Judge: Kevin C. Brazile, Case: 22STCV02248, Date: 2022-08-02 Tentative Ruling

Hearing Date: August 2, 2022

Case Name: Regal Medical Group, Inc., et al. v. Nissanoff, M.D., et al.

Case No.: 20STCV41811 

Matter: Anti-SLAPP Motion

Moving Party: Regal Medical Group, Inc. and Lakeside Medical Organization, A Medical 

Group, Inc.

Responding Party: Advanced Orthopedic Center, Inc.

Notice: OK

Ruling: The Anti-SLAPP Motion is denied.

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On May 27, 2022, Regal Medical Group, Inc. and Lakeside Medical Organization, A Medical Group, Inc. filed the operative First Amended Complaint (“FAC”) against Defendants Advanced Orthopedic Center, Inc. (“AOC”) and Jonathan Nissanoff for (1) violations of the UCL, (2) fraud, (3) unjust enrichment, and (4) declaratory relief.  “This action arises out of Dr. Nissanoff’s ongoing and unlawful efforts to game California’s managed care system as a means for reaping unjust and excessive profits at the expense of patients and health care payers like Plaintiffs Regal and Lakeside.”  (FAC ¶ 1.)

In consolidated case no. 21SMCV01411, AOC filed a Second Amended Complaint (“SAC”) against Regal Medical Group, Inc. for quantum meruit, breach of implied contract, unfair competition, and declaratory relief arising from unpaid medical bills.

 Regal Medical Group, Inc. and Lakeside Medical Organization, A Medical Group, Inc. now bring an Anti-SLAPP Motion with respect to the bribery allegations in AOC’s SAC.  

1. Legal Standard

Code of Civil Procedure section 425.16 sets forth the procedure governing anti-SLAPP motions.  In pertinent part, the statute states, “A cause of action against a person 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 shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”  (Code Civ. Proc. § 425.16(b)(1).)  The purpose of the statute is to identify and dispose of lawsuits brought to chill the valid exercise of a litigant’s constitutional right of petition or free speech.  (Code Civ. Proc. § 425.16(a); Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1055-1056.)

Courts employ a two-step process to evaluate anti-SLAPP motions.  (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 61.)  To invoke the protections of the statute, the defendant must first show that the challenged lawsuit arises from protected activity, such as an act in furtherance of the right of petition or free speech.  (Ibid.)  From this fact, courts “ ‘presume the purpose of the action was to chill the defendant’s exercise of First Amendment rights.  It is then up to the plaintiff to rebut the presumption by showing a reasonable probability of success on the merits.’ ”  (Ibid.)  In determining whether the plaintiff has carried this burden, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.”  (Code Civ. Proc. § 425.16(b)(2); see Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291 (“Soukup”).)

2. Protected Activity 

To meet their burden for the first prong of the anti-SLAPP analysis, moving parties must demonstrate that the bribery allegations arise from protected activity.  That is, it must be that “defendant’s conduct by which plaintiff claims to have been injured falls within one of the four categories described in subdivision (e) . . . ‘the act underlying the plaintiff’s cause’ or ‘the act which forms the basis for the plaintiff’s cause of action’ must itself have been an act in furtherance of the right of petition or free speech.’ ”  (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 63 (internal citations omitted).)  

An “ ‘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, 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.”  (Code Civ. Proc. § 425.16(e).)

Here, the relevant allegations of the SAC are as follows.  Moving parties paid “Patient 5” $500, but this payment was not tied to medical coverage.  This “gratuitous” $500 was supposedly reimbursement for AOC’s taking of a deposit, which AOC already has or will return.  “AOC is informed and believes that Defendants paid $500 to Patient 5 at least in part in order to influence Patient 5’s testimony in AOC’s lawsuit against Regal. Around the same time as their payment to Patient 5, Defendants did, in fact obtain a written declaration, drafted wholly by Defendants’ counsel, that made multiple outright misrepresentations with respect to AOC’s business practices and contained skewed and inaccurate testimony favoring Defendants. [¶] The declaration Defendants obtained in exchange for payment falsely attests to numerous facts and circumstances that Defendants wanted Patient 5 to testify to, but which are simply not true. For instance, the declaration gets wrong numerous basic facts about AOC’s business practices and processes. It was clearly drafted by someone who was not actually familiar with AOC’s way of doing business. That was no deterrent to Defendants, who paid Patient 5 and obtained a false and inaccurate declaration. . . . . On information and belief, the payment by Defendants constitutes bribery under California law and is punishable as a felony. ”  (SAC ¶¶ 91-92, 94.) 

These bribery allegations are relevant to AOC’s claims for unfair competition and declaratory relief. 

Moving parties argue that these allegations arise from protected activity because the SAC target’s moving parties’ procurement of false testimony for a lawsuit.  (Code Civ. Proc. § 425.16(e)(2).)  

AOC argues that these allegations do not arise from protected activity in that the elements of its bribery claim simply target moving parties’ gratuitous payment with intent to obtain testimony; that is, there is no requirement to show that moving parties actually obtained any false testimony.  AOC contends that the allegations as to a false declaration merely serve as “evidence” of liability and do not constitute the gravamen of its claims. 

“[I]n ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.”  (Park v. Bd. of Trustees of California State Univ. (2017) 2 Cal.5th 1057, 1063.)

With respect to bribery, the SAC cites Penal Code § 641.3 and 18 U.S.C. § 102(b).  AOC’s Opposition concedes these statutes have no relevance; AOC points to its notice of errata that replaces Penal Code § 641.3 with Penal Code § 137, and 18 U.S.C. § 102(b) with 18 U.SC. § 201(c).  Moving parties object to the notice of errata as an improper amendment when this Motion stayed the action.

This is a non-issue.  The SAC did properly refer to 18 U.S.C. § 201(c) in paragraph 94, and 18 U.S.C. § 102 does not even exist.  Further, even if Penal Code § 137 was not specifically cited, it is fairly encompassed by the allegations of the SAC.  Indeed, Penal Code § 137 is the only witness bribery state statute that the Court is aware of.  The objection is overruled.

Penal Code § 137(a) states, “Every person who gives or offers, or promises to give, to any witness, person about to be called as a witness, or person about to give material information pertaining to a crime to a law enforcement official, any bribe, upon any understanding or agreement that the testimony of such witness or information given by such person shall be thereby influenced is guilty of a felony.”

18 U.S.C. § 201(c)(2) states, “Whoever . . . directly or indirectly, gives, offers, or promises anything of value to any person, for or because of the testimony under oath or affirmation given or to be given by such person as a witness upon a trial, hearing, or other proceeding, before any court, any committee of either House or both Houses of Congress, or any agency, commission, or officer authorized by the laws of the United States to hear evidence or take testimony, or for or because of such person’s absence therefrom . . . shall be fined under this title or imprisoned for not more than two years, or both.”

As can be seen from the plain language of these statutes, neither requires that the defendant have actually obtained false testimony.  These statutes target payment coupled with the understanding that the payment is for altered testimony.  Indeed, for Penal Code § 137, “bribery must be proposed by the person offering to give or to receive the bribe, as the case may be, with the criminal intent that a corrupt act will be committed by the one accepting the bribe; if the offender has that intent, the fact that the other party does not subjectively intend to perform is irrelevant.”  (People v. Pic'l (1982) 31 Cal.3d 731, 738.)  Similarly, for 18 U.S.C. § 201(c)(2), “[t]he crime is consummated whether or not the offer is accepted by the offeree.”  (United States v. Hernandez (5th Cir. 1984) 731 F.2d 1147, 1149.)

Furthermore, AOC’s claims do not seek damages for false testimony, as the bribery allegations are relevant only to AOC’s claims for declaratory relief and unfair competition.  

For these reasons, AOC’s claims are premised on moving parties’ payment and their corresponding intent, with false testimony merely serving as evidence of liability.  This is insufficient to show that AOC’s bribery allegations arise from protected activity.   This is because “a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.”  (Park v. Bd. of Trustees of California State Univ. (2017) 2 Cal.5th 1057, 1060.)  

As AOC’s bribery claim does not arise from protected activity, the Anti-SLAPP Motion is denied.  The objections are overruled.

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.