Opinion
A149078
12-20-2018
LM CONNEXIONS, INC., Plaintiff and Appellant, v. XAVIER BECERRA, as Attorney General, etc., et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Solano County Super. Ct. No. FCS046309)
The California Department of Justice (DOJ) determined certain computer-based games operated by appellant LM Connexions, Inc. (LMC) were illegal forms of gambling. The DOJ seized LMC's equipment, resulting in closure of LMC's business. LMC sued the DOJ, Attorney General, and Chief of the Bureau of Gambling Control (Defendants), alleging civil rights violations and seeking return of its equipment. The complaint sought a declaration the games were legal and an injunction to prevent Defendants' enforcement of gambling laws against LMC.
The trial court struck the declaratory relief and civil rights claims pursuant to the anti-SLAPP law (Code Civ. Proc., § 425.16) and sustained a demurrer to the cause of action seeking return of the seized property. We reverse the anti-SLAPP order on the ground LMC's claims arise from the government entities' substantive actions, not their speech or other protected activity, but conclude LMC may not otherwise pursue those claims. LMC may, however, pursue a claim for return of the seized equipment, and we reverse the trial court's sustaining of the demurrer as to that cause of action.
I. BACKGROUND
From July 2015 to January 2016, LMC operated retail premises in Vallejo offering customers, among other things, participation in computerized electronic games (Games). To play the Games, a customer had to purchase an account card with "contest credits" in order to log onto a personal computer terminal and select a Game. Cash prizes or additional game credits were awarded. LMC contends the Games are "skill contests" determined entirely by a contestant's timing, precision, manual dexterity, and hand-eye coordination. Defendants maintain the Games are forms of illegal gambling under Penal Code sections 330a, 330b, and 330.1.
Penal Code section 330a provides in pertinent part: "(a) Every person, who has in his or her possession or under his or her control . . . any slot or card machine, contrivance, appliance or mechanical device, upon the result of action of which money or other valuable thing is staked or hazarded, and which is operated, or played, by placing or depositing therein any coins, checks, slugs, balls, or other articles or device, or in any other manner and by means whereof, or as a result of the operation of which any merchandise, money, representative or articles of value, checks, or tokens, redeemable in or exchangeable for money or any other thing of value, is won or lost, or taken from or obtained from the machine, when the result of action or operation of the machine, contrivance, appliance, or mechanical device is dependent upon hazard or chance . . . is guilty of a misdemeanor."
Penal Code section 330b provides in pertinent part: "(a) It is unlawful for any person to . . . own, store, possess . . . , or permit the operation, placement, maintenance, or keeping of, in any place, room, space, or building owned, leased, or occupied, managed, or controlled by that person, any slot machine or device, as defined in this section. [¶] It is unlawful for any person to make or to permit the making of an agreement with another person regarding any slot machine or device, by which the user of the slot machine or device, as a result of the element of hazard or chance or other unpredictable outcome, may become entitled to receive money, credit, allowance, or other thing of value or additional chance or right to use the slot machine or device, or to receive any check, slug, token, or memorandum entitling the holder to receive money, credit, allowance, or other thing of value."
Penal Code section 330.1 provides in pertinent part: "(a) Every person who manufactures, owns, stores, keeps, possesses . . . any slot machine or device as hereinafter defined, and every person who makes or permits to be made with any person any agreement with reference to any slot machine or device as hereinafter defined, pursuant to which agreement the user thereof, as a result of any element of hazard or chance, may become entitled to receive anything of value or additional chance or right to use that slot machine or device, or to receive any check, slug, token, or memorandum, whether of value or otherwise, entitling the holder to receive anything of value, is guilty of a misdemeanor."
In November 2015, two DOJ agents entered LMC's store and took pictures of the store, Game rules, Game terminals, and customers. LMC alleges the agents made statements to customers, employees, and LMC's president that LMC was operating an illegal business. In January 2016, DOJ agents executed a search warrant at the LMC store and seized computers, servers, and other evidence related to the Games. As a result, the business was forced to close.
In December 2015, LMC sued Defendants for declaratory relief and civil rights violations. In a February 2016 first amended complaint, LMC added a "claim and delivery" cause of action seeking the return of property. LMC's first cause of action sought a declaratory judgment that the Games were legal and injunctions prohibiting Defendants from interfering with LMC's business in relation to the Games. In its second through fifth causes of action, LMC sought declaratory and injunctive relief for civil rights violations claimed under section 1983 of title 42 of the United States Code—alleging violation of federal and state rights to free speech, reasonable search and seizure, compensation for takings of property for public purposes, and equal protection. The sixth and final "claim and delivery" cause of action alleged Defendants possessed LMC's property without lawful title or a right to possession.
The First Amendment claim in the second cause of action alleged Defendants interfered with protected commercial speech (i.e., the marketing of its business through offering the Games), interfered with LMC's and its customers' access to the Internet, and targeted LMC based on the content of its communications. The search and seizure claim in the third cause of action alleged Defendants conducted a warrantless "search" in November 2015 without probable cause; the January 2016 search was based on a warrant unsupported by probable cause; and one or both searches exceeded the scope of legitimate law enforcement purposes. The takings claim in the fourth cause of action alleged Defendants' conduct diminished the value of LMC's property and denied LMC the right to pursue a lawful business. The equal protection claim in the fifth cause of action alleged Defendants singled out LMC for enforcement without a rational basis to distinguish its business from those like Chuck E. Cheese, Dave & Busters, and online fantasy sports sites; and Defendants invidiously discriminated against LMC based on the content of its communications.
Defendants demurred to the first amended complaint in its entirety and later moved pursuant to Code of Civil Procedure section 425.16 to strike the declaratory relief and civil rights claims. The trial court granted the anti-SLAPP motion and sustained the demurrer as to the remaining claim and delivery cause of action. The court dismissed the action with prejudice.
II. DISCUSSION
A. Anti-SLAPP Motion
"Anti-SLAPP motions are evaluated through a two-step process. Initially, the moving defendant bears the burden of establishing that the challenged allegations or claims 'aris[e] from' protected activity in which the defendant has engaged. ([Code Civ. Proc.,] § 425.16, subd. (b); see [id.], subd. (e) [defining protected activity]; [citations].) If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least 'minimal merit.' " (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1061 (Park).) "We review de novo the grant or denial of an anti-SLAPP motion." (Id. at p. 1067.)
A claim does not "arise from" protected activity "simply because it contests an action or decision that was arrived at following speech or petitioning activity, or that was thereafter communicated by means of speech or petitioning activity. Rather, a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted." (Park, supra, 2 Cal.5th at p. 1060.) "[I]n ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by defendant supply those elements and consequently form the basis for liability." (Id. at p. 1063.) "[G]overnmental entities are entitled to invoke [anti-SLAPP] protections . . . when such entities are sued on the basis of statements or activities engaged in by the public entity or its public officials in their official capacity." (Vargas v. City of Salinas (2009) 46 Cal.4th 1, 17.)
1. Defendants are Government Entities
Defendants frame the complaint primarily as an attack on statements and conduct of individual DOJ officers in carrying out their duties to enforce gambling laws. For example, they write: "the allegations regarding the special agents' first visit to [LMC's] business go to statements and inquiries that they made while investigating the . . . business"; the complaint alleged "that the special agents 'raided' [LMC's] business premises and 'seized its property' "; the "claims expressly raised numerous allegations of special agents' statements concerning the illegality of [LMC's] business"; "the special agents' statements and conduct are protected activity"; "the special agents' alleged statements were made in a public setting regarding illegal gambling, an issue of public interest"; "[w]hile establishing [LMC's] intent to stifle protected speech by law enforcement employees or to harass them is not necessary . . . , such an inference can be drawn from the record here"; LMC "took great pains to describe in detail the speech and actions of the special agents that gave rise to the claims and incorporated all of those allegations into every claim for relief"; and "it is clear it was the special agents' protected activity . . . that was at issue in the Complaint." (Italics added.)
The trial court similarly focused on the pleading allegations, finding the first five causes of action of the first amended complaint "arise out of the statements made by Agent Retiz to [LMC's] president, employee, and customers that the business was illegal . . . ." Citing Schaffer v. City and County of San Francisco (2008) 168 Cal.App.4th 992, 999 and Salma v. Capon (2008) 161 Cal.App.4th 1275, 1287, the court also found the sworn affidavits supporting the search warrant resulting in seizure of LMC's property were "written statements made in connection with an issue under consideration by an official proceeding."
The first problem is that the special agents are not defendants in the action. The only two named individual defendants were sued in their official capacities—the equivalent of naming government entity defendants. (Pierce v. San Mateo County Sheriff's Dept. (2014) 232 Cal.App.4th 995, 1009.) The third defendant is the DOJ, a government entity. The first prong of anti-SLAPP analysis is applied differently to claims against government entities from its application to government officers or employees who are sued in their individual capacities.
In San Ramon Valley Fire Protection Dist. v. Contra Costa County Employees' Retirement Assn. (2004) 125 Cal.App.4th 343 (San Ramon), a fire protection district filed a writ proceeding challenging a county retirement board's calculation of new retirement contribution obligations. (Id. at pp. 347-349.) Affirming denial of the retirement board's anti-SLAPP motion, this district held: "As to the Board's substantive action . . . , there is nothing about that decision, qua government action, that implicates the exercise of free speech or petition." (Id. at p. 355.) The court noted, however, a different analysis might apply to a suit against individual office holders arising out of their votes. (Id. at pp. 355-356.)
Division One of this district expressly adopted the distinction suggested by San Ramon in Schwarzburd v. Kensington Police Protection & Community Services Dist. Bd. (2014) 225 Cal.App.4th 1345 (Schwarzburd). In Schwarzburd, writ petitioners accused a police protection district board and three board members of unlawfully awarding a merit bonus payment to the district's manager. (Id. at pp. 1348-1349.) The court held the writ proceeding arose from the board members' protected activity but not from the board's protected activity. (Id. at p. 1353.) "The gravamen of petitioners' suit is that defendants violated Board policy by voting in a manner inconsistent with Board policy to extend the July 12, 2012 meeting, and by discussing and voting on a matter (the retention bonus) that was not properly noticed. These defendants were not sued simply because they voted but based on how they voted and expressed themselves at the Board meeting. However, as to the Board itself, as an entity, . . . San Ramon bars this [anti-SLAPP] motion." (Id. at p. 1355.)
The Supreme Court approved both San Ramon and Schwarzburd in City of Montebello v. Vasquez (2016) 1 Cal.5th 409. Vasquez involved a suit against three city councilmembers and a city administrator for approving a waste hauling contract allegedly in violation of conflict of interest laws. (Vasquez, at pp. 413-415.) The court held that the councilmembers' votes and statements during city council meetings and the administrator's statements in negotiating the contract were protected statements made either before a legislative body or in connection with an issue under consideration by a legislative body. (Id. at p. 422-423, citing Code Civ. Proc., § 425.16, subd. (e)(1), (2).) The court distinguished San Ramon, which had expressed concern about chilling citizens' rights to challenge government action in litigation. "[San Ramon's] comments pertained only to . . . actions challenging government decisions, not the acts of individual officials. . . . We have observed that the Legislature was specifically concerned with actions against public officials as individuals when it reconsidered the scope of [Code of Civil Procedure] section 425.16 in 1997." (Vasquez, at p. 426.) "It is not necessary to sue government officers in their personal capacities to challenge the propriety of a government action. Notably, here the [waste hauling] contract was successfully challenged in a [separate] citizen's suit brought against the City." (Ibid.) Similarly, in Park, supra, 2 Cal.5th 1057, the court held that a lawsuit alleging a racially discriminatory denial of tenure by a public employer did not arise from protected activity (id. at pp. 1061, 1073; see id. at p. 1064 [approving San Ramon]), and distinguished cases against individual government employees for their conduct of grievance proceedings that involved similar discrimination claims (Park, at pp. 1070-1071). (See Area 51 Productions, Inc. v. City of Alameda (2018) 20 Cal.App.5th 581, 587-589, 600 [action alleging tortious breach of contract arose from protected activity as to city employees, but not as to city itself].)
We therefore consider Defendants' anti-SLAPP arguments as they specifically apply to the government entities named as defendants in this action.
2. The Claims are Based on Government Action
The critical issue before us is whether LMC's claims arise from the government entities' protected activity or their substantive actions in carrying out their legal duties. Government entities engage in protected activity when, for example, they provide information to the public on ballot measures (Santa Barbara County Coalition Against Automobile Subsidies v. Santa Barbara County Assn. of Governments (2008) 167 Cal.App.4th 1229, 1237-1238) or other matters of public concern (Bradbury v. Superior Court (1996) 49 Cal.App.4th 1108, 1111-1112, 1117 [district attorney's public report on officer-involved shooting]), make statements in the course of carrying out their lawful duties (Santa Clara Waste Water Co. v. County of Ventura Environmental Health Division (2017) 17 Cal.App.5th 1082, 1085-1086, 1089-1090 [without associated enforcement action, determination that plaintiff stored hazardous waste]), and engage in petitioning activity (id. at pp. 1089-1090 [referral to district attorney for possible prosecution]). As noted in San Ramon, however, government entities' substantive actions do not constitute protected activity, even though the actions are usually taken in the context of legislative or other official proceedings that involve protected activity. (See San Ramon, supra, 125 Cal.App.4th at p. 354 [challenge to decision setting retirement fund contribution levels did not arise from protected activity]; Park, supra, 2 Cal.5th at pp. 1060, 1067-1068 [challenge to state university's allegedly discriminatory denial of tenure did not arise from protected activity]; Shahbazian v. City of Rancho Palos Verdes (2017) 17 Cal.App.5th 823, 834-835 [challenge to grant and denial of building permits did not arise from protected activity].)
Here, the gravamen of LMC's causes of action are Defendants' determination that the Games are illegal and Defendants' actions to enforce gambling laws against LMC. The declaratory relief claim seeks a legal determination that the Games are lawful. The civil rights claims challenge Defendants' enforcement of the gambling laws against LMC, including their search and seizure of LMC's property. The claim and delivery claim challenges Defendants' seizure and continuing possession of LMC's property. These claims arise from the actions, not the speech, of the government entities. The speech alleged in the complaint—including the special agents' statements during the two searches—are evidence of Defendants' legal determination and enforcement activity, but those statements are not the basis of LMC's claims.
We acknowledge the allegation that the special agents' statements in November 2015 that LMC's business was illegal deterred customers from using LMC's services and thus inflicted harm separate from the seizure of property in January 2016. The complaint also seeks injunctive relief against similar statements in the future—i.e., threats of prosecution and related intimidation. However, none of LMC's causes of action are based on such statements. In contrast, cases cited by Defendants involved causes of action based on statements government employees made on behalf of government entities. (See City of Costa Mesa v. D'Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 366-367, 375 [city employees told prospective tenants and contractors that illegal businesses were operating in cross-complainants' property]; Hansen v. Department of Corrections & Rehabilitation (2008) 171 Cal.App.4th 1537, 1541, 1544 [alleged conspiracy by government employees to defame whistleblower]; Bradbury v. Superior Court, supra, 49 Cal.App.4th at p. 1112 [district attorney's public report on officer-involved shooting].) We conclude the statement-related allegations in the complaint are merely incidental to LMC's claims. (Baral v. Schnitt (2016) 1 Cal.5th 376, 394 ["[a]ssertions that are 'merely incidental' or 'collateral' [to a claim] are not subject to [Code of Civil Procedure] section 425.16"].)
Because LMC's claims did not arise from Defendants' protected activity, we reverse the trial court's order granting Defendants' anti-SLAPP motion. Even if we were to find the statement-related allegations, and relief sought, were somehow sufficient to satisfy the first prong of anti-SLAPP analysis, LM Connexions's first through fifth causes of action would still fail. As discussed post, LM Connexions could not satisfy the second probability-of-prevailing prong of anti-SLAPP analysis. B. Demurrer
Although Defendants demurred to all of LMC's causes of action, the trial court sustained the demurrer only with respect to the claim and delivery cause of action because it had already struck the other claims pursuant to the anti-SLAPP statute after concluding LMC had no probability of prevailing on the claims. We conclude demurrer is to be sustained without leave to amend as to the first through fifth causes of action and overruled as to the sixth cause of action.
We review an order sustaining demurrer de novo, exercising our independent judgment as to whether, as a matter of law, the complaint states a cause of action on any available legal theory. (See Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.) In doing so, we assume the truth of all material factual allegations together with those matters subject to judicial notice. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) If the court sustained the demurrer without leave to amend, as here, we must decide whether there is a reasonable possibility the plaintiff could cure the defect with an amendment. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) If we find an amendment could cure the defect, we will conclude the trial court abused its discretion and reverse. The plaintiff has the burden of proving an amendment would cure the defect. (Ibid.)
1. Propriety of Declaratory Relief and Injunction Against Prosecution
Defendants argue the declaratory and civil rights claims must be dismissed because LMC improperly seeks declaratory and injunctive relief against discretionary law enforcement action. We agree.
a. Background
In May 2016, shortly before the trial court issued the orders under review in this appeal, the Attorney General filed a separate civil action in Solano County Superior Court seeking, inter alia, equitable relief against parties that sell or license the software used to operate the Games or provide prepaid telephone cards promoted via the Games. (People v. Pong Marketing and Promotions, Inc. (Super. Ct. Solano County, No. FCS047090) (Pong).) Among the named defendants in the Pong case is Michael Strawbridge, president of two named-defendant prepaid telephone card companies, Talk N Win, Inc. and Prepaid Telconnect, Inc.. LMC represents that Strawbridge is also its president. LMC was not itself named as a defendant in Pong. Defendants ask us to take judicial notice of a November 2017 preliminary injunction issued in Pong, based on the court's determination that the Games are illegal gambling contests (Pong Order).
We grant the parties' requests for judicial notice of records in the Pong litigation. (Evid. Code, §§ 452, subd. (d)(1), 459, subd. (a).) The People also requested we take judicial notice of certain federal district court actions, but we decline to do so as they are not relevant to our decision here.
b. Analysis
In Manchel v. County of Los Angeles (1966) 245 Cal.App.2d 501, the court explained: " 'The general rule, sometimes by virtue of statutory provisions, is that an injunction will not be granted to stay criminal or quasi-criminal proceedings, . . . on the principle that equity is concerned only with the protection of civil and property rights, and is intended to supplement, and not usurp, the functions of the courts of law, and on the fact that the party has an adequate remedy at law by establishing as a defense to the prosecution . . . . [¶] . . . The rule applies . . . to prosecutions which are merely threatened or anticipated as well as to those which have already been commenced . . . . [¶] . . . ' "[A]n injunction will not be granted to protect a person from prosecution . . . on a showing that he is not guilty of such offense or that the law does not apply to him. The court having jurisdiction over criminal offenses is the forum in which such questions of fact must be determined." ' " (Id. at p. 505; see Pitchess v. Superior Court (1969) 2 Cal.App.3d 644, 648-649 [same standard].) The same rule applies to declaratory relief. (Manchel, at p. 507.)
This court has explained "[t]he separation of powers doctrine requires judicial restraint in enjoining criminal investigations or prosecutions. . . . The discretionary authority vested in the district attorney to investigate and prosecute criminal conduct is considered too vital to the interest of public order to be subjected to prior restraint by the courts except under extraordinary circumstances. [Citations.] 'The balance between the Executive and Judicial branches would be profoundly upset if the Judiciary assumed superintendence over the law enforcement activities of the Executive branch upon nothing more than a vague fear or suspicion that its officers will be unfaithful to their oaths or unequal to their responsibility.' " (Triple A Machine Shop, Inc. v. State of California (1989) 213 Cal.App.3d 131, 144-145 [reversing preliminary injunction barring prosecutors from contacting certain corporate employees during criminal investigation]; see California Correctional Peace Officers Assn. v. State of California (2000) 82 Cal.App.4th 294, 311-312 [separation of powers analysis]; id. at pp. 299-301, 312 [reversing injunction requiring DOJ to follow certain procedural protocols during criminal investigation].)
Manchel recognized the general rule barring equitable relief affecting criminal prosecutions does not apply "in connection with unconstitutional enactments of the criminal laws, and where their enforcement would invade property rights." (Manchel, supra, 245 Cal.App.2d at pp. 506-507; see Bueneman v. City of Santa Barbara (1937) 8 Cal.2d 405, 407-408 [same exception].) In Manchel, the plaintiff sought a declaration that playing the card game of panguingue for money, which he wished to do for his own pleasure rather than as a commercial enterprise, was not illegal gambling. He asked the court to enjoin law enforcement defendants from arresting him for playing the game. (Manchel, at p. 503.) The court held equitable relief was unavailable because the plaintiff alleged neither that the penal statute was unconstitutional nor that his property rights were impaired. (Id. at p. 506; see Hayman v. Block (1986) 176 Cal.App.3d 629, 632-633, 644-645 [equitable relief unavailable in challenge to alleged selective enforcement of traffic laws against streetwalking prostitutes].)
Here, LMC clearly alleges impairment of its property rights: its equipment was seized and it was forced out of business by Defendants' enforcement actions. Defendants suggests the property rights exception applies only if a plaintiff challenges a statute as facially unconstitutional. While LMC does not challenge the constitutionality of the gaming statues invoked here, it does allege constitutional violations in Defendants' enforcement actions. The Supreme Court has applied the exception to an as-applied constitutional challenge in a First Amendment context. (Zeitlin v. Arnebergh (1963) 59 Cal.2d 901, 905-908 [action seeking declaration that a novel was not obscene under Pen. Code, § 311]; Bueneman v. City of Santa Barbara, supra, 8 Cal.2d at pp. 407-408 ["if the ordinance is unconstitutional in its application to these plaintiffs, they are entitled to the decree which they seek"]; but see DeMott v. Board of Police Commissioners (1981) 122 Cal.App.3d 296, 300 [even in First Amendment context, courts must exercise great caution in granting such equitable relief].) Additionally, courts have entertained civil actions seeking equitable relief about application of the state's gambling laws to certain games or devices. (See, e.g., Sutter's Place, Inc. v. Kennedy (1999) 71 Cal.App.4th 674, 679 [card games]; City of Bell Gardens v. County of Los Angeles (1991) 231 Cal.App.3d 1563, 1567 [pai gow games]; Cossack v. City of Los Angeles (1974) 11 Cal.3d 726, 731-732 [pinball machines].) However, most cases do not expressly consider the propriety of granting the requested equitable relief, and we are not aware of any that involve simultaneously pending enforcement actions.
We further note it is not unusual for the Attorney General to enforce gambling laws via civil actions seeking declarations that certain games or devices are illegal. (See, e.g., People ex. rel. Green v. Grewal (2015) 61 Cal.4th 544, 549-550; People ex rel. Lockyer v. Pacific Gaming Technologies (2000) 82 Cal.App.4th 699, 701.)
We nevertheless conclude LMC's claims for equitable relief should be dismissed in this action. Even in the area of First Amendment rights, where the property rights exception is most commonly applied, courts must exercise caution before interfering with enforcement of criminal laws. (See Pitchess v. Superior Court, supra, 2 Cal.App.3d at pp. 648-649 [reviewing injunction against enforcement of obscenity laws against "nude entertainment"]; Demott v. Board of Police Commissioners, supra, 122 Cal.App.3d at pp. 300-301 [reviewing injunction against enforcement of obscenity laws against private "picture arcades"].)
Such caution is warranted here. First, Defendants have brought a civil enforcement action that will resolve the legal issues raised in this appeal. Therefore, LMC does not face the dilemma of "incur[ring] the risk of criminal prosecution" or "assum[ing] the role of self-appointed censor" by declining to offer the Games to the public out of fear of potential prosecution. (Zeitlin v. Arnebergh, supra, 59 Cal.2d at p. 906.) Rather, LMC is likely to receive authoritative guidance from rulings in the Pong action. Second, while LMC is not a party to the Pong action, its president is a named defendant and thus able to effectively defend its interests in that proceeding. Third, orders denying LMC's preliminary injunction request in this matter and granting Defendants' preliminary injunction request in the Pong action make a strong case that the Games are in fact illegal gambling contests.
Defendants' primary argument for dismissal of LMC's claims that the Games are illegal forms of gambling under the Penal Code, and they urge us rule so here. While the level of skill required to play the Games appears minimal, we cannot conclude based on mere allegations of the complaint that the Games are necessarily illegal. The Pong court considered forensic investigations and expert opinions to assess the skill and chance components of the Games and that evidence is not before us in this appeal.
With regard to its civil rights claims, LMC seeks only declaratory and injunctive relief. Because we have concluded declaratory and injunctive relief interfering with enforcement of the gambling laws against LMC is improper at this time, we direct the trial court to sustain the demurrer without leave to amend as to the first five causes of action on abstention grounds.
2. Claim for Return of Property
LMC's sixth cause of action for claim and delivery seeks return of the property seized in the January 2016 raid pursuant to a search warrant. Defendants concede LMC can state a valid cause of action for the return of property but argue it must be pled as a cause of action under Penal Code section 335a. Penal Code section 335a specifically authorizes such an action after seizure of alleged illegal devices, and LMC seeks leave to amend to add such a cause of action. LMC also maintains its claim and delivery cause of action is proper. (Sharpensteen v. Hughes (1958) 162 Cal.App.2d 381 [implicitly holding a claim and delivery cause of action may lie even where section 335a applies].) Defendants have not cited contrary authority and, indeed, Penal Code section 335a expressly applies "[i]n addition to any other remedy provided by law." (Italics added.) Therefore, we reverse the trial court's order sustaining the demurrer to the sixth cause of action and also direct the court to grant LMC leave to add a claim under Penal Code section 335a.
Penal Code section 335a provides: "In addition to any other remedy provided by law any machine or other device the possession or control of which is penalized by the laws of this State prohibiting lotteries or gambling may be seized by any peace officer, and a notice of intention summarily to destroy such machine or device as provided in this section must be posted in a conspicuous place upon the premises in or upon which such machine or device was seized. Such machine or device shall be held by such officer for 30 days after such posting, and if no action is commenced to recover possession of such machine or device, within such time, the same shall be summarily destroyed by such officer, or if such machine or device shall be held by the court, in any such action, to be in violation of such laws, or any of them, the same shall be summarily destroyed by such officer immediately after the decision of the court has become final. [¶] The superior court shall have jurisdiction of any such actions or proceedings commenced to recover the possession of such machine or device or any money seized in connection therewith.
Any and all money seized in or in connection with such machine or device shall, immediately after such machine or device has been so destroyed, be paid into the treasury of the city or county, as the case may be, where seized, said money to be deposited in the general fund."
III. DISPOSITION
The order granting Defendants' anti-SLAPP motion is reversed. The order sustaining the demurrer to the sixth cause of action is reversed. On remand, the trial court shall enter an order sustaining the demurrer without leave to amend as to the first, second, third, fourth, fifth causes of action, overruling the demurrer as to the sixth cause of action, and granting LMC leave to amend its complaint to add a Penal Code section 335a claim. Defendants shall bear LMC's costs on appeal.
/s/_________
BRUINIERS, J. WE CONCUR: /s/_________
JONES, P. J. /s/_________
SIMONS, J.
Retired Associate Justice of the Court of Appeal, First Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.