Court Opinion

ID: 9405009
Source: CourtListenerOpinion
Date Created: 2023-06-26 23:04:02.845035+00
Date Added: 2024-06-11T17:20:18.550859
License: Public Domain

Filed 6/26/23 ZL Technologies v. Srinivasan CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                      SIXTH APPELLATE DISTRICT

 ZL TECHNOLOGIES, INC., ET AL.,                                      H049444
                                                                    (Santa Clara County
             Plaintiffs and Respondents,                             Super. Ct. No. 21CV378097)

             v.

 ARVIND SRINIVASAN,

             Defendant and Appellant.

         Defendant Arvind Srinivasan appeals from an order denying his special motion to
strike under the anti-SLAPP (strategic lawsuit against public participation) statute. (Code
Civ. Proc., § 425.16.)1 The trial court denied this motion on the ground that the
defamation cause of action asserted by plaintiffs ZL Technologies, Kon Leong, and
Chimmy Shioya (collectively, Plaintiffs) does not arise from activity protected by the
anti-SLAPP statute. We conclude that this cause of action contains multiple claims,
some of which arise from activity protected by the anti-SLAPP statute. Accordingly, we
affirm in part and reverse in part.
                              I. FACTUAL AND PROCEDURAL BACKGROUND
         In reviewing an order granting or denying a motion to strike under the anti-SLAPP
statute, we consider “the pleadings, and supporting and opposing affidavits . . . upon

         1
             Unspecified statutory references are to the Code of Civil Procedure.
which the liability or defense is based” (§ 425.16, subd. (b)(2)), accepting as true the
evidence presented by the opposing party (Soukup v. Law Offices of Herbert Hafif (2006)
39 Cal.4th 260, 269, fn. 3 (Soukup).) The following facts are drawn from Plaintiffs’
complaint and the declarations submitted in connection with Srinivasan’s anti-SLAPP
motion.
   A. The Parties and the Relationship Between Them
       Plaintiff ZL Technologies, Inc. (ZL) is a California corporation co-founded by
plaintiff Kon Leong and defendant Arvind Srinivasan. Srinivasan served as ZL’s chief
technology officer until his termination in April 2020, and he remains a member of ZL’s
board of directors. Leong is ZL’s chief executive officer and chairman of its board of
directors. Plaintiff Chimmy Shioya, who is married to Leong, is ZL’s senior director for
business development and its director of operations and finance. Since 2018, Koichi
Sekiyama, who is not a party to this action, has been the third member of ZL’s board of
directors.
       By 2020, the business relationship between Srinivasan and Leong had soured. In
April 2020, ZL’s board of directors removed Srinivasan as an officer and terminated his
employment, and in June 2020, ZL sued Srinivasan for misappropriation of technology.
       Following his removal and termination, Srinivasan purportedly “went on an all-out
war” against Plaintiffs. In May and September 2020, Srinivasan demanded production of
documents and information from ZL, including copies of the company’s corporate
bylaws, minutes and recordings of board meetings, and financial records. Dissatisfied
with ZL’s response to his demands, Srinivasan called for a special shareholder meeting of
ZL’s shareholders on October 6, 2020. The following day, Srinivasan, through counsel,
sent a 13-page letter to ZL’s counsel, which is at the core of this case.
   B. The October 7, 2020 Letter
       In the October 7, 2020 letter, Srinivasan reiterated his earlier demands for
documents and for a special shareholder meeting as well as requested a list of ZL’s

                                              2
current shareholders. Even more important, the letter accused Leong and Shioya of
misconduct and demanded that the board take corrective action, including removal of
Leong from the board of directors.
          The letter contained a litany of accusations in bullet points stretching nine, single-
spaced pages. It accused Leong and Shioya of “poor leadership,” wasteful spending, and
“incompetence” causing “millions of dollars of losses,” and it contended that Leong had
hired Shioya and taken numerous other actions without board of approval. The letter
further accused Leong of reserving to himself “near-despotic control over Company
operations,” which he exercised without clear disclosure to the board for his personal
benefit; misappropriating corporate assets for his and Shioya’s personal benefit; and
using ZL assets as his “personal ‘piggy bank’” to fund his and Shioya’s lifestyle without
regard for the interests of the corporation and its shareholders. Indeed, the letter
contended that, to further his own interests, Leong had deterred potential buyers by
deliberately overvaluing the company and declining to meet with prospective investors.
Finally, the letter accused Leong of hiding corporate assets by “offshoring ZL’s money
and assets and funneling them into foreign affiliates he and his wife effectively control.”
          The letter concluded by demanding that ZL remove Leong from the board of
directors and take other corrective action “to avoid the commencement of a shareholders’
action,” and it reserved Srinivasan’s “rights and remedies to proceed either in the name of
the corporation in a derivative action or in his own name” if ZL did not promptly take
action.
   C. Other Communications
                 1. Sekiyama
          On or about October 29, 2020, Srinivasan sent an email to Sekiyama, ZL’s third
board member. In addition to asserting that Leong had “refused to take Venture Capital
money” and made “several key decisions . . . without any board meeting or consent,” the
email attached the October 7, 2020 letter to ZL. The email concluded by demanding that

                                                 3
Sekiyama, “as a board member . . . formally look into the contents of the attached letter
and investigate” Leong’s and Shioya’s activities, and it warned Sekiyama that, if he
ignored these problems, he could be held “personally liable.”
              2. Mutaguchi
       Around the same time that he forwarded the October 7, 2020 letter to Sekiyama,
Srinivasan also contacted a major ZL investor, Nobu Mutaguchi, and sent him the letter
as well.
              3. Others
       Finally, Srinivasan contacted several shareholders in an effort to obtain
shareholder proxy votes. Srinivasan apparently did not share or discuss the October 7,
2020 letter with them.
   D. Srinivasan’s Lawsuit
       In November 2020, in his individual capacity as a shareholder, Srinivasan sued ZL
and Leong under Corporations Code section 304. Much as in the October 7, 2020 letter,
Srinivasan alleged that Leong had exercised nearly total control of ZL to the exclusion of
other board members; paid himself a salary and other compensation in amounts
undisclosed to, and without the consent of, ZL’s board; misappropriated corporate funds
to finance a lavish lifestyle; secretly transferred millions of dollars and other corporate
assets into foreign affiliates under his ownership or control; and otherwise engaged in a
“scheme to defraud the Company and its shareholders.” In light of this misconduct,
Srinivasan requested “Leong’s removal as a member of ZL’s board and removal as a ZL
officer.”
   E. The Proceedings in this Case
       In March 2021, Plaintiffs sued Srinivasan, asserting a single cause of action for
defamation. The complaint lists 11 statements, all but one of which paraphrases or
repeats verbatim statements in the October 7, 2020 letter to ZL. (The other allegation is
from Srinivasan’s October 29, 2020 email to Sekiyama.) It alleges that these statements

                                              4
are false and defamatory and that Srinivasan “disseminated and republished” them to “ZL
shareholders, former and current ZL employees and other persons unconnected to the
company.”
       In response, Srinivasan filed a special motion to strike under the anti-SLAPP
statute. Srinivasan argued that Plaintiffs’ defamation cause of action is based on
statements that were made in contemplation of litigation and therefore arise out of
activity protected under subdivision (e)(2) of the anti-SLAPP statute. Srinivasan further
argued that Plaintiffs could not demonstrate a probability of prevailing because the
allegedly defamatory statements are subject to the litigation privilege under Civil Code
section 47.
       After the trial court permitted limited discovery, Plaintiffs opposed the motion to
strike. In so doing, they acknowledged that the October 7, 2020 letter contained
“virtually all of the challenged defamatory statements” and presented evidence of the
October 29, 2020 email to Sekiyama attaching the letter and the transmission of the letter
to Mutaguchi.
       On September 8, 2021, following a hearing, the trial court denied Srinivasan’s
special motion to strike. The court ruled that Srinivasan had not shown that Plaintiffs’
defamation cause of action arises out of protected activity and therefore had failed to
satisfy his burden at step one of the analysis under the anti-SLAPP statute. In particular
the court ruled that Srinivasan had failed to show that the October 7, 2020 letter was
“made in anticipation of litigation contemplated in good faith.” In addition, the court
noted that Srinivasan stated in his declaration that the purpose of the letter was to “spur
ZL to take necessary steps to investigate and remove Mr. Leong and stop the dangers I
believe he poses to [ZL] and its shareholders,” which in the court’s view “undercut any
position that the Letter was created in anticipation of litigation.”
       Srinivasan timely appealed the trial court’s order. (§ 425.16, subd. (j) [orders
granting or denying anti-SLAPP motions are appealable].)

                                               5
                                        II. DISCUSSION
       We review the order denying Srinivasan’s anti-SLAPP motion de novo. (See, e.g.,
Soukup, supra, 39 Cal.4th at p. 269, fn. 3.) We conclude that Srinivasan asserted a mixed
cause of action for defamation containing several claims, some of which are not based on
protected acts, and that the anti-SLAPP motion should have been denied with respect to
those claims. We conclude, however, that other claims arise out of statements made in
connection with anticipated litigation that are protected under the anti-SLAPP statute and
that these claims should be stricken under the anti-SLAPP statute.
    A. The Anti-SLAPP Statute
       The Legislature enacted the anti-SLAPP statute to prevent and deter “lawsuits
brought primarily to chill the valid exercise of the constitutional rights of freedom of
speech and petition for the redress of grievances.” (§ 425.16, subd. (a).) To that end, the
statute “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, italics omitted
(Baral).) In particular, the anti-SLAPP statute authorizes special motions to strike a
claim that “aris[es] from any act of that person in furtherance of the person's right of
petition or free speech under the United States Constitution or the California Constitution
in connection with a public issue,” and such a claim must be stricken unless “there is a
probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).)
       Anti-SLAPP motions are analyzed in two steps. First, “the moving [party] bears
the burden of establishing that the challenged allegations or claims ‘aris[e] from’
protected activity in which the defendant has engaged. [Citations.]” (Park v. Board of
Trustees of California State University (2017) 2 Cal.5th 1057, 1061 (Park).) Second, if
the moving party shows that claims arise from protected activity, the burden shifts to the
opposing party, which “must then demonstrate its claims have at least ‘minimal merit.’ ”
(Ibid.) “Only a [claim] that satisfies both prongs of the anti-SLAPP statute—i.e., that
arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP,

                                              6
subject to being stricken under the statute.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89
(Navellier).)
       If a plaintiff pleads a “mixed” cause of action containing discrete claims based on
allegations of both protected and unprotected activity, “[a]nalysis of an anti-SLAPP
motion is not confined to evaluating whether [the] entire cause of action, as pleaded by
the plaintiff, arises from protected activity or has merit.” (Bonni v. St. Joseph Health
System (2021) 11 Cal.5th 995, 1010 (Bonni).) Instead, each activity out of which a
discrete claim arises is analyzed to determine whether it is protected and whether any
claim arising out of that activity has minimal merit. (Baral, supra, 1 Cal.5th at pp. 393,
395; see Bonni, supra, 11 Cal.5th at p. 1010.)
       While Plaintiffs do not dispute that they have alleged a mixed cause of action for
defamation, they contend that the multiple claims within that cause of action should not
be analyzed individually because Srinivasan did not do so, thereby waiving the Supreme
Court’s ruling in Baral concerning the treatment of mixed causes of action. The Supreme
Court considered a similar argument in Bonni, supra, 11 Cal.5th 995. In Bonni, the
plaintiff argued that its retaliation cause of action should be considered as a whole,
without regard to claims within the cause of action, because the defendants had waived
application of Baral by moving to strike the cause of action in its entirety. (Bonni, supra,
11 Cal.5th at p. 1009-1010, 1011.) The Supreme Court disagreed, ruling that “[o]ur
holding in Baral applies even though the [defendants] sought to strike the entire cause of
action, rather than merely parts of it.” (Id. at p. 1011.)
       The Supreme Court reasoned that waiving Baral would require courts to identify
the “ ‘gravamen’ ” of a cause of action as a whole, which would “risk saddling courts
with an obligation to settle intractable, almost metaphysical problems about the ‘essence’
of a cause of action that encompasses multiple claims.” (Ibid.) The Court also observed
that analyzing multi-faceted causes of action as a whole “would predictably yield
overinclusive and underinclusive results,” which, on the one hand, would “constrain[] a

                                               7
plaintiff’s ability to seek relief without advancing the anti-SLAPP’s goals of shielding
protective activity” and, on the other hand, would “defeat[] the legislative goal of
protecting defendants’ from meritless claims.” (Ibid.) Plaintiffs’ waiver argument raises
both these problems.
       Young v. Midland Funding LLC (2023) 91 Cal.App.5th 63 (Young) does not help
Plaintiffs. In that case, the defendant filed an anti-SLAPP motion seeking to strike the
entire complaint, which the plaintiff defeated by presenting evidence substantiating her
primary claim, which concerned false representation that substituted service had been
effected. (Id. at pp. 72, 77-95.) On appeal, defendants sought for the first time to strike a
paragraph asserting a series of “derivative claims.” (Id. at pp. 72, 95, 97-98.) Rather
than finding application of Baral waived and analyzing the plaintiff’s cause of action as a
whole, as Plaintiffs suggest, Young analyzed the derivative claims separately from the
plaintiff’s primary claim. (Id. at pp. 95-100.) Moreover, Young concluded that the
defendants “either failed to bear their initial burden . . . under Baral or forfeited their
argument by not raising it with sufficient specificity.” (Id. At p. 73.) Thus, far from
supporting Plaintiffs’ waiver argument, Young confirms that courts should apply Baral
and analyze claims individually even when a defendant fails to do so.
       Accordingly, we will analyze the individual claims asserted by Plaintiffs in their
defamation cause of action.
    B. Step One of the Anti-SLAPP Analysis
       The complaint does not identify when and where the allegedly defamatory
statements it challenges were made. However, in response to Srinivasan’s anti-SLAPP
motion, plaintiffs pointed to (1) the October 7, 2020 letter from Srinivasan’s counsel to
ZL’s counsel; (2) the October 29, 2020 email to the ZL board member Koichi Sekiyama
with that letter attached; (3) the transmission of the letter that same day to ZL investor
Nobu Mutaguchi; and (4) various other communications with other ZL investors,

                                               8
shareholders, and employees. In their briefing on appeal, Plaintiffs pointed to the same
communications.
       At oral argument, however, Plaintiffs denied asserting a claim based directly on
the October 7, 2020 letter to ZL’s counsel, relying on a disclaimer that the complaint
challenged only statements “unconnected to . . . any pending or anticipated litigation.”
Especially as Plaintiffs deny that any of the challenged statements are connected to
litigation, this disclaimer at most creates some ambiguity. Plaintiffs might have dispelled
that ambiguity by disavowing any claim based directly on the October 7, 2020 letter in
response to the anti-SLAPP Motion. Plaintiffs, however, did just the opposite: in their
briefing in the trial court (and, again, on appeal), they gave the letter as the first example
of the communications being challenged. Having done that, Plaintiffs cannot avoid
application of the anti-SLAPP statute by denying that they asserted a claim based on the
letter for the first time at oral argument. (Cf. Sylmar Air Conditioning v. Pueblo
Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1054-1056.)
       We now turn to the October 7, 2020 letter and the other communications on which
Plaintiffs have asserted claims.
       1. The October 7, 2020 Letter
       As noted above, Plaintiffs’ defamation claim is based almost entirely on
statements in the October 7, 2020 letter from Srinivasan’s counsel to ZL’s counsel.
Because the letter also demands that ZL take action, and threatens litigation absent such
action, it qualifies as a statement in connection with litigation and is protected under
subdivision (e)(2) of the anti-SLAPP statute.2

       2
          Although on appeal Srinivasan relies primarily on subdivision (e)(4), the anti-
SLAPP statute’s “catch-all” provision, in the trial court he relied solely on subdivision
(e)(2). As a party bringing an anti-SLAPP motion “may not change his theory of the case
for the first time on appeal” in this manner (Flatley v. Mauro (2006) 39 Cal.4th 299, 321,
fn. 10 (Flatley)), we restrict our analysis to subdivision (e)(2). Although Srinivasan did
not separately cite subdivision (e)(2) in his opening brief, he argued at length that there
was a “connection between Srinivasan's alleged defamatory statements and the

                                               9
       The anti-SLAPP statute protects any act of a person “in furtherance of the person’s
right of petition or free speech under the United States Constitution or the California
Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1).) A plaintiff may
establish that an activity is protected by showing that it falls within one of four categories
identified in subdivision (e) of the anti-SLAPP statute, and the second of these categories
is “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).) “Courts have
taken a fairly expansive view of what constitutes litigation-related activity for purposes of
section 425.16.” (Bergstein v. Stroock & Stroock & Lavan LLP (2015) 236 Cal.App.4th
793, 803-804.) To qualify as litigation-related, a statement need not be made while a suit
is pending. To the contrary, “[s]tatements made ‘in anticipation of a court action’ may be
entitled to protection under the anti-SLAPP statute.” (Trinity Risk Management, LLC v.
Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1005 (Trinity),
quoting Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194
Cal.App.4th 873, 887 (Digerati).) In particular, a prelitigation statement may be
protected under subdivision (e)(2) if it concerns “litigation that is contemplated in good
faith and under serious consideration.” (Trinity, at p. 1005, quoting Action Apartment
Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1251.)
       Applying this principle, courts repeatedly have recognized that, “[o]rdinarily, a
demand letter sent in anticipation of litigation is a legitimate speech or petitioning
activity that is protected under section 425.16.” (Malin v. Singer (2013) 217 Cal.App.4th
1283, 1293 (Malin); see also Geragos v. Abelyan (2023) 88 Cal.App.5th 1005, 1027-
1028 [holding demand letter protected conduct]; Feldman v. 1100 Park Lane Associates
(2008) 160 Cal.App.4th 1467, 1476, 1481 [threat to bring unlawful detainer suit];
Blanchard v. DIRECTV (2004) 123 Cal.App.4th 903, 918 (Blanchard) [“demand letter,

litigation.” Neither Srinivasan’s use of subheadings nor his treatment of the record
warrants dismissal.

                                             10
sent in advance of, or to avoid, litigation to vindicate [defendant’s] rights”]; Rohde v.
Wolf (2007) 154 Cal.App.4th 28, 36-37 (Rohde) [voicemail messages threatening
litigation].)
         As Plaintiffs acknowledged at oral argument, Srinivasan’s October 7, 2020 letter
is a demand letter. The letter demanded, among other things, that ZL’s chairman,
plaintiff Leong, be removed from the board of directors due to a litany of misconduct.
The letter made this demand expressly “to avoid the commencement of a shareholder’s
action,” and it reserved Srinivasan’s right to proceed “in his own name against all those
responsible for the improper and unlawful conduct” described. Moreover, it is reasonable
to infer that this demand was made in anticipation of litigation under serious
consideration at the time because Srinivasan actually sued ZL for removal of Leong
based on much the same alleged misconduct on November 3, 2020, less than a month
later.
         It makes no difference that Srinivasan stated in a declaration that the October 7,
2020 letter was intended “to spur ZL to take necessary steps to investigate and remove
Mr. Leong.” That aim is not incompatible with contemplation of litigation. To the
contrary, Srinivasan could have hoped that the letter would prompt ZL to remove Leong
and take other desired corrective action while recognizing that ZL might not give in and
it would be necessary to sue. Indeed, demand letters typically seek to resolve disputes
informally while recognizing that litigation may be necessary. Far from suggesting that
he acted differently, Srinivasan’s declaration noted that he sued “[w]hen ZL took no steps
to curtail the harm caused by Mr. Leong.”
         At oral argument, Plaintiffs asserted that not all the statements made in the
October 7, 2020 letter appear in the Corporations Code section 304 complaint that
Srinivasan filed the following month. While that is true, the anti-SLAPP statute’s
protection for statements in connection with litigation does not require a one-to-one
correspondence. To the contrary, “ ‘courts have adopted “a fairly expansive view of what

                                              11
constitutes litigation-related activities,” ’ ” which requires only that “a statement
‘concern[s] the subject of the dispute.’ ” (Neville v. Chudacoff (2008) 160 Cal.App.4th
1255, 1268.) That requirement is easily satisfied here because the statements in the
October 27, 2020 letter challenged by Plaintiffs concern Leong’s alleged dishonesty,
abuse of authority, and mismanagement of ZL, which is the subject addressed by the
complaint. In addition, while Chimmy Shioya is not named as a party in the complaint,
she is certainly a subject of the complaint, which requests that any removal order
concerning Leong “be applicable to his wife Shioya as an alter ego of Leong.”
       We therefore conclude that all the statements in the October 7, 2020 letter
challenged by ZL are statements in connection with litigation protected under subdivision
(e)(2) of the anti-SLAPP statute.
       2. The Sekiyama email
       On October 29, 2020, one week before suing ZL, Srinivasan sent an email to
Koichi Sekiyama, ZL’s third board member. After describing some of Leong’s
misconduct, the email demanded that, “as a board member,” Sekiyama “formally look
into the contents of the attached letter and investigate” the activities of Leong and Shioya,
and it attached the October 7, 2020 letter, which, as noted above, threatened to sue ZL if
no corrective actions were taken
       Srinivasan’s email to Sekiyama is as much a pre-litigation demand as the October
7, 2020 letter that Srinivasan’s counsel sent to ZL’s counsel. Because ZL has a three-
person board of directors and the other two members of ZL’s board are Leong and
Srinivasan, Sekiyama held the deciding vote on the relief—among other things, removal
of Leong—sought in the October 7, 2020 letter. Thus, for Srinivasan to obtain relief as a
result of the October 7, 2020 letter, ZL’s counsel would have had to convey the letter or
its substance to Sekiyama. By emailing Sekiyama and attaching the letter, Srinivasas

                                              12
simply cut out the middleman. As a consequence, the email should receive the same
protection under the anti-SLAPP statute as the October 7, 2020 letter.
       3. The Communication with Mutaguchi
       On October 29, 2020, the same day as he emailed Sekiyama, Srinivasan also sent
the October 7, 2020 letter to Nobu Mutaguchi, a major ZL investor. Unlike Leong and
Sekiyama, Mutaguchi was not a ZL board member, and Srinivasan presented no evidence
that Mutaguchi could have influenced either Sekiyama or ZL to provide Srinivasan with
the relief requested. To the contrary, Srinivasan appears to have been pursuing a parallel
remedy: namely, a shareholder vote ousting Leong. However, as Plaintiffs correctly
point out, communications are not in relation to litigation if they “ ‘only serve interests
that happen to parallel or complement a party’s interest in the litigation’ ” and do not
advance the litigant’s case. (City of Costa Mesa v. D’Alessio Investments, LLC (2013)
214 Cal.App.4th 358, 382 [applying litigation privilege]; see also Flatley, supra, 39
Cal.4th at pp. 323-324 [noting that courts may look to the litigation privilege in
determining the scope of subdivision (e)(2)); Briggs v. Eden Council for Hope &
Opportunity (1999) 19 Cal.4th 1106, 1121.) Moreover, Srinivasan has not presented
evidence of any other relation to litigation, such as Mutaguchi’s involvement in
Srinivasan’s suit or encouraging Mutaguchi to sue himself. (Cf. Bel Air Internet, LLC v.
Morales (2018) 20 Cal.App.5th 924, 940-941 [counseling or encouraging others to sue];
Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043, 1055
[requesting involvement in suit].) As a consequence, Srinivasan’s anti-SLAPP motion
fails with respect to that communication.
       4. Other Communications
       The complaint also alleges additional, unspecified communications with other
shareholders, former and current ZL employees and others unconnected to the company.
Srinivasan, however, has not demonstrated that these statements have any connection

                                             13
with the litigation that he was contemplating. Consequently, his anti-SLAPP motion fails
with respect to these communications as well.
    C. Step Two of the Anti-SLAPP Analysis
           Because Srinivasan satisfied his burden on step one of the anti-SLAPP analysis
only with respect to the claims based on the October 7, 2020 letter and the email to
Sekiyama, we proceed to step two of the analysis only with respect to these claims. We
conclude that Plaintiffs have not satisfied their burden on this step because the litigation
privilege bars claims based on the letter and the Sekiyama email.3
       As noted above, at step two of the anti-SLAPP analysis the burden shifts to the
plaintiff to establish “a probability that the plaintiff will prevail” (§ 425.16, subd. (b)(1)),
which a plaintiff may do by “demonstrat[ing] its claims have at least ‘minimal merit.’ ”
(Park, supra, 2 Cal.5th at p. 1061, quoting Navellier, supra, 29 Cal.4th at p. 89.) In
particular, a plaintiff must show that it has “a legally sufficient claim” and make “a prima
facie factual showing sufficient to sustain a favorable judgment.” (Baral, supra, 1
Cal.5th at pp. 384-385.) This demonstration cannot be made if an affirmative defense
bars the plaintiff’s claim. (See, e.g., Trinity, supra, 59 Cal.App.5th at p. 1006 [“To defeat
an anti-SLAPP motion, cross-complainants must overcome any substantive defenses that
exist.”].)
       Thus, it is well-established that “a plaintiff cannot establish a probability of
prevailing where the litigation privilege precludes liability.” (Malin, supra, 217
Cal.App.4th at p. 1302, quoting Digerati, supra, 194 Cal.App.4th at p. 888; see Trinity,
supra, 59 Cal.App.5th at p. 1007; Seltzer v. Barnes (2010) 182 Cal.App.4th 953, 972;

       3
         We are not persuaded that Srinivasan’s arguments concerning the litigation
privilege under Civil Code section 47, subdivision (b) should be deemed forfeited due to
procedural noncompliance, and because we conclude that privilege applies, we do not
reach Plaintiffs’ contention Srinivasan has forfeited any reliance on subdivision (c) of
Civil Code section 47.

                                               14
Kashian v. Harriman (2002) 98 Cal.App.4th 892, 926-927; Rohde, supra, 154
Cal.App.4th at p. 38.)
       The litigation privilege bars Plaintiffs’ defamation claims based on the October 7,
2020 letter and the Sekiyama email. The litigation privilege applies to any publication
made “[i]n any . . . judicial proceeding” (Civ. Code, § 47, subd, (b)), and in keeping with
its goal of providing “the utmost freedom of access to the courts,” the privilege has been
interpreted broadly to cover “communications with ‘some relation’ to an anticipated
lawsuit.” (Rubin v. Green (1993) 4 Cal.4th 1187, 1194, italics omitted.) As pre-suit
demand letters have a close relation to anticipated litigation, courts repeatedly have held
that the litigation privilege covers such demand letters. (See, e.g., Malin, supra, 217
Cal.App.4th at pp. 1301-1302; Rohde, supra, 154 Cal.App.4th at p. 38; Blanchard, supra,
123 Cal.App.4th at pp. 919-922; Aronson v. Kinsella (1997) 58 Cal.App.4th 254, 270
Lerette v. Dean Witter Organization, Inc. (1976) 60 Cal.App.3d 573, 577-578.) Both the
October 7, 2020 letter and the Sekiyama email make a pre-litigation demand for the
action—removal of Leong from the ZL board—sought in the Corporation Code section
304 suit filed in early November 2020. Consequently, the litigation privilege applies to
both the October 7, 2020 letter and the Sekiyama e-mail and bars any claim arising out of
statements made in them. (See, e.g., Silberg v. Anderson (1990) 50 Cal.3d 205, 215 [“To
effectuate its vital purposes, the litigation privilege is held to be absolute in nature.”]; see
also Argentieri v. Zuckerberg (2017) 8 Cal.App.5th 768, 780 [“The privilege is absolute
and precludes a claimant from establishing a probability of prevailing on the merits of his
claim.”].)
       Because the litigation privilege bars any claims based on statements made in the
October 7, 2020 letter and the October 29, 2020 Sekiyama email, Plaintiffs cannot
establish a probability of prevailing on the claims based on those communications, and
those claims should be stricken under the anti-SLAPP statute.

                                               15
                                     III.   DISPOSITION
       The September 8, 2021 order denying appellant Srinivasan’s motion to strike is
affirmed in part and reversed in part. On remand, the trial court shall vacate the order
and issue a new order granting the motion to strike defamation claims arising out of the
October 7, 2020 letter and the October 29, 2020 email (including republication of the
letter in that email) but denying the motion with respect to claims arising out of other
republications and communications. The parties shall bear their own costs on appeal.

                                             16
                                           ____________________________
                                           BROMBERG, J.

WE CONCUR:

____________________________
GREENWOOD, P.J.

_____________________________
LIE, J.

ZL Technologies, Inc. v. Srinivasan
H049444

                                      17