Judge Stephen I. Goorvitch, Case Number: 24STCP00313, Date: 2024-07-19 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 24STCP00313, Date: 2024-07-19 Tentative Ruling

[Tentative] Order Granting Respondent Julia Silva’s Special Motion to Dismiss

Petitioner DJCBP Corporation doing business as “Tier One Consulting” (“Petitioner”) filed this verified petition for writ of mandate alleging that the City of Baldwin Park (the “City”) wrongfully and unlawfully revoked its permit for commercial cannabis manufacturing and summarily denied its appeal without a hearing. Petitioner seeks a writ of mandate “compelling the City to reinstate Petitioner’s Municipal Authorization” or, in the alternative, a writ to compel the City to comply with its ministerial duty to hold an appeal. Petitioner also seeks attorney’s fees and costs “as provided by law,” as well as “any other such equitable or legal relief as the Court deems appropriate.” Petitioner named the City and the City Council as respondents, as well as Enrique C. Zaldivar, the City’s Chief Executive Officer “in his official capacity.” Moreover, Petitioner named Julia Sylva (“Sylva”), who represents the City with respect to “all legal matters related to commercial cannabis permits and activities in the City,” including this lawsuit, in “her individual and official capacity.” Now, Sylva moves to dismiss the case under Code of Civil Procedure section 425.16, commonly known as an Anti-SLAPP motion, arguing that her activities relate to her representation of the City in connection with a federal lawsuit and potential litigation. The motion is granted.

On or about April 4, 2018, the City adopted an ordinance which authorized adult-use and medicinal commercial cannabis cultivation, manufacturing, and distribution activities within the city. (Petitioner (“Pet.”) ¶ 14.) Pursuant to the ordinance, “the City entered into development agreements with several cannabis businesses resulting in the issuance of commercial cannabis permits in the forms of Certificates of Occupancy (“COO”). (Id. ¶ 15.) On or about April 3, 2019, the City entered into an amended development agreement with Tier One. (Ibid.)

Sylva is an attorney licensed by the State of California and is outside special counsel to the City handling all legal matters related to commercial cannabis permits and activities in the City. (Petition (“Pet.”) ¶ 8.) On January 18, 2023, Petitioner filed a lawsuit in the United States District Court for the Central District of California “alleging an illegal taking as a result of the City collecting illegal mitigation fees in the form of exactments from Tier One related to its cannabis business.” (Id. ¶ 17.) The parties engaged in settlement discussions relating to that case. (Id. ¶ 19.) On or about November 2, 2023, Sylva sent correspondence to Petitioner in an effort to resolve the dispute. (Id. ¶¶ 19-21.) In a “counter-settlement demand letter,” Sylva stated that she is “authorized” to make a counteroffer on certain enumerated terms. (Id. ¶ 21.) The letter then states:

Be advised, the City of Baldwin Park will also begin to exercise its rights . . . [and] will ‘red tag’ the building . . . and will notify the State of California, Department of Cannabis Control (‘DCC’), that the Tier One local permit/license has been terminated and will request that the DCC license be terminated.

(Ibid.) Sylva copied the Mayor, the City Council, the City’s Chief Executive Officer, and the City Attorney. (Id. ¶ 20.) The letter references the case name and number of the federal case. (Id. Exh. D.)

Sylva then “followed through with her threat to ‘red tag’ (condemn) Tier One’s building by terminating Petitioner’s Municipal Authorization and simultaneously requested termination of the State License.” (Id. ¶ 24.) Specifically, on December 11, 2023, Sylva sent a letter informing the DCC that Tier One’s Municipal Authorization had been terminated. (Id. ¶ 25.) On December 13, 2023, Sylva sent a letter to Petitioner demanding that it cease all commercial cannabis activities at the property. (Id. ¶ 27.)

On December 18, 2023, Petitioner served an appeal of the revocation of its municipal authorization. (Id. ¶ 30.) Sylva sent correspondence, dated December 18, 2023, stating that the City would not participate in any appellate process because she, as cannabis special counsel, could terminate Petitioner’s municipal authorization without a hearing and without action from the City’s Chief Executive Officer and/or the City Council. (Id. ¶ 37.) The letter states: “Your request for an appeal to the City Council is denied.” (Id. ¶ 38.)

The amended development agreement was between Petitioner and the City of Baldwin Hills. (Pet. ¶¶ 15-16 & Exh. B.) The amended agreement was signed by the mayor on behalf of the City of Baldwin Hills. (Id. Exh. B.) The attestation was by the City Clerk and the agreement was “Approved as to Form” by Robert N. Tafoya, who was the City Attorney. (Ibid.) Sylva was neither a party nor a signatory to the amended development agreement. (Ibid.) Yet, Petitioner alleges that Sylva “unilaterally revoked” the permit, which forms the basis of the claims against her. (Id. ¶¶ 40-41.) Petitioner seeks a writ against the City reinstating its permit or, in the alternative, ordering the City to hold a hearing on Petitioner’s appeal. (Pet. ¶¶ 64-65.)

In ruling on a special motion to strike under Code of Civil Procedure section 425.16, commonly known as an “Anti-SLAPP motion,” the court employs a two-step process. First, the respondent must show that the act or acts of which the plaintiff complains were taken in furtherance of the respondent’s right of petition or free speech under the United States or California Constitutions in connection with a public issue. (Code Civ. Proc., § 425.16, subd. (b)(1).) The respondent has the burden of making a prima facie showing that a cause of action arises from an act in furtherance of his or her constitutional rights of petition or free speech in connection with a public issue. (Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) If the respondent satisfies that burden, the burden shifts to the petitioner to demonstrate a probability of prevailing on the claim. (Code Civ. Proc., § 425.16, subd. (b)(3).)

The court first must determine the nature of Petitioner’s case against Julia Sylva. Petitioner attempts to predicate the case on her actions relating to the cannabis permit. Specifically, Petitioner alleges that Sylva “unilaterally revoked” the permit, which forms the basis of the claims against her. (Id. ¶¶ 40-41.) Petitioner alleges that:

Sylva admitted in her December 18, 2023 correspondence that the City’s CEO and City Council took no action to revoke Tier One’s Cannabis Permit. Sylva claims it was Tier One’s inaction that triggered an automatic termination of the Development Agreement. Sylva also stated that there was no need to designate a “designee” of the City’s CEO pursuant to the ordinance.

Sylva, by her own admission, unilaterally revoked Tier One’s Cannabis Permit when she took action to terminate Tier One’s Development Agreement by sending the December 8, 2023, correspondence and then emailing the DCC notice of the revocation on December 11, 2023.

(Id. ¶ 41.) The referenced correspondence, which are attached as exhibits, do not support the allegation that Sylva acted “unilaterally” and that she, rather than the City, is responsible for the termination. To the contrary. All of the correspondence refers to the City revoking the permit (because the City was the party to the development agreement). For example, the letter of December 8, 2023, is a “Notice of Automatic Termination and Demand to Cease Operations of Commercial Cannabis Business in the City of Baldwin Park.” (Id. Exh. E.) The letter states:

On behalf of the City of Baldwin Park, you are hereby given notice, that the Development Agreement dated April 3, 2019, associated with the Property, is terminated, effectively immediately, pursuant to Section 3.6 (iii), for failure to timely pay the fee or fees.

(Ibid., emphasis added.) Similarly, Sylva’s letter of December 18, 2023, references “the City,” not Sylva herself. (Id. Exh. G.) More important, Petitioner’s allegations are contradicted by the amended development agreement itself. The parties to the agreement were the City and Petitioner. Sylva was neither a party nor a signatory to that agreement. (Id. Exh. B.)

Rather, Petitioner’s case against Sylva is predicated upon her communications, i.e., her practice of law on behalf of her client. This is clear not only based upon the content of her communications, but also based upon Petitioner’s prayer for relief. The prayer seeks no relief against Sylva. Petitioner seeks a writ of mandamus compelling “the City” to reinstate Petitioner’s Municipal Authorization. (Id. ¶ 64.) In the alternative, Petitioner seeks a writ to compel “the City” to comply with its ministerial duty to hold an appeal hearing. (Id. ¶ 65.) Petitioner seeks attorney’s fees and litigation expenses, as well as “any such other equitable or legal relief as the Court deems appropriate.” (Id. ¶¶ 66-67.) Neither of these requests are directed at Sylva or cite any authority to awarding these remedies against her in the absence of a judgment on a claim (which Petitioner does not request against her). Even if there was some basis to name Sylva in her official capacity, Petitioner also sued her in her “individual capacity,” and the petition and related documents do not evidence any role outside that of advocating for the City. The fact that Petitioner seeks no relief against Sylva is evidence that she performed no acts outside her role as an attorney (and would form the basis for a motion for judgment on the pleadings had this motion not been filed first).

The anti-SLAPP statute protects “any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law” and “any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body.” (Code Civ. Proc. § 425.16(e)(1), (2). This protection is broad:

Under the plain language of section 425.16, subdivisions (e)(1) and (e)(2), as well as the case law interpreting those provisions, all communicative acts performed by attorneys as part of their representation of a client in a judicial proceeding or other petitioning context are per se protected as petitioning activity by the anti-SLAPP statute.

(Cabral v. Martins (2009) 177 Cal.App.4th 471, 479-480, citations omitted.) An attorney who is sued based on her litigation-related conduct on behalf of a client is protected by the anti-SLAPP statute. (See White v. Lieberman (2002) 103 Cal.App.4th 210, 221.) These protections are broad.

The anti-SLAPP protection for petitioning activities applies not only to the filing of lawsuits, but extends to conduct that relates to such litigation, including statements made in connection with or in preparation of litigation. Indeed, courts have adopted “a fairly expansive view of what constitutes litigation-related activities within the scope of section 425.16.

(Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1537, citations omitted.)

Sylva’s communications fall within the scope of these protections. Sylva’s “counter-settlement demand letter” clearly relates to the federal case because the letter references the case by name and number and contains a settlement proposal. (See Pet. Exh. D.) Sylva also sent a “Settlement Demand” that was a “Privileged/Confidential Communication Pursuant to California Evidence Code section 1152” in relation to the federal case, which was referenced by name and case number in the letter. (See id. Exh. F(C).) Sylva’s cease-and-desist letter, dated December 8, 2023, is a precursor to potential litigation because it states:

On behalf of the City of Baldwin Park, you are hereby given notice, that the Development Agreement dated April 3, 2019, associated with the Property, is terminated, effective immediately, pursuant to Section 3.6 (iii), for failure to time pay the Fee or

Fees. . . . The City of Baldwin Park reserves all rights to seek damages, attorneys fees, and other relief due to your breach of the Development Agreement.

(See id. Exh. E.) Finally, Sylva’s letter of December 18, 2023, was a response to Petitioner’s request for appeal. (See id. Exh. G.) Not only did Petitioner’s counsel’s original correspondence request legal process, viz., the appeal, the letter referenced the federal case and discussed the merits of the case and related legal issues. (See id. Exh. F.) Therefore, Sylva’s response is sufficiently connected to litigation to constitute protected activity.[1]

Sylva demonstrates a likelihood of success on the merits. As discussed, Petitioner seeks a writ to compel “the City” to reinstate Petitioner’s permit or, in the alternative, to hold an appeal of its prior decision. Petitioner seeks relief against “the City,” not Sylva. Sylva was neither a party nor a signatory to the amended development agreement. Moreover, there is no basis to obtain relief against Sylva in her individual capacity. The record is clear that Sylva as an individual has no authority to reinstate Petitioner’s permit or schedule a hearing.

1. Julia Sylva’s special motion to dismiss under Code of Civil Procedure section 425.16 is granted.

2. Counsel for Julia Sylva shall provide notice and file proof of service with the court.

Petitioner seeks a writ of mandate under Code of Civil Procedure section 1085. An action in ordinary mandate is proper where the claim is that an agency has failed to act as required by law. (California Ass’n for Health Services at Home v. Department of Health Services (2007) 148 Cal.App.4th 696, 705.) There are two essential requirements to the issuance of an ordinary writ of mandate: (1) a clear, present, and ministerial duty on the part of the respondent, and (2) a clear, present, and beneficial right on the part of the petitioner to the performance of that duty. (Id. at 704.)

The court has no tentative order on the demurrer. The court has no tentative order on its order to show cause why the case should not be stayed pending resolution of the federal case. The parties should be prepared to discuss these issues during the hearing.

[1] Petitioner cites an order from K8 Investor Holdings, LLC v. City of Baldwin Park, et al., Case Number 23-2428-KK-PVCs denying Julia Sylva’s anti-SLAPP motion. That case involved different claims, specifically negligence, intentional interference with contractual and prospective economic relationships, fraud, and declaratory relief. Moreover, it appears that Sylva engaged in different conduct in that case. Therefore, this order is not beneficial to Petitioner.