Source: https://www.animallaw.info/case/animal-legal-defense-fund-v-lt-napa-partners-llc
Timestamp: 2019-04-18 23:19:26+00:00

Document:
Full Case Name: ANIMAL LEGAL DEFENSE FUND, Plaintiff and Respondent, v. LT NAPA PARTNERS LLC, et al., Defendants and Appellants.
Summary: Plaintiff and respondent Animal Legal Defense Fund filed an action against defendants and appellants LT Napa Partners LLC and Kenneth Frank for unfair competition, alleging defendants sold foie gras in their Napa restaurant in violation of California law. Defendants moved to strike plaintiff's claim pursuant to the anti-SLAPP statute, arguing it was exercising its free speech rights by protesting the law. Defendants appealed the trial court's denial of the motion. The appeals court affirmed the lower court's decision because the ALDF demonstrated probability of prevailing on the claim that it had standing under Unfair Competition Law (UCL); showed basis for liability against chef; and showed probability of prevailing on its claim that owner and chef unlawfully sold foie gras.
In 2004, the Legislature enacted Section 25982, banning the sale of foie gras effective July 1, 2012. (See Health & Saf. Code §§ 25980, et seq.) Plaintiff advocated for passage of the ban and has been active in informing the public about the law and its view that production of foie gras involves cruelty to animals.3 Defendant Frank, who is the head chef at Napa restaurant La Toque, has been a vocal opponent of Section 25982. For example, he testified at state senate hearings preceding passage of the law, publicly debated the merits of the ban, and authored a newspaper opinion article against the ban. La Toque is owned by defendant LT Napa Partners, LLC (“LT Napa”); Frank is the managing member of LT Napa.
On appeal, defendants contend plaintiff failed to demonstrate a probability of prevailing because plaintiff lacks standing, there is no basis for liability against defendant Frank, and plaintiff's evidence fails to show defendants sold foie gras within the meaning ofSection 25982. We disagree.
*5 Plaintiff points out that, although Kwikset declined to “supply an exhaustive list of the ways in which unfair competition may cause economic harm,” the court did note that a plaintiff “required to enter into a transaction, costing money or property, that would otherwise have been unnecessary” would have standing under the UCL. (Kwikset, supra, 51 Cal.4th at pp. 323–324, 120 Cal.Rptr.3d 741, 246 P.3d 877.) Plaintiff contends its expenditure of resources in investigating defendants' alleged sales of foie gras and attempting to persuade the Napa authorities to prosecute were such transactions. Kwikset cited Hall v. Time Inc. (2008) 158 Cal.App.4th 847, 854–855, 70 Cal.Rptr.3d 466 (Hall ), as a case “cataloguing some of the various forms of economic injury.” (Kwikset, at p. 323, 120 Cal.Rptr.3d 741, 246 P.3d 877.) Hall had cited Southern Cal. Housing v. Los Feliz Towers Homeow.(C.D.Cal. 2005) 426 F.Supp.2d 1061, 1069 (Southern Cal. Housing ), as an example of a case where a plaintiff “expended money due to the defendant's acts of unfair competition,” with the parenthetical “housing rights center lost financial resources and diverted staff time investigating case against defendants.” (Hall, at p. 854, 70 Cal.Rptr.3d 466.) In Southern Cal. Housing, the federal district court held that a housing advocacy organization met the Proposition 64 standing requirement by “present[ing] evidence of actual injury based on the loss of financial resources in investigating [a] claim and diversion of staff time from other cases to investigate the allegations here.” (Southern Cal. Housing, at p. 1069,.) Accordingly, although Kwikset did not hold that the precise expenditures made by plaintiff constitute injury in fact under the UCL, the court did express some approval for that proposition through its approving citation to Hall.
*6 Accepting, as we must, the truth of the averments in Mr. Wells' declaration (Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 444, 122 Cal.Rptr.3d 73), we conclude the present case is like Havens and Southern Cal. Housing and unlikeBuckland. The declaration indicates plaintiff spent months on the effort to persuade Napa authorities to take action based on the alleged violations of Section 25982. Thus, plaintiff has presented evidence its investigatory expenditures, as well as the resources spent in attempting to persuade the authorities, had a purpose independent of the current litigation and might have rendered such litigation unnecessary.7 Moreover, Mr. Wells' declaration indicates that, in addition to general advocacy against foie gras, plaintiff specifically advocated for passage of the California ban on sale of foie gras and has expended resources on educating the public about the ban, including immediately before the statute's July 2012 effective date. Plaintiff, thus, has presented evidence of a genuine and longstanding interest in the effective enforcement of the statute and in exposing those who violate it. Plaintiff's evidence provides a basis to conclude that defendants' alleged violations of the statute tended to frustrate plaintiff's advocacy for an effectiveban on the sale of foie gras in California, and tended to impede plaintiff's ability to shift its focus on advocacy efforts in, for example, other states and at the federal level. (See Havens, supra, 455 U.S. at p. 379, 102 S.Ct. 1114 [the plaintiff alleged the defendants' racial steering practices “ ‘frustrated’ ” the plaintiff's “ ‘efforts to assist equal access to housing through counseling and other referral services' ”].) In sum, Mr. Wells' declaration is sufficient to make a prima facie showing of standing to sue.
Defendants argue that a recent decision from this District's Division 4,Two Jinn, Inc. v. Government Payment Service, Inc. (2015) 233 Cal.App.4th 1321, 183 Cal.Rptr.3d 432 (Two Jinn ), demonstrates plaintiff's lack of standing. There, a licensed bail agent brought a UCL action to enjoin the defendant from engaging in bail agent activities in violation of legal requirements. (Two Jinn, at ––––, 183 Cal.Rptr.3d 432.) The plaintiff, like plaintiff in this case, argued it had standing because “ ‘[w]ell before any litigation was considered,’ it expended significant time and resources investigating and documenting [the defendant's] activities in order to assist government regulators and convince them to uniformly enforce the law.” (Id. at ––––, 183 Cal.Rptr.3d 432.) The Two Jinncourt assumed that under Buckland such a showing would demonstrate that plaintiff's investigation “was conducted independently of [the] lawsuit,” but the court held that the plaintiff had failed to present any evidence in support of its argument. (Two Jinn, at ––––, 183 Cal.Rptr.3d 432.) “Indeed, [plaintiff's general counsel] expressly conceded that [its] investigation constituted ‘pre [-]litigation activities.’ ” (Ibid.) The court noted that the plaintiff had shared its evidence with the California Department of Insurance, but “it did so as part of this litigation in order to support its petition for a writ of mandate.” (Ibid.) Here, Mr. Wells' declaration, which avers the investigation and enforcement efforts with Napa authorities had a purpose independent of the lawsuit, as well as harm from the diversion of resources and the frustration of plaintiff's advocacy efforts, provides the evidence absent in Two Jinnand establishes a prima facie case of standing.
We also reject defendants' contention that plaintiff failed to make a prima facie showing that its economic injury was “caused by” defendants' conduct (Kwikset, supra, 51 Cal.4th at p. 326, 120 Cal.Rptr.3d 741, 246 P.3d 877), because the “purpose of [plaintiff's] existence is to invest [its] resources in litigation activities.” That the expenditure of resources in investigating defendants' alleged lawbreaking was wholly consistent with plaintiff's mission does not mean the resources were not in fact diverted from other activities as a result of defendants' conduct. Where the economic injury is diversion of resources, the proper focus of the inquiry is not the “voluntariness or involuntariness” of the expenditures. (Equal Rights Center. v. Post Properties, Inc. (D.C.Cir. 2011) 633 F.3d 1136, 1140 (Equal Rights Center ).) Instead, the proper focus is on whether the plaintiff “undertook the expenditures in response to, and to counteract, the effects of the defendants' alleged [misconduct] rather than in anticipation of litigation.” (Ibid.)8 Plaintiff has made a prima facie showing it can satisfy the UCL's causation requirement for standing.
“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces ‘ “ ‘ “anything that can properly be called a business practice and that at the same time is forbidden by law.” ’ ” ' ” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143, 131 Cal.Rptr.2d 29, 63 P.3d 937, fn omitted.) “[Business and Professions Code] Section 17200 ‘borrows' violations from other laws by making them independently actionable as unfair competitive practices. [Citation.]” (Korea Supply, at p. 1143, 131 Cal.Rptr.2d 29, 63 P.3d 937.) At issue in the present case are Health and Safety Code section 25981 and Section 25982. Under Health and Safety Code section 25981, it is unlawful to “force feed a bird for the purpose of enlarging the bird's liver beyond normal size.” Section 25982, in turn, prohibits the sale of foie gras produced through force-feeding, stating “[a] product may not be sold in California if it is the result of force feeding a bird for the purpose of enlarging the bird's liver beyond normal size.” Plaintiff's UCL action claims defendants violated Section 25982 by selling foie gras at La Toque.
*8 On the merits, defendants do not dispute that the foie gras served at La Toque was produced through force-feeding. The sole issue regarding the applicability of Section 25982 is whether defendants' conduct in serving foie gras at La Toque constituted “sales” prohibited under the statute. In opposing defendants' anti-SLAPP motion, plaintiff presented a declaration from its investigator, who averred that on three occasions he was told he would obtain foie gras if he purchased a tasting menu at La Toque. On two of the occasions the foie gras was characterized as a “gift,” apparently foie gras was not listed in the description of the tasting menu, and apparently a separate amount was not charged for the item. Defendants quote section 2106, subdivision (1) of the Commercial Code for the proposition that “[a] ‘sale’ consists in the passing of title from the seller to the buyer for a price.” Although that definition expressly applies only to the Commercial Code, both parties agree it is a reasonable general definition. (See also Merriam–Webster's Collegiate Dictionary, 10th ed., 2001, at p. 1028 [defining a “sale” as “the transfer of ownership of and title to property from one person to another for a price”].) Employing that definition, defendants assert that plaintiff's evidence does not show that foie gras was provided for a price.
By analogy to Ennabe, supra, 58 Cal.4th 697, 168 Cal.Rptr.3d 440, 319 P.3d 201, and Opinion No. 85–701,13 we construe the term “sold” in Section 25982 to encompass serving foie gras as part of a tasting menu, regardless of whether there is a separate charge for the foie gras, whether it is listed on the menu, and whether it is characterized as a “gift” by the restaurant. Plaintiff has shown a probability of prevailing on its UCL claim based on violation of Section 25982.
*10 The trial court's order is affirmed. Costs on appeal are awarded to respondents.
[FN 2] On January 7, 2015, a Federal District Court held that Section 25982 is preempted by federal law and enjoined its enforcement. (Des Eleveurs de Canards et d'Oies du Quebec v. Harris (C.D.Cal., Jan. 7, 2015, No. 2:12–cv–5735–SVW–RZ) ––– F.Supp.3d. ––––, 2015 WL 191375.) Two days before oral argument, defendants requested dismissal of the present appeal, apparently on the basis that the present lawsuit was mooted by the federal ruling. We denied that request. Nothing in that denial or in this decision precludes defendant from presenting arguments after remand regarding the effect of the federal decision on the present lawsuit.
[FN 4] In a declaration, Frank averred that, “[s]hortly after” the investigator's March 2013 visit, La Toque started “presenting a ‘protest card’ ” when serving foie gras. He averred the cards explained his “criticism of and opposition to” Section 25982.
[FN 7] We need not and do not conclude that plaintiff will ultimately persuade the court that the expenditure of resources had a purpose independent of the current litigation and were not expenditures made to “manufacture the injury.” (Buckland, supra, 155 Cal.App.4th at p. 815, 66 Cal.Rptr.3d 543.) We hold only that plaintiff's showing regarding standing is sufficient to defeat the defendants' special motion to strike.
[FN 8] Although the Equal Rights Center case did not frame this aspect of the standing issue as a causation analysis, the reasoning of the case is applicable to show satisfaction of the UCL's causation requirement.
[FN 9] Because plaintiff has shown a probability of prevailing on this issue, we need not address its contention that defendants forfeited the issue by failing to properly raise it below.
[FN 10] The legislative history indicates proponents of the foie gras ban argued the force feeding involved in its production “is a cruel and inhumane process.” (See, e.g., Sen. Com. on Bus. & Prof., Analyses of Sen. 1540 (2003–2004 Reg. Sess.) as amended Apr. 26, 2004; Assem. Com. On Bus. & Prof., Analysis of Sen. 1520 (2003–2004 Reg. Sess.) as amended May 6, 2004.) “ ‘It has long been the public policy of this country to avoid unnecessary cruelty to animals.’ [Citation.] ‘[T]here is a social norm that strongly proscribes the infliction of any “unnecessary” pain on animals, and imposes an obligation on all humans to treat nonhumans “humanely.” ’ ” (Farm Sanctuary, Inc. v. Department of Food & Agriculture(1998) 63 Cal.App.4th 495, 504, 74 Cal.Rptr.2d 75; see also Church of the Lukumi Babalu Aye, Inc. v. Hialeah (1993) 508 U.S. 520, 538, 113 S.Ct. 2217, 124 L.Ed.2d 472 [referring to “legitimate governmental interests in ... preventing cruelty to animals”].) Defendants do not dispute that the public interest in preventing cruelty to animals is equivalent to the interest in the “protection of the public” referenced in Lungren, supra, 14 Cal.4th at page 313, 58 Cal.Rptr.2d 855, 926 P.2d 1042.
[FN 12 ] Defendants assert La Toque's policy for serving foie gras was other than as described by the investigator. For example, they assert, “There is no evidence in this case that foie gras was offered on a consistent basis to customers that ordered certain meals but only on a random basis to customers chosen by the duty chef. The evidence only showed that a gift of foie gras was offered on some occasions to patrons who ordered certain menu items.... La Toque patrons are occasionally served free foie gras on an arbitrary basis, as chosen by the duty chef, and often when the patrons order certain menu items (i.e., those that would complement, or be complemented by, a serving of foie gras).” Regardless of whether defendants ultimately prove the truth of their assertions, the evidence in plaintiff's investigator's declaration is prima facie evidence of a violation of Section 25982 and sufficient to satisfy the second prong of the anti-SLAPP analysis. We need not and do not decide whether serving foie gras for no extra charge on a truly random basis, not tied to particular menu items or in response to a request by a patron, would constitute a sale prohibited underSection 25982.
[FN 13] In light of the authoritativeness of Ennabe, supra, 58 Cal.4th 697, 168 Cal.Rptr.3d 440, 319 P.3d 201, we need not discuss the various other authorities cited by the parties to support their respective positions, none of which is directly on point.

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