Filed 2/5/15

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

ROBERT C. BARAL,

Plaintiff and Respondent,

v.

DAVID SCHNITT,

Defendant and Appellant.

 B253620

 (Los Angeles County

 Super. Ct. No. BC475350)

APPEAL from an order of the Superior Court of Los Angeles County, Maureen 

Duffy-Lewis, Judge. Affirmed.

Ervin Cohen & Jessup, Michael C. Lieb and Leemore L. Kushner for Defendant 

and Appellant 

Sauer & Wagner, Gerald L. Sauer and Amir A. Torkamani for Plaintiff and 

Respondent

____________________________________________
2

This is an appeal from an order denying a special motion to strike under Code of 

Civil Procedure, section 425.16.1 We are asked to add our voice to the growing debate 

among appellate districts as to whether section 425.16 (anti-SLAPP statute) authorizes 

excision of allegations subject to the anti-SLAPP statute (protected activity) in a cause of 

action that also contains meritorious allegations not within the purview of that statute 

(mixed cause of action). The trial court applied appellate and Supreme Court authority 

holding that the statute does not. (See, e.g., Oasis West Realty, LLC v. Goldman (2011) 

51 Cal.4th 811 (Oasis); Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 

90 (Mann).) We agree and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The original and first amended complaints and first two special motions to strike

Respondent Robert Baral and appellant David Schnitt owned a company, 

IQ BackOffice LLC (IQ), with others.2 Baral’s original complaint, filed in December 

2011, contained 18 causes of action. Baral alleged that Schnitt had engaged in fraud and 

multiple breaches of fiduciary duty, including seizing control and secretly negotiating the 

sale of IQ to his advantage, while excluding Baral’s membership interest and 

comanagement powers. The fifth and sixth causes of action (slander and libel) in the 

original complaint incorporated the latter allegations. Baral also averred that Schnitt 

unilaterally retained Moss Adams to conduct an investigation of IQ after Schnitt 

discovered misappropriation of corporate assets prior to the sale of the business.

Baral contended that Schnitt determined the scope of Moss Adams’s examination 

and knowingly gave Moss Adams false information in order to discredit Baral. He also 

alleged that Schnitt directed Moss Adams not to interview Baral in connection with its 

examination. As a result of Schnitt’s claimed falsehoods, Moss Adams incorrectly 

concluded in its report that Baral had engaged in certain unauthorized transactions and 

that there was incomplete support for others. Schnitt subsequently refused to correct the 

1 Undesignated statutory references are to the Code of Civil Procedure.

2 The other owners are not parties to this appeal.
3

false information contained in the report, which was ultimately published to both the 

potential purchaser and the members of IQ.

On May 17, 2012, the trial court determined that the fifth and sixth causes of 

action should be struck because they were protected under section 425.16. Because these 

defamation claims were based exclusively on communications made in a prelitigation 

fraud investigation, the trial court concluded that the absolute litigation privilege under 

Civil Code section 47, subdivision (b) (litigation privilege) applied to “the statements 

allegedly made by [Schnitt] while conducting the investigation in anticipation of 

litigation.”

Also on May 17, 2012, the trial court ruled on Schnitt’s demurrer to the other 

causes of action. It sustained the demurrer with leave to amend as to nine of the 

remaining 16 causes of action, sustained it without leave to amend as to five causes of 

action, and overruled the demurrer as to two causes of action. Baral filed a notice of 

appeal from the May 17, 2012 rulings, which he abandoned in January 2013 after he 

obtained new counsel. (Baral v. Schnitt (Jan. 22, 2013, B242569).) 

In June 2012, Baral, through his former counsel, filed a first amended complaint. 

The first amended complaint contained 11 causes of action; none was a defamation claim. 

Baral averred that Schnitt had frozen Baral out of participation in the Moss Adams audit 

and that Schnitt had made false representations to auditors in an effort to discredit Baral. 

On July 23, 2012, Schnitt filed another anti-SLAPP motion to strike 10 of the 11 causes 

of action from the first amended complaint.3 According to Schnitt, each incorporated 

allegations about the Moss Adams audit that had been the subject of his first motion to 

strike.

The second amended complaint and third special motion to strike

On January 24, 2013, Baral, who was then represented by new counsel, filed a 

second amended complaint. The second amended complaint contained four causes of 

3 The trial court did not rule on that anti-SLAPP motion because that motion had 

been withdrawn by stipulation when Baral abandoned his appeal and the parties further 

stipulated to Baral’s filing the second amended complaint.
4

action: breach of fiduciary duty, constructive fraud, negligent misrepresentation, and 

declaratory relief.4 Baral asserted that Schnitt violated his fiduciary duties in usurping 

Baral’s ownership and management interests in IQ so that Schnitt could benefit from 

what was initially a secret sale of IQ. As one example of Schnitt’s alleged breach of 

fiduciary duty, Baral asserted that Schnitt prevented him from participating in Moss 

Adams’s investigation in an effort to force Baral’s cooperation in the sale of IQ. That 

cause of action sought the trial court’s assistance in reopening the investigation, in which 

Baral would participate, and preventing Schnitt from interfering with corrections to the 

report, if any, taken by Moss Adams.

More specifically, Baral alleged that in 2003 he was a certified public accountant 

and owned and operated an accounting firm, R.C. Baral & Company, Inc. (R.C. Baral). 

In August or September 2003 Schnitt was having a dispute with his partner in CoEfficient 

Back Office Solutions LLC (CoEfficient) when he approached Baral to invest and 

become a partner in CoEfficient. Both R.C. Baral and CoEfficient specialized in 

“outsourcing” business services to companies that did not internally handle those needs.

Baral, Schnitt, and nonparty Dennis Foster ultimately orally agreed in 2003 to 

operate IQ as a new outsourcing company. They agreed to act as comanaging members, 

with Schnitt holding a 35 percent interest and Baral a 30 percent interest. Baral alleged 

that, unbeknownst to him, in September 2003 Schnitt filed with the California Secretary 

of State documents that identified Schnitt as the sole managing member. Also without 

Baral’s knowledge, in October 2003 Schnitt executed an operating agreement for IQ that 

identified Schnitt as the sole manager and member of IQ.

Baral further alleged the parties operated IQ as comanaging partners from 2003 

until 2010, when Schnitt began unilateral negotiations for the sale of IQ to LiveIt 

Investment, Ltd. (LiveIt). As part of the purchase agreement to sell IQ, Schnitt agreed to 

sell a 72.6 percent interest in IQ based on his representation that he was the sole member 

4 We recite the facts taken from the second amended complaint and the parties’ 

respective declarations only for the purpose of deciding the anti-SLAPP motion.
5

and manager of IQ. Schnitt negotiated an employment position and ownership interest 

for himself without Baral’s knowledge or consent. Also in connection with the sale, in 

November 2010 Schnitt retained Moss Adams to audit IQ’s financial statements. Moss 

Adams issued an auditor’s report on December 15, 2010, which concluded that the 

financial statements fairly represented IQ’s financial position.

Later, in December 2010 Schnitt discovered that Baral’s son, who was a 

bookkeeper for IQ, had misappropriated funds belonging to IQ. When apprised of this, 

Baral guaranteed that he would indemnify IQ for any losses caused by his son. Schnitt 

retained Moss Adams to determine the amount of misappropriated assets. Baral averred 

that on Schnitt’s instructions, Moss Adams did not interview Baral during its 

investigation or otherwise allow Baral to submit information to the auditors. Schnitt’s 

motivation for excluding Baral from the investigation was to leverage Baral’s 

cooperation with the sale of IQ.

Baral also alleged that the Moss Adams investigative report, which was distributed 

by Schnitt to Baral and various third parties in February 2011, contained inaccurate 

conclusions. Schnitt refused to instruct Moss Adams to withdraw the report or reopen the 

investigation to consider additional information that would be provided by Baral. In 

March 2011, Baral reimbursed IQ for all funds allegedly misappropriated by his son.

In addition, Baral alleged that in April 2011, Schnitt, Baral, and Foster sold IQ to 

LiveIt. In connection with the sale, the parties entered into a number of agreements, 

which reflected that Baral was a member and manager of IQ from its inception in 2003. 

In May 2011, after the sale of IQ had closed, Baral renewed his efforts to provide 

information to the Moss Adams auditors, to no avail.

On February 22, 2013, Schnitt filed an anti-SLAPP motion, seeking to strike all 

references to the Moss Adams audit in the first (breach of fiduciary duty), second 

(constructive fraud), and fourth (declaratory relief) causes of action and related prayers 
6

for relief.5 Schnitt asserts that, under Cho v. Chang (2013) 219 Cal.App.4th 521 (Cho) 

and City of Colton v. Singletary (2012) 206 Cal. App.4th 751 (City of Colton), the trial 

court should have struck these allegations notwithstanding that the first, second, and 

fourth causes of action contain other allegations that are not within the purview of the 

anti-SLAPP statute, and notwithstanding that Schnitt chose not to argue that Baral could 

not make a prima facie showing of prevailing on the merits of those surviving allegations.

The trial court denied the anti-SLAPP motion on December 13, 2013. Without 

expressly deciding whether the second amended complaint contained allegations of 

protected activity, the trial court concluded: “[The] Anti-SLAPP motion still applies to 

causes of action or to an entire complaint, not allegations. Cases cited state that if a cause 

of action contains portions that are subject to anti-SLAPP and portions that are not, the 

defendant can move to strike those portions that are subject, i.e. the cause of action would 

be considered to contain two ‘counts’; one count subject and one count not. No case 

allows striking allegations per se under [section] 425.16; that is within the province of a 

regular motion to strike.” Schnitt filed this timely appeal.

After the trial court denied Schnitt’s anti-SLAPP motion, Schnitt filed a motion to 

quash Baral’s subpoena to Moss Adams, which was denied on September 23, 2014 

(September 23 Order). In the September 23 Order, the trial court stated that the 

“[l]ititgation privilege is not a discovery privilege . . . . The audit goes directly to the 

issues and may lead to the discovery of admissible evidence.”

Schnitt also filed a motion to stay the trial court proceedings pending appeal. 

When the trial court denied that motion and Baral threatened to initiate contempt 

proceedings if Schnitt did not comply with Baral’s discovery requests, Schnitt filed a 

petition for writ of supersedeas to stay all trial court proceedings pending the instant 

appeal and to vacate the September 23 Order.

5 Schnitt did not seek to strike any part of the third cause of action for negligent 

misrepresentation.
7

In that petition, Schnitt made many of the same arguments he made in his appeal. 

Baral opposed the petition, also reiterating his arguments in the appeal and expressing 

dismay over the three-year delay in the case. Baral disputed that the discovery subpoena 

related only to the Moss Adams fraud audit; he contended the discovery was also relevant 

to claims that Schnitt conceded would be in the case irrespective of our ruling on the antiSLAPP motion. We granted a temporary stay, and then granted the writ of supersedeas 

staying all trial court proceedings pending resolution of the instant appeal.

At oral argument, Baral contended that Schnitt did not have standing to assert the 

litigation privilege because IQ had retained Moss Adams, and IQ was no longer a party. 

Schnitt responded that by contesting standing for the first time at oral argument on 

appeal, Baral had waived the argument, and that because Baral abandoned his appeal

from the anti-SLAPP motion as to the defamation claims in the original complaint, this 

court may not revisit the merits of the litigation privilege as to the anti-SLAPP motion 

regarding the Moss Adams allegations in the second amended complaint. We asked for 

and received letter briefs on these issues, as well as the issue of if we were to affirm the 

trial court, whether Schnitt would be foreclosed from asserting the litigation privilege 

upon remand.6

DISCUSSION

Schnitt asserts that Baral’s causes of action are mixed. Schnitt denies the 

relevance of whether Baral would have had a probability of prevailing on allegations of 

breach of fiduciary duty not based on the Moss Adams audit. Instead, he contends that 

all allegations in the second amended complaint about the Moss Adams audit are 

governed by the trial court’s prior anti-SLAPP ruling regarding the defamation claims in 

the original complaint.

Schnitt further contends, as he did below, that Cho, supra, 219 Cal.App.4th 521, 

and City of Colton, supra, 206 Cal.App.4th 751, require striking the Moss Adams audit 

allegations even though such a ruling would not eliminate any cause of action. Any 

6 Baral and Schnitt filed their respective letter briefs on January 5, 2015.
8

ruling to the contrary would allow artful pleading as a means to evade the purpose of the 

anti-SLAPP statute, especially here, where the trial court already had struck Baral’s 

claims regarding the Moss Adams audit from the original complaint.

Baral responds that Schnitt mischaracterizes the second amended complaint when 

he equates the Moss Adams allegations therein to the defamation claims in the original 

complaint. The allegations about the Moss Adams audit do not address the content of the 

auditor’s report, but instead describe Schnitt’s efforts to preclude Baral from participating 

in the audit, which is not protected activity, but was a breach of fiduciary duty given that 

Baral was a member and comanager of IQ.

Finally, Baral contends that the trial court correctly followed Mann, supra, 120 

Cal.App.4th 90, and Oasis, supra, 51 Cal.4th 811. All causes of action would remain 

given Schnitt’s admitted failure to argue that Baral could not prevail on the merits of 

breaches of fiduciary duty and fraud not relating to the Moss Adams audit. To hold 

otherwise would (1) contravene the language of the anti-SLAPP statute, which expressly 

refers to a cause of action, and its underlying purpose of preventing defendants from 

incurring litigation costs that would chill First Amendment and redress rights; and (2) 

force courts to engage in time-consuming evaluations of all allegations in a cause of 

action without achieving any appreciable reduction in trial time.

I. The anti-SLAPP statute requires a two-pronged analysis

Section 425.16, subdivision (a) provides: “The Legislature finds and declares that 

there has been a disturbing increase in lawsuits brought primarily to chill the valid 

exercise of the constitutional rights of freedom of speech and petition for the redress of 

grievances. The Legislature finds and declares that it is in the public interest to 

encourage continued participation in matters of public significance, and that this 

participation should not be chilled through abuse of the judicial process. To this end, this 

section shall be construed broadly.”

Section 425.16, subdivision (b)(1) 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 
9

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.”

Section 425.16, subdivision (e) states: “As used in this section, ‘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, (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, or (4) 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.”

A trial court engages in a two-part analysis in deciding an anti-SLAPP motion. 

First, the trial court considers whether the defendant has satisfied the initial burden to 

establish a prima facie case that the plaintiff’s claim arises out of activity in furtherance 

of the right of petition or free speech. (§ 425.16, subd. (b)(1); Flatley v. Mauro (2006) 39 

Cal.4th 299, 314 (Flatley); Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056 (Rusheen).) 

In making this determination, the trial court “shall consider the pleadings and supporting 

and opposing affidavits stating the facts on which the liability or defense is based.” 

(§ 425.16, subd. (b)(2).)

Second, if the defendant satisfies this first prong, the burden shifts to the plaintiff 

to establish a legally sufficient claim and a probability of prevailing on the merits of that 

claim. (§ 425.16, subd. (b)(1); Flatley, supra, 39 Cal.4th at p. 314; Rusheen, supra, 37 

Cal.4th at p. 1056.) The plaintiff meets this burden by making a prima facie showing, 

with admissible evidence, of facts that would sustain a favorable judgment if plaintiff’s 

evidence were credited. (Oasis, supra, 51 Cal.4th at p. 820.) In considering the second 

prong of the anti-SLAPP analysis, the trial court cannot weigh evidence. (Flatley, supra, 
10

39 Cal.4th at pp. 323, 326.) Instead, the trial court must accept as true evidence that is 

favorable to the plaintiff; it may consider the defendant’s evidence only to determine 

whether the cause of action fails as a matter of law. (Id. at p. 326.)

Appellate courts review de novo an order granting an anti-SLAPP motion. (Oasis, 

supra, 51 Cal.4th at p. 820.)

II. Baral’s allegations regarding the audit describe protected activity; accordingly, 

the causes of action are mixed

Baral’s claims for slander and libel, respectively, in the fifth and sixth causes of 

action in the original complaint addressed, in major part, Schnitt’s allegedly false 

statements to the Moss Adams auditors and the resulting “false and defamatory 

Investigative Report.” Baral sought general, special, and punitive damages. As noted 

earlier, Baral further alleged in the fifth cause of action for slander that Schnitt directed 

Moss Adams not to interview him. The same allegation appears in the general 

allegations section, which was also incorporated in the fifth and sixth causes of action.

Schnitt moved to strike the fifth and sixth causes of action in their entirety under 

the anti-SLAPP statute. The trial court held that the defamation causes of action were 

based on communications to the auditor triggered by misappropriation of corporate assets 

by Baral’s son. For this reason, it concluded that the audit was in anticipation of 

litigation and protected activity that was absolutely privileged under Civil Code section 

47, subdivision (b).

Schnitt argues that because this ruling applies to all allegations in the second 

amended complaint referring to the Moss Adams audit, “The first prong is not at issue in 

this appeal.” We are not aware of any authority that would make a trial court’s antiSLAPP ruling as to a different complaint binding on this court.7

7 The trial court’s ruling would not be law of the case absent a prior appellate 

ruling (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, §§ 459–460, pp. 515–517), nor 

would collateral estoppel apply when the trial judge never addressed Baral’s general 

allegations in the original complaint regarding being frozen out of the audit (see 7 

Witkin, Cal. Procedure, supra, Judgment, § 414, p. 1055). Res judicata also would not 
11

In accordance with the dictates of the anti-SLAPP statute, we now examine the 

pleadings and evidence that Schnitt submitted in support of his anti-SLAPP motion. We 

do so to determine whether Schnitt has satisfied his burden to show that the allegations 

regarding the Moss Adams audit in the second amended complaint describe protected 

activity.

The thrust of the breach of fiduciary and constructive fraud causes of action is that 

Schnitt endeavored to treat Baral as if he did not exist as an owner and comanager of IQ 

and to usurp the financial benefits of the business for himself. All this, even though Baral

alleged that he invested about half of IQ’s operating capital and allowed IQ to use his 

business moniker so that IQ could market its services based on Baral’s alleged decades of 

successful accountancy practice. In further breach of Schnitt’s fiduciary duties, Baral 

alleged that Schnitt held Baral’s participation in the Moss Adams audit hostage to Baral’s 

cooperation in the sale of IQ.

In contrast to the defamation claims in his original complaint, Baral does not seek 

compensatory or punitive damages relating to the Moss Adams audit in any of his causes 

of action. He seeks just an injunction that would (1) require notifying Moss Adams that 

it is to accept information from Baral “in connection with any disputed conclusions” in 

the audit and “to undertake any corrective measures that it deems appropriate under the 

circumstances (i.e., the issuance of a new written report)”; and (2) restrain Schnitt from 

objecting to Baral’s submission of additional information and any corrective measures 

undertaken by Moss Adams as long as Baral pays Moss Adams for this additional work.

In his declaratory relief cause of action, Baral incorporates the allegations from the 

preceding causes of action and seeks, in part, a declaration that Baral was a comanaging 

member of IQ “at all relevant times.” The thrust of the cause of action, however, is a 

request for a declaration of Baral’s right to submit information to contravene the 

 

appear to apply to an earlier ruling in the same case (id. § 334, p. 939). We do not address 

any of these doctrines of preclusion because Schnitt failed to assert them.
12

conclusions of the audit report so that Moss Adams may choose to revise that report and a 

declaration precluding Schnitt from preventing Baral from doing so as a comanager.

In support of the instant anti-SLAPP motion, Schnitt submitted, among other 

documents, the first and supplemental declarations he previously filed in support of the 

anti-SLAPP motion addressed to the defamation causes of action in the original 

complaint. His first declaration contained the conclusion that, after discovering 

unauthorized checks payable to Baral’s son and “anticipating litigation,” he hired Moss 

Adams to do a forensic audit. His supplemental declaration is less opaque. There, he 

asserted that, because Baral supervised IQ’s books and records and prepared its tax 

returns, Schnitt had to hire a forensic auditor to discern the extent of the misappropriation 

and whether Baral was involved in it. He anticipated both suing others if the audit 

revealed that persons other than Baral’s son were involved in the theft and being sued by 

Baral’s son if Schnitt fired him, which Schnitt expected to do.

This evidence constitutes a prima facie showing that Schnitt hired Moss Adams to 

conduct a forensic audit in anticipation of litigation. Substantial case law supports the 

principle that oral statements and writings made before litigation actually commences can 

arise from the right to petition the judicial branch. (Burke, Anti-SLAPP Litigation (The 

Rutter Group 2014) ¶ 3:29, pp. 3-23 to 3-24, and cases cited therein.) The parties do not 

challenge this principle.

The next question is whether merely seeking to participate in a reopening of the 

audit for the purpose of convincing Moss Adams to revise a report procured in 

anticipation of litigation “aris[es] from any act . . . in furtherance of the person’s right of 

petition . . . .” (§ 425.16, subd. (b)(1).) In answering this question, we are required to 

look to the conduct on which the liability is based and not the motive for the conduct. 

(Hunter v. CBS Broadcasting, Inc. (2011) 221 Cal.App.4th 1510 (Hunter).) In addition, 

“arising from any act . . . in furtherance of a person’s right of petition or free speech” 

within the purview of section 425.16, subdivision (b)(1) also means “helping to advance, 

assisting.” (Lieberman v. KCOP Television, Inc. (2003) 110 Cal.App.4th 156, 166 

[newsgathering through surreptitious recordings incorporated in a broadcast was in 
13

furtherance of the news media’s right of free speech as to an issue of public interest and, 

therefore, protected activity]; Hunter, supra, 221 Cal.App.4th at p. 1520.)

In Hunter, the appellate court expressly rejected the argument that the act of hiring 

a younger female anchor was not in furtherance of the free speech rights of a television 

station where the male plaintiff alleged age and gender discrimination in that station’s 

hiring decisions. “Thus, even if Hunter is correct that the act of hiring a weather anchor 

does not qualify as an exercise of free speech rights (an issue we need not decide), he has 

provided no argument as to why such conduct does not qualify as an act in furtherance of 

the exercise of such rights. For the reasons explained above, we conclude that it does.” 

(Hunter, supra, 221 Cal.App.4th at p. 525.) This case is similar. Schnitt proffered 

evidence in support of his motion that he hired the forensic auditor because he wanted to 

investigate the extent of embezzlement by Baral’s son and whether Baral and others were 

involved. Schnitt did so in order to consider whether to take legal action against them.

Under the unique facts of this case and the preceding authorities, the decision as to 

who may participate in the audit would also be “in furtherance of the right to petition.” 

To hold otherwise — where the very subjects of the forensic audit were Baral and his 

son — would indeed chill exercise of “the right to petition for the redress of grievances” 

(§ 425.16, subd. (b)(1)) given that the audit was evaluating potential claims against them. 

For all these reasons, we hold that Schnitt has satisfied his burden under the first prong of 

the anti-SLAPP analysis.

III. Baral may contest Schnitt’s standing to assert the litigation privilege and 

Baral’s abandonment of his appeal regarding the original complaint has no 

preclusive effect here

Lack of standing is a jurisdictional defect that cannot be waived. As the California 

Supreme Court observed in Common Cause v. Board of Supervisors (1989) 49 Cal.3d 

432, “Although [the defendant] did not raise these issues before the Court of Appeal, 

contentions based on a lack of standing involve jurisdictional challenges and may be 

raised at any time in the proceeding.” (Id. at p. 438.)
14

Schnitt contends that because (1) the trial court found that the litigation privilege 

provided a complete defense to the defamation claims in the original complaint, and (2) 

Baral abandoned his appeal from that ruling, then (3) this court must conclude that the 

litigation privilege applies to the Moss Adams allegations in the second amended 

complaint. More specifically, Schnitt asserts that California’s “‘one shot’ rule” 

recognized in In re Baycol Cases I and II (2011) Cal.4th 751, 761, footnote 8 and in 

section 906 requires this conclusion.

Schnitt arguably would be correct if Baral were arguing here that the trial court 

erred in granting the anti-SLAPP motion regarding statements that were the subject of the 

defamation claims in the original complaint. That, however, is not Baral’s argument. 

There are no defamation claims in the second amended complaint, and Baral is not 

seeking damages regarding the Moss Adams allegations in that complaint. The Moss 

Adams allegations in the second amended complaint regard a different wrong—breach of 

fiduciary duty in being frozen out of the management of IQ.8 By this observation, we are 

not ruling that the litigation privilege does not apply to these allegations, but only that 

this is still an open question. In fact, both sides argue in their letter briefs that were we to 

affirm the trial court’s ruling before us, it would not bind the trial court in considering the 

litigation privilege upon remand.

We decline the invitation to decide the merits of the litigation privilege as applied 

to the second amended complaint. As set forth post in part IV, even if, arguendo, Schnitt 

were correct that the litigation privilege applies to the Moss Adams allegations in the 

second amended complaint, the anti-SLAPP statute does not authorize excising 

allegations in mixed causes of action where the plaintiff has demonstrated a prima facie 

8 At oral argument, Schnitt’s counsel conceded that he was not relying on 

traditional doctrines of preclusion to support his argument that we are precluded from 

revisiting the litigation privilege as applied to a different complaint. As set forth in 

footnote 7, ante, the trial court’s ruling as to the original complaint would not appear to 

be law of the case, nor would the doctrines of collateral estoppel or res judicata appear to 

apply.
15

case of prevailing on part of the mixed causes of action. Once again, by so ruling, we 

express no opinion on what impact, if any, the litigation privilege would have on future 

pretrial and trial proceedings upon remand.9

IV. The anti-SLAPP statute applies only to an entire cause of action, and Baral 

demonstrated a prima facie case of prevailing on at least part of each cause of 

action, thus satisfying the second prong of the anti-SLAPP analysis

Schnitt does not contest that Baral proffered evidence establishing a prima facie 

case of breach of fiduciary duty as to the allegations not involving protected activity and

not relating to the Moss Adams audit in each cause of action. Instead, he argues that this 

inquiry is irrelevant because the anti-SLAPP statute can be used to strike nonmeritorious 

allegations of protected activity within an entire cause of action. Thus, the only 

remaining issue before us is whether Schnitt is correct.

Division Four of this District observed, “Appellate courts have wrestled with the 

application of the anti-SLAPP law where . . . a single cause of action includes multiple 

claims, some protected by that law and some not.” (Cho, supra, 219 Cal.App.4th at 

p. 526 [cataloging the competing points of view].) We too have struggled with this issue. 

We come out on the side of those cases holding that, if the nonmoving party demonstrates 

a prima facie case of prevailing on any part of a mixed cause of action, the anti-SLAPP 

motion fails. Our conclusion is based on: (1) the express words of the statute; (2) its 

underlying policies; and (3) the extraordinary consequences of the anti-SLAPP statute 

that distinguishes it from all other procedural motions.

In Mann, supra, 120 Cal.App.4th 90, the plaintiff asserted several causes of action, 

including defamation, trade libel, and interference with business. The plaintiff asserted 

that the defendants, who were former employees, made false remarks to regulators about 

plaintiff’s handling of carcinogenic chemicals. Plaintiff also alleged that defendants 

made false remarks to plaintiff’s customers to lure them away from plaintiff’s business 

9

In keeping with this observation, we conclude that the September 23 Order 

should be vacated.
16

and harassed plaintiff by inundating it with facsimiles, as well as pornographic material 

and junk mail. The allegations regarding false statements to regulators were incorporated 

in plaintiff’s interference with business claims.

The defendants moved to strike these causes of action. The trial court denied the 

motion on the ground that the plaintiff had not alleged protected activity. Division One 

of the Fourth District affirmed as to the defamation cause of action and reversed and 

remanded as to the trade libel cause of action. On remand, the trial court was to consider 

the motion under a “new rule of law regarding the prior analysis of the second prong of 

the anti-SLAPP procedure[.]” (Mann, supra, 120 Cal.App.4th at p. 113.) It also reversed 

as to the mixed interference cause of action. “Where a cause of action refers to both 

protected and unprotected activity and a plaintiff can show a probability of prevailing on 

any part of its claim, the cause of action is not meritless and will not be subject to the 

anti-SLAPP procedure.” (Id. at p. 106.)

The appellate court recognized the policy underlying the anti-SLAPP statute “to 

encourage participation in matters of public significance by allowing a court to promptly 

dismiss unmeritorious actions or claims that are brought to chill another’s valid exercise

of the constitutional rights of freedom of speech and petition for the redress of 

grievances.” (Mann, supra, 120 Cal.App.4th at p. 102.) It rejected the analogy to a 

motion to strike under section 436. “Stated differently, the anti-SLAPP procedure may 

not be used like a motion to strike under section 436, eliminating those parts of a cause of 

action that a plaintiff cannot substantiate. Rather, once a plaintiff shows a probability of 

prevailing on any part of its claim, the plaintiff has established that its cause of action has 

some merit and the entire cause of action stands. Thus, a court need not engage in the 

time-consuming task of determining whether the plaintiff can substantiate all theories 

presented within a single cause of action and need not parse the cause of action so as to 

leave only those portions it has determined have merit.” (Mann, supra, 120 Cal.App.4th 

at p. 106.)

In Oasis, supra, 51 Cal.4th 811, the plaintiff sued the defendant attorney and his 

law firm for breach of fiduciary duty, professional negligence, and breach of contract. 
17

The claims related to the public opposition by the individual defendant to a development 

project. The defendant engaged in that conduct after he had concluded the representation 

of the plaintiff developer in seeking approval of that very project. The defendant moved 

to strike all causes of action. The trial court denied the motion, which ruling was 

reversed on appeal.

The Supreme Court reversed the appellate court. In its discussion of general 

principles underlying the anti-SLAPP statute, the Supreme Court quoted the above 

language in Mann. (Oasis, supra, 51 Cal.4th at p. 820.) It further observed that the 

“complaint identifies a number of acts of alleged misconduct and theories of recovery, 

but for purposes of reviewing the ruling on an anti-SLAPP motion, it is sufficient to focus 

on just one.” (Oasis, at p. 821.) The Supreme Court did not specify those other acts of 

misconduct or expressly label the causes of action as “mixed.” It appears, however, 

based on the Supreme Court’s recitation of the facts, that the plaintiff’s causes of action 

were mixed; to find otherwise would render as surplus the Supreme Court’s reference to 

the Mann holding.

Since Oasis was decided, a number of courts has concluded that section 425.16 is 

not available to strike allegations from an otherwise viable cause of action. (Burrill v. 

Nair (2013) 217 Cal.App.4th 357, 379 (Burrill); Wallace v. McCubbin (2011) 196 

Cal.App.4th 1169, 1211–1212 (Wallace).) Wallace explained that “Oasis clearly holds 

that, where a cause of action (count) is based on protected activity, the entire cause of 

action may proceed as long as the plaintiff shows a probability of prevailing on at least 

one of the asserted bases for liability. [¶] . . . Indeed, not only does Oasis permit the 

entirety of the cause of action to go forward, it precludes consideration of the merit of 

any other claims in the cause of action once a probability of prevailing is demonstrated as 

to one of them.” (Wallace, at p. 1211.)

Schnitt relies on two appellate rulings that disagreed with Mann—one (City of 

Colton) from the very same district that decided Mann, and the other (Cho), from 

Division Four of our own district. 
18

The subject of the anti-SLAPP motion in City of Colton, supra, 206 Cal.App.4th 

751, was the causes of action asserted by the City of Colton (City) in a cross-complaint 

for unfair business practices under Business and Professions Code section 17200 and for 

injunctive relief. The City claimed that the cross-defendant had bribed a City councilman 

to obtain a development contract. The City also asserted in the general allegations 

portion of its cross-complaint that cross-defendant had sued to compel the City to pay for 

infrastructure improvements under a prior contract—improvements the City alleged were 

to be built and paid for by cross-defendant. The City incorporated these allegations in its 

Business and Professions Code section 17200 cause of action and sought an injunction 

compelling cross-defendant to construct and pay for the remaining infrastructure and to 

cease profiting from his own bribery. (City of Colton, at pp. 758–759.)

The cross-defendant moved to strike the cross-complaint, including the causes of 

action for unfair business practices and injunctive relief. The appellate court found that 

the bribery portion of those causes of action was not protected activity, but that crossdefendant’s filing of a lawsuit was protected activity. It also held that the anti-SLAPP 

statute is available to strike protected allegations even within a single cause of action 

containing other allegations. In so holding, the appellate court relied principally on the 

Supreme Court’s opinion in Taus v. Loftus (2007) 40 Cal.4th 683 (Taus). “Given the 

ruling in Taus, we conclude that the portions of the [Business and Professions Code 

section 17200 and injunctive relief causes of action] that concern [cross-defendant’s] 

lawsuit activity must be stricken from the complaint.” (City of Colton, supra, 206 

Cal.App.4th at p. 774.)

In Taus, the plaintiff sued, among others, the authors of several articles on 

recovered memory of child abuse for negligent infliction of emotional distress, invasion 

of privacy, fraud, and defamation. The defendants filed an anti-SLAPP motion to strike 

the entire pleading. Relevant to the inquiry in the instant appeal, we focus on the 

Supreme Court’s analysis of the invasion of privacy cause of action. Noting that this 

cause of action was based on two theories, public disclosure of private facts and intrusion 

into private matters, it found protected activity as to the former, but not the latter, where 
19

the plaintiff alleged that “defendants employed fraudulent means to obtain private 

information from plaintiff’s relatives, including misrepresenting their identity and 

befriending plaintiff’s biological mother.” (Taus, supra, 40 Cal.4th at p. 701.) The Taus 

court then struck all allegations except those relating to obtaining private information by 

fraudulent means. (Id. at p. 742.) 

Other courts have criticized City of Colton’s conclusion that section 425.16 can be 

used to parse protected allegations from a cause of action. These courts have referred to 

the failure of City of Colton to consider the Supreme Court’s post-Taus decision in Oasis, 

or explain why Oasis was inapplicable. (See Burrill, supra, 217 Cal.App.4th at pp. 378–

382.) In addition, some authorities have concluded that City of Colton’s reliance on Taus

is questionable because, in citing language from Mann, Oasis implicitly overruled Taus. 

(See Burrill, at pp. 378–382; Wallace, supra, 196 Cal.App.4th at p. 1211.) We note that 

Taus is not referenced in Oasis.

Next comes the ruling of Division Four of our District in Cho, supra, 219 

Cal.App.4th 521. There, the plaintiff sued the defendant for, among other causes of 

action, sexual harassment. The defendant cross-claimed, alleging defamation and 

intentional infliction of emotional distress based on statements plaintiff made to the Equal 

Employment Opportunity Commission and the California Department of Fair 

Employment and Housing in obtaining her right-to-sue letter and statements to her 

coworkers. The plaintiff filed an anti-SLAPP motion as to the cross-complaint. The Cho

court affirmed the trial court’s grant of the anti-SLAPP motion as to the allegations about 

the statements made to the governmental entities and denial of the motion as to the 

allegations about statements made to coworkers. (Cho, at pp. 527–528.)

The Cho court acknowledged Taus and Oasis, but observed that neither “is a 

mixed cause of action.” (Cho, supra, 219 Cal.App.4th at p 527.) Eschewing a “broad[]” 

reading of Oasis, the appellate court counseled that “the guiding principle in applying the 

anti-SLAPP statute to a mixed cause of action case is that ‘a plaintiff cannot frustrate the 

purposes of the SLAPP statute through a pleading tactic of combining allegations of 

protected and nonprotected activity under the label of one “cause of action.”’ [Citation.]” 
20

(Cho, at p. 527.) Where each cause of action combined allegations of conduct that is 

protected by section 425.16 with conduct that is not, “the better view in such a case is 

that the trial court may strike the allegations . . . attacking the protected activity while 

allowing the unprotected theories to remain.” (Cho, at p. 523.)

Cho cited the policy of the anti-SLAPP statute and section 436 to conclude that it 

“would make little sense if the anti-SLAPP law could be defeated by a pleading . . . in 

which several claims are combined into a single cause of action, some alleging protected 

activity and some not.” (Cho, supra, 219 Cal.App.4th at p. 527.) “Striking the entire 

cause of action would plainly be inconsistent with the purposes of the statute. Striking 

the claims that invoke protected activity but allowing those alleging nonprotected activity 

to remain would defeat none of them. Doing so also is consonant with the historic effect 

of a motion to strike: ‘to reach certain kinds of defects in a pleading that are not subject 

to demurrer.’ (See 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 1008, p. 420.)” 

(Cho, supra, 219 Cal.App.4th at p. 527 [referring to Witkin’s discussion of motions to 

strike under §§ 435 and 436].)

We respectfully disagree with our colleagues. First, the anti-SLAPP statute states 

that it applies to a “cause of action.” The Legislature amended the statute several times 

(see Historical and Statutory Notes, 14B West’s Ann. Code Civ. Proc. (2004 ed.) foll. 

§ 425.16, pp. 384–385), but left intact its application to a “cause of action.” If the better 

rule is to apply the statute to less than a cause of action, enacting that rule is a legislative 

function, not a judicial one.

Second, section 425.16 was enacted “to dispose of lawsuits that are brought to 

chill the valid exercise of constitutional rights” of petition or free speech. (Rusheen, 

supra, 37 Cal.4th at pp.1055–1056.) “[T]he core purpose . . . is not to pose new 

impediments to all lawsuits arising from speech and petitioning activity but to remedy a 

very specific pattern by which contestants in the arena of public affairs were using 

meritless litigation as a device to silence and punish their adversaries.” (Old Republic 

Construction Program Group v. Boccardo Law Firm, Inc. (2014) 230 Cal.App.4th 859, 

876.) This “core” purpose would not be served by granting the motion in this case.
21

It is undisputed that were we to reverse the order denying the instant motion, not a 

single cause of action would be eliminated from the second amended complaint. Each 

would be the subject of pretrial and potential trial proceedings in the trial court. There 

would be no appreciable timesaving if certain portions of the claims were struck. This is 

not a case in which the plaintiff merely rebranded a prior defamation claim and thereby 

implicated concerns about artful pleading. Instead, the second amended complaint 

describes several acts of self-dealing and breaches of fiduciary duty aimed at depriving 

Baral of the financial benefits of his investments of time and labor in IQ, of which the 

Moss Adams allegations are but a small part.

The Cho court analogized anti-SLAPP motions to “the historic effect” of motions 

to strike under section 436 to eliminate defects in pleadings not subject to demurrer. 

(Cho, supra, 219 Cal.App.4th at p. 527.) We respectfully observe that this analogy does 

not give proper measure to the extraordinary features of a motion to strike under section 

425.16. Unlike any other motion in the procedural toolbox, the filing of an anti-SLAPP 

motion (1) stays all discovery absent court permission; (2) precludes amendment of the 

complaint; (3) forces the plaintiff to make an early proffer of proof generally without the 

benefit of discovery; (4) provides for an award of attorney fees if the moving party 

prevails; and (5) provides for automatic appeal if the motion is denied and stays all other 

proceedings in the case. (Burke, Anti-SLAPP Litigation, supra, ¶ 1.1, p. 1-2.)

For a defendant to get the benefit of these extraordinary consequences merely by 

filing a motion aimed at some allegations would encourage a different kind of artfulness, 

as worrisome as the artful pleading that concerned the Cho court. Under the rule 

advocated in Cho, defendants would be encouraged to file an anti-SLAPP motion to 

excise allegations—no matter how minimal in relation to the remainder of the cause of 

action—merely to stop discovery and force plaintiff to show plaintiff’s evidentiary hand 

early on, with further delay if the motion is denied and there is an appeal. Trial courts, 

moreover, would be burdened with more prolix motions with little commensurate savings 

in trial time.
22

We appreciate that there are competing policies at stake. On the one hand is the 

policy behind the anti-SLAPP statute aimed at protecting redress and free speech rights 

against unmeritorious claims. On the other are other procedural rules aimed at giving the 

parties their day in court and promoting efficient pretrial and trial proceedings. We also 

appreciate that reasonable minds may differ on how to balance these competing policies 

in a mixed cause of action. For the reasons set forth above, we conclude that the balance 

tips in favor of allowing mixed causes of action containing potentially meritorious claims 

to proceed unencumbered by the special procedures of the anti-SLAPP statute. For all 

these reasons, we affirm.

DISPOSITION

The order denying the special motion to strike is affirmed. Baral is awarded his 

costs on appeal. The writ of supersedeas and the September 23, 2014 order are vacated.

CERTIFIED FOR PUBLICATION.

BENDIX, J.*

We concur:

CHANEY, Acting P. J.

JOHNSON, J.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant 

to article VI, section 6 of the California Constitution.