Opinion
B315637
09-21-2022
LINDA MILES et al., Plaintiffs, Cross-defendants, and Respondents, v. THE VILLA TREATMENT CENTER, LLC, et al., Defendants, Cross-complainants, and Appellants.
Spillane Trial Group, and Jay M. Spillane for Defendants, Cross-complainants and Appellants. Law Offices of Justin Silverman and Justin G. Silverman, for Plaintiffs, Cross-defendants and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County, No. 20STCV26591 Rupert A. Byrdsong.
Spillane Trial Group, and Jay M. Spillane for Defendants, Cross-complainants and Appellants.
Law Offices of Justin Silverman and Justin G. Silverman, for Plaintiffs, Cross-defendants and Respondents.
HARUTUNIAN, J. [*]
INTRODUCTION
Cross-complainants ask us to reverse the trial court's order granting cross-defendants' special motion to strike the entire the cross-complaint as a strategic lawsuit against public participation (SLAPP) under Code of Civil Procedure section 425.16 (the anti-SLAPP statute). The record does not support the conclusion that the cross-defendants met their burden to show the cross-complaint implicates activity protected under the anti-SLAPP statute. We therefore reverse.
Unless otherwise indicated, subsequent statutory references are to the Code of Civil Procedure. References to a "subdivision" without an accompanying statutory reference are to subdivisions of section 425.16.
We take the facts from the pleadings and the affidavits submitted in connection with the special motion to strike. (§ 425.16, subd. (b)(2); Navellier v. Sletten (2002) 29 Cal.4th 82, 89 (Navellier).)
A. The Parties
The Villa Treatment Center, LLC, The Villa Outpatient Services, LLC, and Villa California Treatment Center, Inc., are affiliated entities engaged in the provision of healthcare services. For simplicity, we refer to these entities collectively as Villa. Maria Koch is an owner of Villa and Georgia Frabotta is an owner or other principal of Villa. We refer to Koch and Frabotta collectively with Villa as the Villa Parties. The Villa Parties are appellants here and defendants and cross-complainants below.
Linda Miles worked for Villa as a Director of Finance and Operations from March of 2018 through September 12, 2019. Tiara Miles worked for Villa as a Compliance Manager and in some human resources role from June of 2018 through September 12, 2019. Tiara is Linda Miles's daughter. We refer to Linda and Tiara collectively as the Mileses except where their individual capacities are material, in which case we refer to them by their first name out of necessity and not disrespect. The Mileses are respondents here and plaintiffs and cross-defendants below.
B. The Mileses's Tenure with Villa
Shortly after she began working for Villa, Linda suffered a stroke. She reported her stroke to her supervisors, including Frabotta and Koch. The Mileses do not allege the extent to which Linda's 2018 stroke interfered with her job duties at Villa.
In February 2019, Linda made new reports of various physical and mental ailments to Villa representatives. Linda's medical provider suggested that she limit her exertion at work when these ailments "flare[d] up." To accommodate her, Frabotta allowed Linda to begin working from home in June or July 2019. According to the Mileses, Frabotta was unhappy with this arrangement and became "increasingly harassing and condescending" towards Linda the longer that she worked from home. The Mileses allege this conduct included verbal abuse and threats of termination if Linda did not return to the office.
With Frabotta's permission, Tiara also began working from home in August 2019. This followed an incident in which the Mileses allege a Villa coworker verbally abused Tiara and menaced her with scissors and a stapler.
The Mileses's work-from-home arrangement did not last long. They allege that Villa "wrongfully terminated" Linda on September 12, 2019, for "working from home and complaining about her disabilities." They further allege that Villa fired Tiara the same day "due to her association with and advocacy on behalf of [Linda]." Villa did not rehire the Mileses (there is no allegation that they sought reinstatement).
C. The Mileses Sue the Villa Parties Under FEHA and Other Tort Theories
Following their termination, the Mileses made a complaint to the Department of Fair Employment and Housing (DFEH) about Villa. DFEH issued the Mileses right to sue notices. The Mileses then filed a complaint against the Villa Parties in the trial court on July 15, 2020 (the Complaint), thereby commencing the underlying proceedings.
The Complaint contains a total of 20 counts relating to the Mileses's tenure with, and termination by, Villa. They include, among others, theories of wrongful treatment based on disability, race, national origin, and retaliation. According to the Mileses, this and other conduct alleged amounted to violations of the Government Code, the Labor Code, the Business and Professions Code, and common law.
Most significant for our purposes is count 16, which is for whistleblower violations pursuant to section 1102.5 of the Labor Code. Supporting allegations include that the Mileses complained about certain Villa business practices, including employment practices, which are the focus of the Complaint, and, in paragraph 298(a) only, other business practices. We refer to the latter as the "paragraph 298(a) allegations." The paragraph 298(a) allegations include allegations of "[f]raudulent or improperly backdated documents frequently discovered," "[b]illing issues resulting in 'lost money,' being funneled elsewhere," and "various types of insurance fraud, including double billing."
As to both the employment practices and the paragraph 298(a) allegations, the Mileses allege that their complaints were directed "to Defendant Villa Treatment and its relevant managers and supervisors, who had authority over Plaintiffs and/or authority to investigate, discover, or correct the violation or noncompliance ...." Aside from their post termination DFEH complaint, the Complaint contains no allegations that the Mileses complained to anyone outside of the Villa organization.
D. The Villa Parties Countersue
After the Mileses sued the Villa Parties, the Villa Parties filed a cross-complaint against the Mileses. The operative claims are asserted in the Villa Parties' first amended cross-complaint dated November 20, 2020 (the ACC).
The ACC, prepared on Judicial Council pleading forms,contains counts for breach of fiduciary duty, fraud, intentional tort, general negligence, and common counts. The allegations of the ACC are that the Mileses engaged in various forms of misconduct toward the Villa Parties both during and after their tenure there. The allegations are vague and conclusory but broadly assert that the Mileses took money and property from Villa without permission, engaged in accounting improprieties, usurped Villa business opportunities for their own benefit, and, most significantly for our purposes, defamed Villa to its "billing company" and to "a vendor." There is no claim in the ACC based on complaints the Mileses made internally to Villa personnel or to the DFEH.
The ACC evinces a lack of care in preparation. It contains misquotations of statutes and allegations that lack specificity and are otherwise difficult to follow. In particular, the allegations span numerous attachments to the form complaint, as well as attachments to those attachments. The construction of the ACC adds unnecessary difficulty to our review.
The asserted defamation is described in greater detail in later-filed affidavits. One such affidavit was made by Matthew deNicola, the owner of Malibu Group Medical Billing LLC, which provides medical billing services to Villa. According to deNicola, Linda told him that Koch "was stealing money from [Villa]," asked him "whether Ms. Koch was 'doing drugs,'" and warned him that Koch's behavior would drive Villa "into the ground."
Koch offered in an affidavit that deNicola had related back to her some of the statements he attributed to Linda in his affidavit. She also attested that she "attended a meeting with a representative from Spectrum regarding our commercial campaign" and that this representative "told [Koch] that Linda Miles told him not to discuss prices or finances with [Koch's] coowner and to only send information through [Linda]," and that Linda also told the Spectrum representative that "[Linda] and her colleague were the marketing company for The Villa Treatment Center, which was false, and that she would purchase on airtime [sic] for The Villa Treatment Center at wholesale and resell it to the Company."
E. The Trial Court Grants the Mileses's Anti-SLAPP Motion to Strike the ACC
The Mileses filed a special motion to strike the ACC pursuant to section 425.16. By their motion, the Mileses requested that the court strike 17 specified paragraphs of the ACC. These are the same 17 paragraphs of the ACC that contain some variant of the word "defame," so we refer to them as the defamation allegations. The Mileses also sought to "strike portions of Defendants['] causes of action," without specifying which "portions."
According the Mileses, the anti-SLAPP procedures applied because the Villa Parties' claims based on the defamation allegations "interfere with [their] right to exercise their constitutional right of petition and free speech." Specifically, the Mileses argued the defamation allegations concern "statements made in connection with a potential lawsuit" (see § 425.16, subd. (e)(2)) and" 'in furtherance of the exercise of the constitutional right of petition or [ ] free speech'" (see id., subd. (e)(4)). They further argued that, in any event, the Villa Parties would not be able to carry their burden to show that their claims are meritorious.
In support of their anti-SLAPP motion, the Mileses each filed a short declaration. The declarations are substantially identical. The Mileses each refer to the allegations in the Complaint, explain why they made internal complaints about workplace issues and engaged in other whistleblowing activity, deny defaming Villa, and disclaim any managerial role with Villa.
The Villa Parties opposed the motion. They argued that the Mileses could not satisfy their burden to show the ACC's allegations implicate protected conduct. At the core of the Villa Parties' argument is that the Mileses improperly conflated their complaints communicated to Villa representatives with statements made to third parties. The former, the Villa Parties concede, are protected, while the latter, they contend, are not. They further asserted that, even if subject to the anti-SLAPP statute, their claims have merit.
The Villa Parties submitted with their opposition the affidavits of Koch and deNicola described above.
The trial court held a hearing and granted the anti-SLAPP motion. It struck each defamation allegation, as well as each claim, in its entirety. No transcript is included in the record and the court's order does not reflect its reasoning. The court further awarded the Mileses attorney fees in the requested amount of $28,500.
The Mileses assert in their brief that the court heard "oral testimony" at this hearing but they do not assert that such testimony was relevant to the disposition of the motion such that the absence of a transcript would be material to our analysis.
The Villa Parties timely appealed.
DISCUSSION
I. Overview of the Anti-SLAPP Statute
The Anti-SLAPP statute provides a mechanism for early assessment of claims implicating certain protected speech activities. Qualifying claims found to be without merit must be stricken and costs and expenses awarded to the defendant. (§ 425.16, subd. (c)(1).) This relieves defendants wrongfully sued for engaging in protected activities of the expense of ordinary litigation.
The statute imposes on the defendant an initial burden to show the challenged claims qualify for protection under the statute. (§ 425.16, subd. (b)(1).) If the defendant satisfies this burden, the plaintiff then bears the burden to establish a probability of prevailing on the challenged claims. (Ibid.)
The statute applies only to claims "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." (§ 425.16, subd. (b)(1).) Such acts are broken into four illustrative categories of conduct in subdivision (e). Only two of these categories are at issue in this case: subdivision (e)(2)'s "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," and subdivision (e)(4)'s "any . . . 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." (Id. at subd. (e).)
Due to the important interests it seeks to protect, the Legislature commands that we construe the anti-SLAPP statute broadly. (§ 425.16, subd. (a); Navellier, supra, 29 Cal.4th at p. 92.) However, "not all speech or petition activity is protected by section 425.16." (Flatley v. Mauro (2006) 39 Cal.4th 299, 313.)
As to speech and petition activity not subject to the statute's protections, courts must not consider the merits of the claims in deciding an anti-SLAPP motion, no matter how deficient the claims may appear. This is because an anti-SLAPP motion "is not a substitute for a demurrer or summary judgment motion." (Lam v. Ngo (2001) 91 Cal.App.4th 832, 851, fn. 12 (Lam).)
II. Standard of Review
We review a trial court's order granting an anti-SLAPP motion de novo, considering the pleadings and affidavits submitted in support of, or in defense to, the subject claims. (Verceles v. Los Angeles Unified School Dist. (2021) 63 Cal.App.5th 776, 785.)
III. Analysis
A. Villa's Claims Against the Mileses Do Not Arise from Speech in Connection with Subdivision (e)(2) Petitioning Activity
The Mileses argue that the Villa Parties' claims arise from petitioning activity protected under subdivision (e)(2) because the statements described in the defamation allegations relate to the Mileses's later-filed Complaint, and the ACC's claims therefore arise from statements "made in connection with an issue under consideration or review by a . . . judicial body." (§ 425.16, subd. (e)(2).) We disagree.
The phrase "in connection with" is undoubtedly broad. As such, prelitigation statements-i.e., statements made before an issue comes before a judicial body for consideration-may still be "in connection" with such future or contemplated consideration. (Briggs v. Eden Council for Hope &Opportunity (1999) 19 Cal.4th 1106, 1115 [" 'communications preparatory to or in anticipation of the bringing of an action . . . are . . . entitled to the benefits of section 425.16' "].) This protection may even extend to statements made to or by non-parties to the eventual litigation. (Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1270 (Neville).)
But just as not all speech is protected under section 425.16, not all statements made before litigation occurs are subdivision (e)(2)-protected petitioning activity. To qualify for such protection, a statement must" 'concern[] the subject of the dispute'" and be made" 'in anticipation of litigation "contemplated in good faith and under serious consideration." '" (Neville, supra, 160 Cal.App.4th at p. 1268; see also Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 887.) The record does not establish that the statements referenced in the defamation allegations are either.
1. The Defamation Allegation Statements Do Not Concern the Subject of the Dispute
The statements referenced in the defamation allegations are statements allegedly made by the Mileses to Villa's billing company (and perhaps another vendor). The statements were that (a) Villa's owners were stealing from Villa; and (b) because the owners were stealing, (i) Linda had changed the passwords "to the portals," and (ii) the vendor(s) should not communicate with the owners but rather deal directly with Linda. The affidavits submitted with the Villa Parties' opposition to the anti-SLAPP motion elaborate only slightly but remain limited to statements by Linda to Villa vendor representatives about financial mismanagement by Villa's owners.
As noted above, the ACC alleges only defamatory statements to Villa's "billing company" and to "a vendor." In her declaration, Koch alleges statements to "Spectrum." It is unclear whether Spectrum is the unnamed vendor referenced in the ACC.
These statements do not concern the subject of the dispute alleged in the Complaint. The Complaint primarily concerns purported violations of employment law. Only the paragraph 298(a) allegations allude to statements about improper business practices. But the Mileses only allege that these statements were made to Villa representatives (not to third parties) and they are material only to the dispute of whether the Villa Parties retaliated against the Mileses for "blowing the whistle." The Mileses did not sue the Villa Parties because the Villa Parties were mismanaging Villa's finances.
In their appellate briefing, the Mileses attempt to recast the allegations of the Complaint and ACC as covering the same ground. For example, the Mileses assert that "the whistleblower complaint statements pled in [the Complaint] are the same exact statements related to unlawfulness for which [the Mileses] are now being sued in the [ACC]." But this is not true. As a matter of law, the ACC's defamation allegation statements are not whistleblower statements because they were made to vendors, not to "a government or law enforcement agency," "a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance," or a "public body conducting an investigation, hearing, or inquiry." (Lab. Code, § 1102.5, subd. (b).)
Recognizing this flaw, the Mileses assert that their purported whistleblowing complaints were made "to others outside the company that had authority to remedy the illegalities (i.e. to billing vendors about illegal billing practices and ongoing retaliation for investigating such practices)." Setting aside that vendors are not among the statutory classes of persons to whom protected whistleblower complaints can be made, there is no assertion in any pleading or affidavit that any billing vendor had control over Villa's business practices. Moreover, there is no assertion in any pleading or affidavit that the Mileses complained to any vendors about retaliation or other employment practices. Such assertions exist only in the Mileses's briefing.
The Mileses's resort to such strained arguments in their briefing suggests an awareness that the actual allegations and supporting affidavits are inadequate to support a connection between the defamation allegation statements and the Mileses's suit against the Villa Parties. Such an awareness would reasonably come from the lack of authority supporting the Mileses's position.
The Mileses cite no valid authority for the proposition that prelitigation derogatory statements to third parties having no identified relationship to, nor interest in, future litigation qualify for protection under subdivision (e)(2). We discuss each authority they cite in turn.
We decline to address a case the Mileses refer to just as" Cromwell" but for which they offer no citation.
Contemporary Services Corp. v. Staff Pro Inc. (2007) 152 Cal.App.4th 1043 (Contemporary Services), the Mileses's lead citation, does not involve prelitigation conduct. Rather, it concerned an email, from the president of a party to ongoing litigation, to the party's customers "who had some involvement in the parties' litigation." (Id. at p. 1055.) The Contemporary Services court described the email as "a litigation update." (Ibid.) As courts assess subdivision (e)(2) eligibility differently depending on whether the subject claim arises from a statement made prior to or during litigation, Contemporary Services has little bearing on the ACC's claims or allegations against the Mileses. In any event, where the Contemporary Services email specifically described the progress of pending litigation to individuals involved, there can be little doubt that it was made" 'in connection with'" the litigation and does not resemble the statements at issue here. (Ibid.)
See Neville, supra, 160 Cal.App.4th at p. 1266 [statement made during litigation is protected under § 425.16, subd. (e)(2), "if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation"]; Neville, at p. 1268 [statement made prelitigation may be protected under subd. (e)(2) if it" 'concern[s] the subject of the dispute' and is made 'in anticipation of litigation "contemplated in good faith and under serious consideration"' "].)
Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153 (Fremont Reorganizing) similarly involves a statement made during a judicial proceeding: "[The defendant's] statements concerned the assets of an insolvent insurer, Fremont Indemnity. [The defendant] made those statements to the [Insurance] Commissioner as the court-appointed liquidator in the then pending liquidation proceeding, who was charged with marshaling the insolvent insurer's assets." (Id. at p. 1167.) Like Contemporary Services, Fremont Reorganizing, as a pending litigation case, has little bearing on the ACC's claims or allegations against the Mileses based on their prelitigation conduct. In any event, where the Fremont Reorganizing communication concerned statements about assets to the court-appointed representative responsible for liquidating those assets, there can be little doubt that they were made "in connection with" the proceeding and do not resemble the statements at issue here.
Neville, supra, 160 Cal.App.4th 1255 did involve prelitigation statements. In that case, an employer, Maxsecurity, fired an employee, Neville, for misappropriating Maxsecurity's customer lists. Maxsecurity believed that Neville intended to use those lists to start a new business that would compete with Maxsecurity. After firing Neville, Maxsecurity sent a letter to its customers warning them not to do business with Neville. Maxsecurity then sued Neville and Neville cross-complained against Maxsecurity, alleging that its letter to customers was defamatory. (Id. at p. 1260.) The trial court struck Neville's cross-complaint as petitioning activity protected by section 425.16, subdivision (e)(2). (Neville, at p. 1261.)
The appellate court affirmed. Among other things, it noted that the letter unambiguously referenced threatened litigation (Neville, supra, 160 Cal.App.4th at p. 1269), was drafted by eventual litigation counsel (ibid.), and reflected an attempt to mitigate Maxsecurity's damages by deterring potential "unwitting participants" in Neville's misappropriation from doing further business with him. (Neville, at pp. 1267-1268.) Again, the operative facts of Neville bear no resemblance to the facts presented here.
Comstock v. Aber (2012) 212 Cal.App.4th 931 (Comstock) is similarly unhelpful to the Mileses. In Comstock, an employee, Aber, sued her employer and two other employees for sexual harassment and battery. One of those other employees, Comstock, cross-complained against Aber for defamation based on statements she made about the claimed harassment and battery to four categories of persons: a human resources employee of her employer, a nurse, friends of Aber's, and the police. (Id. at pp. 936-937.) On Aber's motion, the trial court struck Comstock's cross-complaint under section 425.16. (Comstock, at p. 939.)
The appellate court affirmed. It found Aber's statements to three of the four categories of persons were protected under subdivisions (e)(1) or (e)(2). First, it recognized precedent that statements to police are" 'made in connection with an official proceeding authorized by law.'" (Comstock, supra, 212 Cal.App.4th at pp. 941-942.) Second, it reasoned that the nurse's mandatory reporting obligations warranted treating Aber's statements to the nurse the same as statements to the police. (Id. at p. 943 ["it would appear that the Legislature intended that reporting of information to a mandatory reporter result in a governmental investigation-an 'official proceeding'-even when the victim does not directly report to the law enforcement agency"].) Third, it held that internal reporting to the human resources representative was protected because it was "necessary to defeat an affirmative defense that [the employer] could- indeed, did-assert in [Aber's later-filed] lawsuit." (Id. at p. 945.)
The Mileses attempt to align their own reporting with Aber's reporting to the nurse in Comstock by "not[ing] that one of the individuals to whom The Miles [ sic ] complained regarding [Villa's] 'nefarious billing practices,' including insurance fraud and double billing, of which was notated on a 'denial report,' is Defendant owner Georgia Frabotta, who would have reporting obligations as a director/executive of a medical center." First, there is no allegation in the ACC concerning the Mileses reporting to Frabotta or other Villa representatives. The defamation allegations are that the Mileses made defamatory statements to representatives of Villas vendors. Courts properly "reject[] efforts by moving parties to redefine the factual basis for a plaintiffs claims as described in the complaint to manufacture a ground to argue that the plaintiffs claims arise from protected conduct." (Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 936 (Bel Air Internet).) Even if this were not so, we would disregard the assertion that someone has a reporting obligation where the source of such obligation is not identified. (See Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979 [reviewing court may disregard contentions unsupported by citation to the record or legal authority].)
In contrast, the Comstock court treated Aber's alleged reports to "friends" as not protected by the anti-SLAPP statute. (Comstock, supra, 212 Cal.App.4th at pp. 945-946.) However, because it deemed those statements merely "incidental" to the causes of action that also relied on protected statements, it concluded the trial court properly struck all the causes of action.
One common thread in the Mileses's prelitigation statement cases is that the statements afforded protection under subdivision (e)(2) each had some function relative to the contemplated litigation. Put another way, they served to further the speaker's interest in the litigation. In neither case was the mere factual relationship between the subject matter of the statement and the subject matter of the contemplated litigation independently sufficient to warrant protection under subdivision (e)(2). Indeed, in Comstock, where Aber made the same statements to human resources as she did to friends, the statements to human resources were protected because they could serve to defeat an affirmative defense, whereas the statements to friends had no identified litigation purpose and were not protected.
We are aware of cases not cited by the Mileses that statements advancing the interests of another in litigation may also be protected under subdivision (e)(2). (See Bel Air Internet, supra, 20 Cal.App.5th at pp. 943-944 [discussing cases].) The Mileses have not indicated that these cases have any application here and we do not see from the record how they could.
This is consistent with the design of the anti-SLAPP statute. It applies only to acts "in furtherance of [a] person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue . . . ." (§ 425.16, subd. (b)(1).) Such acts "in furtherance" are defined to include statements "in connection" with petitioning activities. (Id., subd. (e)(4).) It would make no sense to define an act "in furtherance of' a right as an act that does not further the right. Thus, statements made in connection with petitioning activity must somehow further the exercise of the petitioning right in order to qualify for subdivision (e)(2) protection.
Fremont Reorganizing, supra, 198 Cal.App.4th 1153, recognizes this but through a slightly different analysis. It interprets the phrase" 'arising from'" in subdivision (b)(1) as requiring that the conduct be "in furtherance" of the defendant's protected rights. (Fremont Reorganizing, at p. 1166 ["A cause of action is one 'arising from' protected activity within the meaning of section 425.16, subdivision (b)(1) only if the defendant's act on which the cause of action is based was an act in furtherance of the defendant's constitutional right of petition or free speech in connection with a public issue"].) Since it is a prerequisite that any claim based on protected conduct" 'arise from'" such protected conduct, the Fremont Reorganizing court's analysis applies the "in furtherance" requirement to each category of subdivision (e) conduct.
Courts construing section 425.16 have interpreted" in furtherance" as "helping to advance [or] assisting." (Lieberman v. KCOP Television, Inc. (2003) 110 Cal.App.4th 156, 166, italics in original.) The customer letter that could help mitigate damages in Neville and the report to human resources that had the potential to defeat an affirmative defense in Comstock each furthered the exercise of the petitioning right because they advanced or assisted the speaker's interest in contemplated future litigation. (See also Trinity Risk Management, LLC v. Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1005 [prelitigation statements that were functional equivalent to discovery in litigation protected under § 425.16, subd. (e)(2)].)
The pleadings and affidavits here reveal no way in which the defamation allegation statements could have furthered the Mileses's or any other future petitioning activity against the Villa Parties. The Mileses's claims arise from their employment with Villa. There is no allegation that those vendors to whom the Mileses made the statements are either employees of Villa or involved in Villa's management of employees. Nor is there any allegation that those vendors might have had a claim against Villa based on the content of the defamation allegation statements. That the billing vendor might have processed bills that were the product of Villa financial misconduct the Mileses "bl[ew] the whistle" about does not involve the vendor in the contemplated litigation. There is not so much as a suggestion that the vendor was a participant in any of the financial misconduct alleged, nor did the Mileses sue to address financial misconduct. Rather, the main purpose of their Complaint is to recover damages for the Villa Parties' employment practices.
In short, the defamation allegation statements served no purpose relative to future litigation. They merely addressed purported facts that would later be referenced in future litigation. As the Villa Parties observe, this makes the statements akin to Aber's unprotected statements to her friends in Comstock. The defamation allegation statements are not protected under subdivision (e)(2).
2. The Record Does Not Establish the Defamation Allegation Statements Were Made in Anticipation of Litigation
Even if the defamation allegation statements did concern the subject of the Mileses's later-commenced litigation, the record does not support the conclusion that they were made" 'in anticipation of litigation "contemplated in good faith and under serious consideration." '" (Neville, supra, 160 Cal.App.4th at p. 1268.)
The Mileses concede that they made statements to one or more "billing vendors." They dispute only that they "defame[d] [Villa] by spreading falsities about their billing practices, for example, to any vendors." But they do not say that they made their statements to vendors in anticipation of litigation. They do not say when they made such statements, whether they anticipated any litigation at the time, or how the statements to vendors might have related to any such contemplated litigation.
In contrast, the Mileses do explain that they made complaints "to the owners of [Villa]" and "blew the whistle by complaining about various illegal activities" "as a precursor to [their] FEHA and whistleblower lawsuit." Their stated reasons for doing so are as follow: (1) they "did not want [Villa] to argue [it] did not know about the harassing comments, or that they offended [the Mileses], or did not know that [Linda] was disabled/needed accommodations;" and (2) they "did not want [Villa] to argue any affirmative defenses such as that [the Mileses] did not take the proper remedial actions at work (i.e., some type of internal grievance process) or that [the Mileses] could have avoided the situation." While these rationales would have currency if the Villa Parties had counter-sued for statements that the Mileses had made to Villa,, they have no application to the statements to Villa vendors underlying the Villa Parties' actual claims.
The absence of any assertion in the pleadings or affidavits that the Mileses made statements to Villa vendors in anticipation of litigation also takes them out of subdivision (e)(2)'s purview.
B. The Villa Parties' Claims Against the Mileses Do Not Arise from Speech in Connection with a Public Issue
As an alternative to subdivision (e)(2) protection, the Mileses argue the defamation allegation statements are protected under subdivision (e)(4), which the Mileses explain as follows: "The anti-SLAPP statute protects 'any other conduct in furtherance of the exercise of the constitutional right of petition or [] free speech.' C.C.P. § 425.16(e)(4)." This is only half of the requirement. What the Mileses omit, without indication, is that the conduct must also be "in connection with a public issue or an issue of public interest." (§ 425.16, subd. (e)(4); see also Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, 898 ["limited by the requirement that the statement or conduct be connected with an issue of public interest"].)
The Mileses's analysis is just as lacking as their recitation of the statutory requirements. In support of their claim to subdivision (e)(4) protection, the Mileses offer four bald assertions. First, they say that the defamation allegation statements "relate to protesting unlawful or unethical behavior on the part of [the Villa Parties]." But this is not enough. Subdivision (e)(4) does not protect statements in protest of unlawful behavior that does not concern an issue of public interest. (See, e.g., Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, 924 [statements published by union critical of supervisor at public employer not protected because "unlawful workplace activity below some threshold level of significance is not an issue of public interest, even though it implicates a public policy"].) Without an explanation of how the defamation allegation statements implicate an issue of public interest, we have no basis to conclude that they are protected under subdivision (e)(4).
Second, the Mileses claim the statements are "all exercises in furtherance of [their] first amendment right to free speech or petition." This is inadequate both because it merely states a legal conclusion and because the legal conclusion stated is inadequate to trigger the protection subdivision (e)(4). Again, the Mileses fail to address how the statements concerned an issue of public interest.
Third, they claim that the statements are "consumer statements about a small business." But they are not. Nowhere do the pleadings or affidavits indicate that the Mileses are "consumers" of Villa's products or that their statements were made to or for the benefit of consumers.
Fourth, the Mileses claim that "the allegations in the [ACC] expressly include [their] protesting unlawfulness via a whistleblowing complaint to a public third party." They offer no record citation for this assertion. Moreover, the pleadings and affidavits reflect that the only "public third party" to whom the Mileses made any complaint was the DFEH. The ACC makes no reference to such complaint.
In short, there is no merit in the Mileses's claims that the defamation allegation statements are protected under subdivision (e)(4).
CONCLUSION
For the reasons set forth above, we find the record inadequate to support the conclusion that the defamation allegation statements are protected activity under section 425.16. As such, we need not consider the Mileses's arguments concerning "mixed causes of action" or address the merits of the Villa Parties' claims. Moreover, as we see no basis for the trial court's order striking the defamation allegations-the allegations the Mileses specifically identified as subject to the anti-SLAPP statute-we see no basis for the trial court's order striking the Villa Parties' claims that relied on such allegations. We therefore must reverse the trial court's order in its entirety.
In doing so, we reiterate the observation in Lam, supra, 91 Cal.App.4th 832, that an anti-SLAPP motion "is not a substitute for a demurrer or summary judgment motion." (Id. at p. 851, fn. 12.) Any alleged general deficiencies in the ACC were not before the trial court. The mere fact that a complaint contains defamation allegations is not enough to make it a SLAPP complaint.
Indeed, even in making their anti-SLAPP motion, and again in their appellate briefing, the Mileses allow that the ACC "looks more like a suit filed in retaliation against [them]" for filing the Complaint than a "classic" SLAPP suit. As the court in Kajima Engineering &Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921 noted, "[i]f a cross-defendant believes that a cross-complaint has been filed 'for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation,' or that the claims against it are frivolous or lacking in evidentiary support, then it may move for sanctions, including attorney fees and other expenses, to be awarded in the trial court's discretion. [Citation.] The anti-SLAPP statute, however, is not the appropriate remedy." (Id. at p. 934.) On remand, the Mileses remain free to challenge the ACC on other appropriate grounds. Nothing herein should be construed as a comment on the viability of any such other grounds.
DISPOSITION
The order granting the Mileses's special motion to strike, inclusive of its award of attorney fees, is reversed. The matter is remanded with directions to reinstate the Villa Parties' action against the Mileses, and for further proceedings not inconsistent with this opinion. The Villa Parties shall recover their costs on appeal.
We concur: STRATTON, P. J., GRIMES, J.
[*] Judge of the San Diego Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.