Judge Monica Bachner, Case 22STCV19512 2022-09-29 Tentative Ruling

Defendant Arakelian Enterprises, Inc. dba Athens Services’ special motion to strike the complaint of Plaintiff WasteXperts, Inc. is granted. Defendant may separately move for an award of attorneys’ fees and costs.

Defendant Arakelian Enterprises, Inc. dba Athens Services (“Athens”) (“Defendant”) moves to strike the complaint of Plaintiff WasteXperts, Inc. (“WasteXperts”) (“Plaintiff”) on the grounds the causes of action arise out of Defendant’s protected activities, namely, Defendant’s statements in connection with an official proceeding and an issue under consideration or review by an executive or judicial body. (Notice of Motion, pg. 1; C.C.P. §§425.16(e)(1), (2).) Defendant also requests an award of attorneys’ fees and costs. (Motion, pg. 15; C.C.P. §425.16(c).)

Plaintiff’s 9/14/22 evidentiary objections to the Declaration of Cesar Torres (“Torres”) are overruled as to Nos. 1, 2, 3, 4, 5, 6, 8, 9, and 10, and sustained as to No. 7.

Defendant’s 9/19/22 evidentiary objections to the Declaration of Derek Ruckman (“Ruckman”) are overruled as to Nos. 2, 3, 5, 8, 9, 10, 11, 12, and 14, and sustained as to 1, 4, 6, 7 and 13.

Defendant’s evidentiary objections to the Declaration of Erica Boulting (“Boulting”) are overruled as to Nos. 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, and 31.

Defendant’s evidentiary objections to the Declaration of Christopher Frost (“Frost”) are overruled as to No. 32 and sustained as to Nos. 33, 34, 35, 36, and 37.

Plaintiff is a waste management service that provides a variety of services on the premises of a customer, including sorting waste into compostable and recyclable items “in a manner that is environmentally sound” and provides a range of maintenance support that includes operating compactors and pressure washing areas where waste is stored and maintained on the customer’s premises. (Complaint ¶13.) Defendant is a waste removal company in Los Angeles that has existing agreements with governmental entities. (Complaint ¶21.) In or around February 2017, The City of Los Angeles (“City”) and Defendant (collectively, “Defendants”) entered into a personal service contract for an exclusive franchise agreement to collect, transfer, process, and dispose of waste from commercial establishments and applicable multifamily establishments in the West Los Angeles, North Central, and Harbor Zones (“Original Contract”), which Defendants amended in or around March 2019 (“First Amendment”) (collectively, “Franchise Agreement”). (Complaint ¶21.)

Plaintiff alleges that its “novel approach” to waste management is intended to work cooperatively with industry professionals and reduce hidden fees charged to customers and has caused competitors like Defendant to fear losing “hidden ‘distance charges’ related to onsite work.” (Complaint ¶2.) Plaintiff alleges its work is purely onsite, conducted on customers’ private property, within the bounds of the law,[1] whereas Defendant performs work offsite on public property and charges customers “distance charges” related to onsite work. (Complaint ¶2.) Plaintiff alleges “distance charges” are “hidden costs” Defendant charges customers to move customers’ containers from their permanent location(s) to the collection location and back. (Complaint ¶ 22.) Plaintiff alleges Defendant’s distance charges are $25-$35 per container per collection event, and such “hidden charges” can add up dramatically. (Complaint ¶23.) Plaintiff alleges Defendant’s “distance charges” are included in Section 7.4 of Defendant’s Original Contract, under “Extra Services” that Defendant “shall offer their CUSTOMERS.” (Complaint ¶22.) Section 3.1 of the Original Contract purports to give Defendant an “exclusive franchise” to provide “EXTRA SERVICES to each COMMERCIAL ESTABLISHMENT and applicable MULTIFAMILY ESTABLISHMENT[s] in the FRANCHISE ZONE(s).” (Complaint ¶22.)

Plaintiff’s suit relates to actions Defendant Athens took on December 27, 2021, when Plaintiff received a “cease-and-desist” letter from Defendant’s attorneys alleging that Plaintiff’s onsite waste management services (i.e., moving and staging containers) “are tampering with [Defendant’s] property.” (Complaint ¶16; Decl. of Torres, Exh. 2.) Defendant’s letter “alleges Plaintiff has damaged Defendant’s enclosures and placed them in the wrong locations, both of which ‘threaten public health and safety.’” (Complaint ¶16.) Defendant’s letter also claims that Plaintiff’s actions are in violation of the Los Angeles Municipal Code and threatened Plaintiffs with legal action for (1) interference with Defendant’s existing and prospective business relations; (2) trespass; (3) negligence; (4) interference with contract; and (5) violation of LAMC §§66.00.21 and 66.32.1. (Complaint ¶16.) Plaintiff alleges they responded in January 2022 to Defendant’s letter explaining the services Plaintiff provides are wholly appropriate. (Complaint ¶17.) Plaintiff alleges Defendant’s cease-and-desist letter constitutes “the first in a series of attempts to wrongfully weaponize [Defendant’s] franchise agreement with the City.” (Complaint ¶20.)

Plaintiff alleges on or around January 2022, it contacted Daniel K. Meyers, the Division Manager for LA Sanitation’s Solid Resources Commercial Franchise Division for the City’s position “concerning this matter.” (Complaint ¶25.) Plaintiff alleges the City’s position was “jumbled and inconclusive,” but in part “reportedly acknowledged that a property owner could decide who stages containers owned by the property owner.” (Complaint ¶25.) On January 18, 2022, Plaintiff submitted a letter to the City seeking clarification on the City’s position; the City has not responded. (Complaint ¶25.)

Plaintiff alleges Defendant also “made it difficult or impossible for [Plaintiff’s] customers to schedule the pick-up and hauling of trash, which Plaintiff characterizes as an aggressive course of conduct designed to harass and intimidate Plaintiff’s customers.” (Complaint ¶¶26-27, 28.) Defendant allegedly “suddenly made it difficult or impossible for [Plaintiff] to schedule pick-up and handling of trash.” (Complaint ¶27.) Plaintiff alleges on or about January 31, 2022, Plaintiff sent the City a letter requesting the City authorize one of Plaintiff’s customers, AIR Communities, “to contract with another solid waste enterprises to provide the services Defendant was unable or unwilling to perform pursuant to the provisions of the Franchise Agreement,” or to notify Defendant that it was in breach of its Franchise Agreement. (Complaint ¶29.)

Further, Plaintiff alleges Defendant has sent correspondence to Plaintiff’s customers falsely accusing Plaintiff of acting illegally and demanded customers force Plaintiff to “cease immediately.” (Complaint ¶¶3, 30, 34, 35.)

Plaintiff filed the operative Complaint on June 15, 2022, against Defendants alleging five causes of action: (1) declaratory relief; (2) intentional tortious interference with contract; (3) intentional tortious interference with prospective economic advantage; (4) unfair competition in violation of Business and Professions Code §§17200 et seq.; and (5) trade libel. In response, Defendant filed this Motion to Strike each cause of action in the Complaint and award Defendant attorneys’ fees and costs relating to this motion. (Notice of Motion, pg. 1.) Plaintiff filed an opposition on September 13, 2022, and Defendant replied on September 19, 2022.

“Litigation of an anti-SLAPP motion involves a two-step process. First, ‘the moving defendant bears the burden of establishing that the challenged allegations or claims ‘aris[e] from’ protected activity in which the defendant has engaged.’ [Citation] Second, for each claim that does arise from protected activity, the plaintiff must show the claim has “at least ‘minimal merit.’ [Citation]” (Bonni v. St. Joseph Health System (2021) 11 Cal. 5th 995, 1009.) As to the second step inquiry, a plaintiff seeking to demonstrate the merit of the claim “may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence.” (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931 (Sweetwater).)

A plaintiff opposing a special motion to strike has the burden to “state [] and substantiate [] a legally sufficient claim.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 & 93.) “‘Put another way, the plaintiff “must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.”’ [Citations.]” (Navellier, supra, 20 Cal.4th at pgs. 88–89.) To that end, the plaintiff must present competent evidence, “that would be admissible at trial.” (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.) “[D]eclarations may not be based upon ‘information and belief’ [citation]” and documents submitted without the proper foundation will not be considered. (Ibid.) The complaint, even if verified, is insufficient to carry the plaintiff’s shifted burden. (Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 614; Karnazes v. Ares (2016) 244 Cal.App.4th 344, 354 [“pleadings do not constitute evidence”].) (See also Burke, Anti-SLAPP Litigation (The Rutter Group, Civil Litigation Series 2018 § 5:13) “To satisfy prong two, the plaintiff must submit admissible evidence that if credited is sufficient to sustain a favorable judgment against the legal theories asserted by the defendant.”)

“A cause of action is subject to a special motion to strike if the defendant shows that the cause of action arises from an act in furtherance of the Defendants’ constitutional right of petition or free speech in connection with a public issue and the plaintiff fails to demonstrate a probability of prevailing on the claim. [Citations]” (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 883.)

“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’ is defined by statute to include ‘(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.’ [Citation] If the defendant shows that the cause of action arises from a statement described in clause (1) or (2) of section 425.16, subdivision (e), the defendant is not required to separately demonstrate that the statement was made in connection with a ‘public issue.’ [Citation]” (Id.)

“A cause of action arising from a person’s act in furtherance of the ‘right of petition or free speech under the [federal or state] 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 claim will prevail. (C.C.P. §425.16(b)(1).)” (Sweetwater, supra, 6 Cal.5th at 940.) 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.” (C.C.P. §425.16(e).)

“A cause of action is one ‘arising from’ protected activity within the meaning of section 425.16, subdivision (b)(1) only if the Defendants’ act on which the cause of action is based was an act in furtherance of the Defendants’ constitutional right of petition or free speech in connection with a public issue. [Citation] In deciding whether the ‘arising from’ requirement is satisfied, ‘the court shall consider 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).)] Whether the ‘arising from’ requirement is satisfied depends on the ‘gravamen or principal thrust’ of the claim. [Citations] A cause of action does not arise from protected activity for purposes of the anti-SLAPP statute if the protected activity is merely incidental to the cause of action. [Citations]” (Id. at 883-884.) To show that a claim arises from protected activity under section 425.16, subdivision (b)(1), it is not sufficient to show that the claim “was filed after, or because of, protected activity, or when protected activity merely provides evidentiary support or context for the claim.” (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 621) “Rather, the protected activity must ‘supply elements of the challenged claim.’ [Citation omitted]” (Ibid.)

“At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff’s showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing.” (Baral, supra, 1 Cal.5th at 396. (Emphasis Added).)

Defendant argues all causes of action in the complaint are based on Defendant’s prelitigation statements in the form of its cease-and-desist communications to Plaintiff and various third parties, which qualify as statements Defendant made in connection with an official proceeding. (C.C.P. §425.16(e)(1)-(2).) Defendant argues the causes of action are additionally based on issues that are under consideration or review by an executive body. (C.C.P. §425.16(e)(2).)

Statements Made in Connection with Issue under Judicial Review (C.C.P. §425.16(e)(1) and (2)

Defendant met its burden of showing the causes of action asserted in Plaintiff’s complaint arise from protected activity under C.C.P. §425.16(e)(1) and (e)(2). All five causes of action are based on Defendant’s cease-and-desist letters to Plaintiff and Plaintiff’s customers, which amounts to prelitigation correspondence. (Complaint ¶¶16, 17, 20, 30, 34, 35; Decl. of Torres, Exhs. 2, 4.)

CCP § 425.16(e)(1) protects statements made “before a judicial proceeding,” and § 425.16(e)(2) protects statements made “in connection with an issue under consideration or review by a . . . judicial body.” Thus, the provisions apply to prelitigation communications. (See Sylmar Air Cond. v. Pueblo Cont. Servs., Inc. (2004) 122 Cal. App. 4th 1049, 1057-59 (anti-SLAPP statute protects statements to plaintiff by defendant and its counsel made before, as well as during, litigation).

Communications “ ‘within the protection of the litigation privilege of Civil Code section 47, subdivision (b) [citation], ... are equally entitled to the benefits of section 425.16.’ [Citations.]” (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115.) “The [litigation] privilege [of Civil Code §47(b)] 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 objects of the litigation, and (4) that have some connection or logical relation to the action.” (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 912.) “‘To be protected by the litigation privilege, a communication must be ‘in furtherance of the objects of the litigation.’ [citation] This is ‘part of the requirement that the communication be connected with, or have some logical relation to, the action, i.e., that it not be extraneous to the action.’ [citation] A prelitigation communication is privileged only when it relates to litigation that is contemplated in good faith and under serious consideration. [Citations.]’” (Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467, 1486.)

Plaintiff’s complaint is based on Defendant’s communications in anticipation of litigation, which qualify as statements made before a judicial proceeding. (Decl. of Torres, Exhs. 2, 4; C.C.P. §425.16(e)(1); Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 918 (Blanchard) [determining entire lawsuit premised on Defendant’s demand letter to Plaintiff in advance of or to avoid litigation].) Here, Plaintiff’s causes of action for declaratory relief and trade libel are based on Defendant’s cease-and-desist letter to Plaintiff and threats of legal action. (Complaint ¶¶16, 17, 20, 31, 32, 49, 58; Decl. of Torres, Exh. 2.) Further, Plaintiff’s causes of action for intentional tortious interference with contract, intentional tortious interference with prospective economic advantage, unfair competition, and trade libel are based on Defendant’s cease-and-desist letters to Plaintiff’s clients regarding Defendant’s franchise rights. (Complaint ¶¶30, 34, 35, 38, 43, 51; Decl. of Torres, Exh. 4.) Anti-SLAPP protections extend to prelitigation communications with third parties, even though the recipients of the letters, like AIR Communities, were not prospective parties in the dispute. (Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 945 [“[Defendants’] alleged prelitigation communications with [third-party] employees did not simply provide evidence of liability or occur close in time to some other act that is the basis for [Plaintiff’s] claim. Rather, according to [Plaintiff’s] allegations, [Defendants] urged other employees to pursue a particular course of conduct”]; Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1270 [holding letter sent by cross-Defendant employer to cross-Complainant employee’s customers was “in connection with” issues in anticipated lawsuit]; Blanchard, supra, 123 Cal.App.4th at pgs. 918-919; Rohde v. Wolf (2007) 154 Cal.App.4th 28, 36-37 [determining voicemails sent by Defendant to third-party listing agent were statements made in connection with asset that was subject of dispute in which both Plaintiff and Defendant threatened litigation].)

In opposition, Plaintiff argues the cease-and-desist letters fail to indicate any intent to litigate and Defendant’s communication were not performed in anticipation of litigation to trigger the litigation privilege. (Opposition, pgs. 10-11.) However, a review of the letters themselves demonstrates this argument is without merit, given the letters clearly indicate that Defendant intends to “exercise all remedies,” “seek damages,” and “enforce its rights,” i.e., pursue legal action, if Plaintiff does not cease its interference. (See Decl. of Torres, Exh. 2 [“[Plaintiff’s] [actions] interfere[] with [Defendant’s] existing and prospective business relations. [Defendant] will exercise all remedies available to make sure that this wrongful conduct stops immediately…[Plaintiff’s] unauthorized and intentional movement of [Defendant’s] containers constitutes a tortious—and actionable—trespass to Athens’ personal property. If this does not stop, [Defendant] will seek damages for all damages caused by [Plaintiff’s] negligent handling of [Defendant’s] containers… In such a case [of no response by Plaintiff], [Defendant] plans to proceed with enforcing its rights without any further notice.”].) The communications to Plaintiff’s customers similarly amount to communications in anticipation of litigation. The fact Plaintiff filed its action against Defendant first does not mean the communications themselves were not part of Defendant’s anticipated litigation against Plaintiff to enforce its rights.

The Anti-SLAPP commercial exemption, C.C.P. §425.17(c), does not apply. Defendant’s cease-and-desist letters were not “comparative advertising” to promote or secure a sale or while delivering services, but rather to communicate to Plaintiff and Plaintiff’s customers that Defendant was contemplating litigation. (See FilmOn.com Inc. v. DoubleVerify Inc., 7 Cal. 5th 133, 147 (2019) [“the language of section 425.17, subdivision (c), and subsequent case law indicate that the provision exempts ‘only a subset of commercial speech’—specifically, comparative advertising”]; Demetriades v. Yelp, Inc. (2014) 228 Cal.App.4th 294, 308-310 [“The legislative history indicates this legislation is aimed squarely at false advertising claims.”].) Further, Plaintiff concedes Defendant is not a competitor. (Complaint ¶2 [“WasteXperts’ programs are intended to work cooperatively with garbage industry professionals”; ¶24 [“The services WasteXperts provide to its clients are different and additive, complementing the services provided by solid waste haulers.”].) Therefore, Plaintiff has not met its burden to establish the C.C.P. §425.17(c) exemption applies.

Defendant met its burden of proving Plaintiff’s complaint arises from protected activity. Therefore, the burden shifts to Plaintiff to demonstrate a probability of prevailing on its five causes of action.

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.)

Defendant argues Plaintiff cannot prevail on its declaratory relief claim because the City’s authority to award Defendant an exclusive right to “distance services” derives from the City’s plenary power over all municipal affairs (including waste collection) and Municipal Code provisions granting the City the power to enter exclusive franchise agreements to dispose of solid waste and provide associated “distance services.” (Motion, pgs. 10-13.) Defendant also argues Plaintiff lacks standing to seek a declaration that Defendant violated the Franchise Agreement because Plaintiff does not have rights under the Agreement. (Motion, pg. 13.)

Plaintiff has not met its burden to demonstrate a probability of prevailing on its cause of action for declaratory relief. Initially, Plaintiff presented no argument or evidence regarding its probability of prevailing. Moreover, as discussed below, to the extent the Court considers the allegations of the Complaint itself, Plaintiff has not met its burden.

First, Plaintiff is not entitled to a declaration that the city lacks authority to prohibit a property owner from contracting with an onsite waste management company for onsite waste “management” (Complaint, ¶ 32(i)) because the Franchise Agreement confers on Defendant an exclusive right to engage in solid waste handling services, including “distance services.” (See Decl. of Torres, Exh. 1 §3.1 [defining scope of collections services to include “Extra Services” for commercial and multifamily facilities that include “distance services.”]) Plaintiff’s declarations state that Plaintiff is merely seeking a declaration of the rights and liabilities of parties to a contract. (Opposition, pg. 18.) However, Plaintiff is not a party to the Franchise Agreement and has no basis for declaratory relief. (Lafferty v. Wells Fargo Bank (2013) 213 Cal.App.4th 545, 570, as modified on denial of reh’g (Feb. 27, 2013) [holding no standing to seek declaratory relief as to agreement where plaintiffs were not parties or beneficiaries] [citing Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 54].)

Second, Plaintiff is not entitled to a declaration that the City lacks authority to give Defendant an exclusive franchise to enter multifamily and commercial properties to provide “distance services.” (Complaint, ¶ 32(ii).) The city has plenary power over all municipal affairs.. (Ribikoff v. City of Long Beach (2018) 27 Cal. App. 5th 150, 168, as modified (Sept. 13, 2018)). The City’s police power flows from Article XI, § 7 of the California Constitution, which provides that a “city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.” (Cal. Const. art. XI, §7.) Article XI, § 5 grants plenary authority over all municipal affairs to charter cities, such as the City. (Cal. Const. art. XI, §5(b).) Control of waste collection falls within the basic scope of the police powers delegated to local governments. (E.g., City of Santa Rosa v. Industrial Waste & Debris Box Rentals, Inc. (1985) 168 Cal.App.3d 1132, 1135; City of Camarillo v. Spadys Disposal Service (1983) 144 Cal.App.3d 1027, 1030.) Further, the Public Resource Code defines “solid waste handling” as the “collection, transportation, storage, transfer, or processing of solid waste” and confers the City with the power to determine aspects of solid waste handling, including means of collection, charges and fees, the extent of providing solid waste handling services, and whether the services are to be provided by a wholly exclusive franchise. (Pub. Res. Code §§40195, 40059(a)(1)-(2).) Accordingly, the City’s Municipal Code further states, “[s]hould the City at any time award a franchise or contract for the disposal of solid waste, then no person, other than the franchisee or contractor, shall thereafter be permitted to provide services covered by such franchise or contract within the granted franchise or contract area except as otherwise permitted by the Board.” (L.A.M.C §66.08.1.) The Municipal Code explicitly authorizes the City to grant an exclusive agreement to provide collection services in the case of commercial and multifamily facilities. (L.A.M.C. §66.33.2(a) [“The City may award contracts for collection services for commercial establishments and multifamily dwellings through an exclusive franchise agreement authorizing and obligating the holder to provide collection services within a franchise zone.”]; see also L.A.M.C. §66.33.3 [“it is unlawful for any person to provide collection services to a commercial establishment or multifamily dwelling within a franchise zone unless a written franchise agreement therefor has been executed.”].) Pursuant to the California Constitution, California statutes, and municipal law, Plaintiff has no basis for declaratory relief that the City lacks authority to give Defendant an exclusive franchise to enter multifamily and commercial properties to provide “distance services.”

Third, Plaintiff is not entitled to a declaration that the City may not require franchise agreements for “onsite management of solid waste and recycling programs” (Complaint, ¶ 32(iii)) for the same reasons just explained with regards to “distance services.”

Fourth, Plaintiff is not entitled to a declaration that the Franchise Agreement does not grant Defendant an exclusive franchise for “onsite waste and recycling management.” (Complaint, ¶ 32(iv).) The Franchise Agreement includes this exclusive right in Section 3.1, defined in Table 7-3 of the Agreement, limited to the movement of containers filled with solid waste that are to be moved between 100 to 200 feet to exterior locations for pickup. (See Decl. of Torres ¶¶3-7, Exh. 1 §3.1 [defining scope of collections services to include “Extra Service[s]” for commercial and multifamily facilities that include “Distance Charge[s].”]) Plaintiff has no basis for declaratory relief because it is not a party to the Franchise Agreement, and Defendant’s exclusive franchise right is stated in the Agreement as authorized by the Municipal Code.

Fifth, Plaintiff is not entitled to a declaration that the City “did not confer an exclusive franchise to [Defendant] to enter commercial and applicable multifamily properties to move and stage [Defendant]-owned containers and charge customers associated ‘distance charges’” (Complaint, ¶ 32(v)) for the same reasons stated above.

Sixth, Plaintiff is not entitled to a declaration that customers “are not required to accept [Defendant’s] ‘offer’ to move and stage containers and charge ‘distance charges’” (Complaint, ¶ 32(vi)), for the same reasons stated above and because under the Franchise Agreement, if customers themselves do not move containers to a location for pickup, only Defendant may do so and charge for that service. (See Decl. of Torres ¶¶7, Exh. 1 §3.1; L.A.M.C. §66.33.3.)

Seventh, Plaintiff is not entitled to a declaration that Defendant violated the Franchise Agreement by declining residential communities’ requests for service changes (Complaint, ¶ 32(vii)), because Plaintiff is not a party to the Agreement and lacks standing to seek such relief. (Lafferty, supra, 213 Cal.App.4th at pg. 570.)

The elements of a cause of action for intentional interference with contractual relations are “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.)

Defendant argues Plaintiff cannot prevail on its intentional interference with contract claim because it does not identify any contractual relationship that Defendant breached or disrupted and because the alleged interference consists of Defendant enforcing its own contractual rights. (Motion, pg. 14.) Defendant also argues that the cause of action is barred by Civil Code §47(b) litigation privilege. (Motion pg. 13.)

The litigation privilege under Civil Code §47 is “‘an “absolute” privilege, and it bars all tort causes of action except a claim of malicious prosecution.’ [Citation.] The privilege has also been held to apply to ‘statements made prior to the filing of a lawsuit.’ [Citation.] . . . [C]ommunications preparatory to or in anticipation of the bringing of an action or other official proceeding are within the protection of the litigation privilege of Civil Code section 47, subdivision (b). [Citation.]” (Rohde v. Wolf (2007) 154 Cal.App.4th 28, 38.)

Plaintiff’s claim is barred by Civil Code §47(b) litigation privilege because it pertains to Defendant’s cease-and-desist letters to Plaintiff and Plaintiff’s customers containing statements made prior to the filing of a lawsuit; Plaintiff has not overcome this substantive defense. (Rohde, supra, 154 Cal.App.4th at pg. 38). Further, Plaintiff has not met its burden to demonstrate a probability of prevailing on its cause of action for intentional tortious interference with contract because it has not demonstrated a relationship that was disrupted. Plaintiff argues “customers have stopped using WasteXperts’ ‘push and pull’ service as a result of Athens’ misconduct.” (Opposition, pg. 20; Decl. of Boulting ¶7.) Plaintiff produced evidence of Defendant’s correspondence with one of Plaintiff’s clients. (Decl. of Ruckman ¶ 12, Exh. 3.) However, Plaintiff does not provide evidence of a valid contract with the client or resulting damage. Therefore, Plaintiff has not met its burden on its cause of action for intentional tortious interference with contract.

The elements of a claim for intentional interference with prospective economic advantage include “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional or negligent acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404, citations, brackets, and quotation marks omitted.) Further, “the alleged interference must have been wrongful by some measure beyond the fact of the interference itself. For an act to be sufficiently independently wrongful, it must be unlawful, that is, it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Ibid., citation, ellipsis, and quotation marks omitted.)

Defendant argues Plaintiff cannot prevail on its intentional interference with economic advantage claim because Plaintiff does not allege the existence of an economic relationship with some third party that contains the “probability of future economic benefit to the plaintiff,” but rather that Defendant’s correspondence interfered with Plaintiff’s “business operations.” (Motion, pgs. 14-15.) Defendant also argues that the cause of action is barred by Civil Code §47(b) litigation privilege. (Motion pg. 13.)

Plaintiff’s claim is barred by Civil Code §47(b) litigation privilege, as explained above. Further, Plaintiff has not met its burden to demonstrate a probability of prevailing on its cause of action for intentional tortious interference with economic advantage because Plaintiff’s Complaint does not provide sufficient evidentiary support for its claim that Plaintiff lost revenue from the cancellation of its “push and pull service” at three properties—Palazzo East, Palazzo West, and Broadway Center. (Decl. of Boulting ¶7.) Plaintiff’s email correspondence between customer AIR Communities’ representative, Carrie Diaz, also does not establish that Defendant’s correspondence with AIR Communities caused AIR Communities to cease its relationship with Plaintiff and proximately caused Plaintiff economic harm. (Decl. of Boulting ¶12, Exh. 1 [“Athens is charging us for the bin pulling and will not remove the charges from our bills. They said if we short pay the bills, they will stop service. We can discuss tomorrow, but they are applying pressure since they haven’t received a response. We will need to come to a solution tomorrow.”])

Plaintiff notes in opposition that it is requesting additional discovery for communications between Defendant and customers relating to Plaintiff. (Opposition, 8-9.) However, additional communications between Defendant and Plaintiff’s customers would not increase the probability of Plaintiff prevailing on its cause of action because a claim of tortious interference cannot be based on a defendant’s enforcement of its own contractual rights. (Lawless v. Brotherhood of Painters, Decorators & Paperhangers of America (1956) 143 Cal.App.2d 474, 478 [“If two parties have separate contracts with a third, each may resort to any legitimate means at his disposal to secure performance of his contract even though the necessary result will be to cause a breach of the other contract.”]; SIC Metals, Inc. v. Hyundai Steel Company (C.D. Cal. 2020) 442 F.Supp.3d 1251, 1257, aff’d 838 F. App’x 315 (9th Cir. 2021) [“If the [defendant] is not acting criminally nor with fraud or violence or other means wrongful in themselves but [instead] is endeavoring to advance some interest of his own, the fact that he is aware that he will cause interference with the plaintiff’s contract may be regarded as such a minor and incidental consequence and so far removed from the defendant's objective that as against the plaintiff the interference may be found to be not improper” [quoting Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 56].) Defendant’s communications with Plaintiff’s customers were in furtherance of its rights under the Franchise Agreement. Therefore, Plaintiff has not met its burden on its cause of action for intentional tortious interference with economic advantage.

Defendant argues Plaintiff cannot prevail on its UCL claim because Plaintiff lacks standing; Plaintiff does not allege that it lost money or property. (Motion, pg. 15.) Defendant also argues that the cause of action is barred by Civil Code §47(b) litigation privilege. (Motion pg. 13.)

Plaintiff’s claim is barred by Civil Code §47(b) litigation privilege, as explained above. (Rohde, supra, 154 Cal.App.4th at pg. 38). Further, Plaintiff has not met its burden to demonstrate a probability of prevailing on its UCL cause of action because it failed to allege Defendants lost money or property. (See Kwikset Corp. v. Superiot Court (2011) 51 Cal. 4^th 310, 322 [for a UCL claim, the plaintiff must have suffered a “loss or deprivation of property sufficient to qualify as injury in fact, i.e. economic injury. . .” Here, Plaintiff merely alleges that Defendants have been unjustly enriched by the conduct. Therefore, Plaintiff has not met its burden on its cause of action for UCL.

“Trade libel is the publication of matter disparaging the quality of another’s property, which the publisher should recognize is likely to cause pecuniary loss to the owner. [Citation.] The tort encompasses ‘all false statements concerning the quality of services or product of a business which are intended to cause that business financial harm and in fact do so.’ [Citation.] To constitute trade libel, a statement must be false.” (City of Costa Mesa v. D’Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 376.) “To constitute trade libel the statement must be made with actual malice, that is, with knowledge it was false or with reckless disregard for whether it was true or false.” (J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal.App.4th 87, 97.)

Plaintiff’s claim is barred by Civil Code §47(b) litigation privilege, as explained above. (Rohde, supra, 154 Cal.App.4th at pg. 38). Further, Plaintiff has not met its burden to demonstrate a probability of prevailing on its trade libel claim because it has failed to allege that Defendant “deterred any specific third party from conducting business with plaintiff as required to prevail on a trade libel claim.” (Muddy Waters, LLC v. Superior Court (2021) 62 Cal. App. 5th 905, 924, 925 (“the existence of a specific customer or business entity that refrained from dealing with plaintiff as a result of reliance on [defendant’s statements] is an essential factual element of plaintiff’s cause of action for trade libel”). Therefore, Plaintiff has not met its burden on its cause of action for trade libel.

Based on the foregoing, Defendant’s special motion to strike is granted. With respect to entitlement to attorneys’ fees and costs under C.C.P. §425.16, Defendant may separately move to obtain an award of fees and costs.

[1] Plaintiff cites Article 6 of Chapter VI of LAMC §§66.00 through 66.33.11 governing garbage and refuse collection in the City (“Solid Waste Collection Ordinance”) which does not address onsite management of solid waste and recyclable materials. (Complaint ¶18.) Plaintiff alleges its services are different, additive, and complement the services provided by solid waste haulers and are not the kind of services that a local government agency can franchise under 14 C.C.R. §18984.9(c). (Complaint ¶24.)