Peak Health Center v. Dorfman

District Court, N.D. California·Decided June 16, 2020·No. 5:19-cv-04145·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 PEAK HEALTH CENTER, Case No. 19-cv-04145-VKD

9 Plaintiff, ORDER GRANTING IN PART AND 10 v. DENYING IN PART MOTION FOR ATTORNEYS’ FEES 11 BRANDON DORFMAN, Re: Dkt. No. 55 Defendant. 12

13 Defendant Brandon Dorfman moves for attorneys’ fees and costs pursuant to California’s 14 Anti-Strategic Litigation Against Public Participation (“anti-SLAPP”) statute, California Code of 15 Civil Procedure § 425.16(c). Dkt. No. 55. Plaintiff Peak Health Center (“Peak Health”) opposes 16 the motion. Dkt. No. 58. 17 Pursuant to Civil Local Rule 7-1(b), the Court finds Mr. Dorfman’s motion suitable for 18 decision without oral argument. For the reasons described below, the Court grants in part and 19 denies in part the motion for fees. 20 I. BACKGROUND 21 Peak Health filed this action on July 18, 2019, followed by a first amended complaint 22 (“FAC”) on July 30, 2019 asserting claims for trade libel; intentional interference with prospective 23 economic advantage; negligent interference with prospective economic advantage; unfair 24 competition under the Lanham Act, 15 U.S.C. § 1125(a); and unfair competition under California 25 Business and Professions Code § 17200 et seq. Dkt. Nos. 1, 8. The FAC focused on seven 26 statements that Mr. Dorfman made or published in a news article concerning Peak Health’s claim 27 to have developed a strain of hops plant as a source of cannabidiol instead of a hemp or cannabis 1 Mr. Dorfman moved to dismiss the FAC pursuant to Federal Rules of Civil Procedure 9(b) 2 and 12(b)(6). Dkt. No. 10. He also filed an anti-SLAPP motion to strike the FAC. Dkt. No. 11. 3 The Court granted Mr. Dorfman’s motion to dismiss the FAC with leave to amend and denied 4 without prejudice the anti-SLAPP motion. Dkt. No. 36. In its order, the Court found that Peak 5 Health failed to state a claim for any of the asserted claims and that three of the seven challenged 6 statements qualified for First Amendment protection. The Court also determined that Peak 7 Health’s FAC did not comply with Rule 9(b)’s heightened pleading requirement because it failed 8 to explain why the seven challenged statements were false. Because the Court granted leave to 9 amend, it denied Mr. Dorfman’s anti-SLAPP motion without prejudice to renewal following 10 amendment of the FAC. 11 Peak Health filed its second amended complaint (“SAC”) on November 26, 2019, asserting 12 claims for trade libel, intentional interference with prospective economic advantage, and negligent 13 interference with prospective economic advantage. Dkt. No. 37. The SAC challenged the same 14 seven statements as the FAC. Id. ¶¶ 20-21. Mr. Dorfman moved to dismiss the SAC pursuant to 15 Rules 9(b) and 12(b)(6) and again moved to strike under the anti-SLAPP statute. Dkt. Nos. 44, 16 45. Mr. Dorfman’s motion to dismiss repeated his previous argument that the First Amendment 17 protected all seven challenged statements, despite the Court’s earlier ruling that it did not. Dkt. 18 No. 44 at 10–20. 19 The Court granted in part and denied in part Mr. Dorfman’s 12(b)(6) motion based on First 20 Amendment protection. Dkt. No. 54. The Court determined that while three of the seven 21 challenged statements qualified for First Amendment protection, the remaining four did not. Id. at 22 12. With respect to those four unprotected statements, the Court dismissed Peak Health’s claims 23 for failure to comply with Rule 9(b)’s heightened pleading requirement. Id. 13–14. Because Peak 24 Health had already amended its complaint twice and could not explain how it could cure the 25 defects in the SAC if given another opportunity to amend, the Court denied leave to amend. Id. at 26 14–15. The Court granted Mr. Dorfman’s anti-SLAPP motion, concluding that Mr. Dorfman had 27 shown that Peak Health’s claims arose from protected activity within the meaning of the anti- 1 Id. at 15–18. 2 II. LEGAL STANDARD 3 “[A] prevailing defendant on a special motion to strike shall be entitled to recover his or 4 her attorney’s fees and costs.” Cal. Code Civ. Proc. § 415.16(c)(1). The attorneys’ fee award is 5 mandatory. See Makaeff v. Trump Univ., 715 F.3d 254, 274 (9th Cir. 2013) (Kozinski, J., 6 concurring); Resolute Forest Prods., Inc. v. Greenpeace Int’l, 302 F. Supp. 3d 1005, 1026–27 7 (N.D. Cal. 2017). A defendant is “entitled to recover attorney[s’] fees and costs incurred in 8 moving to strike the claims on which . . . [they] prevailed, but not fees and costs incurred in 9 moving to strike the remaining claims.” Resolute Forest, 302 F. Supp. 3d at 1027 (internal 10 quotation marks omitted). 11 Section 425.16 does not expressly limit a fee award to “reasonable” fees, but California 12 courts have construed the statute to contain a reasonableness requirement. E.g., Lunada 13 Biomedical v. Nunez, 230 Cal. App. 4th 459, 488 (2014) (“[E]ach fee application under section 14 425.16, subdivision (c) must be assessed on its own merits . . . taking into account what is 15 reasonable under the circumstances.” (internal quotation marks and citation omitted)). Fees must 16 be awarded “only for the motion to strike, not the entire litigation.” Christian Research Inst. v. 17 Alnor, 165 Cal. App. 4th 1315, 1320 (2008). Fees also are recoverable for the reasonable time 18 spent seeking an award of attorneys’ fees and costs. Ketchum v. Moses, 24 Cal. 4th 1122, 1133 19 (2001). The anti-SLAPP fee-shifting provision “is broadly construed so as to effectuate the 20 legislative purpose of reimbursing the prevailing defendant for expenses incurred in extracting 21 herself from a baseless lawsuit.” Graham-Sult v. Clainos, 756 F.3d 724, 752 (9th Cir. 2014) 22 (quoting Wanland v. Law Offices of Mastagni, Holstedt & Chiurazzi, 141 Cal. App. 4th 15, 22 23 (2006)). 24 A court’s analysis of a reasonable fee award starts with the lodestar, which the court 25 calculates by multiplying the number of hours reasonably spent by counsel by a reasonable hourly 26 rate. Ketchum, 24 Cal. 4th at 1133. “[T]he lodestar is the basic fee for comparable legal services 27 in the community . . . .” Id. at 1132. 1 adjustment is to fix a fee at the fair market value for the particular action. In effect, the court 2 determines, retrospectively, whether the litigation involved a contingent risk or required 3 extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate 4 the fair market value for such services.” Id. To determine whether a multiplier should be applied, 5 courts consider several factors, including the novelty or difficulty of the questions involved, the 6 expertise and capability of counsel, the results obtained, the contingent risk involved in the case, 7 the extent to which the nature of the litigation precluded other employment by the attorneys, and 8 whether the attorneys received public and/or charitable funding. Id.; Rogel v. Lynwood 9 Redevelopment Agency, 194 Cal. App. 4th 1319, 1329 (2011) (citing Serrano v. Priest, 20 Cal. 3d 10 25, 49 (1977)). Where “a plaintiff has achieved only partial or limited success, the product of 11 hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an 12 excessive amount. . . . [T]he most critical factor [in determining a reasonable fee award] is the 13 degree of success obtained.” Hensley v. Eckerhart, 461 U.S. 424

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