Judge: Helen Zukin, Case: 22STCV16879, Date: 2023-02-21 Tentative Ruling

Case Number: 22STCV16879    Hearing Date: February 21, 2023    Dept: 207

Background

 

Plaintiffs Dennis Brokaw and Bonnie Brokaw (“Plaintiffs” or the “Brokaws”) bring this action against Defendants Robert T. Dolan and Gaglione, Dolan & Kaplan, PC (collectively the “Dolan Defendants”), Defendants Morey & Upton, LLP and John H. Upton (collectively the “Upton Defendants”), and Defendant New York Marine and General Insurance (“New York Marine”) stemming from the Upton Defendants’ previous representation of Plaintiffs in a personal injury action. Plaintiffs separately filed a suit for malpractice against the Upton Defendants, which is currently pending in arbitration. Plaintiffs’ instant action alleges Defendants impermissibly conspired to interfere with the prosecution of their personal injury and malpractice actions.

 

The Dolan Defendants, Morey & Upton, and New York Marine have separately moved to strike Plaintiffs’ entire Complaint pursuant to Code Civ. Proc. § 425.16, which extends protections to strategic lawsuits against public participation (“SLAPP” actions). Plaintiffs oppose Defendants’ motions. As these motions involve overlapping issues and arguments, the Court will address them together.

 

Request for Judicial Notice

 

The Dolan, Upton, and New York Marine Defendants separately request the Court take judicial notice of various court records from this and other actions involving Plaintiffs. These requests are unopposed and are GRANTED.

 

Objections to Evidence

 

The Court SUSTAINS the Dolan Defendants’ objections 5, 6, 7, 8, 9, 14, 15, 16, 18, 19, 23, 24, and 26 to the Declaration of Bonnie Brokaw, objection 4 to the Declaration of Richard Dahl, and objections 2, 3, 4, 5, 6, 7, 9, and 11 to the Supplemental Declaration of Richard Dahl. The Dolan Defendants’ objections are otherwise OVERRULED.

 

The Court SUSTAINS the Upton Defendants’ objections 4, 5, 6, 7, 8, 9, 15, 16, 17, 19, 21, 22, and 24 to the Declaration of Bonnie Brokaw, objection 2 to the Declaration of Richard Dahl, and objections 2, 3, 4, 5, 6, 7, 9, and 11 to the Supplemental Declaration of Richard Dahl. The Upton Defendants’ objections are otherwise OVERRULED.

 

The Court SUSTAINS New York Marine’s objections 6, 7, 8, 9, 10, 15, 16, 17, 19, 20, 24, 25, 27 to the Declaration of Bonnie Brokaw, objection 4 to the Declaration of Richard Dahl, and objections 2, 3, 4, 5, 6, 7, 9, and 11 to the Supplemental Declaration of Richard Dahl. New York Marine’s objections are otherwise OVERRULED.

 

Legal Standard

 

In 1992, the Legislature enacted Code Civ. Proc. § 425.16 as a remedy for the “disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” (C.C.P. §425.16(a); Wilcox v. Sup. Ct. (1994) 27 Cal.App.4th 809, 817.) The lawsuits are commonly referred to as “SLAPP” lawsuits, an acronym for “strategic lawsuit against public participation.” (Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57, fn. 1.) A defendant opposing a SLAPP claim may bring an “anti-SLAPP” special motion to strike any cause of action “arising 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….” (C.C.P. § 425.16(b)(1).)

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In ruling on an anti-SLAPP motion, a trial court uses a “summary-judgment-like procedure” at an early stage of the litigation. (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) The procedure is a two-step process. First, the moving defendant must show that the acts of which the plaintiff complains were protected activity, namely, that they were taken “in furtherance of the [defendant]’s right of petition or free speech under the United States or California Constitution in connection with a public issue.” (C.C.P. §425.16(b)(1).) If the defendant carries that burden, the burden shifts to the plaintiff to demonstrate a probability of prevailing on the claim. (C.C.P. § 425.16(b)(3).)

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In making both determinations, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (C.C.P. § 425.16(b)(2); Equilon, supra, 29 Cal.4th at 67.)

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Pursuant to section 425.16(f) “[t]he special motion may be filed within 60 days of the service of the complaint or, in the court’s discretion, at any later time upon terms it deems proper.”

 

Analysis

 

            1.         Factual Background

 

In January 2012, Mr. Brokaw was injured in a single-vehicle automobile accident in Riverside, California when he crashed into a concrete barrier (“the Collision.”) (Complaint at ¶¶14-15.) The specific location where the Collision occurred was owned by the Riverside County Transportation Commission (“RCTC”). (Id at ¶16.) Via a written agreement that contained an arbitration provision, Mr. Brokaw retained the Upton Defendants to file a lawsuit regarding the Collision. (Id. at ¶7.) Thereafter, Mrs. Brokaw also retained the Upton Firm regarding her loss of consortium claims, but no written retainer agreement signed by Mrs. Brokaw has been located. (Id. at ¶18.)

 

In January 2013, the Upton Defendants filed the personal injury action on behalf of the Brokaws. (Ex B to Dolan RJN.) The complaint sought compensation for injuries sustained by Mr. Brokaw and for Mrs. Brokaw’s loss of consortium. (Ibid.) The Upton Defendants named as defendants the City and County of Riverside and the State of California in the personal injury action but did not name RCTC. (Ibid.) During the representation by the Upton Defendants, the County and the State were dismissed and the City was the only defendant left in the personal injury action. (Complaint at ¶¶30-37.) In September 2015, the Brokaws terminated their attorney-client relationship with the Upton Defendants. (Ex. C to Dolan RJN at 22.) Thereafter, the Brokaws were represented by a series of lawyers including (1) the Nick Pacheco Law Group; (2) Law Offices of Joseph W. Carcione, Jr., Inc. (“the Carcione Firm”); and (3) Markowitz Law Group (“the Markowitz Firm”). (Id. at 22, 45, and 46.)

 

In January 2017, with the personal injury action still pending, the Brokaws filed a legal malpractice lawsuit against the Upton Defendants predicated on RCTC not being named in the personal injury action. (Ex. D to Dolan RJN.) Via their professional liability insurance carrier (New York Marine), the Upton Defendants retained the Dolan Defendants to defend them in the legal malpractice action. (Dolan Decl. at ¶2.) The Upton Defendants initially sought to compel the matter to arbitration pursuant to the retainer agreement between Mr. Brokaw and the Upton Defendants, but the motion was denied because Mrs. Brokaw was not a party to the agreement and thus her claims were not subject to the arbitration provision. (Ex. E to Dolan RJN.)

 

In March 2017, a jury trial was held in the personal injury action. (Ex. C to Dolan RJN at 60-80.) At trial, the Brokaws were represented by the Carcione Firm and the Markowitz Firm. (Ibid.) At the conclusion of the trial, the jury verdict found Mr. Brokaw had sustained damages in the amount of $450,000. (Ex. F to Dolan RJN.) The Jury Verdict apportioned liability for Mr. Brokaw’s injuries as follows: (a) 5% for Real Estate Consulting Services, Inc.; (b) 11% for the City of Riverside; (c) 12% for the State; and (d) 72% for RCTC. (Ibid.) As for Mrs. Brokaw, the jury awarded her zero damages. (Ibid.)

 

In July 2017, now represented by the Markowitz Firm in the legal malpractice action, the Brokaws filed an amended complaint in the legal malpractice action. (See Ex. G to RJN.) In the amended complaint, the Brokaws allege that the Upton Defendants caused them damage by negligently failing to name RCTC and dismissing the State—each of whom were found partially liable for the Collision in the Jury Verdict. (Ibid.)

 

In November 2017, Mrs. Brokaw filed an appeal of the jury verdict in the personal injury action. (See Ex. H to Dolan RJN.) Mr. Brokaw did not appeal. (Ibid.) However, prior to any briefing in the appeal, Mrs. Brokaw sought to work out a deal with the City wherein (1) $45,000 in loss of consortium damages for Mrs. Brokaw would be added to the Jury Verdict; and (2) the liability apportionment in the Jury Verdict would remain unchanged. (Ex. I to Dolan RJN.) This would mean that the City would owe Mrs. Brokaw less than $5,000 (11% liability on $45,000), but avoid paying counsel to litigate the appeal. (Ibid.) However, for Mrs. Brokaw, this would create a legal malpractice claim not provided for in the Jury Verdict. (Ibid.) Specifically, if the Jury Verdict was modified to provide that Mrs. Brokaw had been damaged and that RCTC was largely responsible for that damage, Mrs. Brokaw and Mr. Brokaw would be similarly postured in the legal malpractice action. (Ibid.)

 

In early June 2018, Mrs. Brokaw and the City filed a motion for stipulated disposition in the personal injury action asking the Court of Appeal to approve the terms listed above. (Ibid.) On June 14, 2018, after learning of the Disposition Motion, the Dolan Defendants objected via a letter brief in the appeal. (Dolan Ex. J to RJN.) In the letter brief, which was served on all parties to the appeal including Mrs. Brokaw, the Dolan Defendants provided the Court of Appeal with the (1) the Jury Verdict; and (2) the operative complaint in the Legal Malpractice Action. (Ibid.) the letter brief did not disclose the Brokaws’ confidential information, but merely informed the Court of Appeal of matters of the public litigation record. (Ibid.) In the letter brief, the Dolan Defendants argued that overriding the jury verdict, as requested in the disposition motion, would violate Code Civ. Proc. § 128(a)(8) because it would adversely impact the interests of the Upton Defendants in the legal malpractice action by creating damages for Mrs. Brokaw where none existed under the Jury Verdict. (Ibid.)

 

After back-and-forth letter briefing, the Court of Appeal agreed with the Dolan Defendants and denied the disposition motion. (Exs. K-M to Dolan RJN.) The Court of Appeal held that granting the disposition motion would improperly reverse the jury verdict in a manner that had a “reasonable possibility” of negatively impacting the Upton Defendants in the legal malpractice action. (Ex. N to Dolan RJN.) In response, the Brokaws filed a State Bar Complaint against the Dolan Defendants. (Ex. O to Dolan Decl.) When the State Bar was alerted to the existence of the legal malpractice action and that the letter brief was filed to protect the Upton Defendants’ interest therein, the State Bar dismissed the complaint. (Exs. O and P to Dolan Decl.)

 

In January 2020, the Court of Appeal affirmed the jury verdict, which confirmed Mrs. Brokaw suffered zero damages on her loss of consortium claim. (Ex. H to Dolan RJN.) In October 2018, Mrs. Brokaw dismissed her legal malpractice action against the Upton Defendants. (Complaint at ¶66.) As Mrs. Brokaw was no longer a party to the legal malpractice action, the Dolan Defendants (on behalf of the Upton Defendants) renewed their motion to compel arbitration of Mr. Brokaw’s claims. (Ex. Q to Dolan RJN.) In December 2018, the motion was granted and Mr. Brokaw’ legal malpractice action was compelled to arbitration pursuant to the retainer. (Ibid.)

 

Thereafter, the Brokaw’s counsel in this action, Mr. Dahl, substituted in as counsel for the Brokaws in the legal malpractice action and sought to rescind Mrs. Brokaw’s dismissal. (Ex. R to Dolan RJN.) The Court in the malpractice action denied Mrs. Brokaw’s motions to vacate her dismissal and file an amended complaint. (Ibid.) Meanwhile, Mr. Brokaw’s legal malpractice action remains pending in arbitration, discovery remains open, and the hearing has not occurred. (Ex. T to Dolan RJN.)

 

            2.         Prong One: Protected Activity

 

On May 20, 2022, the Brokaws filed the instant action against the Dolan Defendants, the Upton Defendants, and NYM Insurance. In the Complaint, the Brokaws allege causes of action for (1) breach of fiduciary duty; (2) civil conspiracy; (3) unfair competition; (4) tortious interference with contractual relations and/or intentional interference with prospective economic advantage; (5) fraudulent concealment; and (6) respondeat superior liability. (Ibid.) Each of these causes of action are alleged against all Defendants, except the first cause of action for breach of fiduciary duty is alleged against the Dolan Defendants and Upton Defendants only.

 

The allegations supporting these causes of action are asserted in paragraphs 14 through 87 of the Complaint. Paragraphs 14 through 47 concern background of the Brokaw’s personal injury action and criticisms of the Upton Defendants’ representation of them in connection with that lawsuit. These criticisms form the basis of the malpractice action currently being arbitrated between Mr. Brokaw and the Upton Defendants and are not relevant in determining whether Plaintiffs’ claims in this action arise from the protected activity of Defendants.

 

Plaintiffs’ Complaint alleges the Upton Defendants breached their duties of loyalty and confidentiality to Plaintiffs “by communicating with its adversaries and sharing information and by communicating with the Fourth District Appellate Court improperly in violation of ethics rules and Code of Civil Procedure Section 387.” (Complaint at ¶¶49-50.) Plaintiffs’ claim the Upton and Dolan Defendants interfered with Mrs. Brokaw’s appeal of the jury’s verdict in the personal injury action by sending letters to the Court of Appeal objecting to the settlement reached between Mrs. Brokaw and the City of Riverside. (Id. at ¶¶58-59.) Plaintiffs allege these letters “poisoned the Justices against” Mrs. Brokaw in ruling on her appeal. (Id. at ¶¶61-63.)

 

The Complaint asserts the Dolan and Upton Defendants induced Mrs. Brokaw to dismiss her malpractice claim against the Upton Defendants by failing to object or raise the issue of arbitration when the Judge in the malpractice matter indicated to the Brokaws that Mr. Brokaw’s case would be set for trial if Mrs. Brokaw dismissed her claims. (Id. at ¶¶65-66.) After Mrs. Brokaw dismissed her malpractice claim, the Dolan Defendants brought a motion to compel arbitration on behalf of the Upton Defendants, seeking to enforce the arbitration provision in the retainer agreement between Mr. Brokaw and the Upton Defendants. (Id. at ¶68.) The Court in the malpractice action granted the motion to compel arbitration. (Id. at ¶70.) Plaintiffs’ allege this motion deprived Mrs. Brokaw of the right to a jury trial on her claim for malpractice against the Upton Defendants. (Id. at ¶72.)

 

The Brokaws further claim after the termination of their attorney-client relationship with the Upton Defendants, the Dolan and Upton Defendants “contacted at least four (4) separate attorneys that were intending to represent Plaintiffs in the bodily injury case, or eventually came to represent them, and through the use of lies, extortion, and/or threats, attempted to destroy Plaintiffs’ relationships with said attorneys and deprive Plaintiffs of counsel.” (Id. at ¶¶76-77.) The Complaint also alleges the Dolan and Upton Defendants were “feeding confidential information” to counsel for the City of Riverside in this same time period in order to damage the Brokaws’ personal injury action against the City. (Id. at ¶¶79-82.)

 

Plaintiffs dispute the validity of the arbitration provision in the retention agreement. (Id. at ¶71.) As with paragraphs 14 through 47, this is an issue for the malpractice action pending between Mr. Brokaw and the Upton Defendants and is not an issue before this Court. The same is true of the allegation that the Upton Defendants pursued settlements without the Brokaws’ consent in the underlying personal injury action while they were still representing the Brokaws in that action. (Id. at ¶¶74-75.)

 

Plaintiffs’ Complaint ultimately asserts the Upton and Dolan Defendants breached their duties to Plaintiffs in three ways: (1) by interfering with Plaintiffs’ ability to obtain counsel to represent them in their personal injury and malpractice actions; (2) by communicating confidential information to counsel for the City of Riverside to their detriment in the personal injury action; and (3) interfering in Mrs. Brokaw’s appeal in the personal injury action. (Id. at ¶¶83-84.)

 

These allegations form the basis of each of the causes of action asserted in Plaintiffs’ Complaint. (Id. at ¶¶88, 96, 100, 104, 111, 114.)

 

Defendants each move to strike Plaintiffs’ Complaint in its entirety, arguing all of Plaintiffs’ claims arise from allegations of wrongdoing in connection with the defense of Plaintiffs’ malpractice action against the Upton Defendants. (Dolan Motion at 13-14 [“Here, the alleged conduct giving rise to the claims against the Dolan Defendants is clearly protected litigation activity -- namely their defense of their client (the Upton Defendants) from the Legal Malpractice Action”]; Upton Motion at 7 [“the gravamen of Plaintiffs’ allegations against the Upton defendants is their actions in defending themselves against Plaintiffs’ legal malpractice lawsuit”]; New York Marine Motion at 14-15.)

 

The determination of an anti-SLAPP motion involves a two-step process. First, the moving Defendants bear the burden of establishing that the challenged allegations or claims arise from protected activity in which the Defendants have engaged. Second, for each claim that arises from protected activity, the Plaintiffs must show the claim has at least minimal merit. In determining the first step, “courts are to consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability. The defendant's burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009 [internal quotations and citations omitted].)

 

Where causes of action contain multiple claims, the moving parties bear the burden on showing each claim rests on protected activity. If “a moving party fails to identify how the speech or conduct underlying some of those claims is protected activity, it will not carry its first-step burden as to those claims.” (Id. at 1011.) “A motion directed only to an entire complaint may be denied if some claims involve nonprotected activity (the burden is on the moving party to identify any allegations of protected activity which support a claim of liability.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2021) ¶¶ 7:742 & 7:772 [citing Baral v. Schnitt (2016) 1 Cal.5th 376, 390-391 and Bonni v. St. Joseph Health System, supra, 11 Cal.5th at 1010-1012].)

 

Code Civ. Proc. § 425.16 provides four categories of protected activity which fall within the scope of the statute: (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, or (4) 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. (C.C.P. § 425.16(e)(1)-(4).)

 

As set forth above, Plaintiffs’ Complaint sets forth multiple bases or “claims” within each cause of action. Plaintiffs allege separate and distinct acts of wrongdoing, specifically they allege Defendants (1) interfered with Mrs. Brokaw’s appeal in the personal injury action by sending letters to the Court of Appeal, (2) interfered with Mrs. Brokaw’s right to a jury trial in the malpractice action by inducing her to dismiss her claim so they could move to compel arbitration of Mr. Brokaw’s claim, (3) interfered with Plaintiffs’ ability to obtain counsel to represent them in their personal injury and malpractice actions, and (4) breached the duty of loyalty the Upton Defendants owed to them as clients by communicating confidential information to counsel for the City of Riverside to their detriment in the personal injury action both during and after the Upton Defendants’ representation of Plaintiffs in that action.

 

Defendants’ motions focus principally on the first two claims, and the Court agrees these claims arise from protected activity under C.C.P. § 425.16(e)(1)-(2) as written or oral statements made before a judicial proceeding or in connection with an issue under consideration or review by a judicial body. However, the Court finds Defendants have not carried their burden in demonstrating their alleged interference with Plaintiffs’ ability to obtain counsel or their alleged communication of confidential information to an opposing party in the personal injury action arise from protected activity pursuant to section 425.16.

 

Defendants appear to argue these claims assert actions taken by the Dolan and Upton Defendants in connection with the personal injury and malpractice actions and are thus protected activity under Code Civ. Proc. § 425.16(e)(2). As the court observed in Paul v. Friedman (2002) 95 Cal.App.4th 853, 867 “it is insufficient to assert that the acts alleged were ‘in connection with’ an official proceeding. There must be a connection with an issue under review in that proceeding.” In Paul, the plaintiff and defendant were engaged in arbitration against each other. The plaintiff alleged that in the course of those arbitration proceedings, defendant conducted a harassing investigation into plaintiff and made public disclosure of embarrassing private facts discovered in the course of that investigation. The Court rejected the defendant’s assertion that plaintiff’s claims arose from protected activity in connection with the arbitration proceedings, holding “Fairly read, the complaint alleges [plaintiff] was injured by acts of [defendant] that had no connection to the issues under review in the arbitration.” (Id. at 866.)

 

Defendants here have not shown their alleged interference with Plaintiffs’ ability to retain counsel in the personal injury or malpractice actions had any connection to an issue under consideration or review in either case. Fairly read, Plaintiffs’ Complaint appears to be alleging they were injured by acts of Defendants which had no connection to the issues under review in the personal injury action. As such, Defendants have not shown these alleged actions arose from protected activity under section 425.16(e)(2).

 

A closer question is posed by the allegations that Defendants communicated confidential information to their opponent in the personal injury action, both during and after the Upton Defendants represented Plaintiffs in that action. These allegations appear to assert Defendants shared information bearing on the merits of Plaintiffs’ personal injury action, and thus arguably trigger application of section 425.16(e)(2). However, where, as here, Plaintiffs are alleging a breach of loyalty by their former counsel, the Court must look to the gravamen of Plaintiffs’ claims to determine whether they arise from protected activity.

 

For example, in Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, plaintiffs brought an action against their prior attorneys arguing those attorneys breached their duty of loyalty by representing a rival in arbitration proceedings. Defendants brought an anti-SLAPP motion to strike, arguing the plaintiffs’ claims arose from written statements made in the arbitration proceeding. The trial court granted defendants’ motion to strike and the Court of Appeal reversed, find the gravamen of the plaintiffs’ cause of action was not the defendants’ exercise of the right of petition or speech, but their conflict of interest in representing a rival in arbitration:

 

Respondents’ contention that the claims against them are based on written or oral statements made on Guess's behalf in the arbitration is not accurate. Appellants' claims are based on rule 3-310(C) of the State Bar Rules of Professional Conduct.

 

(Id. at 1186-1187.) Other Courts have reached similar results in the context of claims for breach of loyalty against former counsel. In Freeman v. Schack (2007) 154 Cal.App.4th 719, clients sued their former attorney, claiming he abandoned them to represent adverse interests in a new and different action. The Court of Appeal found the plaintiffs’ claim did not arise from protected activity because the claims did not arise from protected petitioning activity but from the lawyer's “undertaking to represent a party with interests adverse to plaintiffs, in violation of the duty of loyalty he assertedly owed.” (Id. at 732.) The Court concluded the lawyer's litigation activity was only incidental to the core allegations that the attorney breached his duty of loyalty in failing to properly represent the plaintiffs’ interests. (Ibid; see also Coretronic Corp. v. Cozen O'Conner (2011) 192 Cal.App.4th 1381, 1392 [finding plaintiffs’ claim was not a SLAPP because it did not arise from the defendant attorneys’ protected activity of representing their clients in pending or threatened litigation but from the concealment of the defendant attorneys' use of the plaintiffs' confidential information to later represent the plaintiffs' adversary].)

 

Here, Plaintiffs’ claim regarding Defendants’ communications with the attorney for their opponent in the personal injury action are arguably not based on any specific statements or petitioning activity made by Defendants, rather it is based on the violation of Rule 1.9 of the California Rules of Professional Conduct which provides an attorney may not “do anything that will injuriously affect the former client in any matter in which the lawyer represented the former client” or use confidential information acquired by virtue of the previous attorney-client relationship. (See Comment 1 to Rule 1.9.) Ultimately, the Court need not determine whether such conduct is protected activity under section 425.16 as Defendants’ failure to demonstrate Plaintiffs’ claims relating to alleged interference in their ability to obtain new counsel arise from protected activity precludes the Court from granting Defendants’ motions to strike Plaintiffs’ Complaint in its entirety. As the Court finds Defendants have not carried their burden to show all of Plaintiffs’ claims arise from protected activity, the Court need not determine whether Plaintiffs can establish a probability of success on their claims.

 

Defendants’ special motions to strike under Code Civ. Proc. § 425.16 are DENIED.

 

Conclusion

 

Defendants’ special motions to strike under Code Civ. Proc. § 425.16 are DENIED.