Opinion
E073696
07-02-2020
PRECISE AEROSPACE MANUFACTURING, INC., Plaintiff and Appellant, v. BRIDGET CANTU, Defendant and Respondent
Law Office of Harry S. Carmack and Harry S. Carmack for Plaintiff and Appellant. Pettis Law Firm and James C. Pettis for Defendant 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. RIC1902167) OPINION APPEAL from the Superior Court of Riverside County. Daniel A. Ottolia, Judge. Affirmed. Law Office of Harry S. Carmack and Harry S. Carmack for Plaintiff and Appellant. Pettis Law Firm and James C. Pettis for Defendant and Respondent.
Bridget Cantu worked first for MAG Aerospace Industries, LLC (MAG), and thereafter for Precise Aerospace Manufacturing, Inc. (Precise). Precise and MAG became embroiled in litigation in federal court. After Cantu left Precise, she gave MAG a declaration, which MAG filed in the federal action.
Precise then filed this action against Cantu. It asserted causes of action for breach of a confidentiality agreement, for misappropriation of trade secrets, and for intentional interference with contractual relations.
Cantu filed a special motion to strike (anti-SLAPP motion) under Code of Civil Procedure section 425.16 (section 425.16 or anti-SLAPP statute). She argued that all of Precise's causes of action arose out of her declaration, which constituted protected activity, and that Precise could not show a probability of prevailing on any of them. The trial court agreed that all of the causes of action arose out of protected activity. It denied the motion as to the first cause of action, ruling that Precise had shown a probability of prevailing, but granted it as to the second and third causes of action.
Precise appeals. It contends that its causes of action did not arise out of protected activity. We will hold that they all arose out of Cantu's declaration, which was classic protected activity. Hence, we will affirm.
I
PROCEDURAL BACKGROUND
According to Precise's complaint, in 2015, it hired Cantu as its vice-president of sales. She signed a "Confidentiality Agreement." In it, she agreed not to disclose confidential information of Precise during or after her employment.
Also according to the complaint, in May 2017, Cantu left Precise. She was "a disgruntled former employee." Meanwhile, sometime in 2017, Precise sued MAG, Cantu's former employer, in federal court. On or about December 1, 2017, Cantu disclosed to MAG confidential information of Precise, including trade secrets. According to the second cause of action, she made this disclosure by "execut[ing] a declaration under oath." Similarly, according to the third cause of action she made it by "provid[ing] a written declaration to MAG." Cantu intended to damage Precise by helping MAG in the federal action.
Precise also alleged, on information and belief, that Cantu was continuing to disclose its trade secrets and confidential information to MAG.
The complaint asserted three causes of action against Cantu: (1) breach of contract, (2) misappropriation of trade secrets, and (3) intentional interference with contractual relations.
Cantu filed an anti-SLAPP motion. The evidence in support of the motion confirmed that on December 1, 2017, Cantu had signed a declaration that was filed in the federal court action.
Cantu argued that the action arose out of protected activity — specifically, her declaration. She also argued that Precise could not show a probability of prevailing, because (1) her conduct was protected by the litigation privilege (Civ. Code, § 47, subd. (b)(2)), and (2) the information in her declaration was not confidential and did not constitute trade secrets.
In its opposition, Precise argued that the declaration was not the gravamen of its causes of action; it was only evidence of damages. It also argued that it could have asserted the same causes of action against Cantu without mentioning her declaration.
Precise did not introduce any evidence in opposition to the motion.
After hearing argument, the trial court granted the motion in part and denied it in part.
It ruled that all three causes of action arose out of protected activity.
It denied the motion as to the first (breach of contract) cause of action, because it found that Cantu's declaration appeared to violate the confidentiality agreement, and the litigation privilege did not apply.
It granted the motion as to the second (misappropriation of trade secrets) cause of action; it found that the litigation privilege did not apply, but Precise had failed to prove several elements of the cause of action.
It granted the motion as to the third (intentional interference with contractual relations) cause of action, because it found that the litigation privilege did apply.
II
THE ANTI-SLAPP MOTION
A. General Anti-SLAPP Principles.
Section 425.16, "commonly known as the anti-SLAPP statute, allows defendants to request early judicial screening of legal claims targeting free speech or petitioning activities." (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 880-881.)
It provides: "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." (§ 425.16, subd. (b)(1).)
"A court evaluates an anti-SLAPP motion in two steps. '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. [Citations.] If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least "minimal merit."' [Citation.] If the plaintiff fails to meet that burden, the court will strike the claim." (Wilson v. Cable News Network, Inc., supra, 7 Cal.5th at p. 884.)
For purposes of the first step, an "'act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue' includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, [and] (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law . . . ." (§ 425.16, subd. (e).)
"'"[T]he defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech."' [Citation.] In other words, a claim does not 'arise from' protected activity simply because it was filed after, or because of, protected activity, or when protected activity merely provides evidentiary support or context for the claim. [Citation.] Rather, the protected activity must 'supply elements of the challenged claim.' [Citation.]" (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 621.)
"As to the second step inquiry, a plaintiff seeking to demonstrate the merit of the claim 'may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence.' [Citations.]" (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 940.)
"'We review de novo the grant or denial of an anti-SLAPP motion.' [Citation.]" (Sweetwater Union High School Dist. v. Gilbane Building Co., supra, 6 Cal.5th at p. 940.)
B. The First Step: Arising from Protected Activity.
As already noted, protected activity includes "any written or oral statement or writing made before a . . . judicial proceeding . . . ." (§ 425.16, subd. (e)(1).) Thus, Cantu's declaration is protected. (See Schaffer v. City and County of San Francisco (2008) 168 Cal.App.4th 992, 999.)
Precise argues that its causes of action were "triggered by," rather than arising from, the declaration. Here, however, the action was not merely filed after Cantu's declaration. Rather, the declaration supplies necessary elements of Precise's causes of action. It constitutes the alleged misappropriation of trade secrets. It also constitutes the alleged interference with contractual relations.
Precise may be arguing that Cantu must have disclosed the contents of her declaration to MAG (or its attorneys) before the declaration was drafted. Even if so, that disclosure would also be protected, as a "written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body . . . ." (§ 425.16, subd. (e)(2); see Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1266 ["a statement is 'in connection with' litigation under section 425.16, subdivision (e)(2) if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation."].)
Precise also argues that, while one cause of action specifically alleged that Cantu's declaration was the actionable disclosure, the other two did not. More generally, it argues that it alleged that disclosures were continuing.
Both the second and third causes of action, however, specifically alleged that they were based on the declaration. The first cause of action is not in issue in this appeal; we note, however, that while it did not specifically mention the declaration, it did allege that the disclosure occurred on December 1, 2017 — the date of the declaration.
Admittedly, Precise alleged that Cantu was continuing to make tortious disclosures to MAG. However, given the context, it seems that Cantu is making continuing disclosures to MAG — if any — in connection with the federal action. Moreover, this appears to be a collateral allegation, made only on information and belief. "Assertions that are 'merely incidental' or 'collateral' are not subject to section 425.16. [Citations.] Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute." (Baral v. Schnitt (2016) 1 Cal.5th 376, 394.) In any event, "[w]hen relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage." (Id. at p. 396.)
Precise relies on Renewable Resources Coalition, Inc. v. Pebble Mines Corp. (2013) 218 Cal.App.4th 384. There, a mining company and its attorneys (collectively the Pebble defendants) allegedly purchased confidential documents of an anti-mining nonprofit corporation (Coalition) from the Coalition's disgruntled former fundraiser; they then used them to prosecute an election law complaint against the Coalition. (Id. at pp. 386, 388-390.) The Coalition sued the Pebble defendants for interference with contract and interference with prospective economic advantage. (Id. at p. 389.)
The appellate court held that the trial court erred by granting an anti-SLAPP motion. (Renewable Resources Coalition, Inc. v. Pebble Mines Corp., supra, 218 Cal.App.4th at pp. 395-398.) It explained: "[T]he trial court erroneously focused on the Coalition's damages allegations, i.e., that the Coalition was forced to defend itself in the [election law] proceeding. Instead, the proper focus should have been on the 'allegedly wrongful and injury-producing conduct' [citation] which gave rise to the Coalition's damages." (Id. at p 396.)
"[T]he Coalition did not sue the Pebble defendants for having prosecuted the [election law] complaint. Rather, . . . , the pleadings establish the gravamen of the Coalition's claim against the Pebble defendants is that they induced [the fundraiser] to sell them the Coalition's confidential documents for $50,000." (Renewable Resources Coalition, Inc. v. Pebble Mines Corp., supra, 218 Cal.App.4th at p. 397.)
Here, however, Precise did expressly sue Cantu for executing the declaration. Unlike in Renewable, the judicial proceeding was not relevant exclusively to damages. Rather, the allegedly tortious disclosure was made in the course of a judicial proceeding, and thus was inextricable from it.
Regarding the second (misappropriation of trade secrets ) cause of action, Precise argues that a trade secrets claim is categorically immune from an anti-SLAPP motion.
Precise's opening brief does not clearly make this argument. After reading its reply brief, however, which is much clearer on this point, one can look back at the opening brief and see what Precise was trying to say. --------
Civil Code section 3426.11, as relevant here, provides: "Notwithstanding [the litigation privilege], . . . the voluntary, intentional disclosure of trade secret information, unauthorized by its owner, to a competitor or potential competitor of the owner of the trade secret information or the agent or representative of such a competitor or potential competitor is not privileged . . . ." For this reason, the trial court ruled that the litigation privilege did not apply to the second cause of action.
Precise relies on Ruiz v. Harbor View Community Association (2005) 134 Cal.App.4th 1456. Ruiz said, "[S]ubdivision (e), clauses (1) and (2) of section 425.16 are parallel to and co-extensive with the definition of privileged communication under Civil Code section 47, subdivision (b). [Citation.] . . . Thus, . . . a communication protected by the litigation privilege necessarily would fall within section 425.16, subdivision (e)(1) or (2) . . . ." (Id. at p. 1474.) Precise concludes that, because a trade secrets cause of action is not protected by the litigation privilege, under Ruiz, it necessarily also is not protected activity for purposes of the anti-SLAPP statute.
The anti-SLAPP statute, however, contains no exception similar to Civil Code section 3426.11. It protects statements in connection with litigation across the board. Accordingly, while the disclosure of a trade secret generally is not protected by the litigation privilege, it can be protected activity for anti-SLAPP purposes.
The statement quoted from Ruiz is simply overbroad — not surprisingly, as there was no issue concerning trade secrets in that case. "It is axiomatic that cases are not authority for propositions that are not considered. [Citation.]" (California Building Industry Association v. State Water Resources Control Board (2018) 4 Cal.5th 1032, 1043.) It would be more accurate to say that "[t]he privilege informs interpretation of the 'arising from' prong of the anti-SLAPP statute [citation], but protections afforded by the statute and the privilege are not entirely coextensive [citations]." (Navellier v. Sletten (2003) 106 Cal.App.4th 763, 770, italics added.)
Finally, Precise argues (with some rue) that it could have drafted its complaint so as not to mention the declaration at all. But the anti-SLAPP statute cannot be defeated by "artful pleading." (See Baral v. Schnitt, supra, 1 Cal.5th at p. 393.) In deciding whether a cause of action arises from protected activity, the trial court is not limited to the four corners of the complaint. Rather, "[i]n deciding whether the initial 'arising from' requirement is met, a court considers 'the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.' (§ 425.16, subd. (b).)" (Navellier v. Sletten (2002) 29 Cal.4th 82, 89.)
Accordingly, Cantu was free to show that the complaint was actually based on her declaration — and she did. Precise did not rebut that showing. Therefore, the trial court correctly found that the entire action arose out of protected activity.
C. The Second Step: Minimal Merit.
1. First cause of action: Breach of contract.
The trial court ruled that Precise had shown that its first cause of action (breach of contract) had minimal merit. Cantu has not cross-appealed. Hence, we do not review this ruling.
2. Second cause of action: Misappropriation of trade secrets.
The trial court also ruled that Precise had failed to show that its second cause of action (misappropriation of trade secrets) had minimal merit.
Precise contends that this was error, because the litigation privilege does not apply to a trade secrets cause of action. (See part II.B, ante.) It claims, "Cantu's anti-SLAPP motion rests entirely on the claim that her [declaration] . . . is a privileged publication pursuant to California Civil Code section 47 . . . ." Not so. Cantu also argued that Precise also could not prove its second cause of action because any information she disclosed was neither a trade secret nor confidential.
Moreover, the trial court specifically ruled for Cantu on this ground. It stated: "[Precise] fails to identify what information disclosed in the declaration constitutes a trade secret. [Cantu]'s disclosures involved mostly information concerning [Precise]'s contractual negotiations with MAG. It's not clear how this information had value to competitors or the public. . . . [¶] . . . Furthermore, [Precise] has not produced any evidence that [Cantu] attained an unfair competitive advantage or that it was damaged by the disclosure."
Precise introduced no evidence whatsoever. Looking at Cantu's evidence alone, we can hardly say that the information she disclosed did consist of trade secrets. She showed that at least some of it was available on Precise's own website. Precise wholly failed to meet its burden of proof.
3. Third cause of action: Intentional interference with contractual relations.
Finally, the trial court ruled that the third (intentional interference with contractual relations) cause of action lacked merit because the litigation privilege applied.
In its opening brief, Precise does not argue that this was error. If only out of an excess of caution, we also note that it did not introduce any evidence to show that this cause of action had even minimal merit. Hence, the trial court did not err.
III
DISPOSITION
The order appealed from is affirmed. Cantu is awarded costs on appeal, including attorney fees (§ 425.16, subd. (c)(1)), against Precise.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAMIREZ
P. J. We concur: McKINSTER
J. MILLER
J.