after granting respondents' special motion to strike. In this appeal from the judgment of dismissal, Scheuplein argues in part that the complaint is exempt from the anti-SLAPP statute under section 425.17's public interest exception, which is an issue that was not raised in Alhassen's appeal.

Section 425.17, subdivision (b) provides that the anti-SLAPP statute "does not apply to any action brought solely in the public interest or on behalf of the general public if all of the following conditions exist: [¶] (1) The plaintiff does not seek any relief greater than or different from the relief sought for the general public or a class of which the plaintiff is a member. A claim for attorney's fees, costs, or penalties does not constitute greater or different relief for purposes of this subdivision. [¶] (2) The action, if successful, would enforce an important right affecting the public interest, and would confer a significant benefit, whether pecuniary or nonpecuniary, on the general public or a large class of persons. [¶] (3) Private enforcement is necessary and places a disproportionate financial burden on the plaintiff in relation to the plaintiff's stake in the matter." (§ 425.17, subd. (b).)

In order for section 425.17's public interest exception to apply, the action must be brought solely in the public interest to secure a public benefit. (Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 318.) "If individualized relief is sought, a plaintiff must satisfy the requirements of the anti-SLAPP statute in order for the action to proceed." (Id. at p. 320.) Respondents contend the trial court correctly held that the public interest exception does not apply because Scheuplein's primary motives for bringing this action included his expectation of being compensated for acting as Alhassen's proxy.

I. Alhassen's Cross-complaint in Hassen Imports

According to Alhassen's cross-complaint, respondent Councilmembers Touhey, Herfert, and Sanderson violated the Political Reform Act's conflict of interest provisions by voting to file the Hassen Imports action against Alhassen after receiving "gifts with a value in excess of $1,000 from [Alhassen's] `direct business competitors' in which the council members had management or ownership interests. The [cross-complaint] alleged that in order to further their own economic interests, the council members directed the Commission to create the appearance of a tax revenue shortfall by refusing to give [Alhassen] proper credit for tax revenue generated by [Alhassen's] business, and by voting to approve the filing of the underlying lawsuit, knowing it was baseless. The [cross-complaint] prayed for injunctive relief setting aside the council members' financial transactions found to be conflicts of interest, enjoining future violations and enjoining the prosecution of the underlying lawsuit or taking any action on [Alhassen's] contracts with the Commission." (B195660, at p. 4.)

The cross-defendants moved to strike Alhassen's cross-complaint under the anti-SLAPP statute, as a meritless action arising from protected speech or petition activities in connection with a public issue. The trial court granted the motion and dismissed the cross-complaint. In Alhassen's appeal from the judgment of dismissal, he challenged the applicability of the anti-SLAPP statute to causes of action brought under the Political Reform Act. He argued that because the anti-SLAPP statute imposes an automatic stay on discovery (§ 425.16, subd. (g)), it "forecloses a plaintiff's ability to establish a probability of prevailing, as required by section 425.16, subdivision (b)(1), and thus, actions under the [Political Reform Act] face unavoidable dismissal." (B195660, p. 6.) He contended that in light of the anti-SLAPP statute's discovery restrictions, applying the statute to actions under the Political Reform Act would result in an unconstitutional amendment of the Act.

In rejecting Alhassen's contentions, we noted that, in any event, his reliance upon the Political Reform Act to enjoin the prosecution of a lawsuit was misplaced. We stated in relevant part: "Appellants may not obtain an injunction against the underlying lawsuit, as no cause of action will lie to enjoin ongoing litigation, except to avoid a multiplicity of lawsuits. (Code Civ. Proc., § 526; Civ. Code, § 3423.) The prohibition against such injunctive relief predates the [Political Reform Act]. (See Johnson v. Sun Realty Co. (1934) 138 Cal.App. 296, 301-302.)" (B195660, at p. 4, fn. 5.)

II. Scheuplein's Complaint in This Action

Scheuplein filed the first amended complaint in this action while respondents' anti-SLAPP motion was pending in Alhassen's cross-action. Both actions were assigned to the same trial court as related cases. Scheuplein does not deny the obvious similarities of the two pleadings or the accuracy of respondents' charts illustrating those similarities.

In opposition to respondents' special motion to strike, Scheuplein argued that this action was exempt from the anti-SLAPP statute under section 425.17's public interest exception, and that it was respondents' burden to show that the exception does not apply. Several days before the hearing on respondents' motion, Scheuplein requested a continuance in order to conduct limited discovery regarding the council members' financial interests in decisions allegedly made in violation of the Political Reform Act and Government Code section 1090.5 (§ 425.16, subd. (g) ["The court, on noticed motion and for good cause shown, may order that specified discovery be conducted notwithstanding this subdivision."].) However, the trial court issued a tentative ruling to deny the special motion to strike based on section 425.17's public interest exception, which led Scheuplein to withdraw his request for a continuance. Respondents then requested a continuance in order to conduct limited discovery regarding the public interest exception, particularly Alhassen's role in "financing or supporting this lawsuit."

At the initial January 10, 2007 hearing on respondents' motion, the trial court granted respondents' request for a continuance in order to conduct limited discovery as to "whether or not Mr. Scheuplein is acting as an [alter ego] of Mr. Alhassen in this action so that it's not necessarily a public interest lawsuit but one of personal interest." As a condition of granting the continuance, the trial court ordered respondents to respond to Scheuplein's previous document requests. Scheuplein's discovery efforts regarding Touhey's financial interests resulted in several writ proceedings.

Pursuant to a stipulation and order, respondents...

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