Better Meat Co. v. Emergy, Inc.

District Court, E.D. California·Decided April 17, 2023·No. 2:21-cv-02338·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 THE BETTER MEAT CO., No. 2:21-cv-02338-KJM-CKD 12 Plaintiff, ORDER 13 v. 14 | EMERGY, Inc. d/b/a MEATI FOODS, PAUL 15 | VWRONSKY, and BOND CAPITAL MANAGEMENT LP, 16 Defendants. 17 18 19 20 For the reasons below, the court grants defendant Emergy’s motion to strike plaintiff 21 | Better Meat’s first and second claims under California’s anti-SLAPP statute. 22 | I. BACKGROUND 23 This court has summarized the history of this action in a previous order and incorporates 24 | that summary here by reference. See Prior Order (May 25, 2022), ECF No. 66. In short, Emergy 25 | and Better Meat compete in the market for mycelial meat substitutes. Mycelial meat substitutes 26 | are derived from mycelium, “the root-like structure of fungi.” Compl. at 4, ECF No. 1. Emergy 27 | alleges Better Meat and its founders copied or stole Emergy’s trade secrets and intellectual

1 property; Better Meat alleges Emergy and its investors have used threats of litigation to stymie 2 competition and scare away Better Meat’s potential investors. 3 Better Meat’s complaint cites two communications. See generally Compl. First, Emergy 4 sent Better Meat a letter reiterating prior accusations of trade-secret misappropriation and unfair 5 competition. See Dec. 15, 2021 Letter, Sahlsten Decl. Ex. 14, ECF No. 33-14. Emergy expressed 6 its intent to “move forward with legal action” and “fil[e] a complaint . . . in the immediate 7 future.” Id. Second, thirteen minutes after Emergy’s counsel sent his letter to Better Meat, Paul 8 Vronsky, a partner at Bond Capital Management LP, an Emergy investor, sent Better Meat’s 9 “lead investor” an email: 10 I wanted to give you a heads up that one of our portfolio companies, 11 [Emergy], is in a pretty significant trade secret and patent dispute 12 with a company you might be evaluating, The Better Meat Co. I don't 13 know really more than that but as a matter of friendship and courtesy, 14 I thought I would reach out and let you know. I'm happy to connect 15 with your counsel if that is helpful. 16 Vronsky Email, Sahlsten Decl. Ex. 15 at 2, ECF No. 33-15. 17 Two days later, Better Meat filed this lawsuit against Emergy, Bond Capital and Vronsky, 18 asserting state-law claims for tortious interference and unfair competition. See generally Compl. 19 Emergy responded by filing an action against Better Meat, which the court dismissed with 20 instructions to Emergy to pursue a counterclaim in Better Meat’s action. See generally Order 21 (Oct. 12, 2022), ECF No. 108. Emergy now moves to strike Better Meat’s claims for tortious 22 interference and unfair competition based on the two communications reviewed above. Emergy 23 argues the disputed letter and email are protected by California’s litigation privilege because they 24 relate to a judicial proceeding, namely this case. Mot. Strike at 13, ECF No. 31. 25 Better Meat sought discovery to oppose Emergy’s motion to strike, ECF No. 47, which 26 this court granted in part, allowing discovery “narrowly focused on the question whether Emergy 27 had a good-faith intent of filing a lawsuit at the time of the contested communications,” Prior 28 Order (May 25, 2022) at 7. The assigned magistrate judge has overseen the discovery as 29 provided by local rule, which included a deposition of Emergy CEO Dr. Tyler Huggins, during 30 which he answered questions about his motives for the litigation and the disputed 1 communications. Theodore Decl. Ex. 1 (Huggins Dep.), ECF No. 126–3. Emergy also produced 2 documents, including emails from Emergy staff discussing claims against Better Meat, Emergy 3 Emails, Ex. 7, ECF No. 126–9 a draft press release, in which Emergy discusses Better Meat and 4 its alleged trade secret misappropriation, Theodore Decl. Ex. 7 (Press Release), ECF No. 126-9; 5 and responses to Better Meat’s interrogatories, Interrogatory Responses, Ex. 45, ECF No. 129– 6 29. Emergy withheld some information under assertions of attorney–client privilege. Theodore 7 Decl. Ex. 9 (Privilege Log), ECF No. 126–11. Better Meat moved unsuccessfully to compel 8 further depositions and responses. See generally Mot. to Compel, ECF No. 70; MJ Order 9 (July 28, 2022), ECF No. 80; Prior Order (Apr. 14, 2023), ECF No. 133 10 Briefing on the motion to strike is now complete and includes Emergy’s motion, Better 11 Meat’s opposition, Opp’n, ECF No. 53, Emergy’s reply, Reply, ECF No. 57, Emergy’s 12 supplemental brief, Supp. Brief, ECF No. 67, Better Meat’s supplemental brief in opposition, 13 Supp. Opp’n, ECF No. 126-1, and Emergy’s supplemental reply, Supp. Reply, ECF No. 126-17. 14 II. LEGAL STANDARD 15 California law permits special motions to strike under section 425.16(b) of the Code of 16 Civil Procedure “to curtail the ‘disturbing increase in lawsuits brought primarily to chill the valid 17 exercise of the constitutional rights of freedom of speech and petition for the redress of 18 grievances.’” Bulletin Displays, LLC v. Regency Outdoor Adver., Inc., 448 F. Supp. 3d 1172, 19 1178–79 (C.D. Cal. 2006) (quoting Cal. Civ. Proc. Code § 425.16(a)). The section’s intended 20 targets are actions that “‘masquerade as ordinary lawsuits’” but that actually are meant “to deter 21 ordinary people from ‘exercising their political or legal rights or to punish them for doing so.’” 22 Makaeff v. Trump Univ., LLC, 725 F.3d 254, 261 (9th Cir. 2013) (quoting Batzel v. Smith, 23 333 F.3d 1018, 1024 (9th Cir. 2003), superseded in part by statute on other grounds as stated in 24 Breazeale v. Victim Servs., Inc., 878 F.3d 759, 766–67 (9th Cir. 2017)). Actions that fit this 25 description have long been known by the acronym “SLAPP,” for “strategic lawsuits against 26 public participation.” Special motions to strike are thus commonly known as “anti-SLAPP” 27 motions, and section 425.16 is known as the anti-SLAPP statute. Santana v. Cty. of Yuba, No. 28 15-00794, 2016 WL 1268107, at *6 (E.D. Cal. Mar. 31, 2016) (citations omitted). 1 California courts use a two-part test to evaluate anti-SLAPP motions. “First, a defendant 2 ‘must make an initial prima facie showing that the plaintiff’s suit arises from an act in furtherance 3 of the defendant’s rights of petition or free speech.’” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 4 1097, 1110 (9th Cir. 2003) (quoting Globetrotter Software, Inc. v. Elan Comput. Grp., Inc., 5 63 F. Supp. 2d 1127, 1129 (N.D. Cal. 1999)). “The defendant need not show that the plaintiff’s 6 suit was brought with the intention to chill the defendant’s speech; the plaintiff’s ‘intentions are 7 ultimately beside the point.’” Id. (quoting Equilon Enters., LLC v. Consumer Cause, Inc., 8 29 Cal. 4th 53, 67 (2002)). Nor does the defendant bringing the motion need to show its speech 9 was actually chilled. Id. (citing City of Cotati v. Cashman, 29 Cal. 4th 69, 75–76 (2002)). 10 “Second, once the defendant has made a prima facie showing, ‘the burden shifts to the plaintiff to 11 demonstrate a probability of prevailing on the challenged claims.’” Id. at 1110 (quoting 12 Globetrotter Software, Inc., 63 F. Supp. at 1129). If “the court determines that the plaintiff has 13 established that there is a probability that the plaintiff will prevail on the claim,” the court must 14 deny the motion. Cal. Civ. Proc. Code § 425.16(b)(1). Plaintiffs need only make a showing of 15 minimal merit to succeed on this prong. Navellier v. Sletten, 29 Cal. 4th 82, 89 (2002).

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