Filed: Jan. 24, 2019
Latest Update: Mar. 03, 2020
Summary: NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT JAN 24 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS YOUNGEVITY INTERNATIONAL No. 18-55031 CORP.; et al., D.C. No. Plaintiffs-counter-claim- 3:16-cv-00704-BTM-JLB defendants-Appellants, v. MEMORANDUM* WILLIAM ANDREOLI; et al., Defendants-counter- claimants-plaintiffs- Appellees. Appeal from the United States District Court for the Southern District of California Barry Ted Moskowitz, Chief Judge, Presiding Argued an
Summary: NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT JAN 24 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS YOUNGEVITY INTERNATIONAL No. 18-55031 CORP.; et al., D.C. No. Plaintiffs-counter-claim- 3:16-cv-00704-BTM-JLB defendants-Appellants, v. MEMORANDUM* WILLIAM ANDREOLI; et al., Defendants-counter- claimants-plaintiffs- Appellees. Appeal from the United States District Court for the Southern District of California Barry Ted Moskowitz, Chief Judge, Presiding Argued and..
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NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
JAN 24 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
YOUNGEVITY INTERNATIONAL No. 18-55031
CORP.; et al.,
D.C. No.
Plaintiffs-counter-claim- 3:16-cv-00704-BTM-JLB
defendants-Appellants,
v. MEMORANDUM*
WILLIAM ANDREOLI; et al.,
Defendants-counter-
claimants-plaintiffs-
Appellees.
Appeal from the United States District Court
for the Southern District of California
Barry Ted Moskowitz, Chief Judge, Presiding
Argued and Submitted December 3, 2018
Pasadena, California
Before: TASHIMA and IKUTA, Circuit Judges, and KENNELLY,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Matthew F. Kennelly, United States District Judge for
the Northern District of Illinois, sitting by designation.
Youngevity International Corporation appeals the partial denial of its special
motion to strike some of Wakaya Corporation’s counterclaims to Youngevity’s
complaint. See Cal. Civ. Proc. Code § 425.16. Youngevity also appeals the
district court’s denial of Youngevity’s motion to dismiss certain counterclaims on
the ground they are subject to an arbitration provision in Youngevity’s distributor
agreement. We have jurisdiction under 28 U.S.C. § 1291, see Batzel v. Smith,
333
F.3d 1018, 1024 (9th Cir. 2003) (holding that the denial of an anti-SLAPP motion
is appealable under § 1291) and 9 U.S.C. § 16(a)(1) (permitting appeal from the
denial of a motion to compel arbitration).1
We reject Youngevity’s argument that Wakaya’s counterclaims must be
struck in their entirety because they are based on statements by Youngevity that are
protected by section 425.16. Because California courts review each statement
within a pleading, and strike only protected statements, see Baral v. Schnitt,
1 Cal.
5th 376, 390–92 (2016), we separately consider each statement that Youngevity
argues is protected under section 425.16.
1
Because exhibits one through six of Wakaya’s supplemental excerpts of
record were not before the district court at the time of its December 13, 2017 order,
see Lowry v. Barnhart,
329 F.3d 1019, 1024 (9th Cir. 2003), we GRANT
Youngevity’s motion to strike those exhibits. To the extent Youngevity moves to
strike arguments in Wakaya’s pleadings, however, that motion is DENIED. We
also DENY Wakaya’s motion to supplement the record on appeal with excerpts
from a deposition that were not before the district court. See
id.
2
We lack jurisdiction to review the district court’s determination that Joel
Wallach’s oral statements, Steve Wallach’s email, and Michelle Wallach’s alleged
emails constitute commercial speech and therefore are not protected by the anti-
SLAPP statute. See Cal. Civ. Proc. Code § 425.17(c). Such a determination is not
subject to interlocutory review. See Cal. Civ. Proc. Code § 425.17(e); Breazeale v.
Victim Servs.,
878 F.3d 759, 766 (9th Cir. 2017).
We reverse the district court’s decision not to strike those portions of
Wakaya’s counterclaims based on the republication of the Verified Complaint and
the Youngevity press release, which summarized the substance of the Verified
Complaint. California’s litigation privilege applies to communications made in
judicial proceedings, see Cal. Civ. Code § 47(b), and extends to communications
regarding such judicial proceedings made to people with “a substantial interest in
the outcome of the pending litigation,” see Abraham v. Lancaster Cmty. Hosp.,
217
Cal. App. 3d 796, 823 (1990); see also Argentieri v. Zuckerberg,
8 Cal. App. 5th
768, 783–84 (2017) (indicating that the litigation privilege protects statements
made to persons with a “substantial interest” in the litigation, but not statements
made to “the general public through the press”). For this reason, the republication
of the Verified Complaint and the dissemination of the Youngevity press release to
its distributors and the marketing community (which had such a substantial
3
interest) constitute protected speech.2 Therefore, to the extent Wakaya’s
counterclaims are based on the republication of the Verified Complaint and
Youngevity’s press release, Wakaya cannot carry its burden of showing there is a
probability that it will prevail on those claims, see Cal. Civ. Proc. Code §
425.16(b).
Finally, we affirm the district court’s denial of Youngevity’s motion to
dismiss or compel arbitration. Youngevity litigated its own claims that were based
on the same factual nexus as Wakaya’s claims for eighteen months before seeking
to compel arbitration. Because Youngevity acted inconsistently with the
arbitration provision in its distributor agreement, and this inconsistent conduct was
prejudicial to Wakaya, Wakaya carried its burden of proving that Youngevity
waived its right to arbitrate. See Britton v. Co-op Banking Grp.,
916 F.2d 1405,
1412 (9th Cir. 1990).
Each party shall bear its own costs on appeal.
DISMISSED IN PART, AFFIRMED IN PART, REVERSED IN PART.
2
Because we decide on this ground, we do not reach the district court’s
ruling that there is a factual dispute as to whether BFH constituted a “public
journal” for purposes of the fair reporting privilege, see Cal. Civ. Code § 47(d), nor
do we need define the term “public journal” under California law.
4