Court Opinion

ID: 1037147
Source: CourtListenerOpinion
Date Created: 2013-08-12 16:04:44.495426+00
Date Added: 2024-06-11T15:27:53.435190
License: Public Domain

Filed 7/30/13
                           CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            SECOND APPELLATE DISTRICT

                                      DIVISION THREE

RENEWABLE RESOURCES                                B234347 consolidated w/B236218
COALITION, INC.,
                                                   (Los Angeles County
        Plaintiff and Appellant,                   Super. Ct. No. BC456803)

        v.

PEBBLE MINES CORPORATION et al.,

        Defendants and Appellants.

        APPEALS from an order and judgment of the Superior Court of Los Angeles
County, Terry A. Green, Judge. Reversed and remanded with directions.
        Nielsen, Haley & Abbott, Stephen W. Cusick, James C. Nielsen and Christine B.
Cusick for Plaintiff and Appellant.
        Keker & Van Nest, Susan J. Harriman, Steven A. Hirsch and C. Eli Ewing for
Defendants and Respondents.

                              _________________________
       Plaintiff and appellant Renewable Resources Coalition, Inc. (Coalition) appeals an
order granting a special motion to strike (Code Civ. Proc., § 425.16) brought by
defendants and respondents Pebble Mines Corporation (Pebble Inc.), Pebble Limited
Partnership (Pebble LP), and their attorneys, Jermain, Dunnagan & Owens, P.C.
(Jermain) (collectively, the Pebble defendants).1
       The Pebble defendants cross-appeal, contending the trial court abused its
discretion in awarding them merely $30,000 in attorney fees after they prevailed on their
special motion to strike.
       By way of background, the Pebble defendants obtained the Coalition‟s documents
from the Coalition‟s former fundraiser and used those documents to prosecute a
complaint against the Coalition before the Alaska Public Offices Commission (APOC)
for alleged election law violations. In this action, the Coalition sued the Pebble
defendants, alleging they knowingly purchased the Coalition‟s confidential documents
from the former fundraiser for $50,000. The Pebble defendants successfully brought a
special motion to strike. We reverse.
       To determine the applicability of section 425.16, the anti-SLAPP statute, we look
to the gravamen of the instant action. Rather than focusing on the gravamen of this
action, which was that the Pebble defendants allegedly purchased the Coalition‟s
confidential documents, the trial court focused on the injury to the Coalition, which was
forced to defend itself in the APOC proceeding. However, the gravamen of an action is
the allegedly wrongful and injury-producing conduct, not the damage which flows from
said conduct. Here, the gravamen of the Coalition‟s action is the allegation that the
Pebble defendants wrongfully purchased its confidential documents. Said purchase was
not an act by defendants in furtherance of their right of petition or free speech.
Therefore, the trial court erred in granting the special motion to strike.

1
      All further statutory references are to the Code of Civil Procedure, unless
otherwise specified.
                                              2
       As for the cross-appeal, our reversal of the order granting the special motion to
strike moots the issues raised by the Pebble defendants on their cross-appeal. In view of
the reversal of the order granting the special motion to strike, the Pebble defendants are
not prevailing parties at this juncture and thus are not entitled to attorney fees in any
amount.
                  FACTUAL AND PROCEDURAL BACKGROUND
       1. Pleadings.
       The Coalition commenced this action on March 11, 2011, and filed the operative
first amended complaint on March 22, naming the three Pebble defendants as well as
Robert L. Kaplan (Kaplan) (not a party to this appeal).
       The complaint pled in pertinent part:
       Pebble Mine is a proposed open-pit mine for copper, gold and other metals in
Southwest Alaska, in the headwaters of Bristol Bay. Pebble LP is an Alaska limited
partnership undertaking the mine‟s development. Pebble Inc. is an Alaska corporation
operating as the general partner of the limited partnership. The Jermain law firm, located
in Anchorage, represented clients Pebble Inc. and Pebble LP.
       The Coalition is an Alaska nonprofit corporation which opposed the mine project
and seeks to preserve Alaska‟s fishing and hunting resources, including the land and
waters that the fishing and hunting stock need to survive.
       In 2008, opposition to Pebble Mine coalesced in the Alaska Clean Water ballot
initiative, Ballot Measure 4, which would have impeded or blocked the mine‟s
development.
       In April 2008, the Coalition contracted with Fund Raising, Inc. (FRI), a California
corporation, which is in the business of raising money for political campaigns. Kaplan is
the principal and sole shareholder of FRI. As a professional fundraiser, Kaplan knew his
clients considered their communications confidential, and that his clients relied on him
not to disclose their internal, confidential communications related to the political
campaign.

                                               3
       In September 2008, after the defeat of Ballot Measure 4, the Coalition terminated
its contract with FRI. A dispute then arose concerning what amounts, if any were still
due to FRI under the contract.
       Although the contract called for the fee dispute to be resolved by arbitration in
California, Kaplan contacted the Alaska attorneys who had represented the Pebble Mine
interests in the recently concluded election campaign. Kaplan‟s intent in doing so was
twofold: he did so as part of a plan to threaten the Coalition with disclosure of its
confidential campaign correspondence to the Coalition‟s opponents in the event the
Coalition failed to pay FRI all amounts that Kaplan considered due under the contract;
and he did so with the intent of selling his client‟s confidential campaign communications
to the Coalition‟s opponents, in order to raise funds with which to sue his clients for
amounts Kaplan considered due under the contract.
       In early 2009, Attorney Matthew Singer of the Jermain firm met with Kaplan in
Los Angeles under the guise of considering whether to have Jermain represent FRI in its
fee dispute with the Coalition. Jermain declined to represent FRI in the matter.
However, Kaplan gave Jermain copies of confidential communications between Kaplan
and the Coalition, and Jermain gave Kaplan a check for $50,000, drawn on the law firm‟s
bank account.
       A few weeks after obtaining the confidential documents, Jermain used those
documents to prepare and file a formal complaint with the APOC. Jermain brought the
complaint on behalf of its clients, Pebble Inc. and Pebble LP. The APOC complaint
alleged the Coalition and other nonprofits had violated Alaskan election law, primarily,
that the nonprofits were used to shield from public view the fact that substantial
contributions in support of the ballot initiative were being made by one individual, Robert
Gillam (Gillam).
       The actions of Jermain and its clients in bringing the APOC complaint achieved
their aim of undermining the Coalition. For example, the Moore Foundation advised the
Coalition that due to bad publicity surrounding the APOC proceeding, it would not renew
an intended annual grant of $1.8 million.

                                              4
       In the APOC proceeding, the Coalition admitted it had failed to report as
campaign expenditures the cost of sending emails to members urging them to vote yes on
the ballot measure, and the cost of making space available for campaign materials on the
Coalition‟s folding table at the Alaska State Fair. The Coalition disputed all other
charges.
       The APOC complaint was ultimately settled in early 2010 with no finding of
liability against Gillam, the Coalition or the other nonprofits. APOC staff explicitly
acknowledged the respondents to its complaint had asserted their positions in good faith,
and that substantial evidence showed the respondents “ „took substantial efforts to obtain
and rely on proper advice in order to comply with the requirements of Alaska law.‟ ”
The APOC complaint was settled for a payment of $100,000, which was about half of
what APOC spent to prosecute the matter and much less than the expense of having to
defend the matter at trial.
       Based on the above, the Coalition‟s superior court complaint pled causes of action
against Kaplan for breach of fiduciary duty, breach of professional duty, negligence,
interference with prospective economic advantage, and unjust enrichment.
       As against the Pebble defendants, the complaint asserted two causes of action:
interference with contract (fourth cause of action), and interference with prospective
economic advantage (sixth cause of action). The Coalition pled:
       Jermain was aware of the Coalition‟s contract with FRI, and Jermain was given a
copy of the contract, which restricted FRI‟s ability to disclose confidential
communications. Notwithstanding its knowledge of the Coalition/FRI agreement,
Jermain induced FRI to breach the contract by offering to pay, and paying, $50,000 in
exchange for FRI‟s delivery of confidential communications between Kaplan and the
Coalition. In doing so, Jermain acted as counsel and agent for its clients, Pebble Inc. and
Pebble LP. As a result of the sale of the Coalition‟s confidential documents to its
opponents, the Coalition was damaged by having, at substantial expense, to defend the
APOC proceeding to a finding of no liability. The Coalition also suffered a dramatic
drop in contributions and grant money resulting from adverse publicity triggered by the

                                             5
Pebble defendants‟ use of the confidential documents to wage a smear campaign in the
press to the effect that (1) the Coalition and the entire opposition to Pebble Mine were
pawns of one wealthy supporter; and (2) the Coalition was violating Alaska law by
shielding the identity of supporters, which was not the case.
       2. Special motion to strike.
       On April 4, 2011, a mere 24 days after the commencement of the action,2 the
Pebble defendants filed a special motion to strike the only two causes of action in which
they were named, i.e., the fourth cause of action for interference with contract and the
sixth cause of action for interference with prospective economic advantage.
       The moving papers asserted the Coalition‟s claims against the Pebble defendants
arose from protected conduct, that is to say, activities in furtherance of their right of
petition or free speech in connection with a public issue. The Pebble defendants
contended “[b]ecause [the Coalition‟s] causes of action against [them] arise from the
APOC complaint, they fall squarely under the anti-SLAPP statute.”
       The Pebble defendants further argued that because they had made a threshold
showing the Coalition‟s lawsuit against them arose from their exercise of their right of
petition to the APOC, the burden shifted to the Coalition to establish a probability it
would prevail on its claims, and that the Coalition was incapable of meeting its burden.
       The moving papers were supported by extensive declarations and exhibits,
including the declaration of Attorney Matthew Singer of the Jermain firm. Singer stated
he met with Kaplan in Santa Monica on March 1, 2009, at which time he gave Kaplan
“a check payable from my law firm‟s client trust account in the amount of $50,000.”
According to Singer, the check was for a “consulting arrangement” with Kaplan, who
would be available to assist in the preparation of an APOC complaint. Singer admitted

2
      The special motion to strike was filed extremely early in the proceedings. Section
425.16 provides a special motion to strike “may be filed within 60 days of the service of
the complaint or, in the court‟s discretion, at any later time . . . .” (Id. at subd. (f).)
                                               6
receiving a stack of documents from Kaplan, but asserted he only obtained documents
that had not been specifically designated as “confidential.”
       3. Opposition.
       In opposition, the Coalition argued that “bribing a professional consultant to turn
over confidential documents is not protected activity,” and therefore the Coalition‟s
claims against the Pebble defendants were not subject to the anti-SLAPP procedure.
Although the moving parties relied on their bringing the APOC complaint as protected
activity for SLAPP purposes, the Coalition was not suing the Pebble defendants for
bringing the APOC complaint. Rather, the Coalition was suing the Pebble defendants for
inducing Kaplan to sell them the Coalition‟s confidential documents for $50,000.
       Further, although the moving parties “argue[d] that anything done to gather
evidence in preparation for their bringing their APOC complaint should likewise qualify
as protected activity . . . ; the SLAPP statute does not protect illegal activity in preparing
for a lawsuit. Here, . . . ample evidence shows that the moving parties‟ conduct in
bribing Kaplan was a violation of California Uniform Trade Secrets Act, an inducement
of breach of contract, and conversion.”
       As for the merits, the Coalition contended there was sufficient evidence to support
a judgment in its favor. Specifically, the litigation privilege did not protect Kaplan‟s sale
of the Coalition‟s documents to the Pebble defendants. Further, the fact the Coalition had
not yet pleaded “the legal theories of misappropriation of trade secrets and conversion in
addition to what it has pleaded should be of no consequence at this initial stage of the
litigation; a motion for leave to amend will promptly be brought.” The Coalition
specifically invoked Civil Code section 3426.1, subdivision (b)(1), defining
misappropriation as “[a]cquisition of a trade secret of another by a person who knows or
has reason to know that the trade secret was acquired by improper means,‟ – which
covers [the Pebble defendants].”

                                               7
       4. Trial court’s ruling granting special motion to strike.
       On May 13, 2011, the matter came on for hearing. The trial court granted the
special motion to strike and subsequently issued an extensive written ruling setting forth
the basis of its decision.
       Relying on the allegations of the fourth and sixth causes of action against the
Pebble defendants, the trial court found: “Both causes of action, then, arise out of
Defendants‟ filing of the APOC complaint. . . . . „The constitutional right to
petition . . . includes the basic act of filing litigation or otherwise seeking administrative
action.‟ [Citations.] The acts which form the basis for both of these causes of action
(i.e., [Jermain‟s] retention of Kaplan as a consultant and possession of allegedly
confidential documents) were acts in furtherance of defendants‟ right of petition or free
speech. [The Coalition‟s] contention [is] that it „is not suing defendants [for] bringing the
APOC action. Rather, [the Coalition] is suing the [Pebble] defendants for inducing
Kaplan to sell them [the Coalition‟s] confidential documents for $50,000‟. . . is belied by
its damages allegations, set forth above.”
       After finding the Pebble defendants had met their threshold burden to show the
Coalition‟s complaint arose from their constitutionally protected activity, the trial court
ruled the Coalition had failed to meet its burden of showing a probability of prevailing on
any its claims against the Pebble defendants.
       The trial court found the fourth cause of action, interference with contract, was
barred by the litigation privilege.
       As for the sixth cause of action, interference with prospective economic
advantage, the trial court stated: “Plaintiff concedes that its 6th cause of action against
defendants should be stricken: „defendants‟ reliance on the litigation privilege has merit,
insofar as to date, the evidence of damage resulting from the disruption of prospective
economic relationships consists of losses in grants and donations that track back to the

                                               8
APOC proceeding, and the litigation privilege could bar reliance on damages that
resulted solely from that proceeding.‟ (Opposition, 14:1-5).”3
       The trial court also rejected the Coalition‟s request for leave to amend to add new
causes of action for misappropriation of trade secrets and conversion, stating: “Allowing
a SLAPP plaintiff leave to amend the complaint once the court finds the prima facie
showing has been met would completely undermine the statute by providing the pleader a
ready escape from section 425.16‟s quick dismissal remedy. Instead of having to show a
probability of success on the merits, the SLAPP plaintiff would be able to go back to the
drawing board with a second opportunity to disguise the vexatious nature of the suit
through more artful pleading. This would trigger a second round of pleadings, a fresh
motion to strike, and inevitably another request for leave to amend.‟ (Simmons v. Allstate
Ins. Co. (2001) 92 Cal. App. 4th 1068, 1073.)”4
       5. Subsequent proceedings.
       On August 2, 2011, the Pebble defendants filed a motion seeking $169,795 in
attorney fees, having successfully moved to strike both causes of action against them
pursuant to section 425.16. After hearing the matter, the trial court denied the Pebble

3
        On appeal, the Coalition contends the trial court misconstrued its concession with
respect to the sixth cause of action. The record confirms the limited scope of the
Coalition‟s concession. In opposing the special motion to strike, the Coalition conceded
the litigation privilege barred evidence of damage “consist[ing] of losses in grants and
donations that track back to the APOC proceeding,” but the litigation privilege did not
“bar claims for the statutory violation [of the Uniform Trade Secrets Act (Civ. Code,
§ 3426.1)] or the two torts complete upon the exchange of $50,000 for the documents.”
(Coalition‟s Memorandum of Points and Authorities in Opposition to Anti-SLAPP
Motion, p. 14.)
4
       Due to the pendency of the special motion to strike, the trial court denied the
Coalition leave to amend. However, as discussed below, the trial court erred in granting
the special motion to strike because the causes of action against the Pebble defendants
were not subject to the anti-SLAPP statute. Further, the special motion to strike was
brought only 24 days after the commencement of the action. (§ 425.16, subd. (f).) Under
these circumstances, upon remand, leave to amend would be appropriate in order to
enable the Coalition to refine its pleadings.
                                             9
defendants‟ request for fees in the amount of $169,795, and instead granted fees in the
amount of $30,000.
       On September 28, 2011, the trial court entered a judgment of dismissal in favor of
the Pebble defendants. The judgment of dismissal includes the $30,000 award of
attorney fees to the Pebble defendants.
       The Coalition appealed the order granting the Pebble defendants‟ special motion
to strike.5 The Pebble defendants appealed the September 28, 2011 judgment, insofar as
the judgment awarded them only $30,000 in attorney fees.
                                     CONTENTIONS
       The Coalition contend the trial court erred in granting the special motion to strike
because the Pebble defendants‟ alleged liability arose from their conduct in bribing
Kaplan to turn over confidential documents, not from protected speech, making the anti-
SLAPP statute inapplicable; and the trial court further erred in ruling the Coalition‟s
action lacked minimal merit.
       On cross-appeal, the Pebble defendants contend the trial court abused its discretion
by making an inadequate award of attorney fees after they prevailed on their special
motion to strike.
                                       DISCUSSION
       1. General principles re a special motion to strike.
              a. Overview.
       As stated in Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal. 4th 12 (Simpson),
a Strategic Lawsuit Against Public Participation, or SLAPP, “is a civil lawsuit that is
aimed at preventing citizens from exercising their political rights or punishing those who
have done so. „ “While SLAPP suits masquerade as ordinary lawsuits such as defamation
and interference with prospective economic advantage, they are generally meritless suits
brought primarily to chill the exercise of free speech or petition rights by the threat of

5
       The order granting the special motion to strike is directly appealable.
(§ 425.16, subd. (i); § 904.1., subd. (a)(13).)
                                              10
severe economic sanctions against the defendant, and not to vindicate a legally
cognizable right.” ‟ (Castillo v. Pacheco (2007) 150 Cal. App. 4th 242, 249-250, quoting
Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1296 (1997-1998 Reg. Sess.) as
amended May 12, 1997, pp. 1-2.)” (Simpson, supra, 49 Cal.4th at p. 21.)
       In 1992, “out of concern over „a disturbing increase‟ in these types of lawsuits, the
Legislature enacted section 425.16, the anti-SLAPP statute. (§ 425.16, subd. (a).) The
statute authorized the filing of a special motion to strike to expedite the early dismissal of
these unmeritorious claims. (§ 425.16, subds. (b)(1), (f).) To encourage „continued
participation in matters of public significance‟ and to ensure „that this participation
should not be chilled through abuse of the judicial process,‟ the Legislature expressly
provided that the anti-SLAPP statute „shall be construed broadly.‟ (§ 425.16, subd. (a).)”
(Simpson, supra, 49 Cal.4th at p. 21.)
       A special motion to strike “involves a two-step process. First, the defendant must
make a prima facie showing that the plaintiff’s ‘cause of action . . . aris[es] from’ an act
by the defendant ‘in furtherance of the [defendant’s] right of petition or free
speech . . . in connection with a public issue.‟ [Fn. omitted.] (§ 425.16, subd. (b)(1).)
If a defendant meets this threshold showing, the cause of action shall be stricken unless
the plaintiff can establish „a probability that the plaintiff will prevail on the claim.‟ ”
(Simpson, supra, 49 Cal.4th at p. 21, italics added.)
          b. Determining the applicability of the anti-SLAPP statute to a plaintiff’s claim.
       In determining whether the anti-SLAPP statute applies in a given situation, we
analyze whether the defendants‟ (here, the Pebble defendants‟) act underlying the
plaintiff‟s (Coalition‟s) cause of action was an act by the defendants in furtherance of
their right of petition or free speech. (City of Cotati v. Cashman (2002) 29 Cal. 4th 69,
78.) The “principal thrust or gravamen” of the plaintiff‟s claim determines whether
section 425.16 applies. (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal. App. 4th
181, 188; accord Club Members for an Honest Election v. Sierra Club (2008) 45 Cal. 4th
309, 319.)

                                               11
       As used in section 425.16, “ „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;
(4) or 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.” (§ 425.16, subd. (e).)
              c. Standard of appellate review.
       Review “of an order granting or denying a motion to strike under section 425.16 is
de novo. [Citation.] We consider „the pleadings, and supporting and opposing
affidavits . . . upon which the liability or defense is based.‟ (§ 425.16, subd. (b)(2).)
However, we neither „weigh credibility [nor] compare the weight of the evidence.
Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate
the defendant‟s evidence only to determine if it has defeated that submitted by the
plaintiff as a matter of law.‟ [Citation.]” (Soukup v. Law Offices of Herbert Hafif (2006)
39 Cal. 4th 260, 269, fn. 3.)
       2. The instant lawsuit against the Pebble defendants did not arise out of their
exercise of their right to free speech or petition in connection with a public issue.
              a. The relevant inquiry is the gravamen of the instant lawsuit.
       The threshold issue is whether the Pebble defendants met their initial burden in
bringing the special motion to strike. The inquiry is whether the Pebble defendants‟ acts
underlying the Coalition‟s claims were acts by the Pebble defendants in furtherance of
their right of petition or free speech. (City of Cotati v. Cashman, supra, 29 Cal.4th at
p. 78.) To reiterate, the “principal thrust or gravamen” of the plaintiff‟s cause of action
determines whether section 425.16 applies. (Martinez v. Metabolife Internat., Inc.,
12
supra, 113 Cal.App.4th at p. 188; accord Club Members for an Honest Election v. Sierra
Club, supra, 45 Cal.4th at p. 319.)
       The “meaning of „gravamen‟ is clear; „gravamen‟ means the „material part of a
grievance, charge, etc.‟ (Webster‟s New Internat. Dict. (2d ed. 1957) unabridged.)”
(Lindros v. Governing Bd. of the Torrance Unified School Dist. (1973) 9 Cal. 3d 524, 540,
fn. 13.)
       In the context of the anti-SLAPP statute, the “gravamen is defined by the acts on
which liability is based . . . .” (Wallace v. McCubbin (2011) 196 Cal. App. 4th 1169,
1190.) The “focus is on the principal thrust or gravamen of the causes of action, i.e., the
allegedly wrongful and injury-producing conduct that provides the foundation for the
claims. [Citations.]” (Castleman v. Sagaser (2013) 216 Cal. App. 4th 481, 490-491,
italics added.)
               b. Trial court erred in focusing on the complaint’s damages allegations;
the gravamen of an action is the allegedly wrongful and injury-producing conduct, not
the damage which flows from said conduct.
       As indicated, the trial court ruled: “Both causes of action [against the Pebble
defendants] then, arise out of Defendants‟ filing of the APOC complaint. . . . . „The
constitutional right to petition . . . includes the basic act of filing litigation or otherwise
seeking administrative action.‟ [Citations.] The acts which form the basis for both of
these causes of action (i.e., [Jermain‟s] retention of Kaplan as a consultant and possession
of allegedly confidential documents) were acts in furtherance of defendants‟ right of
petition or free speech. [The Coalition’s] contention [is] that it ‘is not suing defendants
[for] bringing the APOC action. Rather, [the Coalition] is suing the [Pebble] defendants
for inducing Kaplan to sell them [the Coalition’s] confidential documents for
$50,000’. . . is belied by its damages allegations, set forth above.” (Italics added.)
       Thus, the trial court erroneously focused on the Coalition‟s damages allegations,
i.e., that the Coalition was forced to defend itself in the APOC proceeding. Instead, the
proper focus should have been on the “allegedly wrongful and injury-producing conduct”

                                               13
(Castleman, supra, 216 Cal.App.4th at p. 490) which gave rise to the Coalition‟s
damages.
       Simply stated, to determine the applicability of the anti-SLAPP statute, we look to
the allegedly wrongful and injurious conduct of the defendant, rather than the damage
which flows from said conduct. Here, the gravamen of the Coalition‟s action was that the
Pebble defendants allegedly wrongfully purchased the Coalition‟s confidential documents
from Kaplan for the sum of $50,000. Said purchase was not an act by the Pebble
defendants in furtherance of their right of petition or free speech, making the anti-SLAPP
procedure inapplicable.
                 c. The Pebble defendants’ arguments lack merit.
       The Pebble defendants contend they were being sued for their protected activity in
complaining to the APOC of the Coalition‟s alleged violations of Alaska elections law.
The Pebble defendants contend their use of the Coalition‟s “purportedly confidential
documents to initiate and litigate the APOC proceeding” satisfied subdivisions (e)(1) and
(e)(2) of section 425.16 because “it consists of statements made in or in connection with
an executive proceeding or other official proceeding authorized by law.” The Pebble
defendants assert section 425.16 applies to their initiating the APOC proceeding because
the constitutional right to petition includes the right to file litigation or to seek
administrative action, such as before the APOC.
       The Pebble defendants also take the position their use of “purportedly confidential
documents” to wage a smear campaign in the press against the Coalition, by publicizing
the allegations of the APOC complaint, also falls within section 425.16, because: it
consists of statements made in connection with an issue under consideration by an
executive body or in an official proceeding (§ 425.16, subd. (e)(2); statements made in a
public forum in connection with an issue of public interest (§ 425.16, subd. (e)(3); and
conduct in furtherance of the rights of petition and free speech, in connection with an
issue of public interest concerning violations of Alaska election laws. (§ 425.16,
subd. (e)(4).)

                                               14
       The Pebble defendants‟ attempts to bring their conduct within the ambit of the
anti-SLAPP statute are unavailing. Although the Pebble defendants rely on their bringing
the APOC complaint as protected activity for SLAPP purposes, the Coalition did not sue
the Pebble defendants for having prosecuted the APOC complaint. Rather, as discussed,
the pleadings establish the gravamen of the Coalition‟s claim against the Pebble
defendants is that they induced Kaplan to sell them the Coalition‟s confidential
documents for $50,000.
       Specifically, the first amended complaint alleges at paragraph 47:
“Notwithstanding knowledge of [the] agreement [between FRI and the Coalition], and
knowledge that such documents were confidential under the agreement, [the Jermain
firm] induced FRI to breach its contract with [the Coalition], and to breach the implied
covenant of good faith and fair dealing implied into that contract, by offering and then
paying $50,000 to FRI in exchange for (i) FRI’s delivery of all of the confidential
communications between its principal Robert Kaplan and the principals of [the
Coalition], . . . .” (Italics added.)
       A fair reading of the Coalition‟s complaint is that the Pebble defendants were
being sued for wrongfully purchasing the Coalition‟s confidential documents from
Kaplan, not for prosecuting the APOC complaint. The Pebble defendants‟ purchase of
the Coalition‟s confidential documents from Kaplan does not amount to an exercise of
the constitutionally protected rights of petition or free speech. Given the nature of the
Coalition‟s claims against the Pebble defendants, the claims were not subject to a special
motion to strike under section 425.16. Therefore, the grant of the special motion to strike
was error.
       3. Unnecessary to address second prong of the two-part test.
       As discussed, on our de novo review we conclude the Pebble defendants failed to
meet their threshold burden to show the Coalition‟s claims arose from the Pebble
defendants‟ constitutionally protected activity. Thus, the Coalition‟s lawsuit against the
Pebble defendants was not subject to early scrutiny by way of a special motion to strike.

                                             15
       Therefore, it is unnecessary to address the second prong of the two-part test, i.e.,
whether the Coalition, in opposing the special motion to strike, met its burden to establish
a reasonable probability it could prevail on its claims.
       4. The Pebble defendants’ cross-appeal concerning the $30,000 award of
attorney fees.
       On cross-appeal, the Pebble defendants contend the trial court abused its discretion
in awarding them $30,000 in attorney fees instead of the $169,795 which they requested.
       In view of our reversal of the order granting the special motion to strike, the
Pebble defendants are no longer the prevailing parties. (§ 425.16, subd. (c)(1).)
Therefore, the Pebble defendants are not entitled to the $30,000 attorney fee award which
they were awarded by the trial court, let alone an enhanced fee award.
                                      DISPOSITION
       The order granting the special motion to strike and the subsequent judgment,
awarding $30,000 in attorney fees to the Pebble defendants, are reversed. The matter is
remanded with directions to reinstate the Coalition‟s action against the Pebble
defendants, and for further proceedings not inconsistent with this opinion. The Coalition
shall recover its costs on appeal.
       CERTIFIED FOR PUBLICATION

                                                           KLEIN, P. J.

       We concur:

                     CROSKEY, J.

                     KITCHING, J.

                                             16