Global Plasma Solutions, Inc. v. IEE Indoor Environmental Eng'g

600 F.Supp.3d 1082

GLOBAL PLASMA SOLUTIONS, INC., Plaintiff,

v.IEE INDOOR ENVIRONMENTAL ENGINEERING, Defendant.

Case No. 21-cv-02884-JSW

United States District Court, N.D. California.

Signed November 19, 2021

Jenny Yi, McGuireWoods LLP, San Francisco, CA, Amanda DeFord, Pro Hac Vice, Lucy Jewett Wheatley, Pro Hac Vice, McGuireWoods LLP, Richmond, VA, Corinne Stone Hockman, Pro Hac Vice, McGuireWoods LLP, Raleigh, NC, Robert Ashley Muckenfuss, Pro Hac Vice, McGuireWoods LLP, Charlotte, NC, for Plaintiff.

Arif Virji, James V. Sansone, Carle, Mackie, Power & Ross LLP, Santa Rosa, CA, Jessica Catherine Shafer, Jackson Lewis P.C., San Francisco, CA, for Defendant.

ORDER DENYING MOTION TO STRIKE COMPLAINT (ANTI-SLAPP)

Re: Dkt. No. 30

JEFFREY S. WHITE, United States District Judge

Now before the Court for consideration is the motion to strike the complaint as a Strategic Lawsuit Against Public Participation ("SLAPP") brought pursuant to California Code of Civil Procedure section 425.16 (" Section 425.16") filed by Defendant IEE Indoor Environmental Engineering ("Defendant" or "IEE"). The Court has considered the parties’ papers, relevant legal authority, and the record in the case, and it finds this matter suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). For the following reasons, the Court HEREBY DENIES Defendant's motion.

BACKGROUND

Plaintiff Global Plasma Solutions, Inc. ("GPS") provides consumers with air purification products. (Compl. ¶ 1.) GPS invented Needlepoint Bipolar Ionization (NPBI) air purification technology. (Id. ¶ 2.) NPMI cleans the air by introducing ions in the space via airflow in the ventilation system and improves the air by reducing airborne particulate, odors, and pathogens. (Id. ¶ 21.)

Defendant IEE advertises itself to consumers as a "a building science consulting firm" that provides customers with "diagnostic, consulting, and similar services designed to promote air quality in the consumers’ desired space." (Id. ¶ 4.) On November 5, 2020, the president of IEE, Francis Offermann, authored and published on IEE's website an article titled Beware: The COVID-19 Snake Oil Salesman Are Here. (Id. ¶¶ 5, 47; Ex. A.) GPS alleges that the article, which specifically mentions GPS and GPS products, "defame[s], disparage[s], and irreparably ruin[s]" the reputation of GPS because it warns consumers that air cleaners promising to eliminate the SARS-CoV-2 airborne virus provide little or no removal of airborne virus and may actually produce dangerous chemicals, such as ozone and formaldehyde. (Id. ¶¶ 3, 6-7.) As a result, GPS alleges that the article conveys that its products are untrustworthy and ineffective. (Id. ¶ 7.) GPS alleges that IEE is intentionally disparaging and defaming GPS to discredit it within the industry and take GPS's place in the air purification industry. (Id. ¶ 9.)

According to GPS, the article makes the following defamatory statements: (1) GPS's products provide little to no removal of airborne virus and may actually produce dangerous chemicals"; (2) "these air cleaners are not new and have been reincarnated many times since the early 1990s"; (3) that consumers should not "expect these ionization devices to have a significant effect on airborne concentrations"; (4) that GPS's product testing is improper, false, inaccurate, unreliable, or otherwise in error; (5) that products like GPS's "do not have test data showing they provide any significant removal of air contaminants"; and (6) that GPS is a "snake oil salesman." (Id. ¶ 39.) GPS further alleges that Mr. Offermann appeared in a publicly available video and made an additional defamatory statement claiming that GPS's products "at best do nothing" and "perhaps, like, create things that you don't want to breathe, like formaldehyde." (Id. ¶ 40.) GPS alleges that the article has disrupted its business and led to the loss of customers. (Id. ¶¶ 49, 50.)

GPS therefore brings this case alleging violations of: (1) Federal False Advertising, Product Disparagement, and Unfair Competition, in violation of the Lanham Act, 15 U.S.C. section 1125(a) ; (2) trade libel; (3) libel in violation of Cal. Civ. Code section 45, et seq. ; (4) slander, in violation of Cal. Civ. Code section 46, et seq. ; and (5) violation of California Business and Professions Code section 17200 et seq.

On August 13, 2021, IEE filed the present motion to strike GPS's complaint pursuant to California's anti-SLAPP statute on the basis that this lawsuit seeks to silence IEE. GPS opposed the motion, and IEE submitted a reply.

ANALYSIS

A. Applicable Legal Standard.

California's anti-SLAPP ("Strategic Lawsuit Against Public Participation") statute provides a mechanism for a defendant to strike civil actions brought primarily to chill the exercise of free speech. Cal. Civ. Proc. Code § 425.16(a). Section 425.16 permits defendants (or counterclaim defendants) to bring a "special motion to strike" if a cause of action against them arises "from any act ... in furtherance of the person's right of petition or free speech ... in connection with a public issue[.]" Id. § 425.16(b)(1), (h). A special motion to strike under Section 425.16 is commonly referred to as an anti-SLAPP motion.

In order to prevail on an anti-SLAPP motion, the movant must first make a prima facie showing, through the pleadings themselves and supporting affidavits, that the statement or conduct underlying the legal claims against it qualifies for protection under the anti-SLAPP statute. Id. section 425.16(b) ; Vess v. Ciba–Geigy Corp. USA , 317 F.3d 1097, 1110 (9th Cir. 2003). The burden then shifts to the non-moving party to demonstrate a probability of prevailing on the challenged claims. Cal. Civ. Proc. Code § 425.16(b)(1) ; Vess , 317 F.3d at 1110.

The California Legislature expressly intended that Section 425.16 "be construed broadly" in protection of the public interest. Cal. Civ. Proc. Code § 425.16(a). Although it is a state statute, a party may bring an anti-SLAPP motion to strike state law claims in federal court. Vess , 317 F.3d at 1109 (citing United States ex rel. Newsham v. Lockheed Missiles & Space Co. , 190 F.3d 963, 970-73 (9th Cir. 1999) (holding that there is no direct conflict between the Federal Rules and sections 425.16(b) and (c), and that adopting California procedural rules serves the purposes of the Erie doctrine)).

The statute establishes four categories of protected speech or conduct: (1) "any written or oral statement or writing made before a legislative, executive, or judicial proceeding"; (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"; (3) written or oral statements made "in a public forum in connection with an issue of public interest"; and (4) any other conduct furthering a right of petition or free speech in connection with a public issue. Cal. Civ. Proc. Code § 425.16(e).

An anti-SLAPP motion involves a two-step analysis. First, the court must decide whether the defendant has made a threshold showing that the challenged cause of action is one "arising from" protected activity. See, e.g. , City of Cotati v. Cashman , 29 Cal. 4th 69, 76, 124 Cal.Rptr.2d 519, 52 P.3d 695 (2002). The defendant may meet this threshold burden by showing that the act which forms the basis for the plaintiff's cause of action was a written or oral statement made before a judicial proceeding. See Church of Scientology of California v. Wollersheim , 42 Cal. App. 4th 628, 646, 49 Cal.Rptr.2d 620 (1996). If the defendant establishes a prima facie case that the claims arise from protected activity, the burden then shifts to the plaintiff to establish a probability that the plaintiff will prevail on the claim. Id. ; see also Cotati , 29 Cal. 4th at 76, 124 Cal.Rptr.2d 519, 52 P.3d 695.

B. The Anti-SLAPP Statute Does Not Apply to GPS's Lanham Act Claim.

GPS asserts a Lanham Act claim, which IEE moves to strike. However, California's anti-SLAPP statute is inapplicable to federal claims brought in federal court.

Smith v. Levine Leichtman Cap. Partners, Inc. , 723 F. Supp. 2d 1205, 1218 (N.D. Cal. 2010) (citing Hilton v. Hallmark Cards , 580 F.3d 874, 881 (9th Cir. 2009) ). IEE does not dispute that this is true, but it argues that when a federal law cause of action is based on the same set of facts as the state law claims, an exception should be made. IEE provides no authority in support of its argument for an exception, and the Court finds this argument unpersuasive. Accordingly, IEE's motion to strike Plaintiff's Lanham Act claim is DENIED on this basis.

C. IEE's Speech is Not Subject to the Commercial Speech Exemption.

GPS first opposes IEE's motion on the basis that the article is subject to the commercial speech exemption. Under Section 425.17(c)’s "commercial speech" exemption, causes of action arising from commercial speech are exempt from the anti-SLAPP law when: (1) the cause of action is against a person primarily engaged in the business of selling or leasing goods or services; (2) the cause of action arises from a statement or conduct by that person consisting of representations of fact about that person's or a business competitor's business operations, goods, or services; (3) the statement or conduct was made either for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services or in the course of delivering the person's goods or services; and (4) the intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual potential buyer or customer. Weiland Sliding Doors & Windows, Inc. v. Panda Windows & Doors, LLC , 814 F. Supp. 2d 1033, 1037 (S.D. Cal. 2011). The burden of proof as to the applicability of the commercial speech exemption falls on the party seeking the benefit of it—here, GPS. Simpson Strong Tie Co. v. Gore , 49...