James M. Donovan appeals from an order of the superior court granting respondents' special motion to strike his complaint under Code of Civil Procedure section 425.16 (the anti-SLAPP statute).
On August 30, 2010, Donovan filed a complaint for declaratory relief and wrongful removal against respondents Dan Murphy Foundation (Foundation), and its current directors, Edward Landry, Richard A. Grant, Jr., Maria O. Grant, Monsignor Jeremiah Murphy, Julia Donohue Schwartz, Frederick Roupp, and Jon Rewinski.
According to the complaint, Donovan first began expressing his concerns in 2008, after the Foundation's assets had dropped approximately $65 million in value from the previous valuation of $250 million. Donovan's concerns were shared by two of the seven directors at that time, Julia Schwartz and Rosemary E. Donohue, but were rejected by three other directors, Edward Landry, Richard Grant, and Maria Grant.
The complaint detailed Donovan's disputes with his fellow directors. First, during a proposed transfer of management of the Foundation's assets, Donovan sought a review of the transfer by the full Board. Landry and Richard Grant opposed Donovan's request, and the management of the Foundation's assets was transferred without a review by the Board. Second, Donovan "demanded" that the Board exercise its responsibilities under the Probate Code to oversee the management of the Foundation's assets. Although not stated in the complaint, it can be inferred that the full Board did not agree with his demands. Third, Donovan requested information and documentation regarding the Foundation's investments, but Landry and Richard Grant did not provide Donovan with the requested information, "except for the delivery of unresponsive, meaningless, and disorganized raw account data." Fourth, Donovan advised Richard Grant, Maria Grant and Landry that the Board was composed of more than half of "interested persons," in violation of Corporations Code section 5227, but the three directors "flatly denied that the Foundation was not in compliance." Later, the three directors informed Donovan that they had terminated the compensation of Daniel J. Donohue, a director and the president of the Foundation, which meant that Mr. Donohue and his sister, Rosemary Donohue, were no longer "interested." Fifth, Donovan raised questions about the compensation of Mr. Donohue, of Richard Grant, who was the Foundation's secretary, treasurer, and chief financial officer, and of Landry, who was legal counsel for the Foundation. He contended their compensation was not approved by the Board, as required by law. The Grants and Landry "actively opposed" Donovan's efforts. Sixth, Donovan sought to remove Mr. Donohue as a director after Mr. Donohue was allegedly declared "incapable" of managing his property unassisted due to cerebral atrophy dementia. After objections by the Grants and Landry, Donovan advised them that if an agreement could not be reached with regard to a new Board member, he
On December 2, 2009, allegedly without prior notice to Donovan, Monsignor Murphy, the Grants and Landry voted to remove Donovan as a director. The remaining directors, Rosemary Donohue and Julia Schwartz, along with Donovan, objected and voted against the removal.
Respondents filed an answer to the complaint, generally denying the allegations. On the same day, respondents also filed a special motion to strike the complaint under the anti-SLAPP statute. In the special motion to strike, respondents contended that both causes of action in the complaint arose from protected activity because "[t]he acts complained of were in furtherance of [the] exercise of their rights of free speech in connection with a public issue or an issue of public interest under section 425.16(e)(4)." Respondents contended that the vote to remove Donovan as a director was an exercise of free speech, that the vote was in connection with a matter of public interest because (1) the Foundation is in the public eye, (2) it is supervised by the Attorney General, and (3) its assets are held for the benefit of the public. In a footnote, respondents also asserted that their conduct fell within the scope of section 425.16, subdivision (e)(2), as "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." Respondents further asserted that board of directors meetings and voting by directors were authorized under the Corporations Code.
Donovan opposed the special motion to strike, contending that the gravamen of his complaint did not involve protected free speech or petitioning activity by the Foundation or the Board. He contended he was suing for "wrongful termination," and that "[a] termination does not become an act of free speech simply because a vote is involved. The termination does not involve petitioning activity because an entity subject to state regulation is involved." He also contended that "nowhere in Defendants' motion is there any reference to any statement made by any Defendant, or any written or oral communication[] by a Defendant which forms the basis of any liability sought to be imposed by Plaintiff." He also asserted that his causes of action had merit because the Foundation did not have an unconditional right to terminate any of its members at any time, under any circumstance. In support of this contention, Donovan cited only wrongful termination cases involving employers and their employees.
On December 17, 2010, after a hearing, the superior court granted the special motion to strike the complaint. The court concluded that respondents had shown their conduct fell within the purview of the anti-SLAPP statute, and that Donovan had failed to demonstrate his complaint had minimal merit. Appellant filed a timely notice of appeal from the order.
Here, the superior court determined that the causes of action should be stricken because they arose from protected activity and lacked minimal merit. Regardless of the validity of appellant's claims, we conclude the superior court's order must be reversed, because the conduct giving rise to the causes of action does not fall within the scope of the anti-SLAPP statute.
In any event, respondents have not demonstrated that the majority vote to remove Donovan as a director was 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.'" (§ 425.16, subd. (e).) The anti-SLAPP statute defines such acts as including: "(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 ... or (4) any other conduct in furtherance of the exercise
Respondents contend their conduct falls within section 425.16, subdivision (e)(2) as a "written or oral statement or writing made in connection with an issue under consideration or review by ... any other official proceeding authorized by law." They note that board of directors meetings and majority voting are authorized under the Corporations Code, and the issue whether to retain Donovan was an issue of consideration before the Board. Respondents have not shown, however, that appellant's complaint challenges any statement or writing by a director. More importantly, a board of directors meeting by a nonprofit charitable organization is not an "official proceeding authorized by law" for the purposes of section 425.16, subdivision (e)(2).
In Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192 [46 Cal.Rptr.3d 41, 138 P.3d 193] (Kibler), the Supreme Court held that a hospital's peer review process qualified as an "`official proceeding authorized by law'" for the purposes of section 425.16, subdivision (e)(2), because the peer review process is required under the Business and Professions Code and is subject to judicial review by administrative mandamus. (Kibler, at pp. 198-200.) In contrast, respondents have not suggested that a vote to remove a director is subject to judicial review. In Vergos v. McNeal (2007) 146 Cal.App.4th 1387 [53 Cal.Rptr.3d 647], the appellate court concluded that a proceeding established by the Regents of the University of California, a constitutional entity with quasi-judicial powers, was an official proceeding authorized by law. (Id. at p. 1396.) Respondents cannot claim that the Foundation is a similar governmental entity. Rather, a nonprofit charitable organization's board of directors meeting is akin to a private company's sexual harassment grievance protocol, which has been held not to be an official proceeding authorized under law. (Olaes v. Nationwide Mutual Ins. Co. (2006) 135 Cal.App.4th 1501, 1508 [38 Cal.Rptr.3d 467].) Both the board of directors meeting and the sexual harassment protocol are authorized by statutes, but the actual procedures are left to the private organizations.
Similarly, the majority vote to remove Donovan was not "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." (§ 425.16, subd. (e)(4).) Even were we to assume that any act of voting is an exercise of the constitutional right of free speech, respondents have not shown that the vote to remove Donovan was "in connection with a public issue or an issue of public interest." Respondents presented no evidence of widespread public interest in the financial oversight
The order granting the special motion to strike under section 425.16 is reversed. Appellant is awarded costs on appeal.
Epstein, P. J., and Suzukawa, J., concurred.
Cabrera v. Alam (2011) 197 Cal.App.4th 1077 [129 Cal.Rptr.3d 74], is distinguishable because it involved statements made during a board meeting prior to the election for directors of a homeowners association. (Id. at pp. 1087-1088.) Conduct involving homeowners associations generally involves a matter of public interest because a homeowners association is akin to a governmental entity. "The definition of `public interest' within the meaning of the anti-SLAPP statute has been broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity." (Damon, supra, 85 Cal.App.4th at p. 479, italics added; accord, Hailstone v. Martinez (2008) 169 Cal.App.4th 728, 737 [87 Cal.Rptr.3d 347] [same].) There is no evidence that the Foundation affects a community in a manner similar to that of a governmental entity.
Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777 [54 Cal.Rptr.2d 830] (Dove Audio), is the case most favorable to respondents' argument. In that case, a law firm had sent a letter soliciting celebrities to support an effort to file a complaint against the defendant, a publishing firm, for the defendant's alleged failure to pay royalties on audio recordings by prominent celebrities, such as Audrey Hepburn, to charities designated by those celebrities. (Id. at p. 780.) This court concluded that the statements were made in connection with an official proceeding authorized by law, which placed the statements within the scope of the anti-SLAPP statute pursuant to section 425.16, subdivision (e)(2). (Dove Audio, at p. 784.) Section 425.16, subdivision (e)(2) does not require that the matter involve an issue of public interest. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1117-1118 [81 Cal.Rptr.2d 471, 969 P.2d 564].) Thus, our determination that the statements in the letter also concerned an issue of public interest because the statements concerned "whether money designated for charities was being received by those charities" is dicta. (Dove Audio, supra, 47 Cal.App.4th at p. 784.) In any event, the statements fell within the scope of the anti-SLAPP statute because they concerned nationally known figures, such as Audrey Hepburn. (Rivero, supra, 105 Cal.App.4th at p. 924.) There is no evidence in the record that the Foundation is a similarly well-known entity.
Likewise, Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036 [61 Cal.Rptr.2d 58] (Braun) is distinguishable because in that case the court determined that statements in five newspaper articles fell within the scope of the anti-SLAPP statute under section 425.16, subdivision (e)(2). (Braun, supra, at p. 1043.) The articles were about the State Auditor's probe of alleged illegal and improper management of a program affiliated with the medical school of the University of California, San Francisco, after an employee sent a whistleblower letter. (Id. at pp. 1040-1041.) The court never discussed section 425.16, subdivision (e)(4), which requires that the matter concern a public issue or an issue of public interest. In addition, the court's observation, in a footnote, that the program's "financial well-being and integrity were legitimate matters of public concern, especially when called into question by the people most closely affected—its employees" (Braun, at p. 1047, fn. 5) did not constitute a holding that the financial well-being and integrity of a program affiliated with a prominent entity was necessarily an issue of public interest. Indeed, the court discussed "public concern" in the context of the whistleblower law and statutes granting the State Auditor investigative authority. (Ibid.)
Similarly, Fontani v. Wells Fargo Investments, LLC (2005) 129 Cal.App.4th 719 [28 Cal.Rptr.3d 833] (Fontani), disapproved on other grounds in Kibler, supra, 39 Cal.4th at page 203, footnote 5, is distinguishable because in that case the court determined that statements made in a filing by the defendant with a regulatory entity that exercises governmental authority fell within the scope of the anti-SLAPP statute under section 425.16, subdivision (e)(2). (Fontani, supra, 129 Cal.App.4th at p. 728.) The court also determined that the statements involved a matter of widespread public interest because the statements could impact persons who were not the customers of, or investors in, the defendant company. (Id. at pp. 732-733.) Here, there is no evidence in the record that the disagreements among the directors or the removal of Donovan as a director could impact persons or entities beyond the directors involved or the beneficiaries of the Foundation.