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Judges ‘Admonished’ to Ignore CCP §425.16 If Commercial Speech Exemption Applies
By a MetNews Staff Writer
The Court of Appeal for this district yesterday “admonished” trial court judges not to undertake an analysis under the state’s anti-the anti-SLAPP statute, Code of Civil Procedure §425.16 where the commercial-speech exemption set forth in §425.17 applies.
That advisement is contained in an unpublished opinion by San Luis Obispo Superior Court Judge Charles S. Crandall, sitting on assignment to Div. One. The decision reverses an order by Los Angeles Superior Court Gloria White-Brown granting the motion of defendants Haidi Wenwu Huang and Auchel World Inc. for a special order to strike the complaint of Tiffany Yan Xu.
The defendants are accused of bad-mouthing a competitor in the insurance business by spreading a lie to independent agents and Xu’s customers that that she cheats clients and falsifies documents.
Court’s Holding
Crandall wrote:
“Courts are admonished to examine section 425.17 as a threshold issue before proceeding to an analysis under section 425.16. Section 425.17 expressly provides that speech or conduct satisfying its criteria is entirely exempt from anti-SLAPP protection even if ‘the conduct or statement concerns an important public issue.’ ”
Proceeding, nonetheless, to conduct an analysis under §425.16, he said the requirement of engaging in speech on a public issue was not present, declaring:
“Huang’s alleged slander of a competitor in a private setting to solicit business is neither speech in furtherance of the exercise of the constitutional right of petition nor the constitutional right of free speech in connection with a public issue.”
Wording of Provision
Sec. 425.17 provides, in subd. (c):
“Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services, including, but not limited to, insurance, securities, or financial instruments, arising from any statement or conduct by that person if both of the following conditions exist:
“(1) The statement or conduct consists of representations of fact about that person’s or a business competitor’s business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services, or the statement or conduct was made in the course of delivering the person’s goods or services.
“(2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer,...notwithstanding that the conduct or statement concerns an important public issue.”
Effect of Language
Crandall observed:
“The purpose of this exemption is straightforward: A defendant who makes statements about a business competitor’s goods or services to advance the defendant’s business cannot use the anti-SLAPP statute against caused of action arising from those statements.”
He added that in enacting the statute (in 2011), “the Legislature expressly carved out a subset of commercial speech that is entirely exempt from anti-SLAPP protection under section 425.16.”
The visiting jurist said the defendants’ efforts to cause insurance sales to be shifted from Xu’s Sky Vision Insurance Company to them satisfied the predicates of the statute.
The case is Xu v. Huang, B311883.
Attorneys on appeal are William P. Cole and Matthew R. Orr of Amin Talati Wasserman for Xu and Craig J. Mariam, Gregory S. Martin and Eunice J. Liao of Gordon Rees Scully Mansukhani for the defendants.
Copyright 2021, Metropolitan News Company