HUESTON HENNIGAN LLP - Courthouse News Servicefiles.courthousenews.com/2016/03/30/State Bar...

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RESPONDENTS THE STATE BAR AND CRAIG HOLDEN’S

ANTI-SLAPP MOTION TO STRIKE CLAIMANT JOSEPH DUNN’S NOC 5044998

HUESTON HENNIGAN LLP John C. Hueston, State Bar No. 164921 [email protected] Moez M. Kaba, State Bar No. 257456 [email protected] Joseph Reiter, State Bar No. 294976 [email protected] 523 W. Sixth Street, Suite 400 Los Angeles, CA 90014 Telephone: (213) 788-4340 Facsimile: (888) 775-0898 Attorneys for Respondents the State Bar of California and Craig Holden

IN THE MATTER OF JAMS ARBITRATION

SENATOR JOSEPH DUNN (Ret.)

Claimant,

vs. THE STATE BAR OF CALIFORNIA; CRAIG HOLDEN, an individual; BETH JAY, an individual; and ROES 2-50, inclusive,

Respondents.

JAMS Case No. 1100083130 Assigned to the Hon. Edward A. Infante (Ret.) RESPONDENTS THE STATE BAR OF CALIFORNIA AND CRAIG HOLDEN’S NOTICE OF MOTION AND MOTION TO STRIKE PURSUANT TO CAL. CIV. PROC. CODE § 425.16 Hearing Date: March 30, 2016 Time: 8:00 a.m.

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- i -RESPONDENTS THE STATE BAR AND CRAIG HOLDEN’S


TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that in accordance with the schedule set forth by the Arbitrator,

duly-appointed pursuant to the terms of Section XVI.B of the State Bar of California Executive

Director Employment Agreement for Claimant Joseph Dunn (“Claimant”), Respondents the State

Bar of California and Craig Holden will move to strike Claimant’s First, Second, Third, and Fourth

Causes of Action in the Notice of Claims pursuant to California Code of Civil Procedure § 425.16

on the grounds that: (i) each cause of action is based on Respondents’ conduct and statements made

regarding an “issue of public interest” or in connection with an “official proceeding authorized by

law”; and (ii) Claimant cannot demonstrate a probability of prevailing on any of the causes of

action. The State Bar and Mr. Holden also request that the Arbitrator award them their attorneys’

fees and costs pursuant California Code of Civil Procedure §§ 425.16(c) and 3344.

This motion is based on this notice, the accompanying memorandum of points and

authorities, the declarations of Robert Hawley, Craig Holden, and Moez Kaba and exhibits thereto,

the arguments and other evidence as may be presented at or prior to the hearing on this motion, the

record and files in this action, and such matters of which the Arbitrator may take notice.

Dated: February 26, 2016 HUESTON HENNIGAN LLP

By: John C. Hueston Attorneys for Respondents the State Bar of California and Craig Holden

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TABLE OF CONTENTS

Page

- i -RESPONDENTS THE STATE BAR AND CRAIG HOLDEN’S


I. INTRODUCTION ................................................................................................................ 1

II. SUMMARY OF ARGUMENT ............................................................................................ 4

III. ARGUMENT ........................................................................................................................ 8

A. The Anti-SLAPP Statute Is Broadly Construed To Protect Statements And Conduct In Furtherance Of Free Speech ........................................................... 8

B. Respondents’ Motion Is Both Permissible And Proper In This Forum .................... 9

C. Claimant’s Causes Of Action Are Subject To The Anti-SLAPP Statute ..................................................................................................................... 10

1. Claimant’s Misconduct And Mismanagement Of State Bar Affairs Constitute “Issues Of Public Interest” ............................................ 10

2. Claimant’s First, Second, Third, And Fourth Causes Of Action Are Based On Statements Regarding “Issues Of Public Interest” ....................................................................................................... 12

3. The State Bar’s Internal Investigation Into Claimant’s Misconduct Constitutes An “Official Proceeding Authorized By Law” ...................................................................................................... 14

4. Claimant’s First, Second, And Fourth Causes Of Action Are Based On Statements And Conduct In Connection With The Official Proceeding ..................................................................................... 16

D. Claimant Cannot Meet His Burden Of Establishing A Probability Of Prevailing On His Claims ....................................................................................... 18

1. Claimant Cannot Prevail On His First Cause Of Action For “Whistleblower Retaliation” ....................................................................... 19

2. Claimant Cannot Prevail On His Second Cause Of Action For “Breach of Fiduciary Duty” ........................................................................ 21

3. Claimant Cannot Prevail On His Third Cause Of Action For “Breach Of Fiduciary Duty – Leak” ........................................................... 21

4. Claimant Cannot Prevail On His Fourth Cause Of Action For “Intentional Interference with Contractual Relations” ............................... 22

IV. REQUEST FOR ATTORNEYS’ FEES ............................................................................. 23

V. CONCLUSION ................................................................................................................... 23

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TABLE OF AUTHORITIES

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Cases

Am. Humane Ass’n v. Los Angeles Times Commc’ns, 92 Cal. App. 4th 1095 (2001) ............................................................................................. 25

Bradbury v. Superior Court, 49 Cal. App. 4th 1108 (1996) ............................................................................................. 20

Braun v. Chronicle Publ’g Co., 52 Cal. App. 4th 1036 (1997) ................................................................................... 4, 12, 14

Cabrera v. Alam, 197 Cal. App. 4th 1077 (2011) ..................................................................................... 11, 15

Church of Scientology v. Wollersheim, 42 Cal. App. 4th 628 (1996) ............................................................................................... 13

ComputerXpress, Inc. v. Jackson, 93 Cal. App. 4th 993 (2001) ............................................................................. 18, 19, 20, 24

Damon v. Ocean Hills Journalism Club, 85 Cal. App. 4th 469 (2000) ........................................................................................ passim

Decambre v. Rady Children’s Hosp.-San Diego, 235 Cal. App. 4th 1 (2015) ............................................................................................. 5, 18

Dowell v. Cty. of Contra Costa, 2013 WL 2181653 (N.D. Cal. May 20, 2013) .................................................................... 22

Equilon Enters. v. Consumer Cause, Inc., 29 Cal. 4th 53 (2002) .................................................................................................. 8, 9, 20

Gallanis-Politis v. Medina, 152 Cal. App. 4th 600 (2007) ............................................................................................. 18

Hailstone v. Martinez, 169 Cal. App. 4th 728 (2008) ....................................................................................... 12, 13

Hansen v. Dep’t of Corr. & Rehab., 171 Cal. App. 4th 1537 (2008) .................................................................................... passim

Hotels Nevada v. L.A. Pac. Ctr., Inc., 203 Cal. App. 4th 336 (2012) ............................................................................................. 10

In re Attorney Discipline Sys., 19 Cal. 4th 582 (1998) ........................................................................................................ 16

In re Rose, 22 Cal. 4th 430 (2000) ........................................................................................................ 16

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TABLE OF AUTHORITIES (cont.)

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Kapler v. City of Alameda, 2012 WL 3861166 (Cal. Ct. App. Sept. 6, 20120 (unpublished) ................................. 16, 19

Ketchum v. Moses, 24 Cal. 4th 1122 (2001) ...................................................................................................... 25

Laff v. Manning & Marder, Kass, Ellrod, Ramirez, LLP, 2004 WL 26750 (Cal. Ct. App. Jan. 6, 2004) (unpublished) .............................................. 10

Lee v. Fick, 135 Cal. App. 4th 89 (2005) ............................................................................................... 16

Mann v. Quality Old Time Serv., Inc., 139 Cal. App. 4th 328 (2006) ............................................................................................. 11

Maranatha Corr., LLC v. Dep’t of Corr. & Rehab., 158 Cal. App. 4th 1075 (2008) ........................................................................................... 12

Matson v. Dvorak, 40 Cal. App. 4th 539 (1995) ............................................................................................... 20

McGarry v. Univ. of San Diego, 154 Cal. App. 4th 97 (2007) ........................................................................................... 9, 13

Miller v. City of Los Angeles, 169 Cal. App. 4th 1373 (2008) ........................................................................................... 16

Morgan v. Regents of Univ. of California, 88 Cal. App. 4th 52 (2001) ................................................................................................. 22

Navellier v. Sletten, 29 Cal. 4th 82 (2002) ............................................................................................................ 8

Neville v. Chudacoff, 160 Cal. App. 4th 1255 (2008) ........................................................................................... 24

New York Times Co. v. Sullivan, 376 U.S. 254 (1964) ............................................................................................................ 14

Nygard, Inc. v. Uusi-Kerttula, 159 Cal. App. 4th 1027 (2008) ........................................................................................... 12

Patten v. Grant Joint Union High Sch. Dist., 134 Cal. App. 4th 1378 (2005) ........................................................................................... 21

Salma v. Capon, 161 Cal. App. 4th 1275 (2008) ........................................................................................... 19

Schlessinger v. Rosenfeld, Meyer & Susman, 40 Cal. App. 4th 1096 (1995) ............................................................................................. 10

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Seelig v. Infinity Broad. Corp., 97 Cal. App. 4th 798 (2002) ............................................................................................... 11

Shekhter v. Fin. Indem. Co., 89 Cal. App. 4th 141 (2001) ............................................................................................... 11

Sheppard v. Lightpost Museum Fund, 146 Cal. App. 4th 315 (2006) ....................................................................................... 10, 11

Taus v. Loftus, 40 Cal. 4th 683 (2007) ........................................................................................................ 14

Tichinin v. City of Morgan Hill, 177 Cal. App. 4th 1049 (2009) ........................................................................................... 16

Vergos v. McNeal, 146 Cal. App. 4th 1387 (2007) ....................................................................................... 5, 18

Wilson v. Parker, Covert & Chidester, 28 Cal. 4th 811 (2002) .......................................................................................................... 9

Statutes

Cal. Bus. & Prof. Code § 6001.1 ........................................................................................ 12, 16, 17

Cal. Bus. & Prof. Code § 6008 ....................................................................................................... 17

Cal. Bus. & Prof. Code § 6026.5 ................................................................................................ 9, 17

Cal. Bus. & Prof. Code § 6030 ....................................................................................................... 17

Cal. Bus. & Prof. Code § 6044 ....................................................................................................... 17

Cal. Civ. Code § 47 ..................................................................................................................... 7, 24

Cal. Civ. Proc. Code § 425.16(a)-(e) ....................................................................................... passim

Cal. Civ. Proc. Code § 3344 ........................................................................................................... 25

Cal. Gov’t Code § 12940(k) ........................................................................................................... 17

Cal. Gov’t. Code § 820.2 ...................................................................................................... 7, 23, 24

Cal. Gov’t. Code § 821 ......................................................................................................... 7, 23, 24

Cal. Labor Code § 1102.5 ............................................................................................... 3, 20, 21, 22

Rules

Rule of the State Bar, Tit. 6, Div. 2, Rule 6.51 ............................................................................... 21

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Rules of the State Bar, Tit. 6, Div. 1, Ch. 2, Rule 6.20 .................................................................. 17

Constitutional Provisions

Cal. Const., art. VI, § 9 ................................................................................................................... 16

Other

Cheryl Miller, Investigation Found Dunn Misled Bar Trustees, Breached Fiduciary Duties, THE RECORDER, November 19, 2014 ..................................................................... 13

Emily Green, Fired State Bar Director Misled Board on a Host of Issues, Internal Report States, DAILY JOURNAL, November 19, 2014 ......................................................... 13

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- 1 -RESPONDENTS THE STATE BAR AND CRAIG HOLDEN’S


MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

Claimant Joseph Dunn is not a whistleblower, and this is not a case of unlawful termination

or retaliation. Claimant was terminated from his role as Executive Director of the State Bar of

California following an internal investigation by the State Bar Board of Trustees (“Board”) that

uncovered evidence Claimant had engaged in gross misconduct, repeated acts of dishonesty, and

financial improprieties in his role as Executive Director. Now, Claimant seeks to punish the State

Bar and Craig Holden (the former, volunteer President of the Board) for investigating complaints

regarding Claimant’s mismanagement of State Bar affairs and then for determining the appropriate

action to take against him. This is precisely the sort of case that California’s Anti-SLAPP statute

was designed to protect against.

On July 31, 2014, the State Bar’s Chief Trial Counsel, Jayne Kim, filed an internal

whistleblower report alleging numerous ethical breaches, acts of dishonesty, and breaches of

fiduciary duties by Claimant in his capacity as Executive Director. Declaration of Robert Hawley

(“Hawley Decl.”) ¶ 4. The Board took Ms. Kim’s allegations seriously. Acting pursuant to its legal

duty to protect the public and the integrity of the State Bar and its statutory authority as the State

Bar’s governing body, the Board retained respected outside counsel—Munger, Tolles & Olson LLP

(“MTO”)—to conduct an independent investigation of Claimant, the State Bar’s highest ranking

employee. Declaration of Craig Holden (“Holden Decl.”) ¶¶ 3-5. Over several months, MTO

interviewed numerous State Bar employees (including Claimant), extensively reviewed the relevant

documents, performed legal analyses, and ultimately prepared a written report of its findings and

conclusions.

As the investigation developed, the Board held four closed-session meetings to consider the

results of the investigation and its response. MTO presented its interim report to the Board during a

September 14, 2014 Board meeting. On October 17, 2014, MTO presented its final, written report

to the Board. On October 30, 2014, the Board held a further meeting with MTO to discuss the

investigation and the Board’s response. Id. ¶¶ 5-6, 9-10.

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The MTO investigators concluded that Claimant engaged in serious misconduct justifying

his termination, by, among other things, “repeatedly provid[ing] inadequate or inaccurate

information to the Board in a way that undermined its ability to exercise its decision-making

authority.” Declaration of Moez Kaba (“Kaba Decl.”) ¶ 2, Ex. MK1 (MTO Report) at 28. Among

other things, the MTO report found that Claimant engaged in the following misconduct:

Misinformed the Board in November 2013 that State Bar funds would not be used to finance a January 2014 trip to Mongolia that Claimant took. Id. at 3-7.

Took further steps to minimize attention to the improper use of State Bar funds for the Mongolia trip and failed to direct the State Bar’s Chief Financial Officer to make sure that all expenses for the trip, and others, were not paid for by mandatory State Bar membership fees. Id. at 7-8.

Failed to correct an April 23, 2014 Daily Journal article (“The Mongolian Connection”) asserting that no State Bar funds were used for the trip, even though Claimant admitted that he read the article and noticed the incorrect statement. Id. at 5-7.

Failed to inform the Board of the Supreme Court of California’s concerns regarding pending legislation (Assembly Bill 852) during multiple May 2014 meetings with the Board and the Board Operations Committee, even though Claimant had been informed only weeks earlier that the Chief Justice of California “want[ed] the bill stopped.” Instead, Claimant asked the Board to authorize the State Bar to sponsor the legislation. He also wrote—falsely—in a memorandum to the Operations Committee that “[t]here is no known opposition to the measure.” Id. at 9-11.

Made misrepresentations to the Board that the Supreme Court of California was supportive of Claimant’s efforts to move the State Bar headquarters from San Francisco to Sacramento. Id. at 11-12.

In light of the above, the MTO investigators determined that Claimant’s misconduct

“plainly” justified his termination. Id. at 28. (“Dunn’s repeated failure to provide adequate or

truthful information to the Board plainly provides an adequate basis to terminate his at will

employment . . . however strong his performance has otherwise been, the nature of the misconduct

involved here and the attitude Dunn showed when questioned by counsel could certainly justify

termination.”).

After receiving the MTO report, the Board voted at a November 7, 2014 meeting to remove

Claimant from his position as Executive Director. Holden Decl. ¶ 16. That same day, Claimant was

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given notice of termination (effective thirty days thereafter) and he was immediately placed on paid

administrative leave and relieved of all responsibilities. Id. ¶ 18, Ex. CH3. News of Claimant’s

termination became public shortly thereafter.

As President of the State Bar, Respondent Craig Holden signed Claimant’s termination

letter. Id. Further to his role as President, Mr. Holden was also responsible—at least in part—for

authorizing and initiating the internal investigation into the veracity of Ms. Kim’s allegations

against Claimant. Id. ¶¶ 2-5.

In retaliation against the State Bar and Mr. Holden (and presumably to divert attention from

Claimant’s own wrongdoing), Claimant filed the instant lawsuit. Claimant’s original complaint

alleged the following claims: (i) “Whistleblower Retaliation” in violation of Labor Code § 1102.5

against the State Bar; and (ii) “Breach of Fiduciary Duty” against Mr. Holden, alleging that he

breached his purported fiduciary duty to Claimant by, among other things, authorizing the internal

investigation and signing Claimant’s termination letter.

After Respondents demurred to his complaint, Claimant responded by filing a First

Amended Complaint on April 29, 2015, alleging an entirely new cause of action (“Breach of

Fiduciary Duty—Leak”) against Mr. Holden and the State Bar based on their purported role in

“leaking” information from the MTO report to the press. Claimant also added a fourth cause of

action (“Intentional Interference with Contractual Relations”) against Beth Jay, Roe 2, and Roe

Board members.

On May 5, 2015, the court stayed all proceedings and deadlines in the case except to allow

limited briefing on Respondents’ Motion to Compel Arbitration. On June 12, 2015, the superior

court granted Respondents’ Motion to Compel Arbitration pursuant to Claimant’s employment

agreement and stayed all proceedings and deadlines in the case pending the completion of

arbitration, except for a hearing on Claimant’s Motion for a Preliminary Injunction (which

Claimant ultimately withdrew).

The court appointed the Hon. Edward A. Infante as the Arbitrator in this case on January 4,

2016. On February 12, 2016, Claimant filed his Notice of Claims (“NOC”). The NOC includes all

four causes of action Claimant originally filed in superior court. With respect to the fourth cause of

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action (“Intentional Interference with Contractual Relations”), Claimant replaced Roe 2 for Mr.

Holden as a named Respondent. In addition, the NOC added a fifth cause of action (“Breach of the

Implied Covenant of Good Faith and Fair Dealing”) against the State Bar and Mr. Holden.

As is clear from the arguments herein and the State Bar and Mr. Holden’s Demurrer filed

concurrently herewith, Claimant’s causes of action are entirely without legal or factual merit.

However, importantly for purposes of this motion, Claimant’s lawsuit violates California’s Anti-

SLAPP statute as it seeks to punish the State Bar and Mr. Holden for exercising their First

Amendment rights to address matters of serious public concern and their “participation in matters

of public significance.” Cal. Civ. Proc. Code § 425.16(a). California law is clear that such

retaliatory claims cannot proceed.

II. SUMMARY OF ARGUMENT

Under California’s Anti-SLAPP statute, lawsuits that threaten to chill the exercise of

constitutionally protected free speech in connection with a public issue are subject to a special

motion to strike. Id. § 425.16(a)–(b). The Anti-SLAPP statute provides substantive immunity for

claims based on conduct or statements made in connection with, among other things, an “issue of

public interest” or an “issue under consideration or review by . . . any [] official proceeding

authorized by law.” Id. § 425.16(b)(1), (e)(2), (e)(4). Once the moving party establishes that the

alleged conduct or statements are protected activities under the Anti-SLAPP statute, id.

§ 425.16(e)(1)–(4), the burden shifts to the non-moving party to demonstrate—with competent and

admissible evidence—that there is a reasonable probability of prevailing on its claims at trial. See

id. § 425.16(b)(1).

While Claimant’s causes of action are meritless, they are also premised on protected

statements and conduct by Mr. Holden, other Board members, and State Bar employees. As set

forth below, Claimant’s first, second, third, and fourth causes of action are subject to the Anti-

SLAPP statute for two independent reasons:

First, the State Bar of California is a government entity and the largest State Bar in the

country with over 250,000 members. The management of State Bar affairs and the misconduct of

its Executive Director clearly involve “issues of public interest” under subsection (e)(4) of the

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Anti-SLAPP statute. See, e.g., Damon v. Ocean Hills Journalism Club, 85 Cal. App. 4th 469, 479–

80 (2000); Braun v. Chronicle Publ’g Co., 52 Cal. App. 4th 1036, 1047 n.5 (1997). And, as

explained below, all four of Claimant’s causes of action addressed herein are based on

Respondents’ statements regarding these “issues of public interest.”

Second, internal investigations of misconduct by government employees—including the

State Bar’s internal investigation into Claimant’s misconduct—constitute “official proceedings

authorized by law” within the scope of subsection (e)(2) of the Anti-SLAPP Statute. See, e.g.,

Hansen v. Dep’t of Corr. & Rehab., 171 Cal. App. 4th 1537, 1544 (2008). As a result, all

communications preparatory to or in anticipation of the State Bar’s internal investigation,

statements or reports made during the investigation, and ultimate personnel actions made by

Respondents in meetings of its governing body following the investigation are entitled to Anti-

SLAPP protection. See id.; Vergos v. McNeal, 146 Cal. App. 4th 1387, 1394–96 (2007); Decambre

v. Rady Children’s Hosp.-San Diego, 235 Cal. App. 4th 1, 22 (2015), as modified on denial of

reh’g (Apr. 2, 2015). Claimant’s first, second, and fourth causes of action are subject to the Anti-

SLAPP statute for this additional and independent reason.

The following chart summarizes the reasons why Claimant’s causes of action “arise from”

protected activity—i.e., statements and conduct by the Board, Mr. Holden, and others regarding

“issues of public interest” and in connection with “an official proceeding authorized by law.”

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No.

Cause of Action

Issues of Public Interest Prong

Official Proceeding Authorized by Law Prong

1 Whistleblower

Retaliation

Based on the Board’s decision to terminate Claimant, which was made during four Board meetings where the investigation, Claimant’s misconduct, and management of State Bar affairs (all “issues of public interest”) were discussed.

Based on the Board’s decision to terminate Claimant, which was made in connection with the internal investigation, including during four Board meetings where the results of the internal investigation were discussed.

2 Breach of

Fiduciary Duty

Based on Holden’s statements and conduct concerning “issues of public interest,” including his alleged initiation of the investigation, allegations that he made false statements to Board members concerning Claimant, and allegations regarding his management of State Bar affairs and State Bar prosecutorial priorities. See NOC ¶¶ 5, 6, 8, 20, 29, 34, 45, 47, 69.

Based on Holden and others' alleged statements and participation in initiating the internal investigation, including alleged statements Mr. Holden made to Board members, (see, e.g., NOC ¶¶ 5, 20, 29, 34, 36, 45-46, 47 69) and the Board’s decision to terminate Claimant, including Mr. Holden’s related statements and conduct (see, e.g., id. ¶¶ 8, 69).

3 Breach of

Fiduciary Duty - Leak

Based on allegations that Board members leaked information to the press regarding the investigation and Claimant’s misconduct. NOC ¶¶ 50, 74.

4

Intentional Interference

with Contractual Relations

Based on alleged statements Holden made to Board members regarding Claimant's mismanagement of State Bar affairs and the judiciary's views on Claimant's employment. NOC ¶¶ 47, 82, 83.

Based on allegations that Holden initiated the investigation and made statements to Board members in connection with the investigation. NOC ¶¶ 82, 83.

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Because Claimant’s causes of action against Mr. Holden and the State Bar fall within the

scope of the Anti-SLAPP statute, Claimant must establish that there is a reasonable probability he

will prevail on his claims at trial with competent and admissible evidence. See Cal. Civ. Proc. Code

§ 425.16(b)(1). Claimant cannot meet his burden for the reasons discussed below and in the

concurrently filed Demurrer; those reasons include:

No. Cause of Action Why Claimant Cannot Prevail

1 Whistleblower Retaliation

Claimant did not engage in protected activity because he did not disclose any actual violation of law. Claimant cannot establish that he was fired for allegedly filing two anonymous whistleblower notices; he was fired on account of his misconduct.

2 Breach of Fiduciary Duty

Neither the State Bar nor Mr. Holden owed Claimant a fiduciary duty as a matter of law. Holden is entitled to immunity per Gov’t. Code §§ 820.2 and 821. Holden’s alleged acts did not harm Plaintiff.

3 Breach of Fiduciary Duty

- Leak

Neither the State Bar nor Mr. Holden owed Claimant a fiduciary duty as a matter of law. Claimant has not alleged (and cannot produce evidence) that any specific Board member leaked the MTO report.

4 Intentional Interference

with Contractual Relations

Holden is entitled to immunity per Gov’t. Code § 820.2. Holden’s alleged statements are privileged under Cal. Civ. Code § 47. Claimant cannot prove that Holden made the alleged statements or that they were false.

Accordingly, the first, second, third, and fourth causes of action should be stricken in their

entirety and the Arbitrator should assess the State Bar and Mr. Holden’s reasonable fees and costs

against Claimant.

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III. ARGUMENT

A. The Anti-SLAPP Statute Is Broadly Construed To Protect Statements And

Conduct In Furtherance Of Free Speech

Under California’s Anti-SLAPP statute, a claim against any person arising from acts taken

“in furtherance of the person’s right of petition or free speech” must be stricken, unless the plaintiff

establishes a “probability” that they will prevail on the claim. Cal. Civ. Proc. Code § 425.16(b)(1).

The California Legislature explicitly directed that the statute “shall be construed broadly,” in

furtherance of its express purpose: to “encourage continued participation in matters of public

significance.” Id. §§ 425.16(a), (b)(1). It “is California’s response to meritless lawsuits brought to

harass those who have exercised these rights.” Hansen, 171 Cal. App. 4th at 1543 (emphasis

added).

Courts evaluate Anti-SLAPP motions using a two-step process. Equilon Enters. v.

Consumer Cause, Inc., 29 Cal. 4th 53, 67 (2002). First, the court determines whether the

“challenged cause of action is one arising from protected activity.” Id. Protected activities include:

(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (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, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other 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.

Cal. Civ. Proc. Code § 425.16(e)(1)–(4). In determining whether a particular claim arises out of

protected activity, the “focus is not the form of the plaintiff’s cause of action but, rather, the

defendant’s activity that gives rise to his or her asserted liability.” Navellier v. Sletten, 29 Cal. 4th

82, 92 (2002). Similarly, the Anti-SLAPP statute applies regardless of whether the plaintiff brought

the cause of action with the intent to chill the defendant’s speech. Equilon, 29 Cal. 4th at 48.

Once the defendant has made a threshold showing that a claim arises from protected

activity, the burden shifts to the plaintiff to demonstrate “a probability of prevailing on the claim.”

Id. at 67; see also Cal. Civ. Proc. Code § 425.16(b)(1). The plaintiff must show “both that the claim

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is legally sufficient and there is admissible evidence that, if credited, would be sufficient to sustain

a favorable judgment.” McGarry v. Univ. of San Diego, 154 Cal. App. 4th 97, 108 (2007).

B. Respondents’ Motion Is Both Permissible And Proper In This Forum

Respondents could have (and planned to) file an Anti-SLAPP motion while this case was

pending in superior court. Because the court sent this case to arbitration and stayed all proceedings,

Respondents filed an Anti-SLAPP motion in this forum instead. They did so in order to protect

their constitutional rights to comment on and participate in matters of public significance and to

protect themselves from the costs and harassment associated with litigating Claimant’s meritless

claims and false allegations.

There is no authority that prevents the Arbitrator from hearing Respondents’ motion.

Rather, the Arbitrator has broad authority under California law and JAMS rules to consider

dispositive motions, including an Anti-SLAPP. See Schlessinger v. Rosenfeld, Meyer & Susman, 40

Cal. App. 4th 1096, 1104 (1995) (holding that an arbitrator had “implicit authority” to hear two

summary judgment motions, even though the California Arbitration Act and the American

Arbitration Association rules did not provide that such a motion could be filed); JAMS Rule 18

(“The Arbitrator may permit any Party to file a Motion for Summary Disposition of a particular

claim or issue.”).

Moreover, the California Court of Appeals has expressly acknowledged that an arbitrator

may hear an Anti-SLAPP motion. Laff v. Manning & Marder, Kass, Ellrod, Ramirez, LLP, 2004

WL 26750, *3 (Cal. Ct. App. Jan. 6, 2004) (rejecting appeal based on superior court’s failure to

adjudicate Anti-SLAPP motion before granting motion to compel arbitration and holding “there is

nothing to prevent appellants from renewing their SLAPP motion before the arbitrator”)

(unpublished); see also Hotels Nevada v. L.A. Pac. Ctr., Inc., 203 Cal. App. 4th 336, 344 (2012)

(arbitration panel ruled on Anti-SLAPP motion).

Although one California court reversed a superior court’s order striking an arbitration claim

pursuant to an Anti-SLAPP motion, the ruling does not apply in this context. In Sheppard v.

Lightpost Museum Fund, 146 Cal. App. 4th 315, 319–20 (2006), an employer filed a claim against

its former employee in arbitration and the employee responded by filing an Anti-SLAPP motion in

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superior court. The superior court granted the Anti-SLAPP motion and the Court of Appeal

reversed. Critically, the court based its holding on the fact that the arbitration claim was filed only

in arbitration and never asserted in court. Id. at 318 (Anti-SLAPP statute “does not authorize a

superior court to grant a motion to strike an arbitration claim filed only in an agreed arbitral forum

and not asserted by the claimant in any complaint, cross-complaint or petition filed in court”

(emphases added)).

By contrast, Claimant originally filed his first, second, third, and fourth causes of action in

superior court, where those claims remained until the court ordered this matter to arbitration on

June 12, 2014.1 Kaba Decl. ¶ 5, Ex. MK4. Accordingly, Sheppard is inapposite and the Arbitrator

should hear Respondents’ motion for the reasons discussed above.

C. Claimant’s Causes Of Action Are Subject To The Anti-SLAPP Statute

Claimant’s first cause of action (“Whistleblower Retaliation”), second cause of action

(“Breach of Fiduciary Duty”), third cause of action (“Breach of Fiduciary Duty – Leak”), and

fourth cause of action (“Intentional Interference with Contractual Relations”) are subject to the

Anti-SLAPP statute for two independent reasons discussed below.

1. Claimant’s Misconduct And Mismanagement Of State Bar Affairs

Constitute “Issues Of Public Interest”

The “public interest” prong, “like all of section 425.16, is to be ‘construed broadly.’”

Seelig v. Infinity Broad. Corp., 97 Cal. App. 4th 798, 808 (2002); Cal. Civ. Proc. Code § 425.16(a).

Courts have held that statements about the leadership and mismanagement of both government and

private entities implicate issues of public interest. See, e.g., Damon, 85 Cal. App. 4th at 479–80

(statements about former homeowner association manager’s competency—including statements

1 Claimant asserted his fifth cause of action for “Breach of the Implied Covenant of Good Faith and Fair Dealing” for the first time in Arbitration. In light of the court’s ruling in Sheppard, Respondents’ Anti-SLAPP motion does not target Claimant’s fifth cause of action. Regardless, the Arbitrator may strike all of Claimant’s other causes of action and grant Respondents’ attorneys’ fees pursuant to this motion. Shekhter v. Fin. Indem. Co., 89 Cal. App. 4th 141, 150 (2001) (Anti-SLAPP statute “allows a single cause of action to be stricken,” even if “other claims remain”); Mann v. Quality Old Time Serv., Inc., 139 Cal. App. 4th 328, 340 (2006) (party who “partially prevails on an anti-SLAPP motion,” is entitled to fees “unless the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion”).

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about “future management and leadership of the [a]ssociation”—involved “public issues” within

the meaning of the Anti-SLAPP statute); Cabrera v. Alam, 197 Cal. App. 4th 1077, 1090–91

(2011) (defamatory statements that former president of homeowner association’s board had “stolen

money from the association and defrauded it” concerned an issue of public interest).

Likewise, statements about a publicly-funded entity’s financial well-being and integrity

constitute matters of public concern. See, e.g., Braun, 52 Cal. App. 4th at 1047 n.5 (statements

concerning “financial well-being” and “integrity” of “a recognized branch of a large, publicly-

funded university medical school” involved issues of public interest). “Taken together, these cases

and the legislative history that discusses them suggest that ‘an issue of public interest’ . . . is any

issue in which the public is interested.” Nygard, Inc. v. Uusi-Kerttula, 159 Cal. App. 4th 1027,

1042 (2008) (emphasis in original).

Conduct or statements about the management of State Bar affairs or funds by its chief

executive officer—as well as any internal investigation into such misconduct—constitute “issues of

public interest” under the Anti-SLAPP statute. In fact, the State Bar’s express purpose and mission

is to protect the general public. Cal. Bus. & Prof. Code § 6001.1 (“Protection of the public shall be

the highest priority for the State Bar of California.” (emphasis added)).

Further, the Board hired Claimant as the State Bar’s highest ranking employee to serve as

its Executive Director—an extraordinarily important position pursuant to which he oversaw all

State Bar employees. NOC ¶ 16. The allegations regarding Claimant’s misconduct involved serious

ethical breaches, repeated acts of dishonesty, and breaches of his fiduciary duties that were later

substantiated by the MTO report. As discussed more fully herein, the MTO investigators concluded

that Claimant, among other things: (i) spent State Bar funds to finance his travel after informing the

Board that State Bar funds would not be spent; (ii) made misrepresentations to the Board regarding

the Supreme Court’s views on moving the State Bar’s headquarters; and (iii) failed to inform the

Board of the Chief Justice’s concerns regarding pending legislation, when the Board voted to

sponsor the bill. Kaba Decl. ¶ 1, Ex. MK1 at 3-12.

Claimant’s misconduct falls squarely within the definition of an “issue of public interest.”

See Hailstone v. Martinez, 169 Cal. App. 4th 728, 738–39 (2008) (union board member’s

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suspension for misappropriation of funds was matter of public interest where union had more than

10,000 members); Maranatha Corr., LLC v. Dep’t of Corr. & Rehab., 158 Cal. App. 4th 1075,

1086 (2008) (private contractor’s misappropriation of public funds constitutes a matter of public

interest); Damon, 85 Cal. App. 4th at 479 (affirming grant of Anti-SLAPP motion where

statements regarding management of homeowner’s association “concerned issues of critical

importance to a large segment of [the] local population”); McGarry v. Univ. of San Diego, 154 Cal.

App. 4th 97, 110 (2007) (alleged defamatory statements regarding college football coach’s

misconduct and resulting termination were matters of “public interest” as they were “of concern to

a substantial number of people”).

Indeed, the amount of media coverage on Claimant’s termination, his misconduct, and State

Bar affairs demonstrates that the public is keenly interested in the issues underlying Claimant’s

claims. See Church of Scientology v. Wollersheim, 42 Cal. App. 4th 628, 651 (1996) (“[T]he

Church is a matter of public interest, as evidenced by media coverage and the extent of the

Church’s membership and assets.”); Kaba Decl. ¶ 3, Ex. MK2, Cheryl Miller, Investigation Found

Dunn Misled Bar Trustees, Breached Fiduciary Duties, THE RECORDER, November 19, 2014; Ex.

MK3, Emily Green, Fired State Bar Director Misled Board on a Host of Issues, Internal Report

States, DAILY JOURNAL, November 19, 2014.2

2. Claimant’s First, Second, Third, And Fourth Causes Of Action Are

Based On Statements Regarding “Issues Of Public Interest”

As explained below, each of Claimant’s first, second, third, and fourth causes of action are

directly based on statements and conduct in connection with the above-mentioned “issue(s) of

public interest.” Cal. Code Civ. Proc. § 425.16(e)(4).

Claimant’s “Whistleblower Retaliation” Claim is based on the Board’s decision to

terminate Claimant—a decision that was made during four Board meetings where it considered and

deliberated on “issues of public interest” (i.e. the investigation, Claimant’s misconduct, and

2 Even Claimant has acknowledged that issues regarding the management of State Bar affairs are issues of public interest. See Kaba Decl. ¶ 6, Ex. MK5 at 9:3–5 (alleging that Claimant’s Complaint “allege[d] serious wrongdoing by the State Bar and its agents,” and therefore implicated “the public interest in [the State Bar’s] proper governance”).

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management of State Bar affairs). The claim therefore arises from conduct and statements in

connection with “issues of public interest.” Cal. Code Civ. Proc. § 425.16(e)(4); see also Damon,

85 Cal. App. 4th at 479; Hailstone, 169 Cal. App. 4th at 739.

Claimant’s “Breach of Fiduciary Duty” claim is based on Mr. Holden’s (i) participation in

the internal investigation into Claimant’s mismanagement of State Bar affairs and misappropriation

of State Bar funds (see, e.g., NOC ¶¶ 5, 8, 20, 29, 34, 36, 45–46, 47 69); (ii) Mr. Holden’s alleged

statements regarding Claimant’s misconduct and the judiciary’s views on Claimant’s employment

(NOC ¶¶ 5, 47); and (iii) Claimant’s resulting termination (NOC ¶¶ 1, 8, 69). For similar reasons,

therefore, the claim arises from protected activity. Cal. Code Civ. Proc. § 425.16(e)(4).

In addition, Claimant alleges that Mr. Holden engaged in other acts such as “condoning and

attempting to cover up the unlawful removal of backlogged State Bar complaints,” “failing to

implement legislation,” “engag[ing] in a campaign to derail the sale of the State Bar’s San

Francisco headquarters,” and hiring MTO despite a conflict of interest and in violation of protocol.

NOC ¶¶ 6, 69. These allegations are demonstrably false—but even if they were true—they relate

to issues of public interest (e.g., management of State Bar affairs and prosecutorial priorities). See,

e.g., Braun, 52 Cal. App. 4th at 1047 n.5; Damon, 85 Cal. App. 4th at 479.

Mr. Holden and the other Board members alleged conduct at the heart of Claimant’s

“Breach of Fiduciary Duty–Leak” claim—the supposed “leak” of MTO’s investigative report to the

press—also constitutes protected activity. See NOC ¶¶ 72–78. Given that the purpose of the

internal investigation was to determine whether allegations regarding Claimant’s misconduct had

merit (they did), the subsequent findings in the MTO report, and any publication of those

statements, necessarily involve the very same “issues of public interest” discussed above. See Taus

v. Loftus, 40 Cal. 4th 683, 712–13 (2007) (publishing article on “public issue” entitled to Anti-

SLAPP protection). Moreover, providing information to the press is a textbook example of

protected First Amendment activity. New York Times Co. v. Sullivan, 376 U.S. 254, 270 (1964).

Finally, Claimant’s “Intentional Interference with Contractual Relations” claim is expressly

based on statements Mr. Holden made regarding “issues of public interest.” Claimant alleges that

Mr. Holden interfered with Claimant’s contract by making false statements to Board members

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during the investigation that (i) the Chief Justice of California wanted Claimant to be terminated;

and (ii) Claimant lied to the Board that the Chief Justice approved his plan to sell the State Bar’s

headquarters. NOC ¶¶ 5, 4, 82, 83. These types of statements and this kind of “participation in

matters of public significance” are precisely the type of conduct that the legislature intended to

protect in passing the Anti-SLAPP statute. Cal. Civ. Proc. Code § 425.16; see also Damon, 85 Cal.

App. 4th at 479–80 (statements about former homeowner association manager’s competency and

management of association protected by Anti-SLAPP statute); Cabrera, 197 Cal. App. 4th at 1090–

91 (defamatory statements that former president of homeowner association’s board had “stolen

money from the association and defrauded it” were protected).

3. The State Bar’s Internal Investigation Into Claimant’s Misconduct

Constitutes An “Official Proceeding Authorized By Law”

Claimant’s claims are subject to the Anti-SLAPP for an additional and independent reason.

Under subsection (e)(2) of the Anti-SLAPP statute, protected activity includes “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.” Cal.

Civ. Proc. Code § 425.16(e)(2). Claimant’s first cause of action (“Whistleblower Retaliation”),

second cause of action (“Breach of Fiduciary Duty”), and fourth cause of action (“Intentional

Interference with Contractual Relations”) are based on Respondents’ alleged statements and

conduct that were made in connection with the State Bar’s internal investigation into the

complaints against Claimant—an “official proceeding authorized by law”—and Claimant’s

resulting termination.

It is well-established that internal investigations of misconduct by government employees

constitute “official proceedings authorized by law” within the scope of the Anti-SLAPP statute. For

example, the California Court of Appeal has held that an “internal investigation” by the California

Department of Corrections and Rehabilitation into allegations that an employee engaged in

misconduct “itself was an official proceeding authorized by law.” Hansen, 171 Cal. App. 4th at

1544. As a result, the court held that allegedly false statements and writings Department employees

made in connection with the investigation were entitled to Anti-SLAPP protection. Id.

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Likewise, in Miller v. City of Los Angeles, 169 Cal. App. 4th 1373, 1383 (2008), the court

held that the City of Los Angeles’ internal “investigation into [an employee’s] conduct in

connection with his public employment and its determination and report that he had engaged in

misconduct on the job” constituted protected activity. Numerous other cases are in accord. See,

e.g., Kapler v. City of Alameda, 2012 WL 3861166, at *1 (Cal. Ct. App. Sept. 6, 2012) (holding

that “[s]tatements made during investigations of government employee misconduct are clearly

protected under the anti–SLAPP statute” and striking causes of action based on the “City’s

investigation into whether [plaintiff] engaged in misconduct and its ultimate decision to terminate

his employment” (emphasis added)) (unpublished); Tichinin v. City of Morgan Hill, 177 Cal. App.

4th 1049, 1061 (2009) (“investigative report” prepared by the City Council was protected as a

statement made in connection with an “official proceeding authorized by law”); Lee v. Fick, 135

Cal. App. 4th 89, 96 (2005), as modified (Dec. 23, 2005) (investigation of high-school coach

following complaints to school board constituted an “official proceeding authorized by law”).

Like the internal investigations by government entities discussed above, the State Bar’s

investigation into Claimant’s misconduct and mismanagement of State Bar affairs qualifies as an

“official proceeding authorized by law.” Cal. Civ. Proc. Code § 425.16(e)(2). The State Bar is an

official government entity. It is an administrative arm of the California Supreme Court established

by Article VI, § 9 of the California Constitution, and expressly acknowledged as an integral part of

the judicial function. See Cal. Const., art. VI, § 9; Cal. Bus. & Prof. Code § 6001; In re Rose, 22

Cal. 4th 430, 438 (2000); In re Attorney Discipline Sys., 19 Cal. 4th 582, 589 (1998).

Further, the State Bar Board of Trustees was legally authorized and required to investigate

Claimant and other State Bar employees’ misconduct upon the filing of Ms. Kim’s whistleblower

report. The Board is the governing entity of the State Bar. As such, it is “charged with the

executive function of the State Bar” and entitled to exercise and carry out “[a]ll powers granted to

the State Bar by Sections 6001 and 6008.3.” Cal. Bus. & Prof. Code §§ 6001(g); 6008.4; 6030.

Critically, the Board has explicit statutory authority to “initiate and conduct investigations of all

matters affecting or relating to (a) The State Bar, or its affairs.” Id. § 6044 (emphases added). In

addition, the Board has specific authorization to hold closed-session Board meetings “relating to

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. . . (4) the appointment, employment or dismissal of an employee, consultant, or officer of the State

Bar or to hear complaints or charges brought against such employee, consultant, or officer.” Id. §

6026.5 (emphases added). Finally, the Board has “supervision and control” over State Bar officers

and has “authority over . . . whether actions or positions taken by a State Bar officer . . . are

consistent with State Bar policies.” Rules of the State Bar, Tit. 6, Div. 1, Ch. 2, Rule 6.20.

The Board’s investigation into Claimant’s misconduct was conducted pursuant to the legal

authority described above. On July 31, 2014, the State Bar’s Chief Trial Counsel, Jayne Kim,

submitted a complaint entitled “Report of Improper Activity.” Hawley Decl. ¶ 4. Ms. Kim alleged

that Claimant Joseph Dunn engaged in numerous ethical breaches, acts of dishonesty, and breaches

of fiduciary duty in his capacity as Executive Director. Because Ms. Kim alleged egregious

improprieties on behalf of a senior State Bar executive, the Board—acting pursuant to its authority

under § 6044 to initiate and conduct investigations and its duty to investigate whistleblower

complaints3—conducted an internal investigation led by the law firm of Munger, Tolles & Olson

LLP. Id. ¶¶ 6-8; Holden Decl. ¶¶ 2-6, 9-10. As the investigation developed, the Board held three

closed-session meetings—pursuant to its authority under § 6026.5—to discuss the results of the

investigation and the disciplinary actions the Board would take in response. Holden Decl. ¶¶ 5-6, 9-

11, 16. On November 7, 2014, the Board held a final closed-session meeting, during which it

formally voted to terminate Claimant’s employment as Executive Director. Id. ¶ 16.

4. Claimant’s First, Second, And Fourth Causes Of Action Are Based On

Statements And Conduct In Connection With The Official Proceeding

Because the State Bar’s internal investigation into Claimant’s misconduct constitutes an

“official proceeding authorized by law,” both “communications preparatory to or in anticipation of”

the investigation, and statements or reports made during the investigation, are entitled to Anti-

SLAPP protection. Hansen, 171 Cal. App. 4th at 1544; ComputerXpress, Inc. v. Jackson, 93 Cal.

App. 4th 993, 1009 (2001) (“The term ‘official proceeding’ has been interpreted broadly to protect

3 The Board investigates whistleblower reports as a matter of internal policy and pursuant to its duty under Cal. Bus. & Prof. Code § 6001.1 to protect the public. Hawley Decl. ¶ 6. In addition, the Board has a legal duty pursuant to Cal. Gov’t Code § 12940(k) to investigate whistleblower complaints in order to protect the whistleblowers from retaliation and discrimination. Id.

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communications to or from governmental officials which may precede the initiation of formal

proceedings.” (citation omitted)). In addition, ultimate personnel actions, such as censure,

demotion, or termination following an internal investigation, are also entitled to Anti-SLAPP

protection. See Vergos, 146 Cal. App. 4th at 1394–96.

Claimant’s first, second, and fourth causes of action are based on Respondents’ protected

activity in connection with the internal investigation, including their statements to initiate the

investigation, their participation in the investigation, and the resulting decision by the Board to

terminate Claimant.

Claimant’s “Whistleblower Retaliation” claim is based on the Board’s decision to terminate

Claimant and that decision was made following the internal investigation into Claimant’s

misconduct and the Board’s discussions during four board meetings. Holden. Decl. ¶¶ 2-6, 9-11,

16. The claim therefore arises from protected activity in connection with “an official proceeding

authorized by law.” See Decambre, 235 Cal. App. 4th at 22 (retaliation and wrongful termination

claims arose from protected activity because the “decision not to renew DeCambre’s contract

stemmed from [] protected peer review activity”); Gallanis-Politis v. Medina, 152 Cal. App. 4th

600, 611 (2007) (wrongful termination claim subject to Anti-SLAPP statute because it arose from

defendants’ internal investigation and report); Vergos, 146 Cal. App. 4th at 1397–99 (hearing

officer’s denial of plaintiff’s grievances including communication of adverse results was

protected); Kapler, 2012 WL 3861166, at *6 (“The city’s decision to terminate Kapler was the final

step in a lengthy, public investigation of alleged misconduct. The investigation and termination

decision—itself memorialized in writing—are protected.” (unpublished)).

Claimant’s “Breach of Fiduciary Duty” claim is also based on Respondents’ alleged

statements relating to their initiation and participation in the investigation, as well as the Board’s

decision to terminate Claimant. See, e.g., NOC ¶ 5 (alleging that Mr. Holden told “several people”

he was “determined ‘to do something about Dunn’” and “demanded the [Board] to terminate

Dunn”), ¶¶ 45–46 (alleging that Mr. Holden, among others, set in motion plans to remove Dunn as

Executive Director and such meetings “culminated in” the filing of an internal grievance

concerning Dunn), ¶ 34 (alleging that the Board “decided to conduct” an “internal evaluation” of

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Claimant after it received an internal grievance concerning him), ¶ 20 (alleging that Mr. Holden

“initiated” the internal investigation), ¶ 47 (alleging that Mr. Holden made allegedly false

statements to Board members about Claimant’s mismanagement of State Bar affairs), ¶ 8 (alleging

that Mr. Holden gave Claimant notice of his termination), ¶ 69 (alleging that Mr. Holden breached

his fiduciary duty by, among other things, terminating Claimant). These statements and conduct

clearly constitute protected activities. Hansen, 171 Cal. App. 4th at 1544; ComputerXpress, 93 Cal.

App. 4th at 1009.4

Likewise, Claimant’s “Intentional Interference with Contractual Relations” claim is based

on allegations that Mr. Holden initiated the State Bar’s investigation and made statements to Board

members in connection with the investigation. See NOC ¶ 82 (alleging that Mr. Holden

“participated in the retention of MTO,” and thereafter “engaged in, and actively participated in

communications” with Board members); ¶ 83 (alleging that Mr. Holden “provid[ed] false

information concerning [Claimant’s] employment status” to Board members); ¶ 47 (alleging that

Mr. Holden “falsely informed [Board] members that Senator Dunn had misrepresented the Chief

Justice’s” views on the sale of the State Bar headquarters and further “falsely informed [Board]

members that the Chief Justice wanted Senator Dunn to be terminated.”); see also id. ¶ 5. This

cause of action also arises from Mr. Holden’s protected activity.

D. Claimant Cannot Meet His Burden Of Establishing A Probability Of

Prevailing On His Claims

Because Mr. Holden and the State Bar have established that they were sued for exercising

their First Amendment rights to free speech in connection with “an official proceeding authorized

by law” and “issues of public interest” that are protected under the Anti-SLAPP statute, the burden

shifts to Claimant to establish that there is a reasonable probability he will prevail on his claims.

Cal. Civ. Proc. Code § 425.16(b)(1). This burden is substantial. It is tested by the same standard

4 Even if some of the allegations underlying Claimant’s “Breach of Fiduciary Duty” claim did not arise from protected activity, the claim would still be subject to the Anti-SLAPP statute, which applies to “mixed causes of action” “if at least one of the underlying acts is protected conduct, unless the allegations of protected conduct are merely incidental to the unprotected activity.” Salma v. Capon, 161 Cal. App. 4th 1275, 1287 (2008).

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governing motions for summary judgment, nonsuit, or directed verdict. See Matson v. Dvorak, 40

Cal. App. 4th 539, 548 (1995). Claimant cannot simply rely on the allegations set forth in his

complaint. ComputerXpress, 93 Cal. App. 4th at 1010. Instead, he must present “competent

evidence” showing that he will “probably prevail at trial.” Bradbury v. Superior Court, 49 Cal.

App. 4th 1108, 1117 (1996). If Claimant fails to carry his evidentiary burden, his claims must be

stricken. Cal. Code Civ. Proc. § 425.16(b)(1); Equilon, 29 Cal. 4th at 67.

Claimant cannot satisfy this burden for the reasons set forth below and in the State Bar and

Mr. Holden’s Demurrer, filed concurrently herewith.

1. Claimant Cannot Prevail On His First Cause Of Action For

“Whistleblower Retaliation”

In order to prevail on his Labor Code § 1102.5 claim, Claimant must first establish a prima

facie case of retaliation by proving the following elements: (i) he engaged in a protected activity;

(ii) his employer subjected him to an adverse employment action; and (iii) a causal link between

the two. If Claimant establishes a prima facie case, the State Bar must provide a legitimate, non-

retaliatory explanation for his termination. After the State Bar does so, Claimant has the burden of

demonstrating that the explanation is pre-textual. Patten v. Grant Joint Union High Sch. Dist., 134

Cal. App. 4th 1378, 1384 (2005).

Claimant cannot demonstrate a reasonable probability that he will prevail on his claim.

First, as explained in the concurrently filed Demurrer, Claimant did not engage in protected

activity under Labor Code § 1102.5. The information he allegedly, anonymously disclosed in two

“whistleblower notices” does not constitute actual violations of law as opposed to mere ethical

breaches or violations of internal policies.

Second, Claimant cannot establish a prima facie case of retaliation because he has no

competent and admissible evidence to prove a causal nexus between the Board’s receipt of

anonymous “whistleblower notices” and the Board’s decision to terminate him. The timeline in this

case speaks for itself and conclusively rebuts Claimant’s claim.

As explained above in Section I, by October 17, 2014, the Board had already received and

reviewed the MTO report detailing Claimant’s misconduct and had numerous non-retaliatory and

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compelling reasons to terminate Claimant. Holden Decl. ¶¶ 6, 9. By October 30, the Board had

held three meetings to discuss the disciplinary actions it would take in response to the report, and it

had already noticed an additional closed-session meeting for November 7.5 Id. ¶¶ 5, 9-11. At that

November 7 meeting, the Board formally voted to terminate Claimant’s employment. Id. ¶ 16. The

Board’s discussion at all four meetings and its resulting decision to terminate Claimant’s

employment were based on his alleged misconduct—not his anonymous “whistleblower notices.”

See id. ¶¶ 14-17.

Critically, it was not until after MTO issued its report, after the Board held two closed-

session meetings to discuss the report and its response, and after the Board scheduled and publicly

noticed its November 7 meeting (during which the Board decided to terminate Claimant) that

Claimant’s lawyer, Mark Geragos, submitted anonymous “whistle-blower notices” on November 3

and 5 in a last-ditch attempt to save Claimant’s reputation and lay the foundation for this baseless

suit against the State Bar and Mr. Holden.6 Id. ¶¶ 12-13, Exs. CH1, CH2. Tellingly, Claimant never

raised his purported concerns with the Board before filing his anonymous “whistleblower notices,”

even though his duties as Executive Director required him to report improprieties to the Board. See

id. ¶ 15; Hawley Decl. ¶ 2, Ex. RH1 § II(E)(1), (4).

What is more, the “whistleblower notices” that Mr. Geragos sent did not identify Claimant

as the whistleblower. Holden Decl. ¶ 12-13, Exs. CH1, CH2. See Morgan v. Regents of Univ. of

California, 88 Cal. App. 4th 52, 69–70 (2001) (“Essential to a causal link is evidence that the

employer was aware that the plaintiff had engaged in the protected activity.”); Dowell v. Cty. of

Contra Costa, 2013 WL 2181653, at *3 (N.D. Cal. May 20, 2013) (“In order to state a claim . . .

under California Labor Code § 1102.5, Plaintiff must allege that Defendants were at least aware of

the allegedly protected speech.”).

5 The Rules of the State Bar require the Board to provide notice of its meetings and an agenda ten days in advance of the meeting. Rule of the State Bar, Tit. 6, Div. 2, Rule 6.51(A)(1). 6 Indeed, Claimant was interviewed in the course of the MTO investigation. The investigation and the impending disciplinary actions were no secret to him.

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The Board did not know that Mr. Geragos represented Claimant, nor should it have known

that the “whistleblower notices” were written on Claimant’s behalf. In fact, the “whistleblower

notices” actually suggest that Claimant was not the whistleblower because, for example, they

allege shredding by Claimant’s own office. Id. ¶ 13, Ex. CH2 at 1-2 (“We are informed that . . .

both the Office of the Executive Director and personnel from other departments were shredding

documents yesterday.”)

For these reasons, Claimant cannot prove that he will establish a prima facie case of

retaliation on his Labor Code § 1102.5 claim. Even if he does, Claimant cannot prove that the State

Bar’s asserted non-retaliatory reasons for terminating Claimant are pre-textual. Morgan, 88 Cal.

App. 4th at 70 (affirming summary judgment where plaintiff’s employer submitted evidence that its

decision not to rehire plaintiff was based on his lack of qualifications and it was not aware that

plaintiff had filed an internal grievance).

2. Claimant Cannot Prevail On His Second Cause Of Action For “Breach

of Fiduciary Duty”

As explained in the concurrently filed Demurrer, Claimant cannot establish a probability of

prevailing on the merits of his “Breach of Fiduciary Duty” claim against Mr. Holden because: (i) as

a matter of law, Mr. Holden did not owe Claimant any fiduciary duty, and Claimant does not allege

any facts to the contrary; and (ii) Mr. Holden, as President of the State Bar (during the relevant

time period) is entitled to discretionary act immunity under Government Code §§ 820.2 and 821 for

all of his alleged acts that form the basis of Claimant’s second cause of action.

3. Claimant Cannot Prevail On His Third Cause Of Action For “Breach

Of Fiduciary Duty – Leak”

Claimant also cannot establish a probability of prevailing on the merits of his “Breach of

Fiduciary Duty – Leak” claim against Mr. Holden or the State Bar for the reasons set forth in their

Demurrer: (i) as a matter of law, Mr. Holden and the State Bar did not owe Claimant any fiduciary

duty, and Claimant does not allege any facts to the contrary; and (ii) the NOC does not plead any

facts that Mr. Holden (or any other Board member) was involved in the leak of the MTO report.

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Indeed, Claimant has not alleged, and cannot present any evidence, that Mr. Holden

“leaked” the MTO report from the Board’s internal investigation to the press. The reason is simple.

Mr. Holden never “leaked” information from the MTO report. Holden Decl. ¶ 8. Moreover, Mr.

Holden never authorized, participated in, or directed the alleged “leak” of the MTO report. Id.

Indeed, the opposite is true: Mr. Holden instructed members of the Board to keep the information

disclosed in the MTO report confidential. Id. ¶ 7. Mr. Holden also cautioned members of the Board

about speaking with the press in response to questions regarding the MTO report. Id. Claimant’s

inability to proffer any admissible, competent evidence that ties Mr. Holden, or any other Board

member, to the supposed “leak” means that Claimant cannot prevail on his claim.

4. Claimant Cannot Prevail On His Fourth Cause Of Action For

“Intentional Interference with Contractual Relations”

Claimant’s fourth cause of action against Mr. Holden fails for three reasons (which are set

forth more fully in Respondents’ concurrently filed demurrer). First, Mr. Holden, as President of

the State Bar (during the relevant time period) is entitled to discretionary act immunity under

Government Code §§ 820.2 and 821 for all of his alleged acts that form the basis of Claimant’s

fourth cause of action.

Second, the statements Mr. Holden allegedly made that form the basis of Claimant’s cause

of action are absolutely privileged under Cal. Civ. Code § 47. That statute provides, in pertinent

part, that statements are privileged if they are made “in any [] official proceeding authorized by

law.” Cal. Civ. Code, § 47(b). This privilege is absolute. Hansen, 171 Cal. App. 4th at 1546.

Although the Anti-SLAPP statute is not coextensive with § 47, the two statutes serve similar policy

interests and California courts “look[] to the litigation privilege [section 47] as an aid in construing

the scope of [section 425.16,] subdivision [(e)(2)] with respect to the first step of the two-step

anti-SLAPP inquiry.” Neville v. Chudacoff, 160 Cal. App. 4th 1255, 1263 (2008) (alterations in

original; citation omitted); see also ComputerXpress, 93 Cal. App. 4th at 1009 (interpreting

meaning of “official proceeding” under Anti-SLAPP statute by looking to “analogous context of

the privilege under Civil Code section 47”). That is, a statement protected under § 425.16(e)(2) as

an “official proceeding”—so as to satisfy the first prong of the Anti-SLAPP analysis—is typically

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protected under § 47 as well, such that the plaintiff cannot demonstrate a probability of success on

the merits of his claim. See Hansen, 171 Cal. App. 4th at 1547 (affirming order striking complaint

pursuant to Anti-SLAPP statute because statements communicated during internal investigation

were done so as part of an official proceeding, and thus, were “absolutely privileged under Civil

Code section 47”). For the reasons stated above, Mr. Holden’s alleged statements were made in

connection with the State Bar’s internal investigation—i.e., an official proceeding authorized by

law—and are therefore protected under the privilege.

Third, Claimant’s allegations are simply untrue. Mr. Holden never falsely informed the

Board that Claimant had misrepresented the Chief Justice’s position regarding the sale of the State

Bar’s San Francisco headquarters or that the Chief Justice wanted Claimant to be terminated.

Holden Decl. ¶ 19. Rather, the MTO report concluded that Claimant had misrepresented the Chief

Justice’s views. Kaba Decl. ¶ 2, Ex. MK1 at 12.

IV. REQUEST FOR ATTORNEYS’ FEES

An award of reasonable attorneys’ fees and costs to a defendant who prevails on an

Anti-SLAPP motion to strike is “mandatory.” Cal. Civ. Proc. Code § 425.16(c); Ketchum v. Moses,

24 Cal. 4th 1122, 1131 (2001). The prevailing party may seek fees with the special motion, by

subsequent motion, or by a cost memorandum at the conclusion of the litigation. Am. Humane

Ass’n v. Los Angeles Times Commc’ns, 92 Cal. App. 4th 1095, 1103 (2001).

Claimant’s lawsuit is designed to punish Mr. Holden and the State Bar for exercising their

rights to address a matter of serious public concern and Claimant cannot prevail on any of his

claims. Mr. Holden and the State Bar therefore ask the Arbitrator to assess their reasonable fees and

costs against Claimant.

V. CONCLUSION

The State Bar and Mr. Holden respectfully request that the Arbitrator strike Claimant’s

claims pursuant to Code of Civil Procedure § 425.16 and award attorneys’ fees and costs under

Code of Civil Procedure §§ 425.16(c) and 3344.

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Dated: February 26, 2016 Respectfully submitted, HUESTON HENNIGAN LLP

By: John C. Hueston Attorneys for Respondents the State Bar of California and Craig Holden

HUESTON HENNIGAN LLP - Courthouse News Servicefiles.courthousenews.com/2016/03/30/State Bar...

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