ComputerXpress, Inc. v. Jackson

113 Cal. Rptr. 2d 625, 93 Cal. App. 4th 993, 2001 Cal. Daily Op. Serv. 9725, 2001 Daily Journal DAR 12135, 2001 Cal. App. LEXIS 2012
CourtCalifornia Court of Appeal
DecidedNovember 15, 2001
DocketE027841
StatusPublished
Cited by337 cases

This text of 113 Cal. Rptr. 2d 625 (ComputerXpress, Inc. v. Jackson) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ComputerXpress, Inc. v. Jackson, 113 Cal. Rptr. 2d 625, 93 Cal. App. 4th 993, 2001 Cal. Daily Op. Serv. 9725, 2001 Daily Journal DAR 12135, 2001 Cal. App. LEXIS 2012 (Cal. Ct. App. 2001).

Opinion

Opinion

RICHLI, J.

Defendants appeal the denial of their motion, pursuant to Code of Civil Procedure section 425.16 (section 425.16), to strike the complaint of ComputerXpress, Inc. (ComputerXpress) as a “SLAPP” suit (strategic lawsuit against public participation). The trial court determined that none of ComputerXpress’s claims was subject to section 425.16. Therefore, it did not require ComputerXpress to establish a probability of prevailing on its claims.

We agree that some of ComputerXpress’s claims were not subject to section 425.16 and affirm the denial of the motion to strike those claims. *998 However, we conclude that some of the claims were subject to section 425.16. We further conclude ComputerXpress did not show a probability of prevailing on those claims and reverse the denial of the motion to strike those claims. Finally, we conclude defendants are entitled to recover attorney fees and costs incurred in moving to strike the claims subject to section 425.16.

I

Procedural Background

The complaint, filed in March 2000, alleged: ComputerXpress is a public company selling computer-related products to the public. In February 1999, when ComputerXpress was considering a merger with businesses owned by defendants, defendants falsely represented that their businesses were profitable, causing ComputerXpress to incur expenses and waste time pursuing the merger. Later, in May 1999, defendants entered into a conspiracy to damage ComputerXpress ’ s reputation and cause it economic harm. To that end, beginning in about August 1999, defendants made numerous false and disparaging statements about ComputerXpress on the Internet and elsewhere to existing and potential customers and investors, causing monetary damage to ComputerXpress.

Based on these alleged facts, the complaint asserted nine causes of action: (1) fraud; (2) negligent misrepresentation; (3) negligence; (4) trade libel; (5) interference with contractual relations; (6) interference with prospective economic advantage; (7) abuse of process; (8) conspiracy; and (9) injunctive relief.

On defendants’ motion to strike the complaint, the court initially ruled the first three causes of action were not within the scope of section 425.16, but the remaining causes of action were. Later, however, the court changed its mind and ruled that defendants had not shown the remaining causes of action were within the scope of section 425.16. Therefore, it denied defendants’ motion in its entirety, without ruling on whether ComputerXpress had shown a probability of prevailing.

II

Discussion

A. Burden of Proof and Standard of Review

Section 425.16 applies to any cause of action arising from an “ ‘act in furtherance of a person’s right of petition or free speech under the United *999 States or California Constitution in connection with a public issue.’” (§425.16, subds. (b)(1), (e).) Such a claim “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.” (Id., subd. (b)(1).) In order to encourage participation in matters of public significance, section 425.16 “shall be construed broadly.” (Id., subd. (a).)

The defendant has the initial burden of making a prima facie showing that the plaintiffs claims are subject to section 425.16. (Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1042 [61 Cal.Rptr.2d 58]; Dixon v. Superior Court (1994) 30 Cal.App.4th 733, 742 [36 Cal.Rptr.2d 687].) If the defendant makes that showing, the burden shifts to the plaintiff to establish a probability of prevailing, by making a prima facie showing of facts which would, if proved, support a judgment in the plaintiffs favor. (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 907 [84 Cal.Rptr.2d 303].) Whether section 425.16 applies and whether the plaintiff has shown a probability of prevailing are both reviewed independently on appeal. (Mission Oaks Ranch, Ltd. v. County of Santa Barbara (1998) 65 Cal.App.4th 713, 721 [77 Cal.Rptr.2d 1], disapproved on another point in Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123, fn. 10 [81 Cal.Rptr.2d 471, 969 P.2d 564]; Monterey Plaza Hotel v. Hotel Employees & Restaurant Employees (1999) 69 Cal.App.4th 1057, 1064 [82 Cal.Rptr.2d 10].)

B. Claims Subject to Section 425.16

As used in section 425.16, an act in furtherance of a person’s right of petition or free speech 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; (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; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or 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.” (§ 425.16, subd. (e).) We must first determine whether defendants met their burden of showing that ComputerXpress’s claims were subject to section 425.16.

1. First, second, third, and fifth causes of action

ComputerXpress ’ s first three causes of action, for fraud, negligent misrepresentation, and negligence, were based on defendants’ alleged false *1000 representations in February 1999 that they owned solvent, profitable businesses which were appropriate for merger with ComputerXpress. ComputerXpress’s fifth cause of action, for interference with contractual relations, alleged that in February 2000 ComputerXpress entered into a contract to sell computers to Cal Tech Solutions and that defendants then contacted Cal Tech and disparaged ComputerXpress and its officers and directors, causing Cal Tech to cancel the contract.

There was no indication, either in the complaint or in the evidence presented on the section 425.16 motion, that the conduct alleged in these causes of action occurred in connection with an official proceeding, concerned a public issue or issue of public interest, or took place in a public forum. However, defendants argue these causes of action were still subject to section 425.16, because (1) the complaint alleged a conspiracy covering all causes of action, some of which did involve public statements, and (2) in any event, section 425.16 applies to any suit filed after the defendant’s exercise of speech or petition rights, not only to claims which are directly based on such conduct.

a. Conspiracy allegations

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113 Cal. Rptr. 2d 625, 93 Cal. App. 4th 993, 2001 Cal. Daily Op. Serv. 9725, 2001 Daily Journal DAR 12135, 2001 Cal. App. LEXIS 2012, Counsel Stack Legal Research, https://law.counselstack.com/opinion/computerxpress-inc-v-jackson-calctapp-2001.