Simpson Strong-Tie Co., Inc. v. Gore

• Decision Date: 30 April 2008
• Docket Number: No. H030444.,H030444.
• Citation: 76 Cal.Rptr.3d 292,162 Cal.App.4th 737
• Court: California Court of Appeals Court of Appeals
• Parties: SIMPSON STRONG-TIE COMPANY, INC., Plaintiff and Appellant, v. Pierce GORE et al., Defendants and Respondents.

76 Cal.Rptr.3d 292

162 Cal.App.4th 737

SIMPSON STRONG-TIE COMPANY, INC., Plaintiff and Appellant, v. Pierce GORE et al., Defendants and Respondents.

No. H030444.

Court of Appeal, Sixth District.

April 30, 2008.

Arthur J. Shartsis, Erick C. Howard, San Francisco, Eisenberg and Hancock, Jon B. Eisenberg, Oakland, William N. Hancock, San Francisco, for Plaintiff and Appellant, Shartsis Friese Simpson Strong-Tie Company, Inc.

Davis Wright Tremaine, Thomas R. Burke, Rochelle L. Wilcox, Los Angeles, for Defendants and Respondents, Pierce Gore et al.

Arkin & Glovsky, Sharon Arkin, Pasadena, for Amicus Curiae Consumer Attorneys for California.

Levy, Ram & Olson, Karl Olson, San Francisco, for Amicus Curiae Senator Sheila Kuehl et al.

RUSHING, P.J.

An attorney published a newspaper advertisement stating that users of certain brand name galvanized screws under specified circumstances "may" have legal rights to compensation or other relief. The manufacturer of one of the named brands brought this action for defamation, trade libel, false advertising, and unfair business practices. We are called upon to decide: (1) Is this a strategic lawsuit against public participation (SLAPP) so as to be subject to summary disposition under the anti-SLAPP law? (2) Is it exempt from that law as a statement "about" the attorney's services, or one made in the course of delivering those services? (3) If it is not exempt, has the manufacturer established that it is likely to prevail on the merits, so as to avoid dismissal?

The trial court answered these questions yes, no, and no, respectively. We find no error in these rulings, and will therefore affirm. In a companion appeal, we affirm the associated award of attorney fees to the defendant attorney.

BACKGROUND

In January 2006, defendant Pierce Gore caused an advertisement to appear in the San Jose Mercury News and Los Gatos Weekly Times in substantially the following form:¹

                                          ATTENTION
                                       WOOD DECK OWNERS
                If your deck was built after January 1, 2004 with
                galvanized screws manufactured by Phillips Fastener
                Products, Simpson Strong Tie or Grip Rite, you may
                have certain legal rights and be entitled to monetary
                compensation, and repair or replacement of your deck
                Please call if you would like an attorney to investigate
                whether you have a potential claim
                                        Pierce Gore
                                       GORE LAW FIRM
                                   900 East Hamilton Ave
                                Suite 100 Campbell, CA 95008
                                        408-879-7444
                

On February 7, 2006, plaintiff Simpson Strong-Tie Co., Inc. (Simpson), filed this action, asserting causes of action against Gore and his firm for defamation, trade libel, false advertising, and unfair business practices. Simpson alleged that Gore's advertisement was false "in that it communicates that Simpson's galvanized screws are defective."² Simpson admitted, however, that there were risks in using some of its products with the "pressure-treated wood" that "is commonly used in outdoor decks...." According to a Simpson web page included in the record, "Pressure treatment is a process that forces chemical preservatives into the wood."³ Simpson alleged in its complaint that wood so treated "can have a corrosive effect on steel products, including galvanized screws, that potentially shortens their service life and compromises their ability to support their recommended loads or endure seismic and environmental stresses." These risks had been magnified by the treated wood industry's abandonment, effective December 31, 2003, of the preservatives formerly used in favor of "chemicals that are considered safer for human contact, but more corrosive to galvanized steel products." Simpson alleged, "The amount of corrosion that can occur when Simpson's screws are used in combination with pressure-treated wood varies depending on the type of metal screw and coating used, the type and amount of chemicals used in pressure treatment, the design and location of the deck, arid numerous environmental conditions. Because different metals and different coatings resist corrosion at different rates, the selection of metal type or coating should vary depending on the conditions and circumstances in which the products will be used. All of these factors are beyond Simpson's control. Simpson has no way of knowing which of these many variables will be present when its parts are used."

Gore moved to strike the complaint under Code of Civil Procedure section 425.16 (§ 425.16). He argued that Simpson's causes of action arose from his exercise of speech rights and were thus subject to summary disposition under the statute. He contended that Simpson could not establish the probability of success necessary to survive such a motion (see § 425.16, subd. (b)(1)), because (1) all of its claims were barred by the privilege for communications in a judicial proceeding (Code Civ. Proc, § 47, subd. (b)); (2) Simpson could not show that the advertisement contained a false statement; and (3) Simpson could not show that Gore published the advertisement with knowledge of falsity or reckless disregard for the truth.

Gore supported his motion with a declaration asserting in essence that the germ of the advertisement was his viewing of three local television news reports suggesting that users of galvanized hardware on recently constructed outdoor decks might be unwittingly exposing themselves to the risk of premature failure and collapse due to the heightened corrosiveness of the new pressure treatments. Gore then made various inquiries, including conversations with a Contra Costa County District Attorney's inspector whose views on the hazards of galvanized hardware had been a subject of the television reports. After learning of a Massachusetts suit against another manufacturer of galvanized fasteners and connectors, he ran the advertisement expecting to find persons who had actually used the described products and who "might be interested in filing a lawsuit as a plaintiff." At the time of drafting his declaration, he averred, he was in the process of preparing class action complaints against Simpson and the other manufacturers named in the ad.⁴

In opposition to the motion, Simpson argued that its causes of action were exempt from the anti-SLAPP statute by virtue of Code of Civil Procedure section 425.17, subdivision (c) (§ 425.17(c)), which excludes claims arising from representations of fact about the speaker's or a competitors products or services, or statements made in the course of delivering the speaker's products or services. Simpson contended, in the alternative, that it had demonstrated a probability of prevailing on its claims under section 425.16, subdivision (b)(1). It submitted several declarations including that of its engineering vice president, who declared that Simpson "manufactures its screws to industry standards" and that "[t]here is nothing defective about our screws and coatings. Our fastener products provide long and useful life when properly selected, installed, inspected and maintained."

Simpson also offered the declaration of statistician Michael Sullivan, who declared that he was hired by Simpson to "determine whether and to what extent" Gore's advertisement "injures [Simpson's] reputation and/or causes consumers to be less inclined to purchase its products." He caused a survey to be conducted by "intercept[ing] 214 shoppers in the parking lots of nine randomly selected Lowe's Home Improvement stores located in Northern and Southern California between January 28th and February 5th of 2006." Insofar as the results were disclosed by Simpson, they indicated that the advertisement reduced subjects' ratings of the quality of galvanized screws manufactured by Simpson, increased their estimate of the likelihood that the screws "would be defective," and reduced the reported likelihood that subjects would purchase galvanized screws manufactured by Simpson. No definition of "defective" was given to the subjects.

The trial court granted the special motion, stating in part, "The court finds that CCP § 425.17(c) does not apply because the statement was not made about a business competitor's products or services. Defendants have made a threshold showing that the statement was made in furtherance of their right of petition or free speech regarding an issue of public interest. (CCP § 425.16(e)(4).) The burden shifts to Plaintiff to demonstrate a probability of prevailing on the merits. Plaintiffs evidence is insufficient to establish that Defendants' advertisement is false." The court implicitly denied a motion by Simpson for relief from the statutory stay on discovery (§ 425.16, subd. (g)) in order to "conduct limited discovery of Pierce Gore and Gore Law Firm on the subject of actual malice...."

The court thereafter entered judgment. Simpson filed this timely appeal from both the judgment and the order granting the special motion to strike.

DISCUSSION

I. General Principles; Standard of Review

A. Mode of Proceeding; Burden of Persuasion

The anti-SLAPP statute provides for a special motion to strike—in effect, to summarily dismiss—a cause of action that (1) tends to chill the defendant's rights of speech and petition, and (2) lacks demonstrable merit.⁵ It is said that ruling on such a motion involves "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. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of...