Court Opinion

ID: 6324284
Source: CourtListenerOpinion
Date Created: 2022-03-17 17:02:55.03908+00
Date Added: 2024-06-11T09:21:50.533528
License: Public Domain

Filed 3/17/22 The Law Offices of Paul N. Philips v. Rudich CA2/3
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not
been certified for publication or ordered published for purposes of rule 8.1115.

  IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                           SECOND APPELLATE DISTRICT

                                        DIVISION THREE

 THE LAW OFFICES OF                                              B305942
 PAUL N. PHILIPS, A
 Professional Law Corporation,                                   (Los Angeles County
                                                                 Super. Ct.
           Plaintiff and Respondent,                             No. 19SMCV00655)

           v.

 DAVID P. RUDICH et al.,

           Defendants and Appellants.

     APPEAL from an order of the Superior Court of Los Angeles
County, Elaine W. Mandel, Judge. Affirmed.
     Law Offices of Philip Kaufler and Philip Kaufler for
Defendants and Appellants.
     Law Offices of Paul N. Philips, Paul N. Philips and
Samantha E. Mirabello for Plaintiff and Respondent.
                      ——————————
      The Law Offices of Paul N. Philips, A Professional Law
Corporation (Philips APLC) sued David P. Rudich and the Law
Office of David Rudich (collectively Rudich) for declaratory relief
and defamation per se. Rudich moved to specially strike the
defamation per se cause of action under Code of Civil Procedure
section 425.16 (anti-SLAPP statute).1 The trial court denied the
motion, finding Rudich failed to establish the defamation per se
allegations were based on protected activity. Rudich contends the
trial court erred because his statements were subject to the
litigation privilege. We disagree and affirm.
                          BACKGROUND
I.    The Underlying Litigation and Fee Dispute
       In 2013, Rudich introduced a high-profile client to Philips
APLC to represent the client in a music copyright infringement
case. Pursuant to a written agreement, Rudich and Philips APLC
agreed to share legal fees earned from the litigation. After Philips
APLC achieved a favorable result and substantial fee award,
Rudich and Philips APLC disagreed over Rudich’s share of the fees.
Rudich claimed he was entitled to 50 percent of the total fee award,
while Philips APLC claimed Rudich was entitled to an amount
proportionate to the number of hours worked.
       When Philips APLC refused to pay Rudich the disputed share
of legal fees, Rudich allegedly made disparaging remarks about
Philips APLC to the high-profile client involved in the litigation,
and to Philips APLC’s former clients and other professionals in the

      1 Subsequent  undesignated statutory references are to the
Code of Civil Procedure. “SLAPP” is an acronym for strategic
lawsuit against public participation. (Briggs v. Eden Council for
Hope & Opportunity (1999) 19 Cal.4th 1106, 1109 & fn. 1.)

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entertainment industry. Rudich allegedly said: (1) Philips APLC
holds, takes, converts, and wrongfully retains clients’ funds;
(2) Philips APLC’s business model includes ignoring and being
purposely inattentive to clients; and (3) Philips APLC’s principal
was fired from his former law firm for being inattentive to clients.2
       Philips APLC sued Rudich for declaratory relief to resolve the
fee dispute and for defamation per se for the subsequent statements
to the high-profile client, Philips APLC’s current, former, and
potential client pool, and industry professionals.
II.   Rudich’s Motion to Strike
      Rudich filed a special motion to strike the defamation per se
cause of action under section 425.16, asserting the alleged
statements were subject to the litigation privilege. In support of the
motion, Rudich declared he had referred over 10 clients to Paul N.
Philips (Philips) individually and each time he was told Philips
would pay him 50 percent of all fees he derived from the litigation.
Rudich denied telling the high-profile client or any other person
that Philips APLC or Philips wrongfully retained client funds,

      2 At  the request of Philips APLC, the first amended complaint
was filed under seal in the trial court, but no request to seal was
filed in this court. We note both sides recite in their trial court
briefs and appellate briefs the content of the alleged defamatory
statements, all of which was redacted in the publicly accessible
version of the first amended complaint. We also note Philips APLC
identifies the high-profile client’s case information in its opening
brief. Though redacted in the trial court, we would be unable to
review the issues on appeal without reciting the alleged defamatory
statements in our opinion. In all other respects, we have
endeavored to refer only generally to redacted allegations.

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ignored their clients, or that Philips was fired from a law firm for
being inattentive to clients.
       In opposition, Philips APLC submitted the declarations of
Philips and Robert Elliott Clarke. Philips declared he learned in
April 2019 Rudich had begun a smear campaign against him and
his firm. He sent Rudich a cease and desist letter that garnered no
response. Philips later learned Rudich continued to defame him
and his law firm to the high-profile client, other former clients, and
lawyers and professionals in Los Angeles, Beverly Hills, West
Hollywood and entertainment communities, prompting the first
amended complaint’s cause of action for defamation per se.
       Clarke declared Rudich introduced him to Philips in 2013 to
handle a case for his late father. After losing touch with Philips,
Clarke called Rudich in July or August of 2017 to inquire about his
father’s case. Clarke declared Rudich said he did not know about
the case, but that Clarke should check with Philips because his
office had been stealing money from clients for years and probably
had all his father’s money. Clarke then called Philips, who assured
him his father’s case had been handled appropriately and recovery
from his case had been properly distributed.
       The court denied the motion to strike, finding, Rudich did “not
provide specific allegations as to how such representations relate to
or are necessary to prepare for anticipated litigation. That the
parties were involved in a dispute over fees does not, on its own,
render any and all representation[s] made by [Rudich] about

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[Philips APLC] protected petitioning activity. [Rudich] fail[ed] to
establish the allegations are based on protected activity.”
      Rudich timely appealed.3
                            DISCUSSION
I.    Overview
        The anti-SLAPP statute provides a procedure for the early
dismissal of what are commonly known as SLAPP suits—litigation
of a harassing nature, brought to challenge the exercise of protected
free speech rights. (Fahlen v. Sutter Central Valley Hospitals (2014)
58 Cal.4th 655, 665, fn. 3.) “The anti-SLAPP statute does not
insulate defendants from any liability for claims arising from the
protected rights of petition or speech. It only provides a procedure
for weeding out, at an early stage, meritless claims arising from
protected activity.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384.)
Pursuant to section 425.16, subdivision (b)(1), a litigant may move
to strike 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 . . . or . . . California Constitution in
connection with a public issue.”
        We review an order granting or denying a special motion to
strike de novo. (Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 820.) In evaluating an anti-SLAPP motion, we first
determine whether the moving defendant has made a threshold
showing that the challenged action arises from protected activity,
i.e., activity in furtherance of the rights of petition or free speech.
(Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056; § 425.16, subd. (e).)

      3 An order denying an anti-SLAPP motion is appealable.
(§§ 425.16, subd. (i), 904.1, subd. (a)(13).)

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If the defendant makes that threshold showing, the burden shifts to
the plaintiff to demonstrate a probability of success on the merits.
(Oasis West Realty, LLC v. Goldman, supra, 51 Cal.4th at pp. 819–
820.)
       We consider the pleadings and supporting and opposing
affidavits stating the facts upon which the liability or defense is
based. (§ 425.16, subd. (b)(2); see Navellier v. Sletten (2002)
29 Cal.4th 82, 89.) We examine the complaint in a fair and
commonsense manner, and we broadly construe the anti-SLAPP
statute. (See § 425.16, subd. (b)(2).) “[W]e neither ‘weigh credibility
[nor] compare the weight of the evidence.’ ” (Soukup v. Law Offices
of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.)
II.   The Defamation Per Se Cause of Action Does Not Arise From
      Protected Activity
       Section 425.16, subdivision (e) identifies the categories of
conduct protected under the anti-SLAPP statute that may support a
motion to strike. As relevant here, the anti-SLAPP statute defines
acts in furtherance of the constitutional right to petition to include
“any written or oral statement or writing made in connection with
an issue under consideration or review by a . . . judicial body.”
(§ 425.16, subd. (e)(2).)
       Rudich contends the alleged defamatory statements are
protected by the absolute litigation privilege in Civil Code
section 47. Rudich seems to assume a statement subject to the
litigation privilege automatically qualifies as protected activity
under the anti-SLAPP statute. Rudich is mistaken.
       While there is a relationship between the litigation privilege
statute and the anti-SLAPP statute, they do not serve the same
purposes. (Flatley v. Mauro (2006) 39 Cal.4th 299, 323–324.) “The
litigation privilege embodied in Civil Code section 47,

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subdivision (b) serves broad goals of guaranteeing access to the
judicial process, promoting the zealous representation by counsel of
their clients, and reinforcing the traditional function of the trial as
the engine for the determination of truth. Applying the litigation
privilege to some forms of unlawful litigation-related activity may
advance those broad goals notwithstanding the ‘occasional unfair
result’ in an individual case.” (Id. at p. 324.)
       The anti-SLAPP statute is “not concerned with securing for
litigants freedom of access to the judicial process.” (Flatley v.
Mauro, supra, 39 Cal.4th at p. 324.) Rather, the purpose of the
anti-SLAPP statute is to protect the valid exercise of constitutional
rights of free speech and petition from the abuse of judicial process,
“by allowing a defendant to bring a motion to strike any action that
arises from any activity by the defendant in furtherance of those
rights.” (Ibid.)
       Nevertheless, because the two statutes are related, courts
“have looked to the litigation privilege as an aid in construing the
scope of section 425.16, subdivision (e)(1) and (2) with respect to the
first step of the two-step anti-SLAPP inquiry.” (Flatley v. Mauro,
supra, 39 Cal.4th at pp. 322–323; Bel Air Internet, LLC v. Morales
(2018) 20 Cal.App.5th 924, 941, fn. 6.)
       “The statute does not accord anti-SLAPP protection to suits
arising from any act having any connection, however remote, with
an official proceeding. The statements or writings in question must
occur in connection with ‘an issue under consideration or review’ in
the proceeding.” (Paul v. Friedman (2002) 95 Cal.App.4th 853,
866.) “[I]t is insufficient to assert that the acts alleged were ‘in
connection with’ an official proceeding. There must be a connection
with an issue under review in that proceeding.” (Id. at p. 867.) A
“lawyer’s attempt to inject an issue into a proceeding does not

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render the issue relevant, nor can the attempted injection of an
irrelevant matter transform it into an issue ‘under consideration or
review’ in the proceeding. By definition, irrelevant matters have no
tendency in reason to prove or disprove any disputed fact of
consequence to the determination of a matter, and are specifically
excluded from consideration. Irrelevant matters thus are not
‘under consideration or review’ in an official proceeding.” (Id. at
pp. 867–868, fn. omitted.)
       We acknowledge communications preparatory to or in
anticipation of the bringing of an action or other official proceeding
are within the scope of conduct protected under section 425.16 and
under Civil Code section 47, subdivision (b). (Briggs v. Eden
Council for Hope & Opportunity, supra, 19 Cal.4th at p. 1115;
Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1268.) However,
the “requirement to show that litigation is seriously contemplated
ensures that prelitigation communications are actually connected to
litigation and that their protection therefore furthers the anti-
SLAPP statute’s purpose of early dismissal of meritless lawsuits
that arise from protected petitioning activity.” (Bel Air Internet,
LLC v. Morales, supra, 20 Cal.App.5th at p. 941.) Thus, under
section 425.16, which protects conduct including “ ‘any written or
oral statement or writing made in connection with an issue under
consideration or review by a . . . judicial body,’ ” a statement has
sufficient “ ‘connection’ ” with anticipated litigation if the person
making the statement is engaged in a serious effort to encourage or
counsel litigation by another. (Id. at p. 943.)
       Rudich has not sufficiently connected the alleged defamatory
statements to this litigation or to anticipated litigation. Rudich
argues without evidentiary support the alleged defamatory
statements were protected activity because they were part of a

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preparatory investigation in anticipation of the instant fee dispute
and because he made them to the client in the underlying copyright
litigation. This contention is not contained in the first amended
complaint or in the declarations. The gravamen of the defamation
per se cause of action is that Rudich retaliated against Philips
APLC by making defamatory statements to the high-profile client,
former clients, and other industry professionals, that Philip APLC
misappropriated client funds, and that Philips APLC and its
principal were inattentive to clients. While Rudich points out the
statements were alleged to have been made to the client whose fees
are in dispute in the instant action, Rudich fails to address the
others. Even if we were to accept Rudich’s argument absent
allegations or evidence that he contacted the former clients and
industry professionals to gather probative information from
potential witnesses, he has not explained how the alleged
defamatory statements were relevant to the present litigation.
       Rudich declared he referred several clients to Philips APLC in
the past, but glaringly absent are facts describing how those former
clients or industry professionals, or the subject matter of the alleged
statements, were connected to this case or an issue under
consideration in any other proceeding. Without more, Rudich’s
alleged defamatory statements appear wholly unconnected to the
instant action and thus do not meet the threshold showing of
protected activity under the first prong of our anti-SLAPP analysis.
Even if the court considers Rudich is alleged to have contacted the
high-profile client, the contact alone does not satisfy a connection to
this or any anticipated litigation.
       Rudich’s reliance on Malin v. Singer (2013) 217 Cal.App.4th
1283 (Malin), Cayley v. Nunn (1987) 190 Cal.App.3d 300 (Cayley),
and Dickens v. Provident Life & Accident Ins. Co (2004)

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117 Cal.App.4th 705 (Dickens) is unavailing. Each of these cases
involved statements directly connected to pending litigation or
official proceedings.
       In Malin, an attorney sent a demand letter and a draft
complaint on behalf of his client to the plaintiff. The letter
threatened to disclose salacious personal information about the
plaintiff if the plaintiff did not agree to settle the claim. (Malin,
supra, 217 Cal.App.4th at p. 1288.) The plaintiff sued the attorney
for civil extortion and the attorney moved to strike the complaint as
a SLAPP suit, arguing the statements in the demand letter and
draft complaint were made in contemplation of litigation. (Id. at
pp. 1288–1290.) The trial court denied the motion, but the
appellate court reversed, finding the attorney’s allegations were
logically connected to a litigation that was seriously contemplated
in good faith when the letter was sent. (Id. at pp. 1301–1302.)
       Unlike in Malin, here Rudich has not shown how the alleged
defamatory statements to former Philips APLC clients and industry
professionals were related to any litigation that was being seriously
contemplated by Rudich in good faith.
       Cayley is not an anti-SLAPP case. There, defendants applied
to the city council for a height variance which their neighbor
plaintiffs opposed. (Cayley, supra, 190 Cal.App.3d at p. 302.)
Defendants responded by circulating a petition around their
neighborhood to support the variance application. (Ibid.) While
circulating the petition, defendants told neighbors plaintiffs had
illegally installed a listening device to defendants’ phone lines.
(Ibid.) Plaintiffs sued defendants for slander and defendants moved
for summary judgment, arguing the statements were subject to the
litigation privilege. The court found the alleged statements were
made in the process of marshalling evidence for the purpose of

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achieving the defendants’ goal of getting the variance at the city
council meeting and therefore privileged. (Id. at p. 304.)
       In Dickens, supra, 117 Cal.App.4th at page 707, an insurer
investigated its insured for fraud and reported its findings to law
enforcement, which resulted in a fraud indictment. A jury
acquitted the insured of all charges, and the insured sued the
insurer for malicious prosecution, claiming it presented false
information to law enforcement to initiate the prosecution. (Ibid.)
The insured brought an anti-SLAPP motion to strike the malicious
prosecution cause of action. (Ibid.) The court held the insurer’s
statements to law enforcement were subject to the litigation
privilege, because the statements constituted reports about a
possible violation of law that were preparatory to commencing an
official proceeding authorized by law. (Id. at p. 714.)
       Neither Cayley nor Dickens supports Rudich’s contention the
alleged defamatory statements were subject to the litigation
privilege or were protected activity under the anti-SLAPP statute.
Unlike Cayley, there is no evidence the alleged statements were
made in the process of marshalling evidence for an official
proceeding. Only in his reply brief on appeal does Rudich argue his
contacts with Philips APLC’s former clients and other industry
professionals were an attempt to reach out to potential witnesses.
Even so, Rudich has not explained how the alleged defamatory
statements that Philips APLC stole from clients or was inattentive
to clients has any bearing on the fee dispute. Further, unlike in
Dickens, Rudich has not shown how telling former Philips APLC
clients and industry professionals Philips APLC misappropriates
client funds and is inattentive to clients was in furtherance of the
objects of this litigation or preparatory to commencing an official
proceeding.

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      Rudich has not met his initial burden to show the alleged
defamatory statements were protected activity under the anti-
SLAPP statute. As such, we do not address the second prong of
whether Philips APLC’s defamation per se cause of action is likely
to succeed on the merits.
                           DISPOSITION
      The order is affirmed. Law Offices of Paul N. Philips, A
Professional Law Corporation is awarded its costs on appeal.
      NOT TO BE PUBLISHED.

                                           KNILL, J.*

We concur:

             LAVIN, Acting P. J.

             EGERTON, J.

      * Judge of the Orange County Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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