Court Opinion

ID: 4361746
Source: CourtListenerOpinion
Date Created: 2019-01-24 21:00:44.391827+00
Date Added: 2024-06-11T14:20:44.156896
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                           FILED
                            FOR THE NINTH CIRCUIT
                                                                            JAN 24 2019
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
YOUNGEVITY INTERNATIONAL                         No.   18-55031
CORP.; et al.,
                                                 D.C. No.
              Plaintiffs-counter-claim-          3:16-cv-00704-BTM-JLB
              defendants-Appellants,

 v.                                              MEMORANDUM*

WILLIAM ANDREOLI; et al.,

              Defendants-counter-
              claimants-plaintiffs-
              Appellees.

                   Appeal from the United States District Court
                       for the Southern District of California
                   Barry Ted Moskowitz, Chief Judge, Presiding

                     Argued and Submitted December 3, 2018
                              Pasadena, California

Before: TASHIMA and IKUTA, Circuit Judges, and KENNELLY,** District
Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Matthew F. Kennelly, United States District Judge for
the Northern District of Illinois, sitting by designation.
      Youngevity International Corporation appeals the partial denial of its special

motion to strike some of Wakaya Corporation’s counterclaims to Youngevity’s

complaint. See Cal. Civ. Proc. Code § 425.16. Youngevity also appeals the

district court’s denial of Youngevity’s motion to dismiss certain counterclaims on

the ground they are subject to an arbitration provision in Youngevity’s distributor

agreement. We have jurisdiction under 28 U.S.C. § 1291, see Batzel v. Smith, 333

F.3d 1018, 1024 (9th Cir. 2003) (holding that the denial of an anti-SLAPP motion

is appealable under § 1291) and 9 U.S.C. § 16(a)(1) (permitting appeal from the

denial of a motion to compel arbitration).1

      We reject Youngevity’s argument that Wakaya’s counterclaims must be

struck in their entirety because they are based on statements by Youngevity that are

protected by section 425.16. Because California courts review each statement

within a pleading, and strike only protected statements, see Baral v. Schnitt, 1 Cal.

5th 376, 390–92 (2016), we separately consider each statement that Youngevity

argues is protected under section 425.16.

      1
         Because exhibits one through six of Wakaya’s supplemental excerpts of
record were not before the district court at the time of its December 13, 2017 order,
see Lowry v. Barnhart, 329 F.3d 1019, 1024 (9th Cir. 2003), we GRANT
Youngevity’s motion to strike those exhibits. To the extent Youngevity moves to
strike arguments in Wakaya’s pleadings, however, that motion is DENIED. We
also DENY Wakaya’s motion to supplement the record on appeal with excerpts
from a deposition that were not before the district court. See id.
                                            2
      We lack jurisdiction to review the district court’s determination that Joel

Wallach’s oral statements, Steve Wallach’s email, and Michelle Wallach’s alleged

emails constitute commercial speech and therefore are not protected by the anti-

SLAPP statute. See Cal. Civ. Proc. Code § 425.17(c). Such a determination is not

subject to interlocutory review. See Cal. Civ. Proc. Code § 425.17(e); Breazeale v.

Victim Servs., 878 F.3d 759, 766 (9th Cir. 2017).

      We reverse the district court’s decision not to strike those portions of

Wakaya’s counterclaims based on the republication of the Verified Complaint and

the Youngevity press release, which summarized the substance of the Verified

Complaint. California’s litigation privilege applies to communications made in

judicial proceedings, see Cal. Civ. Code § 47(b), and extends to communications

regarding such judicial proceedings made to people with “a substantial interest in

the outcome of the pending litigation,” see Abraham v. Lancaster Cmty. Hosp., 217

Cal. App. 3d 796, 823 (1990); see also Argentieri v. Zuckerberg, 8 Cal. App. 5th

768, 783–84 (2017) (indicating that the litigation privilege protects statements

made to persons with a “substantial interest” in the litigation, but not statements

made to “the general public through the press”). For this reason, the republication

of the Verified Complaint and the dissemination of the Youngevity press release to

its distributors and the marketing community (which had such a substantial

                                           3
interest) constitute protected speech.2 Therefore, to the extent Wakaya’s

counterclaims are based on the republication of the Verified Complaint and

Youngevity’s press release, Wakaya cannot carry its burden of showing there is a

probability that it will prevail on those claims, see Cal. Civ. Proc. Code §

425.16(b).

      Finally, we affirm the district court’s denial of Youngevity’s motion to

dismiss or compel arbitration. Youngevity litigated its own claims that were based

on the same factual nexus as Wakaya’s claims for eighteen months before seeking

to compel arbitration. Because Youngevity acted inconsistently with the

arbitration provision in its distributor agreement, and this inconsistent conduct was

prejudicial to Wakaya, Wakaya carried its burden of proving that Youngevity

waived its right to arbitrate. See Britton v. Co-op Banking Grp., 916 F.2d 1405,

1412 (9th Cir. 1990).

      Each party shall bear its own costs on appeal.

      DISMISSED IN PART, AFFIRMED IN PART, REVERSED IN PART.

      2
        Because we decide on this ground, we do not reach the district court’s
ruling that there is a factual dispute as to whether BFH constituted a “public
journal” for purposes of the fair reporting privilege, see Cal. Civ. Code § 47(d), nor
do we need define the term “public journal” under California law.
                                           4