Ross v. Seyfarth Shaw LLP

96 Cal.App.5th 722

314 Cal.Rptr.3d 549

Craig ROSS, et al., Plaintiffs and Appellants,

v.SEYFARTH SHAW LLP, et al., Defendants and Appellants.

B312337

Court of Appeal, Second District, Division 8, California.

Filed September 29, 2023

Craig Ross and Natalie Operstein, in pro. per., for Plaintiffs and Appellants.

Jassy Vick Carolan, Jean-Paul Jassy and Jeffrey A. Payne for Defendants and Appellants.

GRIMES, Acting P. J.

This is an appeal from an order granting defendants Seyfarth Shaw LLP (Seyfarth) and Colleen Regan a portion of the fees they requested pursuant to Code of Civil Procedure section 425.16¹ (the anti-SLAPP² statute) and resulting judgment. The trial court awarded the fees without finally ruling on defendants’ anti-SLAPP motion to strike—it issued a tentative ruling granting in part and denying in part the motion, and plaintiffs immediately thereafter dismissed their complaint. Plaintiffs Craig Ross and Natalie Operstein appeal the fee award on three general theories. First, the anti-SLAPP statute did not apply to their claims, and, in any event, their claims were meritorious. Second, the fees should not have been awarded because defendants did not meet the fee award requirements of subdivision (c)(1) or because judicially created exceptions to their right to seek a fee award applied. Third, even if fees were awardable, the amount awarded was unreasonable.

Defendants cross-appeal. They argue the trial court should have awarded all the fees they requested, not just a portion of those fees, because all of plaintiffs’ claims were based on conduct protected by the anti-SLAPP statute, no exceptions applied, and their request was reasonable.

We agree with defendants that their motion to strike was wholly meritorious and their fee request therefore should not have been reduced on the grounds that they would have prevailed only partially on their motion. We disagree with plaintiffs that the trial court erred in the ways they claim. We therefore affirm in part and reverse in part and remand for further proceedings consistent with this opinion.

BACKGROUND

Plaintiff Operstein was employed as a professor of linguistics at California State University, Fullerton (CSUF), which is part of the California State University (CSU) system. Plaintiff Ross is her husband.

In the course of Operstein's employment, she experienced conflict with her colleagues in the linguistics department. This prompted Operstein to make various written complaints. In early 2013, she wrote to the chair of the department about perceived mistreatment by a peer. By May 2014, the matter had escalated to human resources. In an e-mail to CSUF's Director of Faculty & Staff Labor Relations James Busalacchi, Operstein outlined perceived "widened and intensified" harassment, including "retaliatory employment actions, defamation, violations of contract and university policies, falsification of records, interference with performance, groundless opposition to a[ ] ... request for promotion, and possible discrimination." In seeking to bypass a suggested grievance process, Operstein urged that "[t]he sophisticated matters of law and the extent of the injury involved will require professional legal expertise and experience" and offered that "an investigation by [human resources] may be the most efficient way to proceed." CSUF obliged.

In November 2014, CSUF engaged Seyfarth, a law firm, to investigate Operstein's accusations against three of her colleagues. Its letter engaging Seyfarth identified a nonexclusive list of authorities authorizing the investigation, including CSU Executive Order 1096, entitled "Systemwide Policy Prohibiting Discrimination, Harassment and Retaliation Against Employees and Third Parties and Procedure for Handling Discrimination, Harassment and Retaliation Allegations by Employees and Third Parties."

Colleen Regan, at the time a partner at Seyfarth, had primary responsibility for the investigation. Over the course of about a month, Regan interviewed Operstein's three colleagues she accused of misconduct and another individual. She also attempted to interview Operstein, but Operstein agreed only to respond to written questions. Regan submitted three written questions to Operstein; Operstein responded in writing with an answer to just one. The unanswered questions were requests for evidence and witnesses known to Operstein but not yet disclosed to Regan.

Regan provided a summary of her investigation and findings in an eight-page report dated December 18, 2014 addressed to Mr. Busalacchi and another CSUF employee. The report concluded that none of Operstein's allegations was well founded. As relevant to Operstein's allegations that colleagues defamed her when they called her "uncollegial," Regan wrote: "I conclude by reading the email traffic that much of Dr. Operstein's conduct and email communication was the opposite of collegial. She regularly accused her coworkers of violations and infractions of policy, and of defaming her and violating her rights, all with no apparent basis." Regan also wrote: "Every witness interviewed stated that Dr. Operstein is well-regarded as a scholar and researcher, and appears to be a fine teacher. However, since the beginning of her employment at CSUF, she has been difficult for virtually everyone to work with. At least one administrative support employee has requested never to work with her again, and many others find her behavior odd, and even threatening."

Operstein's relationship with CSUF further soured shortly after Seyfarth completed its report. In March 2015, Operstein filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC) against CSUF. Operstein identified 22 entities, individuals, or classes thereof, as respondents in her May 2015 EEOC charge, including CSU, certain of its agents and employees, and defendant Regan. In early May 2015, CSUF recommended termination of Operstein's employment purportedly due to lack of progress towards tenure. Later that month, Operstein filed another charge of discrimination with the EEOC.

In March 2016, plaintiffs filed a lawsuit in state court against CSU's board of trustees. Their complaint contained 20 causes of action relating to Operstein's employment and the termination of her employment.

In June 2017, plaintiffs filed another lawsuit, this one in federal court. Their second amended complaint in that action named more than 50 individual defendants, including various high ranking state officials, CSU officials, and, among others, Regan. Plaintiffs alleged Regan "conspir[ed] with state officials to discriminate against plaintiff Operstein and to deprive plaintiffs of lifetime employment contract [sic ] and related benefits and of liberty resulting from said deprivation." In June 2018, the federal court dismissed all of Ross's claims with prejudice. In July 2019, it entered summary judgment against Operstein on all her claims.

In April 2020, plaintiffs filed the lawsuit underlying this appeal. In a complaint solely against Seyfarth and Regan, plaintiffs asserted 11 causes of action based on defendants’ work for CSUF in connection with Operstein's internal complaints of workplace harassment and related mistreatment.

The factual allegations include the following:

"Defendants entered into contract with CSU to investigate [Operstein's] [c]omplaints."

The scope of defendants’ work was "limited to investigation of [Operstein's] [c]omplaints and did not include investigation of Dr. Operstein or her conduct." (Underscoring omitted.)

Defendants’ contract with CSU was governed by a "CSU Executive Order governing investigations of discrimination and harassment complaints" and required them to act as an "impartial tribunal." (Underscoring omitted.)

Defendants "assumed said role of an impartial tribunal with the ulterior intent to make findings in favor of [CSUF] and its officials" in order to enhance future business prospects. (Underscoring omitted.)

In conducting their investigation, defendants: "(1) selectively reviewed evidence in favor of employer and/or employer's officials; (2) disregarded and refrained from obtaining and probing evidence which supported [Operstein's] [c]omplaints; (3) limited their interviews to the reported wrongdoers, their subordinates, and employees who relied on the reported wrongdoers for their promotions; (4) disregarded and refrained from obtaining and probing evidence of violation [sic ] of Dr. Operstein's constitutional, contractual, and/or legal rights by CSU and/or its officials, agents, and/or employees; (5) disregarded and refrained from obtaining and probing evidence of potentially retaliatory adverse employment actions." (Underscoring omitted.) We refer to these allegations as the "paragraph 31 allegations" because they were made in paragraph 31 of plaintiffs’ complaint.

In sum, the complaint alleges that, with improper motive, defendants (1) conducted a biased and otherwise flawed investigation of Operstein's complaints; and (2) prepared and submitted a report that was defamatory of Operstein.

Defendants responded with a motion to strike plaintiffs’ complaint under the anti-SLAPP statute.³ They supported their motion with declarations and extensive documentary evidence, including documents they reviewed in the course of their investigation and the resulting report. Plaintiffs opposed the motion and submitted declarations and evidence of their own totaling nearly 3,000 pages. Defendants filed a reply and plaintiffs filed a 70-page surreply.

On the same day plaintiffs filed their surreply, the trial court issued a tentative ruling on defendants’ special motion to strike. The court was inclined to strike three of the 11 causes of action ("negligent misrepresentation and constructive fraud," "defamation," and "fraud and deceit") because the allegations supporting those causes of action "arise solely from protected activity under ... subdivisions (e)(1) and (e)(2)," but was inclined to request further briefing as to...