Monster Energy Co. v. Schechter

any statement about the Action, each other party or Defendants' products in relation to this Action, in the media, including but not limited to print, television, radio or Internet,"

defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. We have described this second step as a 'summary-judgment-like procedure.' [Citation.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as a matter of law. [Citation.] '[C]laims with the requisite minimal merit may proceed.' " ( Baral, supra, 1 Cal.5th at pp. 384-385, 205 Cal.Rptr.3d 475 , 376 P.3d 604 , fn. omitted.) The grant or denial of an anti-SLAPP motion is reviewed de novo. ( Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057 , 1067, 217 Cal.Rptr.3d 130 , 393 P.3d 905 .) As to the second step, a plaintiff seeking to demonstrate the merit of the claim "may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence." ( San Diegans for Open Government v. San Diego State University Research Foundation (2017) 13 Cal.App.5th 76 , 95, 218 Cal.Rptr.3d 160 ; see Grenier v. Taylor (2015) 234 Cal.App.4th 471 , 480, 183 Cal.Rptr.3d 867 ; City of Costa Mesa v. D'Alessio Investments, LLC (2013) 214 Cal.App.4th 358 , 376, 154 Cal.Rptr.3d 698 ; Paiva v. Nichols (2008) 168 Cal.App.4th 1007 , 1017, 85 Cal.Rptr.3d 838 .)

It is undisputed that defendants met their first-step showing. The issue here is whether Monster Energy sufficiently established a probability of

that Freedman represented only Teddi's interests. In addition to the parties, the attorneys signed the licensing agreement with the notation, " 'Approved as to Form and Content.' " ( Freedman, supra, 182 Cal.App.4th at p. 1068, 106 Cal.Rptr.3d 371 .) A dispute arose and CAI sued Teddi, leading to the latter's bankruptcy. CAI also sued Freedman, alleging Freedman had represented CAI during negotiations and that he made statements assuring CAI that Teddi would fulfill its obligations. In the course of this suit, Brutzkus testified at a deposition that CAI and its owner "were relying on Freedman in

liable for such payment." ( Id . at p. 672, fn. omitted.)

The Court of Appeal here initially noted "that the confidentiality provisions of the settlement agreement did at least purport to bind the Attorneys." ( Monster Energy Co. v. Schechter, supra, 26 Cal.App.5th at p. 65, 236 Cal.Rptr.3d 669 .) However, the court concluded defendant counsel were not bound by the agreement. It first reasoned that counsel were not identified as parties to the agreement and the parties could not bind them without their consent. ( Id . at pp. 66-67, 236 Cal.Rptr.3d 669 .) Second, relying on Freedman and RSUI , the court reasoned that Schechter's signature on the agreement did not express an intent to be bound: "[T]he language in the settlement agreement purporting to impose obligations on the Attorneys was a nullity, unless and until the Attorneys consented to it. And while Freedman is not precisely on point, it does stand for the proposition that an attorney's signature under words such as 'approved as to form and content' means only that the document has the attorney's professional thumbs-up. It follows that it does not objectively manifest the attorney's intent to be bound." ( Id . at p. 69, 236 Cal.Rptr.3d 669 .) While acknowledging that "confidentiality is often a material term of a settlement agreement"

bound even though counsel also approves the document for his client's signature. RSUI is, of course, not binding on this court, but its reasoning is instructive in this regard. (See Episcopal Church Cases (2009) 45 Cal.4th 467 , 490, 87 Cal.Rptr.3d 275 , 198 P.3d 66 .) Concluding that counsel there did not assume personal liability, the RSUI court did not rely solely on the signature notation. Instead, it examined the substance of the provisions at issue and reasoned that, at most, the agreement "governs the manner by which payment under the contract was to be

of competing evidence." ( Taus v. Loftus (2007) 40 Cal.4th 683 , 714, 54 Cal.Rptr.3d 775 , 151 P.3d 1185 .) It "accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as a matter of law." ( Baral, supra, 1 Cal.5th at p. 385, 205 Cal.Rptr.3d 475 , 376 P.3d 604 .) "[W]e resolve conflicts and inferences in the record in favor of plaintiff." ( Armin v. Riverside Community Hospital (2016) 5 Cal.App.5th 810 , 815, 210 Cal.Rptr.3d 388 .) However, speculative inferences not supported by the evidence proffered need not be considered. (See Kashian v. Harriman (2002) 98 Cal.App.4th 892 , 931, 120 Cal.Rptr.2d 576 .)

Monster Energy is correct that properly submitted admissible evidence should be considered, and a court evaluating a probability of success should draw any non-speculative inferences favorable to the plaintiff. ( Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931 , 949, 243 Cal.Rptr.3d 880 , 434 P.3d 1152 ; see Code Civ. Proc., § 425.16, subd. (b)(2).) Here, the Court of Appeal had no occasion to consider the cited evidence in light of its erroneous legal conclusion that a signature with a

continued that "[i]n regard to any communication concerning the settlement of this Action, the Parties and their attorneys and each of them hereby agree that neither shall make

complaints in harassing lawsuits that are commonly known as SLAPP suits ... which are brought to challenge the exercise of constitutionally protected free speech rights." ( Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192 , 196, 46 Cal.Rptr.3d 41 , 138 P.3d 193 .) A cause of action arising from a person's act in furtherance of the "right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability" that the claim will prevail. ( Code Civ. Proc., § 425.16, subd. (b)(1).) "The anti-SLAPP statute does not insulate defendants from any liability for claims arising from the protected rights of petition or speech. It only provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity. Resolution of an anti-SLAPP motion involves two steps. First, the

Accordingly, the primary focus in determining the existence of mutual consent is upon the acts of the parties involved.' " ( T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273 , 282, 204 Cal.Rptr. 143 , 682 P.2d 338 ; see Civ. Code, § 1565 [essentials of consent].)

There is no question that the language of the settlement agreement generally, and the confidentiality provisions in particular, purported to encompass not only the Crossland parties but also their respective counsel. Further, counsel could consent to be bound by the agreement's provisions, and, ordinarily, "[i]n the absence of fraud, mistake, or another vitiating factor, a signature on a written contract is an objective manifestation of assent to the terms set forth there." ( Rodriguez v. Oto (2013) 212 Cal.App.4th 1020 , 1027, 151 Cal.Rptr.3d 667 .) Defendants argue that Schechter's signature on the settlement agreement did not manifest his consent to be bound by its provisions because he signed under the notation "APPROVED AS TO FORM AND CONTENT." They urge his signature conveyed only that defendants were approving the agreement for their clients' signatures. The Court of Appeal agreed, relying on two cases construing similar notations: Freedman v. Brutzkus (2010) 182 Cal.App.4th 1065 , 106 Cal.Rptr.3d 371 ( Freedman ) and RSUI Indem. Co. v. Bacon (2011) 282 Neb. 436 , 810 N.W.2d 666 ( RSUI ).

In Freedman , two companies, Teddi and CAI, entered into a licensing agreement. During negotiations, attorney Freedman represented Teddi while attorney Brutzkus represented CAI. Because Freedman had performed legal services for CAI in the past, CAI agreed to waive any conflict of interest. The licensing agreement explicitly stated

to the contract's formation," and "Brutzkus gave this approval to his client." ( Ibid . ) Freedman concluded "that Brutzkus's signature approving the document as to form and content was not an actionable representation" to opposing counsel. ( Ibid . )

The Nebraska Supreme Court in RSUI applied similar reasoning with respect to a breach of contract claim. Ronald Bacon was injured while working on a construction site. He sued Kiewit Construction, the general contractor, and Ridgetop Holdings, the parent company of the subcontractor that employed him. Kiewit and Bacon settled. The settlement agreement included a provision that, in the event Bacon settles with Ridgetop, "BACON and his attorneys" agree to pay Kiewit a specified percentage of the settlement. ( RSUI, supra, 810 N.W.2d at p. 670.) The attorneys for both parties signed the agreement under the notation, " 'Agreed to in Form & Substance.' " ( Ibid . ) Bacon subsequently settled with Ridgetop but refused to pay anything to Kiewit. Kiewit's insurers sued Bacon and his attorneys for breach of contract and obtained a judgment. ( Id . at p. 671.)

RSUI reversed the judgment as to Bacon's attorneys, concluding they had no personal liability. Although acknowledging "the general rule that an agent, acting for a disclosed principal, is not liable for the principal's contract," the court observed that "an agent can become personally liable if 'the agent purports to bind himself or herself, or has otherwise bound himself or herself, to performance of the contract.' " ( RSUI, supra, 810 N.W.2d at p. 671.) The court held the attorneys did not so bind themselves. The signature "under the legend 'Agreed to in Form & Substance' demonstrates only that he was

and a party may not be inclined to settle if opposing counsel "is free to blab about it," the court suggested "[i]t seems easy enough, however, to draft a settlement agreement that explicitly makes the attorneys parties (even if only to the confidentiality provision) and explicitly requires them to sign as such." ( Ibid . )

B. The Significance Of "Approved As To Form And Content"

In light of the procedural posture here, the issue we address is a narrow one. As noted, at the second anti-SLAPP step, " 'a plaintiff responding to an anti-SLAPP motion must " 'state[ ] and substantiate[ ] a legally sufficient claim.' " [Citation.] Put another way, the plaintiff "must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited." ' [Citation.] '... However, we neither "weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant's evidence only to determine if it has defeated that submitted by the

made, not the parties which were to be liable for such payment." ( RSUI, supra, 810 N.W.2d at p. 672.) Thus, counsel's signature that he approved the agreement as to form and content did not reflect his intent to be personally obligated to indemnify an opposing party if his client refused to perform as the agreement required.

Here, a factfinder considering all the circumstances could reasonably conclude Schechter agreed to be bound. (See discussion post .) The

Ante , at 249 Cal.Rptr.3d at p. 299, fn. 3, 444 P.3d at p. 100, fn. 3.) Excluding counsel from

C. Consideration Of Evidence At The Second Anti-SLAPP Step

Monster Energy argues the Court of Appeal "ignored" evidence supportive of its position, including Schechter's statement to reporter Craig that he could not reveal the amount of the settlement because "Monster wants the amount to be sealed," and his deposition testimony explaining his signature. Monster contends this evidence showed Schechter was aware that he was bound by the confidentiality provisions. Defendants counter that the evidence was irrelevant to establish an intent to be bound, arguing Schechter was merely manifesting his ethical obligation to maintain client confidences.

As discussed, at the second anti-SLAPP step, a court "does not weigh the credibility or comparative probative strength

document evinced an understanding of the agreement's terms and a willingness to be bound by the terms that explicitly referred to him, which, in turn, would appear consistent with the expectations of the parties and their counsel. This understanding is also supported by Schechter's statement to reporter Craig that he could not divulge the settlement amount because " 'Monster wants the amount to be sealed,' " which, when viewed in the light most favorable to plaintiff, could be interpreted as a tacit acknowledgement that he was bound by the confidentiality provisions. Further, assuming the confidentiality provisions applied to him, sufficient evidence was presented that Schechter violated them by making public comments about the settlement to a reporter from LawyersandSettlements.com. In light of the nature and extent of provisions in the agreement here purporting to bind counsel, and the other properly submitted evidence, Monster Energy has met its burden of showing its breach of contract claim has "minimal merit" sufficient to defeat an anti-SLAPP motion. ( Oasis West, supra, 51 Cal.4th at p. 825, 124 Cal.Rptr.3d 256 , 250 P.3d 1115 .)

Here the parties to a tort action agreed to settle their lawsuit. Their agreement was reduced to writing and included several provisions purporting to impose confidentiality obligations on the parties and their counsel. All parties signed the agreement and their lawyers signed under a

A. Legal Background

" Code of Civil Procedure section 425.16 sets out a procedure for striking

prevailing on its breach of contract claim. That claim, in turn, hinges on whether defendants were bound by the confidentiality provisions of the Crossland settlement. "A settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts. [Citation.] An essential element of any contract is 'consent.' [Citations.] The 'consent' must be 'mutual.' [Citations.] 'Consent is not mutual, unless the parties all agree upon the same thing in the same sense.' ( Civ. Code, § 1580 ; see also Civ. Code, § 1636 ....)" ( Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793 , 810-811, 71 Cal.Rptr.2d 265 ; see Civ. Code, § 1550 [essential elements of a contract].) " 'The existence of mutual consent is determined by objective rather than subjective criteria, the test being what the outward manifestations of consent would lead a reasonable person to believe. [Citation.]

connection with the transaction on the basis of their ' "long standing professional relationship," ' " and Brutzkus "did not tell Freedman or anyone else representing Teddi about that reliance on Freedman, or that the conflict waiver provisions in the agreement were inaccurate." ( Ibid . )

Freedman then sued Brutzkus, alleging tort claims. Freedman asserted that "in approving the agreement, 'as to form and content,' Brutzkus made an actionable representation ... as to the accuracy of the agreement" that he knew was false because the agreement included an inaccurate conflict of interest waiver. ( Freedman, supra, 182 Cal.App.4th at p. 1068, 106 Cal.Rptr.3d 371 .) The trial court granted Brutzkus's demurrer and the Court of Appeal affirmed, reasoning that "the only reasonable meaning to be given to a recital that counsel approves the agreement as to form and content, is that the attorney, in so stating, asserts that he or she is the attorney for his or her particular party, and that the document is in the proper form and embodies the deal that was made between the parties." ( Id . at p. 1070, 106 Cal.Rptr.3d 371 .) Freedman approved the trial court's characterization of the phrase as showing "that counsel has read the agreement, that the recital formalizes counsel's involvement as attorney to one of the parties, ... the recital adds solemnity

plaintiff as a matter of law." ' " ( Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811 , 820, 124 Cal.Rptr.3d 256 , 250 P.3d 1115 ( Oasis West ).)

We agree with Freedman 's characterization of what the notation "approved as to form and content" means. The notation affirms that counsel has read the document, it embodies the parties' agreement, and counsel perceives no impediment to his client signing it. ( Freedman, supra, 182 Cal.App.4th at p. 1070, 106 Cal.Rptr.3d 371 ; cf. In re Marriage of Hasso (1991) 229 Cal.App.3d 1174 , 1181, 280 Cal.Rptr. 919 .) A similar understanding of this phrase is reflected in case law regarding orders signed by the court and approved as to form and content by the parties' attorneys. (See, e.g., Wagner v. Wagner (2008) 162 Cal.App.4th 249 , 254, 75 Cal.Rptr.3d 511 ; In re Marriage of Walters (1990) 220 Cal.App.3d 1062 , 1069, 269 Cal.Rptr. 557 ; In re Blaze (1969) 271 Cal.App.2d 210 , 213-217, 76 Cal.Rptr. 551 .) Thus, there appears a general consensus that "approved as to form and content" has a fixed meaning understood by the legal community, and we do not suggest otherwise.

This does not end our inquiry, however. The legal question is whether counsel's signature approving an agreement as to form and content for his clients' signature precludes , as a matter of law, a finding that he also intended to be bound by the agreement. If, as in Freedman , the agreement contains no provision purporting to bind counsel or otherwise impose any obligation on him, the question is easily answered. (See Freedman, supra, 182 Cal.App.4th at pp. 1068-1069, 106 Cal.Rptr.3d 371 .) In that circumstance, counsel's signature that he approved the agreement as to form and content could only mean he is approving it for his client's signature.

But that will not always be the case. An attorney's signature on an agreement containing substantive provisions imposing duties on counsel may reflect an intent to be

confidentiality provisions are not only extensive but repeatedly refer both to the parties and their counsel. The agreement stated "Plaintiffs and their counsel agree that they will keep completely confidential all of the terms and contents of this Settlement Agreement, and the negotiations leading thereto, and will not publicize or disclose the amounts, conditions, terms, or contents of this Settlement Agreement in any manner," and "without limitation, Plaintiffs and their counsel of record ... agree and covenant, absolutely and without limitation, to not publicly disclose to any person or entity" facts related to the settlement, specifically identifying "Lawyers & Settlements" as an entity to whom counsel should not disclose such facts. (Emphasis added.) The agreement also required "the Parties and their attorneys " not to "make any statement about the Action, each other party or Defendants' products in relation to this Action, in the media," and any comment "shall be limited to the following, or words to their effect: 'This matter has been resolved.' " (Emphasis added.)

These extensive provisions regarding the specific conduct of counsel stand in stark contrast to RSUI , where the agreement only referenced counsel with respect to the mechanics of payment under the parties' agreement. Further, RSUI involved a different procedural posture. The RSUI court reversed the grant of summary judgment against the attorneys after the trial court concluded the attorneys were liable under the contract as a matter of law. By contrast, the trial court here denied defendants' anti-SLAPP motion, rejecting their claim that they were not liable as a matter of law. It bears emphasis that a plaintiff's burden at the second anti-SLAPP step is a low one, requiring only a showing that a cause of action has at least "minimal merit within the meaning of the anti-SLAPP statute." ( Oasis West, supra, 51 Cal.4th at p. 825, 124 Cal.Rptr.3d 256 , 250 P.3d 1115 .)

Our conclusion also recognizes the role that confidentiality plays in facilitating settlement agreements. "The privacy of a settlement is generally understood and accepted in our legal system, which favors settlement and therefore supports attendant needs for confidentiality." ( Hinshaw, Winkler, Draa, Marsh & Still v. Superior Court (1996) 51 Cal.App.4th 233 , 241, 58 Cal.Rptr.2d 791 .) Routine public disclosure of private settlement terms would "chill the parties' ability in many cases to settle the action before trial. Such a result runs contrary to the strong public policy of this state favoring settlement of actions." ( Board of Trustees of California State University v. Superior Court (2005) 132 Cal.App.4th 889 , 899, 34 Cal.Rptr.3d 82 .) There is little doubt here that "[c]onfidentiality was an important term of that settlement" ( Jalali v. Root (2003) 109 Cal.App.4th 1768 , 1784, 1 Cal.Rptr.3d 689 ), and the agreement goes to great lengths to ensure that virtually nothing

would be publicly said about the case other than that it had been resolved. Indeed, Schechter acknowledged in a deposition that "Monster would not settle the case if the party did not agree to keeping it confidential." As noted, the agreement stated it was "the product of good faith negotiations." (

T

he judgment of the Court of Appeal is reversed.

We Concur:

CANTIL-SAKAUYE, C. J.

CHIN, J.

LIU, J.

CUÉLLAR, J.

KRUGER, J.

GROBAN, J.