American Humane Ass'n v. Los Angeles Times Communications

The complaint, which was filed on January 23, 2001, alleged that plaintiff’s western regional office was responsible for, among other things, monitoring the treatment of animals in television and film productions. Plaintiff certified productions that complied with its guidelines for the ethical treatment of animals. The western regional office was funded in part by grants from entertainment industries, which are located in Los Angeles, including the Screen Actors Guild.

In August 1999, plaintiff retained Attorney Gregory Hurley, of the Kutak Rock law firm in Orange County, to conduct an investigation into a series of disputes within the western regional office. Mr. Hurley interviewed several of plaintiff’s employees concerning the dispute in the western region office for purposes of providing legal advice. The employees were advised that the communications were confidential and the information gleaned from Mr. Hurley’s investigation would not be disclosed to others outside of plaintiff’s enterprise. Mr. Hurley prepared a written report, which is at issue in this case. The report, dated September 24, 1999, was submitted to Robert F. X. Hart, who was then plaintiff’s president. Mr. Hurley’s report was only given to persons who needed the information to make subsequent employment decisions. The report indicated that it was privileged, confidential, and the work product of an attorney. In October 1999, plaintiff removed Mr. Hart from his position as its president.

On March 13, 2000, Mr. Hart sued plaintiff, two of its board of directors members, and its finance director in Colorado state court for: contract breach; wrongful discharge; slander; interference with an employment agreement; civil conspiracy; libel; breach of a settlement agreement; interference with a settlement; failure to timely pay wages as required by Colorado law; and outrageous conduct. Mr. Hart’s complaint filed in Colorado was attached to plaintiff’s complaint in this lawsuit as an exhibit. In the Colorado complaint, Mr. Hart alleged that in August 1999, employees in the western regional office complained that their ability to investigate the misuse of animals in entertainment industry productions had been compromised. Mr. Hart’s Colorado complaint alleged that the head of the western regional office, Gini Barrett, and a subordinate interfered with certain investigations. A conflict of interest existed because Ms. Barrett’s subordinate engaged in sexual relations with two animal trainers. These animal trainers were potentially subject to review and investigation by the western regional office of plaintiff. As a result of these allegations, Mr. Hart retained Mr. Hurley to investigate the matter. At the conclusion of the investigation, Mr. Hurley

prepared a report for Mr. Hart. It is this report authored by Mr. Hurley that is the subject of the dispute between plaintiff and defendant in this lawsuit. Mr. Hurley concluded that a conflict of interest was present and Ms. Barrett was aware of the inappropriate conduct of the subordinate. Also, Mr. Hurley concluded that Ms. Barrett should be reprimanded for not adequately supervising the subordinate. Further, Mr. Hurley concluded the subordinate should be removed from any involvement in investigating animal trainers. Based upon Mr. Hurley’s report, Mr. Hart developed a conflict of interest policy for plaintiff. The conflict of interest policy was drafted and presented to the “Executive Committee of the Board of Directors” for approval. With the advice of Mr. Hurley as well as the chair of the board of directors, Mr. Hart met with Ms. Barrett and the subordinate. Letters of reprimand were presented to Ms. Barrett and the subordinate in the presence of Mr. Hurley as well as another corporate employee. Thereafter, Mr. Hart met with the staff of the western regional office to assure them that their complaints had been acted upon by plaintiff. Many of the employees feared retaliation by Ms. Barrett. Other corporate officials insisted that Mr. Hart withdraw the letters of reprimand and attempted to increase Ms. Barrett’s authority in the western regional office. Mr. Hurley advised Mr. Hart the letters of reprimand were reasonable and that the efforts by the other corporate officers to expand Ms. Barrett’s power in the western regional office were inappropriate. Thereafter, according to the Colorado complaint, false and misleading statements were made by corporate officers and, as a result, Mr. Hart was discharged as the president of plaintiff. Mr. Hart’s Colorado complaint alleged that plaintiff never enacted the conflict of interest policy. Based on these facts, Mr. Hart sought compensatory and exemplary damages in his Colorado lawsuit.

The complaint in this case further alleged that, on January 18, 2001, a reporter employed by defendant requested an interview with Ms. Barrett regarding the filming of a movie. During the course of the interview, defendant’s reporter asked about an alleged conflict of interest in that plaintiff monitored activities on movie sets while at the same time received funding from the Screen Actor’s Guild. Plaintiff received funding from the Producers Industry Advancement and Cooperative Fund, which is administered by the Screen Actor’s Guild.

On January 19, 2001, the reporter had a telephone interview with plaintiffs new president, Timothy O’Brien. In the conversation, the reporter revealed that defendant was in possession of Mr. Hurley’s report. On the same date, plaintiff’s counsel contacted the reporter. The reporter was advised that Mr. Hurley’s report was protected by the attorney-client privilege and the work product doctrine. Plaintiff’s counsel also advised the

reporter that it had not waived any privileges associated with Mr. Hurley’s report and requested its return. Plaintiff’s counsel further requested that defendant not use Mr. Hurley’s report in any news article. Defendant, through its counsel, neither admitted nor denied possessing Mr. Hurley’s report. Defendant’s lawyer also stated that if it was in possession of Mr. Hurley’s report, the document would not be returned. Defendant also indicated that it would not refuse to use Mr. Hurley’s report in any news articles it may publish.

The complaint contained three causes of action for declaratory relief. The first cause of action sought a declaration Mr. Hurley’s report was protected by the lawyer-client and work product privileges. The second cause of action sought a declaration that plaintiff had not waived the lawyer-client and work product privileges. In the third cause of action for declaratory relief, plaintiff requested that defendant be “prohibited from publishing” Mr. Hurley’s report or using it in any news article.

On January 25, 2001, plaintiff filed a request for a temporary restraining order and issuance of an order to show cause why defendant should not be restrained from publishing Mr. Hurley’s report based on the attorney-client privilege and work product doctrine. The request was denied by Judge Dzintra Janavs. In denying the request, Judge Janavs determined the case involved “a classical prior restraint of speech situation . ...” As a result, Judge Janavs advised plaintiff that there was no basis to schedule the matter for an order to show cause hearing.

On January 25, 2001, the date Judge Janavs denied the temporary restraining order request and refused to set the matter for a hearing on an order to show cause, the present lawsuit was dismissed without prejudice at plaintiff’s request. Also on January 25, 2001, defendant filed a section 425.16 special motion to strike the complaint in this lawsuit. Defendant argued the motion should be granted because its conduct, which formed the basis of the complaint, qualified as protected acts under section 425.16, subdivision (e)(4). Defendant further argued that plaintiff could not establish a probability of prevailing on the merits because: there was no actual and present controversy concerning whether the report was privileged; there was no present controversy as to whether any privilege had been waived; and the temporary restraining order request to prohibit defendant from publishing information derived from Mr. Hurley’s report sought an unconstitutional prior restraint. Plaintiff opposed the special motion to strike on the grounds: the motion was moot because the complaint had been voluntarily dismissed; defendant made an insufficient showing that the causes of action arose from

674 ]; Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 111 , 785 [ 54 Cal.Rptr.2d 830 ].) As required by rule 311(a) of the California Rules of Court, the notice portion of the special motion to strike stated that defendant was seeking an award of attorney fees. The notice of motion stated in pertinent part, “In addition, [defendant] requests that it recover from plaintiff its attorneys’ fees and costs incurred in defending this action. Code of Civil Procedure [section] 425.16[, subdivision] (c) mandates that a prevailing defendant ‘shall’ recover such monies.” (Fn. omitted.) The omitted footnote to the foregoing language in the notice of motion stated, “If the Court grants this Special Motion to Strike, [the defendant] will file a noticed motion to recover its attorneys’ fees and costs.” Defendant did not include any proof of its fees and costs along with the special motion to strike.

Plaintiff argues that the failure to have documented the amount of fees and costs incurred constituted a waiver of the right to secure them in the first place and to raise the issue on appeal. We disagree. There is nothing in the language of section 425.16 requiring that proof be provided of the amount of fees and costs incurred at the same time of the filing of the special motion to strike. Moreover, section 1033.5, subdivision (a)(10)(B) states in pertinent part: “(a) The following items are allowable as costs under Section 1032: [IQ . . . [10 (10) Attorney fees, when authorized by any of the following: [10 ... [ID (B) Statute.” Section 1033.5, subdivision (c)(5)(A) states in relevant part: “(c) Any award of costs shall be subject to the following: [ID - - - [ID (5) When any statute of this state refers to the award of ‘costs and attorney’s fees,’ attorney’s fees are an item and component of the costs to be awarded and are allowable as costs pursuant to subparagraph (B) of paragraph (10) of subdivision (a). . . . Attorney’s fees allowable as costs pursuant to subparagraph (B) of paragraph (10) of subdivision (a) may be fixed as follows: (A) Upon a noticed motion, (B) at the time a statement of decision is rendered, (C) upon ... a claim for other costs, or (D) upon entry of default judgment.” Section 1034, subdivision (a) states, “Prejudgment costs allowable under this chapter shall be claimed and contested in accordance with rules adopted by the Judicial Council.” Rule 870.2 of the California Rules of Court states in pertinent part: “(a) [Applicability] Except as otherwise provided by statute, this rule applies in civil cases to claims for statutory attorney fees and claims for attorney fees provided for in a contract. [10 Subdivisions (b) and (c) apply when the court determines entitlement to the fees, the amount of the fees, or both, whether the court makes that determination because the statute or contract refers to ‘reasonable’ fees, because it requires a determination of the prevailing party, or for other reasons. [10 (b) [Attorney Fees Before Trial Court Judgment]