Judge Holly J. Fujie, Case Number: 23STCV25101, Date: 2024-12-17 Tentative Ruling

The Court has considered the moving papers. No opposition papers were filed. Any opposition papers were required to have been filed and served at least nine court days before the hearing under California Code of Civil Procedure section 1005, subdivision (b).

Plaintiffs Rokit World, Inc. and Jonathan Kendrick (collectively “Plaintiffs”) commenced this action on October 13, 2023. On June 3, 2024 Plaintiffs filed the operative second amended complaint (the “SAC”) against Defendant asserting causes of action for: (1) breach of implied contract of confidentiality and (2) violation of California financial information privacy act (§§ 4052.5, 4053, and 4054).

On July 3, 2024, Defendant filed the instant demurrer (“Demurrer”) to the SAC. The Demurrer is unopposed.

Defendant has satisfied the meet and confer requirement. (Code of Civil Procedure (“CCP”) § 430.41; Kenney Decl. ¶ 2.)

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; CCP § 430.10, subd. (e).)

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) “[E]ach evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) Courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

Defendant first demur sto the entire SAC on the ground that the claims are barred by the litigation privilege.

California law does not permit liability for communications relating to lawsuits, except in the case of malicious prosecution. (Civil Code, § 47.) The litigation privilege applies to any communication: (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objectives of the litigation; and (4) that have some reasonable relevancy to the subject matter of the action. (Silberg v. Anderson (1990) 50 Cal. 3d 205, 212.) “It is also well settled that the absolute privilege … extends to preliminary conversations and interviews between a prospective witness and an attorney if they are some way related to or connected with a pending or contemplated action. (Ascherman v. Natanson (1972) 23 Cal.App.3d 861, 865.)

Defendant argues that Plaintiffs’ claims are barred by the litigation privilege because “First, the alleged disclosures were made pursuant to a subpoena in a judicial proceeding. (SAC, ¶¶ 8-9.) Second, [Defendant] is a participant in the litigation as authorized by law because it was brought into the litigation via subpoena. (Id.) Third, alleged disclosure was made to comply with a subpoena initiated by a court appointed receiver. (Id.) Last, the Subpoena bore a relation to the proceeding as it arose out of a district court judgment. (Id.)” (Demurrer, p. 11:9-13.)

The Court finds that the Plaintiffs have failed to alleged facts on the face of complaint to state a cause of action because the claims are barred by the litigation privilege. In the SAC, Plaintiffs assert that the allegedly improper disclosures occurred when Defendant received and responded to a subpoena for documents related to an arbitration proceeding between Plaintiffs and the Houston Rockets. (SAC ¶¶ 7-8.) The conduct in question is therefore covered by the litigation privilege.

In addition, Plaintiffs have failed to oppose the demurrer or offer any explanation as to why the litigation privilege does not apply. The Court construes Plaintiffs lack of opposition as a tacit admission that Defendants arguments are meritorious. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.)

Thus, based on the foregoing, the Court SUSTAINS the Demurrer in its entirety. Because the Court finds sufficient cause to sustain the Demurrer on the above stated grounds, it need not reach Defendant’s other arguments.

Because this is Plaintiffs’ third unsuccessful attempt to allege a claim that is not barred by the litigation privilege, they have demonstrated their inability to do so. Defendant’s Demurrer to Plaintiffs Second Amended Complaint is therefore SUSTAINED without leave to amend.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court