Xu v. Huang

Decision Date16 December 2021
Docket NumberB311883
Parties Tiffany Yan XU, Plaintiff and Appellant, v. Haidi Wenwu HUANG et al., Defendants and Respondents.
CourtCalifornia Court of Appeals Court of Appeals

Amin Talati Wasserman, William P. Cole, Oakland, and Matthew R. Orr, Newport Beach, for Plaintiff and Appellant.

Gordon Rees Scully Mansukhani, Craig J. Mariam, Los Angeles, Gregory S. Martin and Eunice J. Liao for Defendants and Respondents.

CRANDALL, J.*

Plaintiff and appellant Tiffany Yan Xu, chief executive officer of Sky Vision Insurance Company (Sky Vision), and defendants and respondents Haidi Wenwu Huang and Auchel World Inc. (Auchel) specialize in selling life insurance and providing wealth management services, particularly in the Chinese and Chinese-American communities.

In October 2020, Xu filed a defamation case against Huang, alleging that, in an effort to promote the business interests of Auchel and disrupt Xu's relationship with her clients, Huang falsely told independent insurance agents, as well as a Sky Vision client, that Xu is dishonest and unethical in her business practices and falsifies insurance documents.1

Huang and Auchel filed an anti-SLAPP motion under Code of Civil Procedure section 425.16,2 arguing her statements constituted protected speech because they served the "public interest" of providing "consumer information" about Xu's fraudulent business practices. Xu argued in opposition that Huang's statements were far removed from any issues of public interest and represented nothing more than one competitor maligning another in an effort to win business. She claimed that the commercial speech exemption, separately codified at section 425.17, removed any protection from Huang's defamatory statements and, in addition, that these statements did not qualify as protected activity under section 426.16.

Wholly accepting Huang and Auchel's theory of protected activity, the trial court granted the anti-SLAPP motion, emphasizing that commercial speech implicating a matter of public interest may nevertheless be protected through an anti-SLAPP motion. Without any discussion of the commercial speech exemption under section 425.17, the trial court found all of the allegations entirely to be protected under subdivision (e)(4) of section 425.16, commonly known as the "catchall provision" of the anti-SLAPP statute.

Contrary to the trial court's ruling, the anti-SLAPP statute does not protect Huang's statements because they squarely fall within the commercial speech exemption set forth in section 425.17, subdivision (c). Courts are admonished to examine section 425.17 as a threshold issue before proceeding to an analysis under section 425.16. Section 425.17 expressly provides that speech or conduct satisfying its criteria is entirely exempt from anti-SLAPP protection even if "the conduct or statement concerns an important public issue." ( § 425.17, subd. (c)(2).)

Not only do we find Huang's statements covered by the commercial speech exemption, but the trial court also erred in finding that Xu's claims arose from protected activity under section 425.16, subdivision (e)(4). The context in which statements are made holds significant sway in terms of whether they are considered to be in furtherance of free speech in connection with a public issue under subdivision (e)(4) of section 425.16. Huang's alleged slander of a competitor in a private setting to solicit business is neither speech in furtherance of the exercise of the constitutional right of petition nor the constitutional right of free speech in connection with a public issue.

Accordingly, we reverse the trial court's order granting the anti-SLAPP motion.

FACTUAL AND PROCEDURAL BACKGROUND

Sky Vision is alleged to be a leading insurance general agency and broker of insurance policies for the Chinese and Chinese-American communities. Sky Vision also provides wealth management services. With offices in San Marino, Irvine, and Diamond Bar, Sky Vision has a California network of approximately 1,000 affiliated insurance agents.

Xu has managed Sky Vision since its inception in 2008 and has worked in the insurance and wealth management sectors for many years. Her professional reputation is closely intertwined with Sky Vision's reputation in the industry and among insurance agents and clients.

Auchel does business as Grand Prospects Financial & Insurance Services. Auchel competes with Sky Vision in the market for high-wealth life insurance policies and wealth management solutions for Chinese and Chinese-American communities. Huang is Auchel's president and a member of its board of directors.

On October 16, 2020, Xu filed a complaint against Huang and Auchel asserting two causes of action: defamation and civil conspiracy.3 Xu alleges three occasions on which Huang made defamatory statements about her. On the first occasion, in March of 2020, Huang met with an insurance agent of Sky Vision and the agent's brother.4 The complaint alleged that during the meeting, Huang defamed Xu by stating Xu had forged many documents and could not return to China due to having many unpaid debts.

On March 16, 2020, Sky Vision sent a cease and desist letter to Huang, urging her to stop making defamatory statements about Xu and Sky Vision.

On the second occasion, in August of 2020, Huang made defamatory statements about Xu to another insurance agent working with Sky Vision, by stating that Xu does not inform potential clients about the contents of the insurance policy, but instead cheats clients by telling them "bullshit" about the policy benefits.5

On the third occasion, Huang made defamatory statements to a Sky Vision client, stating Xu's license had been revoked, that Xu was a financial criminal in China, and after defrauding people in China had used that money to open Sky Vision in the United States.6

The complaint alleges that Huang made all of the aforementioned statements not only to slander or defame Xu, but to interfere with her economic prospects with agents, clients and potential clients and to promote the business interests of Auchel through unlawful means.

Huang and Auchel filed a special motion to strike the complaint pursuant to section 425.16. While Huang denied making the defamatory statements, she contended the statements qualified as protected activity under section 425.16, subdivision (e)(4), because they served the "public interest" of providing "consumer information." She identified the operative allegations in the complaint as follows:

· "[Xu] could not return to China because she had many unpaid debts in China."
· "[Xu] had forged many documents."
· "[Xu's] license was revoked."
· "[Xu] was a financial criminal in China."
· "[Xu] defrauded many people in China and used that money to open Sky Vision in the United States."
· "[Xu] was afraid to go back to China because she owes so much money there."
· "[W]hen [Xu] sells insurance, she does not tell the potential client what is shown in the policy illustrations but instead cheats clients by telling them ‘bullshit’ about the policy benefits."

Huang asserted that "[d]ue to her expertise, [she] is often asked to review insurance policies issued by other companies, and requested to provide her professional opinion on the protections and risks associated with such insurance policies." Huang then argued that all of her "alleged statements regarding [Xu's] and Sky Vision's fraudulent insurance practices, issuance of sham insurance policies, and financial misconduct in China, are at the very least, a warning of significant public interest to the community of businesses and individuals with whom [Xu] provides insurance and financial services." Her statements therefore deserved protection as a matter of public interest impacting " ‘a broad segment of society.’ " Huang further argued that Xu could not meet her burden of establishing that she would prevail on merits of her claims. As such, the complaint should be dismissed in its entirety.

On January 19, 2021, Xu opposed the anti-SLAPP motion, arguing the commercial speech exemption, embodied in section 425.17, applied and wholly precluded anti-SLAPP protection—even where statements concern a public issue. Xu argued that Huang's challenged statements also did not qualify as protected activity under section 425.16 because they were merely examples of one business person maligning a competitor to try to win its business. Xu further claimed she had made a prima facie showing of merit in that the statements were defamatory in nature, and not privileged.

On January 25, 2021, in their reply, Huang and Auchel stated "there is no per se rule that the anti-SLAPP statute does not protect speech in the business context," and then proceeded to reassert their position that the allegations were protected under the catchall provision of section 425.16.

On March 3, 2021, the trial court granted the special motion to strike. The court noted that " [c]ommercial speech that involves a matter of public interest ... may be protected by the anti-SLAPP statute " (quoting L.A. Taxi Cooperative, Inc. v. The Independent Taxi Owners Assn. of Los Angeles (2015) 239 Cal.App.4th 918, 927, 191 Cal.Rptr.3d 579 ) and, without addressing any of the statutory criteria related to the commercial speech exemption in section 425.17, proceeded to find the alleged statements protected under the catchall provision of section 425.16, subdivision (e)(4).7

The court concluded that "Huang's alleged statements relating to [Xu's] business practice (i.e., forging documents, license being revoked, defrauding people, or failing to inform potential clients what is shown in the policy illustration) provides important consumer information to the members of the communities served by [Xu]."

Citing Huang's declaration, the court noted that Huang has over 30 years of experience in the insurance field, and "is often asked by individuals in the Chinese communities to review insurance policies issued by other companies...

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7 cases
  • Peterson v. Mojdehi
    • United States
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    • September 27, 2022
    ...are not subject to being stricken under the statute regardless of Peterson's probability of prevailing on the claims. (See Xu v. Huang (2021) 73 Cal.App.5th 802, 812 [if defendant does not meet burden to show claim arises from protected activity, court should deny motion and need not addres......
  • Peterson v. Mojdehi
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    • September 27, 2022
    ...are not subject to being stricken under the statute regardless of Peterson's probability of prevailing on the claims. (See Xu v. Huang (2021) 73 Cal.App.5th 802, 812 [if defendant does not meet burden to show claim arises from protected activity, court should deny motion and need not addres......
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    ...its elements,” the Court concludes that California's anti-SLAPP act applies to Nguy's first, third, and fifth claims of defamation. Xu, 73 Cal.App. 5th at 813. a complaint satisfies the provisions of the applicable exception, it may not be attacked under the anti-SLAPP statute.” Club Member......
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