Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 1 of 19
`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 1 of 19
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`EXHIBIT 3
`EXHIBIT 3
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 2 of 19
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`Mark Holscher (SBN 139582)
`mark.holscher@kirkland.com
`Michael Shipley (SBN 233674)
`michael.shipley@kirkland.com
`KIRKLAND & ELLIS LLP
`555 South Flower Street
`Los Angeles, CA 90071
`Telephone: (213) 680-8400
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`Attorneys for Plaintiffs/Intervention-Defendants
`Europlay Capital Advisors, LLC and Claria
`Innovations, LLC
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`SUPERIOR COURT OF THE STATE OF CALIFORNIA
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`COUNTY OF LOS ANGELES, NORTHWEST DISTRICT (VAN NUYS)
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`BRILLIANT DIGIT AL
`ENTERTAINMENT, INC., a Delaware
`corporation; EUROPLA Y CAPITAL
`ADVISORS, LLC, a Delaware limited
`liability company; CLARIA
`INNOVATIONS, LLC, a Delaware limited
`liability company; and MONTO
`HOLDINGS PTY LTD, an Australian
`company,
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`Plaintiffs,
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`v.
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`PERSONAL WEB TECHNOLOGIES, LLC,
`a Texas limited liability company; and
`DOES 1 through 100, Inclusive,
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`Defendants.
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`AMAZON.COM, INC., a Delaware
`corporation; AMAZON WEB SERVICES,
`INC., a Delaware corporation; and TWITCH
`INTERACTIVE, INC., a Delaware
`corporation,
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`Intervenors/Plaintiff-creditors.
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`Case No. 21 VECV00575
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`ASSIGNED FOR ALL PURPOSES TO:
`Honorable Valerie Salkin
`Department U
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`NOTICE OF MOTION AND SPECIAL
`MOTION TO STRIKE COMPLAINT
`UNDER CODE OF CIVIL
`PROCEDURE§ 425.16;
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT
`THEREOF
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`[Filed Concurrently herewith the
`Declaration of Murray Marki/es]
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`Date: March 23, 2023
`Time: 8:30 AM
`Dept.: Department U
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`Reservation ID: 564926252457
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`Action Filed: April 27, 2021
`Complaint In Intervention Filed:
`December 14, 2022
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`SPECIAL MOTION TO STRIKE
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 3 of 19
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`NOTICE OF SPECIAL MOTION TO STRIKE
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`TO THE COURT, ALL PARTIES, AND TO THEIR RESPECTIVE ATTORNEYS OF
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`3 RECORD: PLEASE TAKE NOTICE that on March 23, 2023 at 8:30 AM, or as soon thereafter as
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`counsel can be heard in Dept. U of the Superior Court of the County of Los Angeles, Northwest
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`5 Division, at 6230 Sylmar Ave, Van Nuys, CA 91401 , Plaintiffs Europlay Capital Advisors, LLC and
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`6 Claria Innovations, LLC move the Court for an order striking the second cause of action from the
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`complaint-in-intervention of Plaintiffs in intervention, Amazon.com, Inc., Amazon Web Services, Inc.
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`and Twitch Interactive, Inc. (collectively, "Amazon") under Code of Civil Procedure section 425.16.
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`9 The motion will be based on this motion, the attached memorandum of points and authorities, the
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`concurrently filed Declaration of Murray Marki Jes and and any such other argument and evidence as
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`DA TED: January 28, 2023
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`Isl Michael Shipley
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`Attorneys for Plaintiffs/Intervention(cid:173)
`Defendants Europlay Capital Advisors, LLC
`and Claria Innovations, LLC
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`2
`SPECIAL MOTION TO STRIKE
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 4 of 19
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`TABLE OF CONTENTS
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`Page
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`I.
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`II.
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`INTRODUCTION .......................................................................................................... 7
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`THE COMPLAINT IN INTERVENTION .................................................................. 8
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`III. THE SECOND CAUSE OF ACTION IN THE COMPLAINT IN
`INTERVENTION IS A SLAPP THAT MUST BE STRICKEN ............................... 9
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`A.
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`B.
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`The Second Cause of Action Arises from Protected Activity .......................... 10
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`Amazon Cannot Establish a Probability of Prevailing on the Second
`Cause of Action .................................................................................................... 12
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`SPECIAL MOTION TO STRIKE
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`Cases
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`TABLE OF AUTHORITIES
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`Page(s)
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`Area 55, LLC v. Nicholas & Tomasevic, LLP,
`61 Cal. App. 5th 136 (2021) .......................................................................................................... 12
`
`AT L. Grp., PLLC v. Allstate Ins. Co.,
`461 F. Supp. 3d 610 (E.D. Mich. 2020) ......................................................................................... 15
`
`Bank of New York Mellon v. Citibank, N.A.,
`8 Cal. App. 5th 935 (2017) ............................................................................................................ 14
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`Baral v. Schnitt,
`l Cal. 5th 376 (2016) ......................................................................................................... 10, I 1, 12
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`Bergstein v. Stroock & Stroock & Lavan LLP,
`236 Cal. App. 4th 793 (2015) ........................................................................................................ 11
`
`Bonni v. St. Joseph Health Sys.,
`I l Cal. 5th 995 (2021) ..................................................................................................................... 9
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`Brilliant Digital Ent., Inc. v. Persona/Web Techs. , LLC,
`No. B317580, 2022 WL 4 716637 (Cal. Ct. App. Oct. 3, 2022) ................................................ 8, l 0
`
`C. TF.C. v. Topworth Int'/, Ltd.,
`205 F.3d 1107 (9th Cir. 1999) ......................................................................................................... 8
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`City of Chula Vista v. Gutierrez,
`207 Cal. App. 4th 681 (2012) .................................................................................................. 14, 15
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`Continental Vinyl Products Corp. v. Mead Corp.,
`27 Cal. App. 3d 543 (1972) ......................................................................................................... 8, 9
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`Crossroads Invs. , L.P. v. Fed. Nat'/ Mortg. Assn. ,
`13 Cal. App. 5th 757 (2017) .......................................................................................................... 11
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`Digerati Holdings, LLC v. Young Money Ent., LLC,
`194 Cal. App. 4th 873 (2011) .................................................................................................. 11 , 12
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`Eastern Railroad Presidents Conference et al. v. Noerr Motor Freight, Inc. et al.,
`365 U .S. 127 (1961) ....................................................................................................................... 13
`
`Feresi v. The Livery, LLC,
`232 Cal. App. 4th 419 (2014) ............................................................................................ 10, 14, 15
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`People ex rel. Gallegos v. Pac. Lumber Co.,
`158 Cal. App. 4th 950 (2008) ........................................................................................................ 13
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`HEE Leasing Corp. v. Frank
`48 F .3d 623 (2d Cir. l 995) ....................................................................................................... l 4, 15
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`Hilo Crane Serv., Inc. v. Ho,
`5 Haw. App. 360 (1984) ................................................................................................................ 15
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`Idaho Dev., LLC v. Teton View Golf Ests. LLC,
`152 Idaho 40 1 (Idaho 2011) ........................................................................................................... 15
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`JSJ Ltd. P 'ship v. Mehrban,
`205 Cal. App. 4th 1512 (2012) ................................................................................................ 11 , 12
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`Mine Workers v. Pennington,
`381 U.S. 657 (1965) ....................................................................................................................... 13
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`Navellier v. Sletten,
`29 Cal. 4th 82 (2002) ..................................................................................................................... 15
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`Newcrete Prod. v. City of Wilkes-Barre,
`37 A.3d 7 (Pa. Commw. Ct. 2012) ................................................................................................ 15
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`Park v. Bd. of Trustees of Cal. State Univ. ,
`2 Cal. 5th 1057 (2017) ..................................................................... ................................................ 9
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`Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP,
`133 Cal. App. 4th 658 (2005) abrogated on other issue by See Baral, l Cal. 5th ........................ 11
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`In re Persona/Web Technologies LLC,
`No. 21-01858 (Fed. Cir., fi led Apr. 16, 2021) ................................. ................................................ 8
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`Rusheen v. Cohen,
`3 7 Cal. 4th I 048 (2006) ................................................................................................................. 12
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`S. California Sunbelt Devs., Inc. v. Banyan Ltd. P 'ship,
`8 Cal. App. 5th 910 (2017) ............................................................................................................ 15
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`SA. v. Maiden,
`229 Cal. App. 4th 27 (2014) .......................................................................................................... 12
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`S.E.C. v. Wencke,
`783 F .2d 829 (9th Cir. 1986) ........................................................................................................... 8
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`Sheley v. Harrop,
`9 Cal. App. 5th 1147 (2017) ......................................................................................................... .11
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`Sweetwater Union High Sch. Dist. v. Gil bane Bldg. Co. ,
`6 Cal. 5th 931 (2019) ..................................................................................................................... 10
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`Vitug v. Griffin,
`214 Cal. App. 3d 488 (1989) ......................................................................................................... 15
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`Wilson v. Cable News Network, Inc.,
`7 Cal. 5th 871 (2019) ....................................................................................................................... 9
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`Wolfgram v. Wells Fargo Bank,
`53 Cal. App. 4th 43 (1997) ............................................................................................................ 13
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`Statutes
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`11 U.S.C. § Sl0(c) ............................................................................................................................... 14
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`Cal. Civ. Code section 47(b) ............................................................................................................ 7, 12
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`Cal. Civ. Code§ 47(b)(2) .................................................................................................................... 12
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`Cal. Civ. Proc. Code§ 425.16 ..................................................................................................... 7, 9, 11
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`Cal. Civ. Proc. Code§ 425.16(e)(l) .............................................................................................. 10, 12
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`Cal. Civ. Proc. Code § 566 .................................................................................................................. 14
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`Cal. Com. Code§ 9322 ........................................................................................................................ 14
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`Rules
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`Cal. R. Ct. 3 .1184( c) ............................................................................................................................ 15
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`SPECIAL MOTION TO STRIKE
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 8 of 19
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`MEMORANDUM OF POINTS AND AUTHORITIES
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`I.
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`INTRODUCTION
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`Plaintiffs and defendants in intervention Europlay Capital Advisors, LLC; and Claria
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`Innovations, LLC (together "ECA") move to dismiss the second cause of action under the anti-SLAPP
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`statute, Code of Civil Procedure§ 425.16.
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`The Second Cause of Action in the complaint in intervention-
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`for equitable subordination-
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`is
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`premised on " inequitable conduct" that consists of filings that plaintiffs Brilliant Digital Entertainment,
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`Inc.; Monto Holdings Pty Ltd.; Europlay Capital Advisors, LLC; and Claria Innovations, LLC (the
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`"Secured Creditors") 1 made with the Court. Amazon 2 has, in effect, sued the Secured Creditors for
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`instituting this action and acting to secure the appointment of a receiver of the assets of Defendant
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`PersonalWeb Technologies, LLC ("PersonalWeb"). Amazon claims those acts were ill-motivated or
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`collusive. But that does not matter. The anti-SLAPP statute--makes all court filings " protected
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`activity." If conduct that makes up an element of a cause of action is something the defendant did in
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`court, the anti-SLAPP statute is brought to bear.
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`That being the case, Amazon must demonstrate a probability of prevailing. That is, its complaint
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`needs to state an actionable claim and it needs to come forward with evidence of some evidence that, if
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`credited, supports each element of the claim. Amazon can't do that, for at least three reasons. First, Civil
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`18 Code § 47(b )'s litigation privilege provides a near absolute immunity to civil liability based on
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`communications to a court. Second, the First Amendment-through the Noerr-Pennington doctrine-
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`similarly precludes liability based on court filings. And third, there' s no authority that equitable
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`subordination is a legitimate cause of action or remedy available under the circumstances of this case-
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`The motion should be granted.
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`1 Brilliant Digital Entertainment, Inc. and Monto Holdings Pty Ltd. are separately represented.
`2 There are technically three plaintiffs in intervention: Amazon.com, Inc., Amazon Web Services, Inc. ,
`and Twitch Interactive, Inc. The complaint in intervention does not distinguish among them. They are
`collectively referred to herein as "Amazon."
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 9 of 19
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`II.
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`THE COMPLAINT IN INTERVENTION
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`This is an action by the Secured Creditors, who are holders of secured notes, to collect from an
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`insolvent debtor-PersonalWeb. The complaint was filed on April 27, 2021. PersonalWeb defaulted
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`and, on the stipulation of the Secured Creditors and Personal Web, the Court appointed a receiver on
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`August 27, 2021.
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`Amazon is also a creditor of Personal Web, having been awarded an attorney fee judgment of
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`about $5.4 million in a patent litigation in the Northern District of California. ,i 9 & Exs. A-C. 3
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`Although it could have participated in the receivership proceedings simply by making a claim upon the
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`receiver,4 Amazon instead elected to move to intervene in the action. The Court denied leave to
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`intervene on November 12, 2021. Amazon appealed.
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`The Court of Appeal reversed. See Brilliant Digital Ent. , Inc. v. Persona/Web Techs., LLC, No.
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`B3 I 7580, 2022 WL 4 716637 (Cal. Ct. App. Oct. 3, 2022). In an unpublished decision, it found that,
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`although a creditor ordinarily lacks standing to intervene, this action fell within an exception set out in
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`Continental Vinyl Products Corp. v. Mead Corp., 27 Cal. App. 3d 543 (1972). See Brilliant Digital,
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`2022 WL 4716637, at *4. ln particular, the Court noted that Amazon's " proposed complaint-in(cid:173)
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`intervention alleges respondents colluded to thwart Amazon's ability to collect on its judgment by
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`initiating the underlying action." Id. at *5. As the Court of Appeal concluded:
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`"[T]he record before us supports Amazon's allegations that respondents colluded to
`pursue the underlying action to preclude Amazon from collecting on its judgment against
`PersonalWeb. Specifically, the record supports Amazon's theory that respondents used
`the case to quickly funnel all of PersonalWeb' s assets into a receivership following
`Amazon's victory in the MDL. By doing so, respondents insulated all of Personal Web' s
`assets, including additional money loaned to PersonalWeb to fund further patent litigation
`against Amazon and its affiliates, from Amazon' s judgment while still ensuring
`PersonalWeb's beneficial owners maintained control over the PersonalWeb assets."
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`Id. at *6. 5
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`3 The fee award remains the subject of an appeal in the United States Court of Appeals for the Federal
`Circuit. See In re Persona/Web Technologies LLC, No. 21-01858 (Fed. Cir., filed Apr. 16, 2021).
`4 Holders of debt or equity in an entity that has been placed into receivership for liquidation have the
`right to participate in the receivership proceedings without needing to formally intervene. See S E. C. v.
`Wencke, 783 F.2d 829,838 (9th Cir. 1986); C.T.F.C. v. Topworth Int '/, Ltd. , 205 F.3d 1107, 1114 (9th
`Cir. 1999).
`5 ECA notes that the Secured Creditors did not oppose Amazon' s motion to intervene before this court
`or on appeal, so the record was presented in a one-sided manner slanted in the direction of Amazon.
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 10 of 19
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`The Court "agree[d] with Amazon that respondents ' collusion is ' likely to result in injustice," '
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`justifying the Continental Vinyl exception. Id.
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`On December 9, 2022, Amazon filed its complaint in intervention ("Complaint"). The Complaint
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`states three causes of action: The first and the third claims seek "Judgment Enforcement"-to recover
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`assets from the Personal Web estate, 1125-29-and an equitable accounting in support of that effort.
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`1136-41.
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`The second cause of action, for "Equitable Subordination," seeks to have the secured claims of
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`the Creditors subordinated to Amazon's claims because the Creditors and Amazon allegedly engaged in
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`" inequitable conduct." 132. It is clear from the Complaint that this inequitable conduct included
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`bringing this action and taking efforts to install a purportedly collusive receivership, which was "part of
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`a scheme to avoid the judgment owed to Amazon by keeping PersonalWeb's assets under the umbrella
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`of the same beneficial owner." 122; see generally 11 19-23.
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`III.
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`THE SECOND CAUSE OF ACTION IN THE COMPLAINT IN INTERVENTION IS A
`SLAPP THAT MUST BE STRICKEN.
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`"Litigation of an anti-SLAPP motion involves a two-step process. First, the moving defendant
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`bears the burden of establishing that the challenged allegations or claims arise from protected activity in
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`which the defendant has engaged." Bonni v. St. Joseph Health Sys. , 11 Cal. 5th 995, 1009 (2021)
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`( cleaned up). A claim arises from protected activity if it fall s within one of the four categories listed in
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`§ 425.16(e) and forms the factual basis of a least one element of the claim. Wilson v. Cable News
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`Network, Inc., 7 Cal. 5th 871 , 887 (2019); see also Park v. Bd. of Trustees of Cal. State Univ., 2 Cal. 5th
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`1057, 1063 (2017) ("[I]n ruling on an anti-SLAPP motion, courts should consider the elements of the
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`challenged claim and what actions by the defendant supply those elements and consequently form the
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`basis for liability."). In making that assessment, the Court can consider both the face of the plaintiff s
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`complaint as well as evidence submitted by the moving defendant. Wilson, 7 Cal. 5th at 887. "At this
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`stage, the question is only whether a defendant has made out a prima fac ie case that activity underlying a
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`plaintiffs claims is statutorily protected, not whether it has shown its acts are ultimately lawful." Id. at
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`888 (cleaned up).
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`Secured Creditors submit that the facts will show that they did nothing to interfere with Amazon' s
`participation in the receiver' s orderly liquidation of the assets of Personal Web.
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`"If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate
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`the merit of the claim by establishing a probability of success. We have described this second step as a
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`'summary-judgment-like procedure.' The court does not weigh evidence or resolve conflicting factual
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`claims. Its inquiry is limited to whether the plaintiff has [1] stated a legally sufficient claim and [2] made
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`a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's
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`evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's
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`claim as a matter of law." Baral v. Schnitt, I Cal. 5th 376, 384-85 (2016) (cleaned up). " [T]he evidence
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`relied on by the plaintiff [must] be admissible at trial," although the court may also "consider affidavits,
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`declarations, and their equivalents if it is reasonably possible the proffered evidence set out in those
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`statements will be admissible at trial." Sweetwater Union High Sch. Dist. v. Gilbane Bldg. Co., 6 Cal.
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`5th 931 , 946, 949 (2019). Rank hearsay, however, will not suffice. Id. at 886.
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`A.
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`The Second Cause of Action Arises from Protected Activity.
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`Under the first prong of the test, a claim arises from protected activity when the defendant' s
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`conduct falls within the four categories in § 425. l 6(e)(l)-( 4), and that conduct constitutes the factual
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`basis of an element of the claim. Wilson, 7 Cal. 5th at 887; Park, 2 Cal. 5th at 1063. To the extent
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`equitable subordination is even a valid cause of action, an element is that the defendant engaged in
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`"inequitable conduct." See Feresi v. The Livery, LLC, 232 Cal. App. 4th 419, 427 (2014) (elements of
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`equitable subordination are: " (]) [a] fiduciary engaged in inequitable conduct; (2) the misconduct
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`resulted in injury to the petitioner or conferred an unfair advantage on the fiduciary ; and, (3) invocation
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`20 of the remedy of equitable subordination will not be inconsistent with the Commercial Code"). As the
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`Complaint alleges and the Court of Appeal recognized, the core of Amazon' s claim of inequitable
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`conduct consists of Creditors' purportedly bringing this action and using it to set up a purportedly
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`collusive receivership, in order to deprive Amazon of its ability to collect on its judgment against
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`PersonalWeb. i! 22; see also Brilliant Digital, 2022 WL 4716637, at *5 (noting that Amazon' s
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`" proposed complaint-in-intervention alleges respondents colluded to thwart Amazon 's ability to collect
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`on its judgment by initiating the underlying action. " (emphasis added)).
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`Of course, filing a complaint and seeking provisional remedies based on "written or oral
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`statement[ s] or writing[ s] made before a ... judicial proceeding," § 425.16( e )(1 )-protected activity
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 12 of 19
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`under the anti-SLAPP statute. See Sheley v. Harrop, 9 Cal. App. 5th 1147, 1165 (2017) ("The filing of
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`lawsuits is an aspect of the First Amendment right of petition, and thus is a protected activity under the
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`anti-SLAPP statute." ( cleaned up)); Digerati Holdings, LLC v. Young Money Ent., LLC, 194 Cal. App.
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`4th 873, 888 (2011) (filings for preliminary injunction and TRO are protected activity). In the first step
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`of the analysis the merits of the underlying lawsuit are irrelevant. See JSJ Ltd. P 'ship v. Mehr ban, 205
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`6 Cal. App. 4th 1512, 1521 (2012).
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`Using litigation to thwart the collections efforts of creditors is protected activity. In Peregrine
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`8 Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, 133 Cal. App. 4th 658,672 (2005)
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`abrogated on other issue by See Baral, 1 Cal. 5th at 396 the SEC was investigating what it believed was
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`a Ponzi scheme. It attempted to stop the company from dissipating assets. Id. at 668. To frustrate those
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`efforts, lawyers representing the company's controllers threatened to "put the Funding Entities into
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`bankruptcy in order to derail or disrupt the SEC action." Id. at 667. They then "orchestrated the
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`bankruptcies of the entity-plaintiffs" and stymied the SEC in obtaining key discovery. Id. at 672. Years
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`later, a bankruptcy trustee representing the insolvent entities sued the lawyers for aiding and abetting
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`and malpractice. Id. at 668. The lawyers brought an anti-SLAPP motion, which the trial court denied. Id.
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`at 665.
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`The Court of Appeal reversed. Finding that causes of action arose from protected activity, the
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`court found that, among other things, "threaten[ing] to put [the entities] into bankruptcy" and
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`"orchestrat[ing] the bankruptcies of the entity-plaintiffs ... constitute[d] ' conduct in furtherance of the
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`exercise of the constitutional right of petition'(§ 425.16, subd. (e)(4)) in that they were litigation tactics
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`the firm employed to benefit" its client. Id. at 672. Other cases based on allegedly improper filings or
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`tactics in bankruptcy proceedings have also found that they arise from protected activity. See Bergstein
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`v. Stroock & Stroock & Lavan LLP, 236 Cal. App. 4th 793, 811 (2015); Crossroads Invs., L.P. v. Fed.
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`24 Nat'! Mortg. Assn. , 13 Cal. App. 5th 757, 777-785 (2017)
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`The litigation activity here is even more clearly protected than that in Peregrine Funding. The
`Secured Creditors did not just "orchestrate" this case. They filed it. ,r 22. They also applied to the court
`for the appointment of a receiver. ,r 23. That is the " inequitable conduct" claimed by Amazon. ,r,r 23- 31.
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`28 And it is these actions that allegedly harmed Amazon and entitle it to the relief demanded in the second
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 13 of 19
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`cause of action. ,r,r 23, 24, 31-35. The second cause of action thus arises directly out of.filings that
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`2 Creditors made to this Court, that is, "any written or oral statement or writing made before a .. . judicial
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`6
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`proceeding[.]" Code Civ. Proc. § 425. l 6(e)(] ); see S.A. v. Maiden, 229 Cal. App. 4th 27, 41--42 (2014)
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`(abuse of process claim grounded in allegedly improper applications for restraining order arose from
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`protected activity). The Creditors have met their burden under the step one.
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`B.
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`Amazon Cannot Establish a Probability of Prevailing on the Second Cause of
`Action.
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`Because the second cause of action arises from protected activity, "the burden shifts to the
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`[Amazon] to demonstrate the merit of the claim by establishing a probability of success." Baral, 1 Cal.
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`5th at 384. The procedure is essentially a " motion for summary judgment in 'reverse.' Rather than
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`requiring the defendant to defeat the plaintiff's pleading by showing it is legally or factually meritless,
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`the motion requires the plaintiff to demonstrate that he possesses a legally sufficient claim which is
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`'substantiated,' that is, supported by competent, admissible evidence." Area 55, LLC v. Nicholas &
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`Tomasevic, LLP, 61 Cal. App. 5th 136, 152 (2021 ). Amazon cannot meet that burden here.
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`1.
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`The Second Cause of Action is Barred by Civil Code§ 47(b)'s litigation
`privilege.
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`That Amazon' s claim is premised on Creditors' filings in this Court similarly precludes Amazon
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`from establishing any likelihood of success.
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`Civil Code section 4 7(b) creates a " litigation privilege" for any statement made "in any ...
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`judicial proceeding[.]" Civ. Code§ 47(b)(2). The privilege "bars all tort causes of action except a claim
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`of malicious prosecution." JSJ Ltd. P 'ship v. Mehrban, 205 Cal. App. 4th 15 I 2, 1522 (2012) ( cleaned
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`up). "A plaintiff cannot establish a probability of prevailing if the litigation privilege precludes the
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`defendant' s liability on the claim." Digerati Holdings, LLC v. Young Money Ent., LLC, 194 Cal. App.
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`4th 873, 888 (2011 ).
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`The litigation privilege applies to any claim based on court filings, even if they are allegedly
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`false or abusive of the court's processes. Rusheen v. Cohen, 37 Cal. 4th 1048, 1062- 64 (2006). The
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`"privilege is absolute and applies regardless of malice." Id. at 1063. Apropos here, it applies to
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`"postj udgment enforcement activities that are necessarily related to the allegedly wrongful
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`communicative act[.]" Id. The breadth of the privilege is based on " modem public policy" that "seeks to
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`SPECIAL MOTION TO STRIKE
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 14 of 19
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`1
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`2
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`3
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`encourage free access to the courts and finality of judgments by limiting derivative tort claims arising
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`out of litigation-related misconduct and by favoring sanctions within the original lawsuit." Id.
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`As explained above, Amazon's second cause of action is premised on Creditors' having
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`4 wrongfully instituted this action to obtain a receivership to liquidate PersonalWeb's estate. But those
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`5
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`acts are well within the core of activities protected under the litigation privilege. That being the case,
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`6 Amazon cannot establish a probability of prevailing.
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`8
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`9
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`2.
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`The Second Cause of Action Is Barred by the Noerr-Pennington Doctrine.
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`Similar to the litigation privilege, the First Amendment to the U.S. Constitution bars any claim
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`for civil liability based on petitioning the government for redress, including activity in the courts.
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`10 Although it originated in antitrust cases, this rule, known as the Noerr-Pennington doctrine, 6 "has been
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`extended to preclude virtually all civil liability for a defendant's petitioning activities before not just
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`courts, but also before administrative and other governmental agencies." People ex rel. Gallegos v. Pac.
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`Lumber Co., 158 Cal. App. 4th 950, 964 (2008). If a claim is based upon petitioning activity, the
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`doctrine requires dismissal unless the plaintiff proves it is a "sham," which requires a two-part test. First,
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`"the lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically
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`expect success on the merits"-that is, the litigation must be "objectively meritless." Wolfgram v. Wells
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`17 Fargo Bank, 53 Cal. App. 4th 43, 55 (1997). "[S]econd, the litigants subjective motivation must conceal
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`an attempt to interfere directly with the business relationships of a competitor through the use of the
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`governmental process-as opposed to the outcome of that process-as an anticompetitive weapon."
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`20 Pac. Lumber Co., 158 Cal. App. 4th at 965 (cleaned up).
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`Amazon can't satisfy that test. This litigation is neither objectively nor subjectively baseless.
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`22 PersonalWeb owes ECA about $800,000 in unpaid principal, plus interest, on notes that long preexist its
`dispute with Amazon. Markiles Deel. ,r,r 2, 4 & Exs. 1 &3. Money was actually loaned to PersonalWeb.
`Id. ,r,r 1, 4. PersonalWeb' s assets were pledged as the collateral on those loans and those security
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`interests where appropriately perfected with UCC-1 filings. Id. Exs. 2 & 4. ECA, along with the other
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`Secured Creditors, brought this litigation and sought a receivership to marshal those assets and to protect
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`6 The doctrine derives its name from two antitrust cases decided by the United States Supreme Court:
`Eastern Railroad Presidents Conference et al. v. Noerr Motor Freight, Inc. et al., 365 U.S. 127 (1961)
`and Mine Workers v. Pennington, 381 U.S. 657 (1965).
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`13
`SPECIAL MOTION TO STRIKE
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`Case 5:18-md-02834-BLF Document 854-4 Filed 03/08/23 Page 15 of 19
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`them from lower priority creditors