Maughan v. GOOGLE TECHNOLOGY, INC.

49 Cal. Rptr. 3d 861, 143 Cal. App. 4th 1242, 2006 Daily Journal DAR 13833, 2006 Cal. App. LEXIS 1574

• Court: California Court of Appeal
• Decided: October 11, 2006
• Docket: B183969
• Status: Published

Opinions

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] OPINION

Plaintiffs Mark G. Maughan and Brown Maughan, an accounting corporation, on behalf of themselves and the putative class, appeal from the judgment in favor of defendant Google Technology, Inc. (Google). Google filed a cross-appeal from the judgment "insofar as it establishes attorneys' fees and costs."

By letter, this court invited the parties to brief: (1) whether the order granting Google's motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16 et seq.)¹ was final although the trial court did not rule on the request in the motion for attorney fees and costs; and if so, (2) whether the appeal must be dismissed as untimely; (3) whether the order granting Google's separate motion for attorney fees and costs under the anti-SLAPP statute was appealable; and if so, (4) whether the cross-appeal must be dismissed as untimely. We have received their responses.

Based on our review of the record and applicable law, we affirm the judgment. The challenge of Maughan and Brown Maughan to the order granting Google's anti-SLAPP motion is not cognizable on appeal from the judgment. Contrary to Google's contention in its cross-appeal, the trial court did not abuse its discretion in awarding $23,000 as the amount of reasonable attorney fees and costs to which Google was entitled.

BACKGROUND On November 22, 2004, Maughan and Brown Maughan, on behalf of themselves and the putative class, filed a first amended complaint seeking damages and injunctive relief against Google based on three causes of action; defamation (libel), products liability (strict liability in tort), and unfair business practice (Bus. Prof. Code, § 17200 et seq.).

On or about January 18, 2005, Google filed an anti-SLAPP motion to strike the complaint and for attorney fees and costs under the anti-SLAPP statute.

On February 24, 2005, the trial court granted Google's anti-SLAPP motion, but its order "signed and filed this date" was silent regarding attorney fees and costs. Also on the same date, a copy of the notice of entry of the order was served by mail by the clerk of the court.²

On or about March 18, 2005, Google filed a separate motion for attorney fees and costs under the anti-SLAPP statute.

On April 20, 2005, the trial court granted the motion and awarded Google $23,000 as fees and costs, and the order was "signed and filed this date." Also the same date, a copy of the notice of entry of the order was served by mail by the clerk of the court. The April 20, 2005 order recited, "A Judgment is also signed and filed this date."

The judgment also entered on April 20, 2005, recapitulated the court's earlier order granting Google's anti-SLAPP motion and order granting Google's separate motion for attorney fees and costs in the amount of $23,000 under the anti-SLAPP statute. The judgment then concluded: "Accordingly, IT IS ORDERED AND ADJUDGED: [¶] That . . . Maughan and Brown Maughan . . . take nothing, and the action is dismissed on the merits, with prejudice, and in its entirety. Further, . . . Google . . . is awarded attorneys' fees and costs in the amount of $___."³

On June 20, 2005, Maughan and Brown Maughan filed a notice of appeal from "the Judgment of April 20, 2005 entered in favor of Google. . . ." No appeal was filed from the order granting Google's anti-SLAPP motion.

On July 1, 2005, Google filed a notice of cross-appeal "from the Judgment of April 20, 2005 insofar as it establishes attorneys' fees and costs." No appeal was filed from the order granting Google's motion for fees and costs under the anti-SLAPP statute.

DISCUSSION 1. Challenge to Anti-SLAPP Motion Order Not Cognizable

In their appeal, Maughan and Brown Maughan challenge the order granting Google's anti-SLAPP motion essentially on three grounds: (1) Google failed to prove that section 425.17, subdivision (b), the express anti-SLAPP motion exclusion for class actions and actions in the public interest (private attorney general), was inapplicable to this action; (2) Google did not carry its burden to show their claims were based on an issue of public interest and arose from protected speech or petitioning activity; and (3) Maughan and Brown Maughan demonstrated their claims had the requisite minimal merit, because the trial court erred in determining that Google's search results do not necessarily convey a defamatory meaning and that their claims were barred by the Communications Decency Act of 1996 (CDA) (47 U.S.C. § 230). We conclude their challenge to the anti-SLAPP motion order is not cognizable on this appeal from the judgment.

"An order granting or denying a special motion to strike [under the anti-SLAPP statute] shall be appealable under Section 904.1." (§ 425.16, subd. (i); see generally § 425.16 et seq.) Section 904.1 provides "[a]n appeal . . . may be taken . . . [¶] . . . [¶] . . . [f]rom an order granting or denying a special motion to strike under Section 425.16." (§ 904.1, subd. (a)(13).) "`If a judgment or order is appealable, an aggrieved party must file atimely appeal or forever lose the opportunity to obtain appellate review.' [Citations.]" (Norman I. KrugReal Estate Investments, Inc. v. Praszker (1990)220 Cal.App.3d 35, 46 [269 Cal.Rptr. 228].)

The order granting the anti-SLAPP motion was filed on February 24, 2005, and notice of entry of the order was served by mail by the clerk of the superior court on the same day. Accordingly, the notice of appeal from that order had to be filed within 60 days, or no later than April 25, 2005. (Cal. Rules of Court, rule 2(a)(1).)⁴ Thus, the merits of the issues raised on appeal by Maughan and Brown Maughan cannot be reached. "If a notice of appeal is filed late, the reviewing court must dismiss the appeal." (Rule 2(b); cf. rule 45.1.)

That the trial court included no ruling on Google's request for attorney fees and costs in the motion does not compel a contrary conclusion on the theory that the order on the anti-SLAPP motion was simply an interim order. Google's failure to prompt the court to rule on its request and obtain such a ruling amounted to a forfeiture of its request. (See Peoplev. Hill (1992) 3 Cal.App.4th 16, 43-44 [4 Cal.Rptr.2d 258].) The order granting the anti-SLAPP motion therefore was final when made, and thus appealable.

Section 906 is of no help to Maughan and Brown Maughan because, as the order on the anti-SLAPP motion is itself appealable, we are foreclosed from reviewing that order on appeal from the judgment.⁵ Section 906 provides in pertinent part that on appeal from the judgment "the reviewing court may review . . . any intermediate ruling, proceeding, order or decision which involves the merits or necessarily affects the judgment . . . and may affirm, reverse or modify any judgment . . . and may direct the proper judgment . . . to be entered. . . ." But "[t]he provisions of this sectiondo not authorize the reviewing court to review anydecision or order from which an appeal might have beentaken." (Ibid., italics added.) "The taking of an appeal is . . . jurisdictional, and where no appeal is taken from an appealable order, a reviewing court has no discretion to review its merits." (Berge v. International HarvesterCo. (1983) 142 Cal.App.3d 152, 158 [190 Cal.Rptr. 815].)

2. Cross-appeal Timely

On June 20, 2005, Maughan and Brown Maughan filed a notice of appeal from "the Judgment of April 20, 2005 entered in favor of Google. . . ." The superior court clerk served the notice of appeal by mail on June 21, 2005.

On July 1, 2005, Google filed its notice of cross-appeal from "the Judgment of April 20, 2005 insofar as it establishes attorneys' fees and costs." In pertinent part, the judgment reads: "On April 12, 2005, [Google's] Motion for Attorneys' Fees and Costs Pursuant to . . . § 425.16 came on before the Court. The Court granted the Motion for Attorneys' Fees and Costs on Apr[il] 20, 2005, and awarded to . . . Google . . . its reasonable fees and costs in the amount of $23,000.00."

Rule 3(e)(1) provides: "If an appellant timely appeals from a judgment . . ., the time for any other party to appeal from the same judgment . . . is extended until 20 days after the superior court clerk mails notification of the first appeal."

We conclude the cross-appeal from the judgment is timely, because it was filed within 20 days of mailing of the notice of appeal. Having determined that the cross-appeal is timely, it is inconsequential in this instance whether we were to review the order granting Google attorney fees and costs as an interim order under the judgment (§ 906) or to construe the cross-appeal to have been taken from the order itself. (Cf.Johnston v. Corrigan (2005) 127 Cal.App.4th 553, 556 [25 Cal.Rptr.3d 657] [holding order appealable]; Paulus v.Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 665-666,685-686 [43 Cal.Rptr.3d 148] [order presumed appealable].) We therefore need not, and thus do not, determine whether an order granting attorney fees and costs to a prevailing defendant under the anti-SLAPP statute is directly appealable or, instead, reviewable only on appeal from the judgment.

3. Order Granting $23,000 as Fees and Costs Not Abuse

Google contends the trial court abused its discretion in reducing the attorney fees and costs sought by Google in its motion for attorney fees and costs under the anti-SLAPP statute. We disagree.

These unchallenged facts were set forth in the trial court's order granting Google's motion for attorney fees and costs: As the prevailing defendant on its anti-SLAPP motion, Google sought $112,288.63 in attorney fees and costs, consisting of $98,120.40 as fees and $5,168.23 as costs in connection with that motion, plus $9,000 as fees and costs in connection with its separate motion for fees and costs. "Although four attorneys worked on the [anti-]SLAPP motion, Google seeks to recover fees earned only by partner Timothy L. Alger, Esq. who bills at the rate of $500 per hour and senior associate Lesley E. Williams, Esq. who bills at the rate of $350 per hour."⁶

The court granted Google's motion for fees and costs but reduced the amount awarded to $23,000 after explaining: "This Court routinely deals with attorneys' fee requests in complex cases and other contexts such as in class actions and discovery motions. As such, this Court has experience with how much time attorneys should be spending and typically do spend on difficult and complex matters. This court believes that a reasonable time spent on the [anti-]SLAPP motion and theinstant motion [for fees and costs] is, as [Maughan and Brown Maughan] have suggested, approximately 50 hours or one attorney work week. Averaging the billing rate of the two attorneys who worked on the motion results in $425 per hour. $425 per hour multiplied by 50 hours amounts to $21,250. Adding a reasonable figure for costs the Court believes that $23,000 is a generous and reasonable award of attorneys' fees and costs given the circumstances in this action."

Abuse of discretion is the standard applicable to review of an attorney fees award. (Ketchum v. Moses (2001)24 Cal.4th 1122, 1130 [104 Cal.Rptr.2d 377, 17 P.3d 735].) We therefore decline Google's invitation to apply the substantial evidence rule. (Cf. Lenk v. Total-Western, Inc. (2001)89 Cal.App.4th 959, 968 [108 Cal.Rptr.2d 34] ["A challenge in an appellate court to the sufficiency of the evidence is reviewed under the substantial evidence rule"].)

"`While the concept "abuse of discretion" is not easily susceptible to precise definition, the appropriate test has been enunciated in terms of whether or not the trial court exceeded "`the bounds of reason, all of the circumstances before it being considered. . . .'" [Citations.]' [Citation.] `A decision will not be reversed merely because reasonable people might disagree. "An appellate tribunal is neither authorized nor warranted in substituting its judgment for the judgment of the trial judge." [Citations.] In the absence of a clear showing that its decision was arbitrary or irrational, a trial court should be presumed to have acted to achieve legitimate objectives and, accordingly, its discretionary determinations ought not be set aside on review.' [Citation.]" (Gouskos v. Aptos Village Garage, Inc. (2001) 94 Cal.App.4th 754, 762 [114 Cal.Rptr.2d 558].) Accordingly, an abuse of discretion transpires if "`the trial court exceeded the bounds of reason'" in making its award of attorney fees. (Dove Audio, Inc. v. Rosenfeld, Meyer Susman (1996) 47 Cal.App.4th 777, 785 [54 Cal.Rptr.2d 830].)

Google has failed to carry its burden to show the trial court's award of $23,000 as attorney fees and costs constituted an abuse of discretion. Although cast as a challenge for abuse of discretion, Google's position is essentially that the trial court's ruling is not supported by substantial evidence. Google contends: "The Superior Court's decision to award $23,000 in fees and costs based on the unsupported claim of [Maughan and Brown Maughan]'s counsel, and in the face of a detailed evidentiary showing by Google, was arbitrary and capricious" and the award should be reversed because it was "unsupported by substantial evidence and beyond `the bounds of reason.'" Google further contends that its "evidentiary showing . . . established the baseline for any award of fees, and the court below was required, in departing from that baseline, to do so based on a careful evaluation of Google's evidence — not a wholesale rejection of the evidence in favor of the self-interested and unsupported claim of opposing counsel." Google also contends there is an "utter lack of `substantial evidence' for the court's award" because "Maughan's estimate of time spent by his lawyers is not the kind of `substantial evidence' required for a proper calculation of fees under" the anti-SLAPP statute (§ 425.16, subd. (c)).⁷

In its reply brief, Google continues its challenge to the sufficiency of the evidence to support the $23,000 award of fees and costs by arguing the trial court's reliance on the estimated 50-hour figure put forth by counsel for Maughan and Brown Maughan in his declaration was "outrageous [in] that there was no documentary support whatsoever for that estimate." Google also renews its claim that the substantial evidence rule governs and that the fee award was not supported by substantial evidence. Although in its opening brief Google contends the trial court "abused its discretion by failing to use a lodestar analysis of Google's actual fees and costs," Google concedes in its reply brief that "the court touched on the lodestar factors in its decision. . . ."

Contrary to Google's claim, the trial court did not abuse its discretion by arbitrarily applying these lodestar adjustment factors. Initially, we point out the trial court did not, as asserted by Google, "arbitrarily use Maughan's counsel's claimed expenditure of time as the yardstick for an award of fees [and then] put window dressing on its decision by discussing Google's evidence of actual fees and costs." The court expressly found Maughan and Brown Maughan's "counsel who, by this court and [Google]'s own admission, are capable lawyers with an impressive track record, and whose brief was of equal caliber to [Google]'s vis a vis the [anti-]SLAPP hearing, spent only 50 hours between one partner and one associate."⁸ In evaluating the attorney hours claimed by Google's counsel, the trial court took into account not only this factual finding but also the court's own experience and expertise in handling complex civil cases.

In this regard, the court found "[i]n order to have charged $98,000 in fees for the [anti-]SLAPP motion the firm must be claiming over 200 hours of work. This seems excessive especially since Google's counsel acknowledge that they are old hats at [anti-]SLAPP motions and experts in defamation and the CDA. Such a motion should not have been such a monumental undertaking. Applying the factors suggested by [Google] inNiederer v. Ferreira [(1987) 189 Cal.App.3d 1485, 1507 [234 Cal.Rptr. 779]], this Court finds the fee request excessive."

Additionally, the trial court found "the time sheets attached to the motion are somewhat vague in their descriptions of what precisely defense counsel was doing for the claimed amount of time. Defense counsel disputes that it is seeking 400 hours of time (as claimed by [Maughan and Brown Maughan]) but offers this Court no total number of hours it did spend on the [anti-]SLAPP motion."

The court further found that it had to "factor in some type of efficiency analysis" for these reasons. "This case had been active for approximately 6 months at the time of the [anti-]SLAPP motion. There was no discovery taken or other motion practice. Indeed, under the [anti-]SLAPP statute all proceedings are stayed once a[n anti-]SLAPP motion is filed. The Court's file reflects very few Court hearings on this matter. It is hard to believe that counsel for Google spent approximately four 50-hour work weeks preparing the [anti-]SLAPP motion. [(Fn. omitted.)] The litigation may have been difficult from the Court's perspective given the newly developed area of law vis a vis the CDA but from [Google's] perspective, Google's counsel is clearly on the cutting edge of such jurisprudence and the firm has handled some of the only cases interpreting the [CDA]. Accordingly, counsel was presumably up to speed on the subject as well as being well versed in [anti-]SLAPP motion litigation." In a footnote, the court stated: Google "makes much of the detailed factual record that had to be developed for the motion regarding how Google works. While helpful, it simply did not merit the time expended."

In addressing the difficulty issue, the trial court announced it had "trouble believing that these [anti-]SLAPP experts reasonably needed to spend 200 hours researching the relevant law and drafting the [anti-]SLAPP motion." The court noted that "[c]ounsel for Google spends a large portion of its brief convincing the court that they are experts in this type of case. They have represented Lycos in one of the only cases to interpret the CDA. Counsel has expertise in defamation law and has litigated 20 [anti-]SLAPP motions to date."

On the issue of the monetary value of the action, the trial court found "[i]t is unclear how much money would have been involved in the litigation. The Court notes that the main relief sought by [Maughan and Brown Maughan] appeared to be injunctive relief," namely, to compel "Google to stop the alleged misrepresentation." Google contends the trial court "unreasonably discounted the amount of money involved in the litigation by characterizing [the] requested relief as primarily injunctive." We disagree. Although the complaint sought monetary damages, including punitive damages and attorney fees, the lawsuit was essentially a putative class action, and at this early stage of the proceedings, it would be speculative to place any dollar amount on the alleged damages.

The trial court awarded fees and costs for both Google's "[anti-]SLAPP motion and the instant motion" for fees and costs. We conclude that the trial court did not abuse its discretion in this regard for reasons we shall explain. Initially, we note the omission from the trial court's order of an allocation of the specific amount of fees and costs attributable to each motion is inconsequential. A statement of decision is not required regarding an award of attorney fees pursuant to a motion. (See, e.g., Maria P. v. Riles (1987) 43 Cal.3d 1281, 1294 [240 Cal.Rptr. 872, 743 P.2d 932]; see also Melnyk v. Robledo (1976) 64 Cal.App.3d 618,625 [134 Cal.Rptr. 602] [not "incumbent upon the trial court to specify each and every item in defendant's memorandum with which the court found fault"].)

We determine that Google forfeited any claim on appeal to additional fees and costs in making the fees and costs motion by failing specifically to argue its claim. (See, e.g.,Wint v. Fidelity Casualty Co. (1973) 9 Cal.3d 257, 265 [107 Cal.Rptr. 175, 507 P.2d 1383] ["it is counsel's duty by argument and citation of authority to show in what respects rulings complained of are erroneous"]; Mansell v.Board of Administration (1994) 30 Cal.App.4th 539, 545-546 [35 Cal.Rptr.2d 574] ["[I]t is established that `. . . an appellate brief "should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration." [Citation.] [¶] . . . This court is not inclined to act as counsel for . . . appellant and furnish a legal argument as to how the trial court's rulings . . . constituted an abuse of discretion.' [Citation.]"].)

Additionally, a review of the record establishes that Google's request for fees and costs incurred in making the fees and costs motion was unsupported by the requisite evidence necessary for the court to exercise its discretion.

Google sought an award of attorney fees and costs regarding its anti-SLAPP motion in the amount of "$103,288.63, and in connection with [its fees and costs] motion in the amount of $9,000.00 — for a total of $112,288.63." In its motion for an award of fees and costs, however, Google specifically acknowledged: "The actual fees and costs relating to this motion are not yet known, but Google estimates that fees will be in the amount of $9,000, including the preparation of a reply and appearance at a hearing." As support, Google relied on paragraph 15 of the March 18, 2005 declaration of Timothy L. Alger, an attorney for Google. Mr. Alger stated that he prepared the motion for attorney fees and costs and that "[p]reparation of the motion required about 10 hours of my time, and I anticipate that preparation of a reply will require about four hours of my time, and preparation for and attendance at a hearing on the motion will require another four hours of time. At my regular billing rate, Google will incur fees for 18 hours of time in the amount of $9,000." Google presented nothing more, such as time sheets or other evidence setting forth the breakdown of time in relation to services provided by Mr. Alger as to preparation of the fees and costs motion, preparation of a reply, or time spent at the hearing.

In view of the foregoing, we conclude Google failed to carry its burden to establish the trial court abused its discretion, namely, that its decision was arbitrary, irrational, or beyond the bounds of reason. We therefore affirm the order granting Google $23,000 as attorney fees and costs under the anti-SLAPP statute.

4. No Additional Attorney Fees/Costs to Google Warranted

Google requests costs and attorney fees on appeal. This request is denied because there is no "prevailing" party on appeal. "In any action subject to subdivision (b), a prevailing defendant on [an anti-SLAPP motion] shall be entitled to recover his or her attorney's fees and costs." (§ 425.16, subd. (c).) Although we affirm the judgment against Maughan and Brown Maughan, Google did not "prevail" on appeal because we also affirm the judgment regarding the award of attorney fees and costs under the anti-SLAPP statute. Accordingly, we conclude there is no prevailing party.

DISPOSITION The judgment is affirmed. Each party shall bear own costs on appeal.

Rothschild, J., concurred.

¹ All further section references are to the Code of Civil Procedure unless otherwise indicated.

"SLAPP" is an acronym for "strategic lawsuit against public participation," and the quintessential issue raised by such a special motion to strike, or anti-SLAPP motion, is whether the challenged action was one "arising from" activity protected by the anti-SLAPP statute (§ 425.16), which authorizes early dismissal of SLAPP actions. (See, e.g.,Navellier v. Sletten (2002) 29 Cal.4th 82, 85, fn. 1 [124 Cal.Rptr.2d 530, 52 P.3d 703].)

² The trial court did not sign the proposed order submitted by Google, which would have provided that: (1) Google's "Special Motion to Strike and for Attorneys' Fees and Costs Pursuant to . . . § 425.16 is GRANTED"; (2) "[Maughan and Brown Maughan's] First Amended Complaint is stricken in its entirety, and Judgment shall be entered in favor of Google . . . and against [Maughan and Brown Maughan]"; and (3) Google "shall be awarded its reasonable attorneys' fees and costs incurred in bringing this motion upon submission of proof of actual fees and costs."

³ Google's briefs reveal that the thrust of its cross-appeal concerns the $23,000 awarded as fees and costs under the anti-SLAPP statute. Google does not challenge that portion of the judgment awarding it "attorneys' fees and costs in the amount of $___."

⁴ All further rule references are to the California Rules of Court.

⁵ In pertinent part, the judgment reads: "On February 17, 2005, [Google's] Special Motion to Strike and for Attorneys' Fees and Costs Pursuant to . . . § 425.16 came on for hearing. . . . By a written ruling dated February 24, 2005, the Special Motion to Strike was granted in its entirety." The February 24, 2005 order reveals no mention was made of attorney fees or costs.

⁶ In its order, the trial court noted Google asserted it had discounted both its fees and its costs by 40 percent "where the attorney time was spent on matters (i.e., a demurrer and motion to strike) unrelated to the [anti-]SLAPP motion."

⁷ We find unpersuasive Google's argument that "[m]any courts have recognized the impropriety of using the time expended by the losing party as a `reasonableness' measure for the prevailing party." As authority Google cites various decisions by lower federal courts. (See, e.g., Ferland v.Conrad Credit Corp. (9th Cir. 2001) 244 F.3d 1145, 1151;Shaw v. AAA Engineering Drafting, Inc. (10th Cir. 2000) 213 F.3d 538, 543; Norman v. Housing Authorityof City of Montgomery (11th Cir. 1988) 836 F.2d 1292,1305, fn. 3; Johnson v. Univ. Col. of Univ. of Ala. inBirmingham (11th Cir. 1983) 706 F.2d 1205, 1208.) "Although we are obligated to follow the decisions of the United States Supreme Court, we are not bound by the decisions of the lower federal courts." (Tully v. World Savings Loan Assn. (1997) 56 Cal.App.4th 654, 663 [65 Cal.Rptr.2d 545].)

⁸ In opposition to the motion for fees and costs, John A. Girardi, a partner in the law firm representing Maughan and Brown Maughan, submitted his declaration in which he stated that "[i]n reviewing firm records and approximating to the best of my ability, I estimate that the amount of time spent by firm associate Joseph A. Schwar and myself, on the thorough and complete representation of our client, was 50 hours."