Opinion
G054723
06-14-2018
CH BUS SALES, INC., Plaintiff and Respondent, v. ABC BUS COMPANIES, INC., Defendant and Appellant.
Stroock & Stroock & Lavan, Stephen J. Newman, Crystal Y. Jonelis and Bryan J. Weintrop, for Defendant and Appellant. Law Offices of John A. Belcher, John A. Belcher and Nicholas W. Song, for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2016-00873767) OPINION Appeal from a judgment of the Superior Court of Orange County, Nathan R. Scott, Judge. Affirmed. Stroock & Stroock & Lavan, Stephen J. Newman, Crystal Y. Jonelis and Bryan J. Weintrop, for Defendant and Appellant. Law Offices of John A. Belcher, John A. Belcher and Nicholas W. Song, for Plaintiff and Respondent.
INTRODUCTION
ABC Bus Companies, Inc., dba ABC Bus Sales (ABC), appeals from an order denying its motion to strike pursuant to Code of Civil Procedure section 425.16, the anti-SLAPP statute. Respondent CH Bus Sales, Inc., sued competitor ABC for defamation after a representative of ABC sent an anonymous package of newspaper and Wikipedia articles to Netflix, which was allegedly contemplating a contract to furnish commuter bus service to its employees. Who got the contract would determine whether ABC or CH Bus Sales provided the buses.
"SLAPP" is an acronym for "strategic lawsuit against public participation," and refers to a lawsuit which both arises out of defendants' constitutionally protected expressive or petitioning activity, and lacks a probability of success on the merits. (Code Civ. Proc., § 425.16; S.B. Beach Properties v. Berti (2006) 39 Cal.4th 374, 377.)
All further statutory references are to the Code of Civil Procedure.
ABC filed an anti-SLAPP motion, asserting that the statements upon which CH Bus Sales based its complaint were statements made in connection with a public issue or an issue of public interest. The trial court denied the motion on the ground ABC had failed to show that CH Bus Sales' complaint arose from protected activity. The court did not reach the issue of whether CH Bus Sales could show a likelihood of prevailing.
We affirm. The statements made in the cover letter included in the package, which form the basis of CH Bus Sales' claims, dealt with two subjects. One was a local businessman, whom the letter-writer claimed was friendly to unions. The other dealt with the manufacturer of the buses CH Bus Sales would supply if its customer got the Netflix contract; the letter implied, although it did not actually state, that the bus manufacturer had links to supporters of terrorism.
These did not raise a public issue or an issue of public interest. The issue, instead, was Netflix's choice of the company to supply it with commuter buses. The letter's author represented Netflix's choice as a misguided one, or an ill-informed one, but the issue itself concerned only a relatively small, specific audience. The letter and articles were not an effort to comment on terrorism, international relations, or any other issue of public interest.
FACTS
According to CH Bus Sales' complaint, Netflix was in the market for a commuter bus program for its employees. One company it was considering to run the program was Transdev. If Transdev got the Netflix contract, CH Bus Sales stood to benefit, because it would supply TEMSA buses to Transdev. CH Bus Sales is the exclusive distributor for TEMSA brand buses in the United States.
Commuter buses are a "perk" of employees of companies such as Apple and Google. The buses transport the company's employees from their home areas to the workplace and back so that the employees need not use their private cars. Besides saving money for the employees, the buses cut down on traffic and pollution.
ABC was CH Bus Sales' competitor. If ABC's customer, which was also seeking the Netflix contract, was successful, ABC would supply a different brand of buses to this company.
In May 2016, an anonymous package (the Guth package) was sent to a Netflix employee involved in selecting the company to run the commuter bus program. It was later determined that the person who sent this package was Clint Guth, an ABC officer. In a cover letter, the anonymous writer in essence represented to the Netflix employee that TEMSA buses were manufactured by a subsidiary of a conglomerate controlled by a family (the Sabanci family) with "very close business and personal ties" to the Erdogans, the family of Turkish president Recip Erdogan. The accompanying articles in the Guth package asserted, among other things, that the Erdogan family was supporting ISIS terrorists and that the Turkish government, under Recip Erdogan, was bombing Kurdish separatists.
Specifically, Guth's cover letter made the following statements about a Transdev officer, Mike McLean, and about "the Temsa product."
• "Mike McLean's father is involved with local unions.
• "Mike McLean has a lot of former clients in the [B]ay [A]rea [i.e., San Francisco and environs].
• "It is advantageous to Mike McLean for his customers to become unionized[.]
• "Temsa is owned by the Sabanci family[.]
• "The Sabanci family has very close personal and business ties with the Erdogan family[.]
• "The Sabanci & Erdogan families do not have the same moral compass or ideologies as those that ride commuter programs or reside in the [B]ay [A]rea." The package included the following materials:
• A Wikipedia article about TEMSA, referring to its being part of the Sabanci conglomerate.
• A Wikipedia article about Sabanci Holding, explaining, among other things, that the Sabanci family owns 61 percent of the stock.
• A 2016 article from a website called zerohedge quoting the Russian foreign minister as accusing the Turkish government of siding with ISIS in shooting down a Russian plane and of supporting ISIS by buying oil stolen from Iraq from it. The article accused Bilal Erdogan, the son of Turkey's president, of being behind the illegal oil trade.
• A 2016 article from the Observer, accusing Turkey of aiding ISIS by buying oil stolen from Iraq and Syria from it.
• A 2015 article from the Wall Street Journal regarding Turkish airstrikes against a Kurdish separatist organization battling ISIS in Syria. According to the article, both the United States and Turkey have identified the separatist group as a terrorist organization.
• An incomplete article from the Times of Israel reporting a 2016 suicide bombing in Istanbul that killed several Israelis and injured others.
The inclusion of this article in the Guth package is puzzling. CH Bus Sales alleged that the article "implied or represented that TEMSA supported attacks against Israeli citizens." The article as included in the package nowhere mentions TEMSA or the Sabancis, and, according to the article, the official response from Erdogan's government was to condemn the bombing. An official from the political party to which Erdogan belongs tweeted, "I wish that the wounded Israeli tourists were dead." This person was immediately fired, and the twitter account was removed.
CH Bus Sales sued ABC in September 2016 for defamation, intentional interference with prospective economic advantage, and unfair competition. CH Bus Sales alleged that ABC stood to gain if a Transdev competitor got the Netflix contract, because the competitor would buy its buses from ABC.
CH Bus Sales alleged the Guth package "falsely implied or represented" that "TEMSA was complicit in the funding of terrorist organization ISIS" and "supported attacks against Israeli citizens." The package also falsely implied or represented that "an officer at Transdev . . . intended to unionize Netflix employees." Moreover, the selection of Transdev to supply buses for Netflix commuters would allegedly result in "undue negative press."
The letter actually read, "[Commuter transportation] is also a very visible hot button occasionally receiving undue negative press."
ABC moved to strike the complaint under the anti-SLAPP statute, section 425.16. The gist of the motion was that ABC was exercising its "First Amendment right to comment on matters of international relations" and CH Bus Sales could not show a likelihood of prevailing on any cause of action. ABC argued that private companies' commuter bus programs were the subject of "significant public controversy," and the articles in the Guth package about Turkey "address international relations and terrorism," which are "matters of public interest."
The trial court denied ABC's anti-SLAPP motion on the ground that it had failed to meet its initial burden to show protected activity. The court did not reach the second prong of anti-SLAPP analysis - the plaintiff's probability of prevailing.
The respondent's appendix includes a first amended complaint, filed after ABC filed its notice of appeal. Perfecting an appeal from the denial of an anti-SLAPP motion stays further proceedings on the merits in the trial court. (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 186.)
ABC moved to strike the respondent's appendix and the portions of the respondent's brief that referred to it. We deny this motion as unnecessary. (See San Diegans for Open Government v. City of San Diego (2015) 242 Cal.App.4th 416, 438, fn. 10.)
DISCUSSION
"A SLAPP suit is 'a meritless suit filed primarily to chill the defendant's exercise of First Amendment rights.' [Citations.] In response to this perceived problem, the Legislature adopted the anti-SLAPP statute, which states: 'A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.' [Citation.]" (Finton Construction, Inc. v. Bidna & Keys, APLC (2015) 238 Cal.App.4th 200, 208 (Finton).)
"The purpose of the statute is to dismiss meritless lawsuits designed to chill the defendant's free speech rights at the earliest stage of the case. [Citation.] . . . [¶] Trial courts evaluate motions brought under the statute using 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).)"' [Citation.] If that requirement is met, the court then proceeds to the second step to determine whether the plaintiff has demonstrated a probability of prevailing on the claim. [Citation.] 'Only a cause of action that satisfies both prongs of the anti-SLAPP statute - i.e., that arises from protected speech or petitioning and lacks even minimal merit - is a SLAPP, subject to being stricken under the statute.' [Citation.]" (Finton, supra, 238 Cal.App.4th at p. 209 (first italics added).)
In Baral v. Schnitt (2016) 1 Cal.5th 376, the California Supreme Court instructed that an anti-SLAPP motion, like a traditional motion to strike, could be used to strike specific allegations; an anti-SLAPP motion was not an all-or-nothing proposition. (Id. at pp. 393-394.) With regard to the first step of the anti-SLAPP analysis - whether the conduct alleged is protected - the court stated, "At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached." (Id. at p. 396.)
ABC asserts that the communications in the Guth package are protected activity as defined in section 425.16, subdivision (e)(4): "any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest." The Legislature added this subdivision to the anti-SLAPP statute, as well as a revised statement of legislative intent, in 1997 "'to address recent court cases that have too narrowly construed California's anti-SLAPP suit statute.' [Citation.]" (Nygård, Inc. v. Uusi-Kerttutla (2008) 159 Cal.App.4th 1027, 1039.) The statement of legislative intent was amended to include the statement, "To this end, the section shall be construed broadly." The new subdivision was intended to bring "constitutionally protected expressive conduct" within the protection of the anti-SLAPP statute. (Sen. Jud. Com., Analysis of Sen. Bill No. 1296 (1997-1998 Reg. Sess.) as amended May 12, 1997.)
The Legislature added the 1997 amendment because some appellate courts were tacking on a "public interest" requirement to subdivisions (e)(1) and (e)(2) of section 425.16. (See Briggs v. Eden Counsel for Hope & Opportunity (1999) 19 Cal.4th 1106, 1113, 1120-1121.)
ABC's motion identified "the commuter transportation programs utilized by Bay Area technology companies," "international relations and terrorism," and "unionization of employee workforces" as the public issues or issues of public interest qualifying as protected activity under of section 415.16 and addressed in the Guth package.
Courts have struggled to define "public issue" and "issue of public interest" as those terms are used in section 425.16, subdivision (e)(4). After surveying the applicable cases, the court in Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913 (Rivero) concluded that a public issue (a) "concerned a person or entity in the public eye," (b) involved "conduct that could directly affect a large number of people beyond the direct participants," or (c) concerned "a topic of widespread, public interest." (Id. at p. 924.) The court in Weinberg v. Feisel (2003) 110 Cal.App.4th 1122 (Weinberg), added a few more observations. An issue of public interest "should be something of concern to a substantial number of people," not to a "relatively small, specific audience[.]" There must be "some degree of closeness between the challenged statements and the asserted public interest," and "the assertion of a broad and amorphous public interest is not sufficient[.]" (Id. at p. 1132.) While statements made in commercial disputes can qualify for anti-SLAPP protection (see DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 567 [statements made in connection with medication purchased by 1.8 million patients to treat blood clots establish issue of public interest]), there must be some evidence that the product involved is widely used or has some other connection to an issue of public interest. (See Consumer Justice Center v. Trimedica International, Inc. (2003) 107 Cal.App.4th 595, 602 [advertising about bust-enhancing herbal supplement not matter of public interest].)
In determining whether section 425.16, subdivision (e)(4), applies to allegations of a complaint, one of the trial court's basic tasks is to draw the boundaries of the issue. What is this complaint really about? If the boundaries are drawn too expansively, any issue will become a "public issue" or an "issue of public interest." As the court observed in Rivero, any workplace dispute would become a public issue if the dispute is characterized as being about workplace fairness or employment in general. (Rivero, supra, 105 Cal.App.4th at p. 924.) A garden-variety contract case could be about business ethics or the entrepreneurial system. (See World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc. (2009) 172 Cal.App.4th 1561, 1569 (World Financial Group) ["[D]efendants erroneously identify generalities that might be derived from their speech rather than the specific nature of what they actually said and did."].)
In this case, the cover letter in the Guth package refers to two entirely separate topics. The first is Mike McLean and his or his father's purported unionizing proclivities. The second is the relationship between TEMSA and the Sabanci family and the relationship between the Sabanci family and the Erdogan family. The articles included in the package deal exclusively with TEMSA, the Sabanci family, and the Erdogan family. None of the articles in the Guth package mentions Mike McLean or Transdev.
The remarks regarding Mike McLean do not qualify as communications about a public issue or issue of public interest. There is no evidence that Mike McLean or his father is a person in the public eye or that a significant portion of the public cares whether Mike McLean has a lot of clients in the Bay Area or how he feels about unions. (See Weinberg, supra, 110 Cal.App.4th at p. 1135 ["Since the record does not support a conclusion that plaintiff is a public figure or that he has thrust himself into any public issue, defendant's accusations against plaintiff related to what in effect was a private matter."].) ABC presented no evidence of any activity on McLean's part that would "directly affect a large number of people beyond the direct participants" or that concerns a "topic of widespread public interest."
The second topic is the provenance of TEMSA buses. Again, the focus must be on the boundaries of the issue that underlies the complaint. The issue addressed in the cover letter is the company supplying commuter buses to Netflix. The purpose of the letter and the articles is clearly to incline Netflix against one bus supplier.
Once again, ABC has not demonstrated that the supplier of Netflix commuter buses is a public issue or an issue of public interest. ABC tries to connect the statements in the cover letter with the terrorist activities of ISIS, but this again is drawing the boundaries of the issue too broadly. The link between the company seeking the Netflix contract and ISIS is simply too attenuated to support a conclusion that the public has an interest in the Netflix bus contract. As was the case in World Financial Group, ABC has "erroneously identif[ied] generalities that might be derived from [its] speech rather than the specific nature of what [it] actually said and did." (World Financial Group, supra, 172 Cal.App.4th 1561, 1569; see Commonwealth Energy Corp. v. Investor Data Exchange, Inc. (2003) 110 Cal.App.4th 26, 34 [Court must examine specific nature of speech "rather than the generalities that might be abstracted from it"].)
As we understand it, the links are (1) Transdev supplies TEMSA buses; (2) TEMSA buses are manufactured by a company that is part of a conglomerate in which the Sabanci family holds a majority interest; (3) the Sabanci family has close ties to the Erdogan family; (4) the Erdogan family supports ISIS by buying its oil. The link between the Sabancis and the Erdogans is supplied only by the letter-writer, not the articles. --------
Although the complaint alleged that the Guth package implied or represented "that TEMSA was complicit in the funding of the terrorist organization ISIS" and that "TEMSA supported attacks against Israeli citizens," the articles included in the package offer no support for either allegation. None of the articles connects the Sabancis and the Erdogans in any way, even implicitly. The articles do not claim or imply any linkage between either TEMSA and ISIS or the Sabancis and ISIS, and they likewise supply no connection whatsoever between TEMSA and attacks on Israelis. For its part, the letter contains only vague remarks about "close personal and business ties" between the Sabancis and the Erdogans and the "moral compass" of the Sabancis, the Erdogans, and residents of the Bay Area. It contains nothing about funding terrorism, ISIS, or international relations.
The purpose of the Guth package was not to comment on unions, international affairs, terrorism, or commuter bus programs. There is no evidence that the supplier of Netflix buses is an issue "of concern to a substantial number of people" or "is a topic of widespread public interest." Sending the Guth package to Netflix does not constitute conduct in furtherance of the exercise of the constitutional right of free speech in connection with a public issue or an issue of public interest.
ABC has also characterized the public issue as commuter buses in general and included, as evidence of public interest, articles about protesters blocking these buses. This is another example of drawing the boundaries of the issue too expansively. (See Commonwealth Energy Corp. v. Investor Data Exchange, Inc., supra, 110 Cal.App.4th at p. 34 [rejecting "synecdoche theory"; part does not stand for the whole].) The protesters' criticisms, as recounted in the articles, focused on the effect the influx of tech workers from companies such as Google and Apple was having on San Francisco real estate prices, causing gentrification and displacement of the less affluent. Blocking the buses was a way to register disapproval of this effect. The letter and the articles in the Guth package did not address this issue at all; they dealt with the origin of a particular brand of bus. Neither the letter nor the articles expressed or implied any opinion about the commuter bus program in general.
Because we have determined that the relevant conduct was not conduct in furtherance of the exercise of the constitutional right of free speech in connection with a public issue or an issue of public interest, we do not need to reach the issue of whether CH Bus Sales established a probability of prevailing. (See City of Cotati v. Cashman (2002) 29 Cal.4th 60-80-81.)
DISPOSITION
The order denying appellant's anti-SLAPP motion is affirmed. Respondent's motion to strike is denied. Respondent is entitled to costs on appeal.
BEDSWORTH, J. WE CONCUR: O'LEARY, P. J. FYBEL, J.