Court Opinion

ID: 4275808
Source: CourtListenerOpinion
Date Created: 2018-05-16 20:00:44.465064+00
Date Added: 2024-06-11T14:33:46.570768
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAY 16 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

PLANNED PARENTHOOD                              No.    16-16997
FEDERATION OF AMERICA, INC.; et al.,
                                                D.C. No. 3:16-cv-00236-WHO
                Plaintiffs-Appellees,

 v.                                             MEMORANDUM *

CENTER FOR MEDICAL PROGRESS; et
al.,

                Defendants-Appellants,

and

TROY NEWMAN; et al.,

                Defendants.

                  Appeal from the United States District Court
                       for the Northern District of California
                 William Horsley Orrick, District Judge, Presiding

                    Argued and Submitted November 17, 2017
                            San Francisco, California

Before: GOULD and MURGUIA, Circuit Judges, and FREUDENTHAL,** Chief
District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
              The Honorable Nancy Freudenthal, Chief United States District Judge
for the District of Wyoming, sitting by designation.
        This appeal arises from the district court’s denial of Defendants’ motion to

strike under California Civil Code § 425.16 (anti-SLAPP law). Plaintiffs sued

Defendants alleging that Defendants used fake identities and entities to infiltrate

Planned Parenthood Federation of America (PPFA) and National Abortion

Federation (NAF) conferences. Defendants moved to dismiss Plaintiffs’ fifteen

claims under both Federal Rule of Civil Procedure 12(b)(6) and California’s anti-

SLAPP motion to strike. The district court denied both motions, and this appeal

followed. Because we are required by Batzel v. Smith, 333 F.3d 1018 (9th Cir.

2003) to review the district court’s denial of an anti-SLAPP motion on

interlocutory appeal, we now consider the legal sufficiency of Plaintiffs’ pleadings

de novo applying a Rule 12(b)(6) standard, which we have held is the correct

standard to apply in this case. Planned Parenthood Federation v. Center for

Medical Progress, 16-16997, 2018 WL              *    (9th Cir. May        , 2018).1

We affirm the district court.

        Plaintiffs allege 15 claims. We review each in turn.

        Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss

a complaint if it fails to state a claim upon which relief can be granted. To survive

a Rule 12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a

1
    This disposition is filed concurrently with the aforementioned published opinion.

                                           2
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007).

1.     Defendants contend that Plaintiffs’ claims for breach of contract are legally

and factually deficient because BioMax did not make misrepresentations to secure

a place at PPFA’s conference and Plaintiffs’ allegations as to violations of

numerous laws are vague and conclusory. “[T]he elements of a cause of action for

breach of contract are (1) the existence of the contract, (2) plaintiff’s performance

or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting

damages to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821

(2011).

       Plaintiffs claim that Defendants breached privacy and confidentiality clauses

of the agreement that apply to both sponsors and exhibitors, by surreptitiously

recording their conversations. Those provisions state that “Exhibitor and PPFA

each agree that they shall comply with all applicable federal, state and local laws

and regulations . . . including . . . laws related to fraud . . . privacy . . .

confidentiality, [and] false claims.” Plaintiffs have plausibly alleged that

Defendants violated laws related to privacy and confidentiality by recording

attendees of the private conference without their consent. Defendants assert that

Plaintiffs did not allege violations of any laws, particularly the Racketeer

Influenced and Corrupt Organizations Act (RICO) and wiretapping. Defendants

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challenge those claims now on appeal on factual sufficiency grounds, though at the

district court they were challenged only for legal sufficiency. For this reason, we

decline to review belated factual sufficiency challenges. The district court did not

err by denying Defendants’ motion to strike on the grounds that the claim of

contract breach was legally sufficient.

      Defendants contend that Plaintiffs’ claim for breach of Planned Parenthood

Gulf Coast (PPGC)’s non-disclosure agreement fails because Plaintiffs did not

allege that any information disclosed was confidential or that there were

foreseeable damages. Plaintiffs allege that Merritt entered into a Non-Disclosure

and Confidentiality Agreement (“NDA”) with PPGC, and that Defendants

breached that agreement by secretly recording conversations and then

disseminating the recordings on the internet. While that particular paragraph of the

complaint does not specify which statements were made, it states that the

agreement was signed on April 5, 2015, the same day as the private meeting with

PPGC’s staff in Houston. It appears that Plaintiffs are referring to statements

recorded during that April 5, 2015 meeting. Plaintiffs further allege that because

of Defendants’ wrongful conduct, PPGC suffered harm in the form of increased

security and IT costs. Plaintiffs’ allegations are sufficient to allege foreseeable

damages at this stage. Mnemonics, Inc. v. Max Davis Assocs., Inc., 808 So. 2d
1278, 1281 (Fla. Dist. Ct. App. 2002) (“It is not necessary to prove that the parties

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contemplated the precise injuries that occurred so long as the actual consequences

could have reasonably been expected to flow from the breach.”); see also Civic

Ctr. Drive Apartments Ltd. P'ship v. Sw. Bell Video Servs., 295 F. Supp. 2d 1091,

1107 (N.D. Cal. 2003) (“Whether damages arising from a breach of contract were

reasonably foreseeable is a question of fact” under California law.). The

allegations in the complaint, taken together, are sufficient to state a claim for

breach of the NDA.

      Defendants also argue that Plaintiffs may not assert a breach of contract

claim as third-party beneficiaries of Defendants’ contract with the NAF because

Plaintiffs have not shown that the contract was made expressly for Plaintiffs’

benefit. Plaintiffs allege to the contrary that they have standing to sue for breach

of the non-disclosure agreements because Plaintiffs were intended third-party

beneficiaries of the contracts. All participants at the NAF conference signed

NDAs, knew that everyone attending the conference signed a NDA, and that the

agreements required confidentiality. At the motion to dismiss stage, Plaintiffs have

plausibly alleged their status as intended third-party beneficiaries.

2.    Defendants argue that Plaintiffs’ claims for RICO and federal wiretapping

violations are factually insufficient to state a claim, asserting that “PPFA failed to

demonstrate that, in recording at the PPFA conferences, Defendants intended to

violate RICO,” and that “PPFA failed to demonstrate that Defendants invaded or

                                           5
intended to invade the privacy of Plaintiffs’ staff.” Because Defendants cannot

challenge the factual sufficiency of Plaintiffs’ claims at this stage, we affirm the

district court’s denial of the motion to strike on the claims for RICO and

wiretapping. We stress that a defendant cannot use an anti-SLAPP motion to strike

federal causes of action. Hilton v. Hallmark Cards, 599 F.3d 894, 901 (9th Cir.

2010).

3.    Defendants argue that Plaintiffs did not state a claim for fraudulent

misrepresentation because Plaintiffs did not allege that Defendants’

misrepresentations were the proximate cause of their damage and because the First

Amendment bars Plaintiffs’ claim for damages. 2 Plaintiffs allege that they are

damaged by “being forced to expend additional, extensive resources on security

and IT services, property damage, and responding to multiple state and federal

investigations and inquiries.” Notions of proximate cause may preclude Plaintiffs

from recovering some of the damages claimed such as damages from the

publication of the videos, costs associated with responding to multiple state and

federal investigations, and damages for increased acts of violence because of

intervening or superseding causes. But Plaintiffs may be entitled to damages

2
  This disposition considers state law claims for fraudulent misrepresentation and
trespass arising from conduct in Colorado, D.C., Florida, and Texas. The parties
agree that the legal standards in these states are the same, therefore, we do not
string cite to each state’s case that supports the proposition.

                                           6
caused by Defendants’ misrepresentations about Defendant’s identity, such as

increased costs associated with security and IT services. The additional costs in

security to prevent people with fake identities from infiltrating Planned Parenthood

could be a direct cost from Defendants’ conduct. See Food Lion, Inc. v. Capital

Cities/ABC, Inc., 964 F. Supp. 956, 962–63 (M.D.N.C. 1997), aff’d on other

grounds, 194 F.3d 505 (4th Cir. 1999). 3 A decision on the propriety of particular

damages is premature at this stage. See Laird v. Integrated Res., Inc., 897 F.2d
826, 841 (5th Cir. 1990).

      In regard to Defendants’ contention that a plaintiff who seeks damages from

a publication must satisfy First Amendment pleading requirements, the standard

required depends on the type of damages sought. See Food Lion, Inc. v. Capital

Cities/ABC, Inc., 194 F.3d 505, 522 (4th Cir. 1999). We affirm the district court’s

denial of Defendants’ Motion on this ground.

4.    Defendants argue that the district court erred by not dismissing Plaintiffs’

claim for trespass because Plaintiffs did not have an ownership or possessory

interest in the venues where the conferences occurred and because Defendants’

attendance was not “unauthorized.” Defendants further argue that they did not

exceed the scope of consent. “The tort of trespass is defined as ‘an unauthorized

3
 Both parties cite this case as the operative authority on proximate cause related to
damages, and so we adopt the rule of Food Lion for purposes of this case.

                                          7
entry onto property that results in interference with the property owner’s

possessory interest therein.’” Greenpeace, Inc. v. Dow Chem. Co., 97 A.3d 1053,

1060 (D.C. Cir. 2014) (internal citation omitted) (emphasis in original).

      Defendants’ argument that they did not exceed the scope of consent is a

factual contention, inappropriate for review on a motion to dismiss. Also, a

consent may be ineffective if gained by fraudulent misrepresentations or

substantial mistake. See Council on American-Islamic Relations Action Network v.

Gaubatz, 793 F. Supp. 2d 311, 345 (D.D.C. 2011)). Further, Plaintiffs allege that

their leases gave them an exclusive, possessory interest in the conference spaces

and relevant law was satisfied because it requires only a possessory interest. See

Gaetan v. Weber, 729 A.2d 895, 898 (D.C. 1999) (internal citation omitted). That

is sufficient at this stage to allege a plausible claim for trespass.

5.     Defendants argue that Plaintiffs did not state a claim for non-consensual

recording under California Penal Code § 632(a) because the recordings took place

at a conference where the speakers did not announce an expectation that their

conversations could not be overheard. Plaintiffs allege that Defendants violated

§ 632 by recording Planned Parenthood staff’s confidential conversations at the

NAF conference. Plaintiffs allege not only that Defendants signed confidentiality

agreements, but also that Plaintiffs knew and relied on the fact that all event

participants executed such agreements. Plaintiffs also allege that Plaintiffs knew

                                            8
that the NAF had security measures in place to ensure that persons attending the

conference were friends and not foes stating, “NAF had in place a Security

Program to ensure that communications concerning and made during the annual

meeting would be confidential and restricted to NAF members and trusted others.”

California appellate precedent holds that “a conversation is confidential under

section 632 if a party to that conversation has an objectively reasonable

expectation that the conversation is not being overheard or recorded.” Flanagan v.

Flanagan, 27 Cal. 4th 766, 776–77 (2002). Defendants demand that Plaintiffs set

forth the facts of each conversation. However, the content, the location, and the

capacity in which staff was acting will be, and under federal procedural rules,

developed after discovery. See Lieberman v. KCOP Television, Inc., 110 Cal. App.
4th 156, 169 (2003). The district court did not err in refusing to strike this claim at

the motion to dismiss stage.

      Defendants further argue that Plaintiffs do not have standing to assert the

privacy interests of individuals under § 632 and that the meetings were not in

confidential locations. Plaintiffs contend, and Defendants do not contest, that this

argument is waived because Defendants did not raise the issue below. Even if the

argument was not waived, Plaintiffs have standing to raise an expectation of

privacy on their staff’s behalf. Ion Equip. Corp. v. Nelson, 110 Cal. App. 3d 868,

880 (1980) (finding that the term “any person” includes corporations).

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6.    Defendants argue that any claim by Dr. Gatter related to the lunch meeting

cannot stand because the claim was not brought by her affiliate Planned

Parenthood Pasadena and San Gabriel Valley (PPPSGV). This argument was not

raised before the district court, and the cause of action does not refer to the lunch

meeting. That it was not pleaded on PPPSGV’s behalf is of no consequence.

Defendants also argue that Plaintiffs’ claim for trespass under California Penal

Code § 634 for the purpose of committing a § 632 violation fails because there was

no underlying § 632 violation. Under section 634, “[a]ny person who trespasses on

property for the purpose of committing any act, or attempting to commit any act, in

violation of Section 631, 632, 632.5, 632.6, 632.7, or 636 shall be punished by a

fine.” Cal. Penal Code § 634. Plaintiffs alleged a claim for violation of § 632, so

Defendants contention necessarily fails.

      Defendants separately argue that Plaintiffs have not alleged that NAF had a

possessory interest in the hotel conference rooms where the meeting occurred,

thereby precluding a cause of action for trespass. This argument is unpersuasive

because Plaintiffs allege that “NAF possessed a right to exclusive use of the real

property they leased for the 2014 conference.” To the extent that Defendants’

argument is based on the actual lease terms, that factual determination is not

appropriate on 12(b)(6) review and requires examining the terms of the lease,

                                           10
which neither party has yet offered. Further, as discussed above, under the

applicable state law, only a possessory interest in the property is necessary.

      Defendants independently argue that Plaintiffs did not allege claims under

§§ 632 and 634 against Lopez because none of Plaintiffs’ allegations implicate

Lopez. Plaintiffs argue that Daleiden and his co-conspirators committed the acts

under § 632 leaving room for Lopez to be included under § 632. Although the

cause of action under § 634 expressly refers only to Merritt and Brianna Allen, it

first incorporates by reference the entire complaint. The complaint alleges that all

employees of BioMax and CMP are part of the conspiracy, and so, at the pleading

stage, that is sufficient for the claim to survive as to Lopez.

      Defendants also argue that Plaintiffs did not allege a claim against Merritt

because Merritt recorded the conversations to obtain evidence reasonably believed

to relate to the commission of a crime of violence. Merritt’s subjective belief,

however, is inherently factual and would require a credibility determination that is

inappropriate at the motion to dismiss phase. The district court did not err in so

concluding.

7.    Defendants argue that Plaintiffs’ claims for invasion of privacy fail because

Plaintiffs cannot assert associational standing on behalf of their employees and

because Plaintiffs claims do not allege private and personal communications.

Plaintiffs allege that they can assert claims on behalf of their staff, and we agree.

                                           11
Plaintiffs allege that their staff could raise the claim on their own, that the suit

implicates Planned Parenthood’s purposes, and that its members do not need to

participate for the relief requested. See Fleck & Assocs., Inc. v. Phoenix, City of,

an Arizona Mun. Corp., 471 F.3d 1100, 1105–06 (9th Cir. 2006). While Plaintiffs’

employees may not have expressed a collective view as ordinarily required for

associational standing (we cannot know this for sure because there’s no record on

what views have been expressed), Plaintiffs’ staff apparently are trying to advance

Plaintiffs’ purposes and must implicitly agree with those purposes by continuing to

work towards Plaintiffs’ goals. At this stage, Plaintiffs allegations are adequate to

assert associational standing.

      Defendants further argue that Plaintiffs did not allege invasions of privacy

that were sufficiently serious. The tort of intrusion requires proof of two elements:

“(1) the intrusion into a private place, conversation or matter, (2) in a manner

highly offensive to a reasonable person.” Sanchez-Scott v. Alza Pharm., 86 Cal.

App. 4th 365, 379 (2001), as modified (Jan. 29, 2001) (internal citation omitted).

Plaintiffs’ allegations regarding the confidentiality agreements and security

measures taken to ensure that attendees were all there for the same purpose are

sufficient to survive the motion to strike. The district court did not err in

concluding that the complaint’s allegations were sufficient to create a reasonable

expectation of privacy.

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8.    Defendants argue that Plaintiffs’ claims for wiretapping under state law fail

because Plaintiffs did not allege that they have standing to bring claims on behalf

of staff at the Maryland NAF meeting and because they failed to allege that

Plaintiffs’ staff was recorded at the Florida NAF meeting. Defendants further

argue that Plaintiffs have not alleged objective and subjective expectations of

privacy. The applicable Florida state law that controls this issue provides: “An

oral communication is protected under section 934.03 if it satisfies two conditions:

‘A reasonable expectation of privacy under a given set of circumstances depends

upon one’s actual subjective expectation of privacy as well as whether society is

prepared to recognize this expectation as reasonable.’” Jatar v. Lamaletto, 758
So. 2d 1167, 1169 (Fla. Dist. Ct. App. 2000), cause dismissed, 786 So. 2d 1186

(Fla. 2001) (quoting State v. Inciarrano, 473 So. 2d 1272, 1275 (Fla. 1985)

(emphasis in original)).

      The district court did not err in concluding that Plaintiffs could assert

standing on behalf of their employees. Plaintiffs have sufficiently alleged a

reasonable expectation of privacy in their conversations at the PPFA conference in

Florida—(1) all attendees at the meeting, including Defendants, were required to

agree to terms and conditions designed to ensure that all conference participants

held interests consistent with those of Planned Parenthood and would disclose any

conflicts of interest; (2) PPFA had in place security protocols requiring all

                                          13
conference participants to provide legal identification and ensuring that

communications concerning and made during the conferences would be

confidential and restricted to legitimate conference participants and trusted others;

and (3) the nature and subject matter of the conferences were highly sensitive. For

the same reasons, Plaintiffs survive the motion to strike as to the NAF conference

in Maryland. See Fearnow v. Chesapeake & Potomac Tel. Co. of Maryland, 342
Md. 363, 376 (1996).

9.    Defendants argue that Plaintiffs’ claim for unfair business practices against

Merritt fails because no business transactions were conducted and because

Plaintiffs cannot show a sufficient likelihood that they will be wronged again in a

similar way. Unfair competition includes “unlawful, unfair or fraudulent business

practice and unfair, deceptive, untrue or misleading advertising.” Bus. & Prof.

Code, § 17200. California courts have interpreted such language broadly. See

People v. McKale, 25 Cal. 3d 626, 631–32 (1979).

      Plaintiffs have plausibly claimed that they were subject to the conspiracy—

undercover investigations to shame the company—which may warrant injunctive

relief. Newman stated, “[b]ut this is just the beginning, we have moles and spies

deep inside the abortion cartel . . . we will release more damning evidence,” and

Daleiden stated that new videos will “continue to be released in the days and

months to come.” Those statements are sufficient at this stage to allege a claim for

                                         14
unfair business practices, and the district court did not err in denying the motion to

strike.

10.       Defendants argue that Plaintiffs did not state a claim for conspiracy against

Merritt because Plaintiffs did not plead with particularity Merritt’s involvement in

the creation or distribution of the fraudulent materials. Plaintiffs allege that

Defendants organized a sham company, used the company to infiltrate NAF and

Planned Parenthood conferences, and secretly recorded conversations with the

purpose to injure Plaintiffs. Earlier in the complaint, Plaintiffs note that Merritt

took part in the conspiracy to defraud by attending conferences under a fake name

as the CEO of the sham company. Fed. R. Civ. P. 9. They allege that Merritt used

the fake identification to infiltrate specific conferences and meetings. Those

allegations are sufficient to implicate Merritt in the conspiracy and to survive a

12(b)(6) motion. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.

2009).

          We affirm the district court’s conclusions that Plaintiffs sufficiently alleged

their fifteen causes of action. 4

AFFIRMED.

4
  Defendants’ Motion for Judicial Notice is DENIED. Defendant’s Motion to
Strike portions of Plaintiffs’ Opening Brief is GRANTED, but Defendants’
request for the imposition of sanctions against Plaintiffs is DENIED.

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