Parrish v. Latham & Watkins

lacked evidentiary support. The Court of Appeal answered that question in the affirmative. We agree and affirm.

A.

This case arises from a trade secrets dispute over the manufacture of microbolometers, devices used in thermal imaging systems to detect infrared

not have a sufficient evidentiary basis to initiate the lawsuit [or] continue the lawsuit through trial." The court also faulted FLIR and Indigo for certain shortcomings of the expert testimony on which they relied. Although the court recognized that it had denied Parrish's and Fitzgibbons's motions for summary judgment, it explained that it "had not heard all the evidence

year statute of limitations], ... the trial court's rationale for granting the anti-SLAPP motion is no longer viable."

The Court of Appeal then considered whether the anti-SLAPP motion should have nevertheless been granted based on the interim adverse judgment rule. The court concluded that the trial court's summary judgment ruling in the underlying action established "probable cause in [that] action." The Court of Appeal relied solely on the trial court's determination that Parrish and Fitzgibbons "had 'failed to sustain their burden of proof on the motion' "-not on the superior court's conclusion that certain expert declarations gave

Sheldon Appel , supra , 47 Cal.3d at pp. 874, 875, 254 Cal.Rptr. 336 , 765 P.2d 498 .) "[T]he probable cause element calls on the trial court to make an objective determination of the 'reasonableness' of the defendant's conduct, i.e., to determine whether, on the basis of the facts known to the defendant, the institution of the prior action was legally tenable," as opposed to whether the litigant subjectively believed the claim was tenable. ( Id. at p. 878, 254 Cal.Rptr. 336 , 765 P.2d 498 .) A claim is unsupported by probable cause only if " ' "any reasonable attorney would agree [that it is] totally and completely without merit." ' " ( Wilson , supra , 28 Cal.4th at p. 817, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ; accord, Sheldon Appel , at p. 885, 254 Cal.Rptr. 336 , 765 P.2d 498 ; In re Marriage of Flaherty (1982) 31 Cal.3d 637 , 650, 183 Cal.Rptr. 508 , 646 P.2d 179 ; see also Zamos , supra , 32 Cal.4th at p. 970, 12 Cal.Rptr.3d 54 , 87 P.3d 802 .) "This rather lenient standard for bringing a civil action reflects 'the important public policy of avoiding the chilling of novel or debatable legal claims.' " ( Wilson , supra , at p. 817, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) The standard safeguards the right of both attorneys and their clients " ' "to present issues that are arguably correct, even if it is extremely unlikely that they will win." ' " ( Ibid. , quoting Flaherty , supra , at p. 650, 183 Cal.Rptr. 508 , 646 P.2d 179 .)

As we explained in Wilson , California courts have long embraced the so-called interim adverse judgment rule, under which "a trial court judgment or verdict in favor of the plaintiff or prosecutor in the underlying case, unless obtained by means of fraud or perjury, establishes probable cause to bring the underlying action, even though the judgment or verdict is overturned on appeal or by later ruling of the trial court." ( Wilson , supra , 28 Cal.4th at p. 817, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) This rule reflects a recognition that "[c]laims that have succeeded at a hearing on the merits, even if that result is subsequently reversed by a trial or appellate court, are not so lacking in potential merit that a reasonable attorney or litigant would necessarily have recognized their frivolousness." ( Id. at p. 818, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) That is to say, if a claim succeeds at a hearing on the merits, then, unless that success has been procured by certain improper means, the claim cannot be "totally and completely without merit." ( Zamos , supra , 32 Cal.4th at p. 970, 12 Cal.Rptr.3d 54 , 87 P.3d 802 .) Although the rule arose from cases that had been resolved after trial, the rule has also been applied to the "denial of defense summary

necessarily concludes that the plaintiff has substantiated a legally tenable claim through a facially sufficient evidentiary showing and that the defendant's contrary showing, if any, does not defeat the plaintiff's as a matter of law." ( Id. at p. 821, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) After all, "[a] claim that is legally sufficient and can be substantiated by competent evidence is ... one that a 'reasonable attorney would have thought ... tenable.' " ( Ibid. , quoting Sheldon Appel , supra , 47 Cal.3d at p. 885, 254 Cal.Rptr. 336 , 765 P.2d 498 .)

We explained that it is of no moment that a trial court, in ruling on an anti-SLAPP motion, "determines only whether the plaintiff has substantiated a prima facie case and does not weigh one side's evidence against the other in the manner of a jury or court trying the merits." ( Wilson , supra , 28 Cal.4th at pp. 821-822, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) "A litigant or attorney who possesses competent evidence to substantiate a legally cognizable claim for relief does not act tortiously by bringing the claim, even if also aware of evidence that will weigh against the claim. Plaintiffs and their attorneys are not required, on penalty of tort liability, to attempt to predict how a trier of fact will weigh the competing evidence, or to abandon their claim if they think it likely the evidence will

and Slaney were attempting to defraud it, was malicious. Punitive damages in excess of $7 million were assessed." ( Id. at p. 309, 8 Cal.Rptr.3d 915 .)

Slaney sued for malicious prosecution. ( Slaney , supra , 115 Cal.App.4th at p. 309, 8 Cal.Rptr.3d 915 .) The insurer filed an anti-SLAPP motion, relying on the interim adverse judgment rule. ( Ibid. ) The trial

suit was objectively specious, standing alone, does not negate the effect of the interim adverse judgment rule, the underlying findings supporting that conclusion demonstrate that probable cause was lacking. In particular, they contend that the trial court "concluded that sanctions ... were not barred under the interim adverse judgment rule due to the denial of summary judgment ... because the expert declarations submitted in support of the summary judgment opposition were materially false." In support of this argument, they point to the Court of Appeal's opinion in the underlying action, which states that the expert declarations submitted at the summary

should not irrefutably establish probable cause." ( Id. at p. 384, 90 Cal.Rptr.2d 408 .) "For example," the court continued, "if denial of summary judgment was induced by materially false facts submitted in opposition, equating denial with probable cause might be wrong." ( Ibid. ) The court in Roberts did not hold, however, that "materially false facts" prevented application of the interim adverse judgment rule in that case, and thus had no occasion to specify the contours of the exception to which it alluded. Given Wilson 's recognition that a litigant may rely on evidence that ultimately fails to persuade a fact finder, the interpretation Parrish and Fitzgibbons would have us adopt here is not tenable.

Parrish and Fitzgibbons also rely on Carpenter v. Sibley , in which we referred to a "general rule" that no presumption of probable cause exists when a prior judgment (in a criminal case) " 'was procured by fraud, perjury or subornation of perjury, or other unfair conduct .' " ( Carpenter v. Sibley (1908) 153 Cal. 215 , 218, 94 P. 879 , italics added.) In the more than 100 years since we recited that "general rule," however, we have cited Carpenter only three times-and never for the proposition that "unfair conduct" includes inadvertent reliance on factual inferences that turn out to be unsupported at trial. (See Wilson , supra , 28 Cal.4th at p. 817, fn. 2, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ; Bealmear v. So. Cal. Edison Co. (1943) 22 Cal.2d 337 , 340, 139 P.2d 20 ; Roos v. Harris (1928) 203 Cal. 201 , 202, 263 P. 225 .)

Parrish and Fitzgibbons further contend that, without an exception for adverse rulings based on "materially false facts," "so long as the party prosecuting the underlying action could establish that the evidence it submitted in opposition to the summary judgment motion was not the product of fraud or perjury, then that summary judgment denial conclusively establishes probable cause and the malicious prosecution action will forever fail-even though the underlying plaintiff clearly and knowingly continued to prosecute that action in the absence of probable cause." The premise of this argument is faulty. As we held in Zamos , "the tort of malicious prosecution ... include [s] continuing to prosecute a lawsuit discovered to lack probable cause." ( Zamos , supra , 32 Cal.4th at p. 966, 12 Cal.Rptr.3d 54 , 87 P.3d 802 .) That means that there may be circumstances in which an interim ruling rendered at one point in the litigation will not, due to intervening

summary judgment by citing the purportedly different business plans, while arguing the plans were substantively the same. Consistent with that contention, the trial court concluded, after comparing the 1999, 2004 and new business plans, that it was 'unable to find as a matter of law ... that [FLIR] own[s] none of the concepts for [the] new business, that nothing in the [new] business plan made use of [FLIR]'s proprietary confidential information, intellectual property, or work product, or that all concepts in the [new] plan were identical to those in the 1999 plan.' Though the court framed its conclusion in terms of [Parrish and Fitzgibbons's] failure to sustain their burden as the moving part[ies], the necessary implication of the court's ruling is that the evidence raised a triable issue of material fact. [Citation.] This is not a 'technical ground,' but rather an acknowledgement that FLIR's claim had some conceivable merit."

III.

The denial of summary judgment in the underlying trade secrets action established probable cause to bring that action. Because that action was supported by probable cause, Parrish and Fitzgibbons cannot "establish[ ] a

had developed while still employed by FLIR. Parrish and Fitzgibbons each moved for summary judgment. Among other things, they argued that Fitzgibbons had developed the business plan for the new venture before he joined Indigo, and that no trade secrets would be misappropriated in the plan's implementation. In their opposition to the summary judgment motions, FLIR and Indigo relied on the declarations of two experts who opined that the business plan could not be implemented "without using FLIR's and Indigo's proprietary trade secrets on the design and bulk manufacture of [certain] microbolometers."

The trial court denied the summary judgment motions. The court concluded that although Parrish and Fitzgibbons had "made a compelling argument that they [were] entitled to judgment," in light of the "highly technical" nature of the case, they had "failed to sustain their burden" of showing that their planned new business was not based on FLIR's and Indigo's intellectual property. The court pointed in particular to evidence that Fitzgibbons made a presentation to FLIR's board of directors that, FLIR and Indigo argued, overlapped with the plan for his new business. The court explained that it was "unable to find as a matter of law, for purposes of this motion only, that [FLIR and Indigo] own none of the concepts for [Parrish and Fitzgibbons's] new business, that nothing in the [new] business plan made use of [FLIR's and Indigo's] proprietary confidential information, intellectual property, or work product, or that all concepts in the [new] plan were identical to those" contained in a plan drafted by Fitzgibbons before he joined Indigo. The court further concluded that even if Parrish and Fitzgibbons's business was not itself based on FLIR's and Indigo's intellectual property, FLIR and Indigo had "produced sufficient evidence, for example with the [expert] declarations, to raise a triable issue as to misappropriation of trade secrets" in the plan's implementation.

The case proceeded to a bench trial, after which the trial court denied FLIR's and Indigo's requests for relief. The trial court then awarded Parrish and Fitzgibbons their costs and attorney fees under the California Uniform Trade Secrets Act, Civil Code section 3426 et seq., which authorizes cost and fee awards to prevailing defendants "[i]f a claim of misappropriation [was] made in bad

or considered witness credibility" at that stage. The court ultimately awarded Parrish and Fitzgibbons more than $1.6 million in fees and costs.

The Court of Appeal affirmed the award of fees and costs, upholding the trial court's finding that the suit against plaintiffs had been prosecuted in bad faith. ( FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270 , 1274, 95 Cal.Rptr.3d 307 ; see also id. at pp. 1275-1276, 95 Cal.Rptr.3d 307 , citing Gemini .) It also, as relevant here, rejected FLIR and Indigo's argument that the trial court was estopped from finding bad faith because the trial court had earlier denied a defense motion for summary judgment. ( FLIR Systems , at p. 1282, 95 Cal.Rptr.3d 307 .) The appellate court explained that at the time the trial court ruled on the summary judgment motion, that court had not yet "heard all the evidence or considered witness credibility." ( Id. at p. 1283, 95 Cal.Rptr.3d 307 .) The appellate court noted that the trial court had denied the summary judgment motion in part based on "expert declarations suggesting there was a scientific methodology to predict the likelihood of trade secret misuse," but at trial, the "experts admitted there was no valid scientific methodology to predict trade secret misuse and agreed that no trade secrets were misappropriated." ( Id. at p. 1282, 95 Cal.Rptr.3d 307 .)

B.

Parrish and Fitzgibbons later brought a malicious prosecution claim against FLIR's and Indigo's lawyers in the trade secrets case: defendants Latham & Watkins LLP (Latham) and Latham partner Daniel Scott Schecter.

Defendants filed an anti-SLAPP motion under Code of Civil Procedure section 425.16 -that is, a special motion to strike a "strategic lawsuit against

The Court of Appeal in this case relied on Roger Cleveland in rejecting the trial court's conclusion that the action was untimely. "[S]ince we have no cause to reverse our holding in Roger Cleveland ," the court reasoned, and "[a]s Latham [and Schecter] concede[ ] the action is timely under [the two-

malice. ( Ibid. ; see

id. at pp. 817-820 & fn. 4, 824, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ; Roberts v. Sentry Life Insurance (1999) 76 Cal.App.4th 375 , 90 Cal.Rptr.2d 408 [denial of defense motion for summary judgment]; Davis v. Butler (1999) 240 Ga.App. 72 , 522 S.E.2d 548 [same]; Porous Media Corp. v. Pall Corp. (8th Cir. 1999) 186 F.3d 1077 [denial of motion for directed verdict].)

In Wilson , we considered whether the interim adverse judgment rule applied to the denial of an anti-SLAPP motion. In that case, school teachers and administrators had sued protestors for harassment and defamation. Several of the defendants filed an anti-SLAPP motion. The trial court denied the motion, concluding, among other things, that the plaintiffs had demonstrated a probability of prevailing on the merits. The Court of Appeal, however, vacated the superior court's order denying the motion to strike as to certain defendants and, on remand, the trial court granted the anti-SLAPP motion and dismissed the action as to those defendants. Those defendants then filed a malicious prosecution action against certain plaintiffs and their attorneys. ( Wilson , supra , 28 Cal.4th at pp. 815-816, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) We concluded that the action failed because "a trial court's denial of [an anti-SLAPP] motion ... on the ground that the plaintiff has established the requisite probability of success, establishes probable cause to bring the action, and precludes the maintenance of a subsequent malicious prosecution action, unless the prior ruling is shown to

have been obtained by fraud or perjury." ( Id. at p. 820, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) "In denying a motion to strike on the ground that the plaintiff has established the requisite probability of success," we reasoned, a "trial court

court denied the motion, and the Court of Appeal affirmed. Based on the grant of summary judgment, the jury's finding that the insurance claim had been denied in bad faith, and the finding of malice underlying the jury's punitive damages award, the Court of Appeal thought it "reasonable to infer that the jury concluded [that the insurer's] theory of conspiracy to defraud between Slaney and the [insureds] was itself fraudulent and prosecuted in bad faith." ( Id. at p. 321, 8 Cal.Rptr.3d 915 .) "This," the court continued, "along with the ultimate grant of summary judgment in favor of respondent is sufficient to offset the first denial of the motion for summary judgment and support inferences of lack of probable cause and malice." ( Ibid. )

Regardless of whether the Court of Appeal correctly interpreted the meaning of the jury's findings in Slaney -a question on which we need take no position here-the court's interpretation of those findings distinguishes that case from this one. In concluding that the interim adverse judgment rule did not apply, the Court of Appeal in Slaney did not rely solely on the jury's conclusion that the denial of insurance coverage demonstrated the insurer's bad faith or malice, but on the jury's supposedly implicit conclusion that the insurer's cross-claim of conspiracy to defraud was "itself fraudulent ." ( Slaney , supra , 115 Cal.App.4th at p. 321, 8 Cal.Rptr.3d 915 , italics added.) We have, as noted, made clear that the interim adverse judgment rule does not apply when the adverse judgment in question has been "shown to have been obtained by fraud or perjury." ( Wilson , supra , 28 Cal.4th at p. 820, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) The Slaney decision can be understood as an attempt, right or wrong, to give force to that principle. The

meritorious." ( Ibid. ) Reliance on a verdict to raise doubts about probable cause threatens to impinge on these principles. A defense verdict may reflect the weight of the evidence adduced at trial, rather than whether the evidence was sufficient to support the prosecution of a claim.

C.

Parrish and Fitzgibbons argue that even if the trial court's conclusion that the

testing, that the inferences have proved false.

Of course, when a litigant relies on evidence that she knows to be false, she is not entitled to reap the benefits of the interim adverse judgment rule by deceiving a court into believing that her claim has merit. But no "materially false facts" exception is necessary to address that concern, because we have already recognized that the rule does not apply to interim decisions "shown to have been obtained by fraud or perjury." ( Wilson , supra , 28 Cal.4th at p. 820, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ; cf. Mary Pickford Co. v. Bayly Bros., Inc. (1939) 12 Cal.2d 501 , 520, 86 P.2d 102 ["Fraud ... involves the ... requirement that the [person making representations] knew, or, in the exercise of reasonable diligence should have known, that his representations were false."].)

circumstances, establish the existence of probable cause to continue the litigation. Accordingly, we need not carve out any general exception

Chin, J.

Corrigan, J.

Liu, J.

Cuéllar, J.

To establish liability for the tort of malicious prosecution, a plaintiff must demonstrate, among other things, that the defendant previously caused the commencement or continuation of an action against the plaintiff that was not supported by probable cause. We have held that if an action succeeds after a hearing on the merits, that success ordinarily establishes the existence of probable cause (and thus forecloses a later malicious prosecution suit), even if the result is overturned on appeal or by later ruling of the trial court. ( Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811 , 818, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ( Wilson ).) This principle has come to be known as the "interim adverse judgment rule."

In this case we are asked to decide whether the interim adverse judgment rule applies when a trial court had initially denied summary judgment, finding that a lawsuit had sufficient potential merit to proceed to trial, but concluded after trial that the suit had been brought in "bad faith" because the claim, even if superficially meritorious, in fact

radiation. Plaintiffs William Parrish and E. Timothy Fitzgibbons served as officers of Indigo Systems Corporation (Indigo), a company in the microbolometer business. When FLIR Systems, Inc. (FLIR) acquired Indigo, both Parrish and Fitzgibbons joined the FLIR team. Approximately two years later, Parrish and Fitzgibbons left FLIR to start a new, competing venture.

FLIR and Indigo sued Parrish and Fitzgibbons for misappropriation of trade secrets. Among other things, they alleged that Parrish and Fitzgibbons had solicited venture capital for their new business by presenting a business plan that Fitzgibbons

faith." ( Civ. Code, § 3426.4.) The trial court relied on Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249 , 116 Cal.Rptr.2d 358 ( Gemini ), which held that " 'bad faith' for purposes of section 3426.4 requires objective speciousness of the plaintiff's claim, as opposed to frivolousness, and [the plaintiff's] subjective bad faith in bringing or maintaining the claim." ( Id. at p. 1262, 116 Cal.Rptr.2d 358 .) Here, the trial court concluded that FLIR and Indigo had initiated and pursued the action against Parrish and Fitzgibbons in both subjective and objective bad faith, "primarily for the anticompetitive motive" of preventing Parrish and Fitzgibbons from creating a new business that would compete with that of their former employers. The court determined that FLIR and Indigo had relied on a legal theory of inevitable misappropriation "not supported by California law," and "knew, or should have known, that they did

public participation (SLAPP)." ( Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53 , 57, 124 Cal.Rptr.2d 507 , 52 P.3d 685 .) To prevail on such a motion, a defendant "must establish that the challenged claim arises from [protected] activity." ( Baral v. Schnitt (2016) 1 Cal.5th 376 , 384, 205 Cal.Rptr.3d 475 , 376 P.3d 604 ( Baral ).) If a defendant is able to do so, "the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success." ( Ibid . ) Defendants argued that Parrish and Fitzgibbons could not establish a probability of success because: (i) the malicious prosecution action was untimely filed; and (ii) the order denying summary judgment in the underlying trade secrets action established probable cause to prosecute that action. Parrish and Fitzgibbons's opposition brief challenged both points, but did not dispute that the malicious prosecution claim arose from protected activity; namely, from Latham and Schecter's prosecution of the earlier lawsuit. (See Code Civ. Proc., § 425.16, subd. (e) ; Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728 , 734, 3 Cal.Rptr.3d 636 , 74 P.3d 737 .)

The trial court granted the motion to strike, deeming the action untimely under the one-year statute of limitations set out in Code of Civil Procedure section 340.6, subdivision (a) ( section 340.6(a) ). The court did not reach the probable cause issue.

Parrish and Fitzgibbons appealed. While their appeal was pending, the Court of Appeal decided Roger Cleveland Golf Co., Inc. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660 , 170 Cal.Rptr.3d 431 . In pertinent part, that case held that the one-year limitations period does not apply to a malicious prosecution suit filed against a former litigation adversary's attorney. ( Id. at p. 677, 170 Cal.Rptr.3d 431 .) Instead, the court concluded, a two-year limitations period controls.

rise to a material factual dispute. The Court of Appeal further held that the trial court's subsequent finding of "bad faith" under the California Uniform Trade Secrets Act, "based on the more complete record developed at trial," did not establish a lack of probable cause. In so holding, the court criticized the opinion of Division Four of the same district in Slaney v. Ranger Ins. Co. (2004) 115 Cal.App.4th 306 , 8 Cal.Rptr.3d 915 .

Parrish and Fitzgibbons petitioned for review. While their petition was pending, this court issued its decision in Lee v. Hanley (2015) 61 Cal.4th 1225 , 191 Cal.Rptr.3d 536 , 354 P.3d 334 , which (i) held that the one-year statute of limitations in section 340.6(a)"applies to claims whose merits necessarily depend on proof that an attorney violated a professional obligation in the course of providing professional services" ( Lee , at pp. 1236-1237, 191 Cal.Rptr.3d 536 , 354 P.3d 334 ); and (ii) "disapprove[d]" Roger Cleveland "to the extent [it was] inconsistent with [our] opinion" ( Lee , at p. 1239, 191 Cal.Rptr.3d 536 , 354 P.3d 334 ). In particular, Lee criticized Roger Cleveland 's premise that section 340.6(a) should be understood " 'as a professional negligence statute' " ( Lee , at p. 1239, 191 Cal.Rptr.3d 536 , 354 P.3d 334 )-without analyzing Roger Cleveland 's ultimate conclusion that section 340.6(a) is inapplicable to claims filed against a former litigation adversary's attorney. The answer to the petition argued that Lee provides an alternative basis for upholding the trial court's grant of defendants' special motion to strike.

We granted the petition for review. We now conclude that the Court of Appeal was correct to hold that the interim adverse judgment rule applies. Because we conclude the malicious prosecution suit was barred on that basis, we do not reach the limitations issue.

A.

"The common law tort of malicious prosecution originated as a remedy for an individual who had been subjected to a maliciously instituted criminal charge, but in California, as in most common law jurisdictions, the tort was long ago extended to afford a remedy for the malicious prosecution of a civil action." ( Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863 , 871, 254 Cal.Rptr. 336 , 765 P.2d 498 ( Sheldon Appel ).) The tort consists of three elements. The underlying action must have been: (i) initiated or maintained by, or at the direction of, the defendant, and pursued to a legal termination in favor of the malicious prosecution plaintiff; (ii) initiated or maintained without probable cause; and (iii) initiated or maintained with

judgment motions, directed verdict motions, and similar efforts at pretrial termination of the underlying case." ( Wilson , supra , 28 Cal.4th at p. 819, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ; see also

ultimately weigh against them. They have the right to bring a claim they think unlikely to succeed, so long as it is arguably meritorious." ( Id. at p. 822, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .)

We also recognized that the interim adverse judgment rule has its limits. The rule applies only to rulings regarding the merits of the claim, not those that rest "solely on technical or procedural grounds." ( Wilson , supra , 28 Cal.4th at p. 823, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) And even where a ruling is based on the court's evaluation of the merits of the claim, the ruling does not establish the existence of probable cause if the ruling is "shown to have been obtained by fraud or perjury." ( Id. at p. 820, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) While plaintiffs and their attorneys have "the right to bring a claim they think unlikely to succeed, so long as it is arguably meritorious" ( id. at p. 822, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ), they have no right to mislead a court about the merits of a claim in an attempt to procure a favorable ruling, and such a ruling can provide no reliable indication that the claim was objectively tenable.

B.

Parrish and Fitzgibbons do not dispute that a summary judgment order on the merits can trigger application of the interim adverse judgment rule. They argue, rather, that the rule should not apply here because after initially denying the defense motion for summary judgment, the trial court made a posttrial finding that FLIR and Indigo had brought the suit in "bad faith" for purposes of the California Uniform Trade Secrets Act. Even assuming that the trial court's bad faith ruling should be imputed to defendants here, we disagree.

As Wilson makes clear, whether an interim ruling is "subsequently reversed by [a] trial or appellate court" has no bearing on the probable cause inquiry. ( Wilson , supra , 28 Cal.4th at p. 818, 123 Cal.Rptr.2d 19 , 50 P.3d 733 ; see also, e.g., Crowley , supra , 8 Cal.4th at p. 692, fn. 15, 34 Cal.Rptr.2d 386 , 881 P.2d 1083 .) In Wilson , for example, the fact that the order denying the anti-SLAPP motion was vacated-and the motion ultimately granted-posed no obstacle to our concluding that the denial established probable cause to bring suit. ( Wilson , supra , at p. 817, 123 Cal.Rptr.2d 19 , 50 P.3d 733 .) Likewise here, the summary judgment ruling in favor of FLIR and Indigo establishes that their position had arguable merit, whether or not, after trial, the court wished it had ruled against them.

Unlike a finding that the summary judgment ruling was obtained by fraud or perjury, the trial court's posttrial finding that the suit was brought in "bad faith" within the meaning of the California Uniform Trade Secrets Act does not vitiate the trial court's earlier finding that FLIR's and Indigo's suit had some arguable merit. The trial court's finding of "bad faith" rested on two conclusions: that the suit had been brought in "subjective bad faith"-that is,

for the subjective

In resisting this conclusion, Parrish and Fitzgibbons rely on Slaney v. Ranger Ins. Co. , supra , 115 Cal.App.4th 306 , 8 Cal.Rptr.3d 915 ( Slaney ). In Slaney , the insurer had denied an insurance claim for damage to an aircraft. ( Id. at p. 309, 8 Cal.Rptr.3d 915 .) Slaney had "prepared an estimate for repair of the aircraft in support of the claim." ( Ibid. ) When the insureds sued, the insurer cross-complained, alleging that the insureds and Slaney had "presented a fraudulently excessive claim." ( Ibid . ) Slaney initially moved unsuccessfully for summary judgment but successfully renewed the motion after discovery revealed that the insurer had not, as it had claimed, in fact relied on Slaney's allegedly excessive estimate. In entering judgment, the court found that the insurer's cross-complaint was " 'without any substantive basis in law and/or fact.' " ( Id. at p. 313, 8 Cal.Rptr.3d 915 , italics omitted.) "After a jury trial, the insureds prevailed and obtained an award of compensatory damages in excess of $1 million for bad faith. The jury also concluded that [the insurer's] denial of the claim, based in part upon its assertion that the insureds

Parrish and Fitzgibbons's argument for recognizing a broader "materially false facts" exception relies primarily on dicta from Roberts v. Sentry Life Insurance , supra , 76 Cal.App.4th 375 , 90 Cal.Rptr.2d 408 . In that case, the Court of Appeal held that while the denial of a summary judgment motion "in an earlier case normally establishes [that] there was probable cause to sue," "there may be situations where denial of summary judgment

probability of success" on their malicious prosecution claim. ( Baral , supra , 1 Cal.5th at p. 384, 205 Cal.Rptr.3d 475 , 376 P.3d 604 .) We thus affirm the judgment of the Court of Appeal.

We Concur:

Cantil-Sakauye, C.J.

Werdegar, J.