Veeva Systems v. Medidata Solutions CA1/3

Filed 3/10/22 Veeva Systems v. Medidata Solutions CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

VEEVA SYSTEMS, INC.,
Plaintiff and Appellant,
A158736, A159062
v.
MEDIDATA SOLUTIONS, INC. et (Alameda County
al., Super. Ct. No. RG17868081)
Defendants and Appellants.

Veeva Systems, Inc. (Veeva) sued Medidata Solutions, Inc. (Medidata)
and Sparta Systems, Inc. (Sparta) (collectively defendants) for declaratory
and injunctive relief, alleging that defendants’ use and enforcement of
noncompete and nondisclosure agreements (NCA/NDAs) against their former
employees violate Business and Professions Code section 16600.1 Defendants
moved to strike Veeva’s operative complaint under the anti-SLAPP law (Code
Civ. Proc., § 425.16)2 on the grounds that Veeva’s claims (1) targeted their
protected acts of enforcing the NCA/NDAs in litigation, and (2) lacked

1 Business and Professions Code section 16600 provides in pertinent part
that “every contract by which anyone is restrained from engaging in a lawful
profession, trade, or business of any kind is to that extent void.”
2 Further section references are to the Code of Civil Procedure unless
specified otherwise.

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probable success on the merits. The trial court struck two of Veeva’s seven
causes of action—the fourth cause of action for declaratory relief and the
seventh cause of action under the unfair competition law (UCL) (Bus. & Prof.
Code, § 17200 et seq.)—but denied the motions as to the remaining claims,
which the court found did not arise from protected activity. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
We take the following facts from the pleadings and evidentiary
submissions on the anti-SLAPP motions.
Veeva is a cloud-computing software technology company
headquartered in Pleasanton. Medidata is a New York-based software-as-a-
service technology company. New Jersey-based Sparta provides quality
management solutions to the life sciences industry. The three are
competitors in the life sciences technology industry and compete for
employees. Defendants require their employees to enter into NCA/NDAs
prohibiting them from disclosing defendants’ confidential information during
and after their employment, and from directly or indirectly engaging in
competition with defendants for a restricted period of time after their
employment ends.3 Veeva does not require its employees to sign noncompete
agreements.
In January 2017, Medidata filed suit against Veeva and several former
Medidata employees in the United States District Court for the Southern
District of New York (hereafter the federal action). Medidata alleged that
Veeva induced former employees Alan Mateo, Jason Rizzo, Sondra Pepe,
Michelle Marlborough, and Richard Young to join Veeva and disclose

3 The restricted period under the Medidata NCA/NDA is one year. For
former Sparta employees, the restricted period is nine months.

2
Medidata’s trade secrets in violation of their obligations under the
NCA/NDAs.4
Around the same time that Medidata filed the federal action, Sparta
filed suit against Veeva and former Sparta employee Scott Mitreuter in New
Jersey state court, alleging that Veeva induced Mitreuter to leave Sparta and
disclose Sparta’s proprietary information to Veeva. Sparta filed a similar
lawsuit in New Jersey state court against Veeva and former Sparta employee
Joby George. We will refer to these suits as the New Jersey actions.
In July 2017, Veeva filed the instant action against defendants5 in
California, alleging that their NCA/NDAs were unenforceable restraints on
trade in violation of Business and Professions Code section 16600. Veeva
alleged that its efforts to recruit defendants’ employees to work for Veeva in
California was made more difficult and expensive due to defendants’
NCA/NDAs. It also alleged that defendants “threaten to and actively attempt
to enforce these unlawful agreements in order to prevent employees from
leaving Defendants for a better employment opportunity with a California-
based employer.”
Medidata responded to Veeva’s complaint by filing a demurrer and
anti-SLAPP motion, arguing that Veeva’s claims arose from protected

4 In March 2017, Medidata voluntarily dismissed the individual
defendants from the federal action.
5 Veeva also named Quintiles IMS Incorporated (IMS) as a defendant. In
a prior unpublished opinion, we reversed a judgment in favor of IMS after the
trial court sustained IMS’s demurrer to Veeva’s first amended complaint.
(Veeva Systems Inc. v. Quintiles IMS, Inc. (Oct. 31, 2019, A155603) (Quintiles
IMS).) The parties dispute whether Quintiles IMS operates as the “law of the
case” as to defendants here, but we need not resolve that question, as the
particular merits issues addressed in our analysis of the second anti-SLAPP
prong simply do not overlap with those discussed in Quintiles IMS.

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activity—e.g., Medidata’s efforts to protect its trade secrets by filing the
federal action. The trial court sustained the demurrer with leave to amend
and “dropped” the anti-SLAPP motion as moot. Veeva filed a first amended
complaint, to which defendants each demurred and filed anti-SLAPP
motions. After defendants elected to have the demurrers heard first, the trial
court sustained the demurrers with leave to amend and again “dropped” the
anti-SLAPP motions as moot. Veeva filed a second amended complaint.
Defendants again demurred and filed anti-SLAPP motions. At a
hearing in December 2018, the trial court did not rule on the pending
motions. Rather, the court found that Veeva’s second amended complaint
suffered from technical issues and did not comply with the order granting
leave to amend. The court continued the matter to March 2019 and
instructed Veeva to either file a motion for leave or omit the improper
allegations.
In February 2019, Veeva filed a “Corrected Second Amended
Complaint” (CSAC) to address the deficiencies identified by the trial court.
Veeva also filed a motion for leave to file a supplemental complaint, which
was granted. In May 2019, Veeva filed its “Supplemental Complaint to the
Corrected Second Amended Complaint” (hereafter the supplemental
complaint). We now summarize the material allegations.
Veeva alleges that it conducts its principal corporate activities and
recruitment of employees at its Pleasanton headquarters, and that a
significant number of its employees and customers are based in California.
Defendants likewise conduct significant business in California and recruit
Veeva’s current and former employees. According to Veeva, defendants’
NCA/NDAs are unlawful under Business and Professions Code section 16600
and make Veeva’s efforts to recruit employees more difficult. For instance, in

4
2017, a “Medidata employee declined to even consider working for Veeva
because of the Medidata non-compete/NDA,” and in 2018, after Veeva began
recruiting Medidata employee Justin Zacchone, Medidata sent a letter to
Zacchone in which it advised Zacchone of his continuing obligations under the
NCA/NDA, and reserved its rights and remedies thereunder.
Veeva alleges there is an actual controversy “over the legality and
enforceability of the Medidata non-compete as it relates to Veeva’s
recruitment and/or employment of Mateo, Rizzo, Pepe, and Zacchone” and
“other current and former employees of Medidata for employment in
California within the meaning of California law.” As “[e]vidence” of this
controversy, Veeva describes Medidata’s federal action, including the
allegation that Veeva tortiously interfered with Medidata’s employees’
NCA/NDA obligations by hiring and employing them. Veeva alleges it has
lost money and property within the meaning of the UCL by “paying its
employees’ defense costs” in the federal action, and spending “attorney time
and management time in analyzing and providing advice concerning the
unlawful agreement,” which “has resulted in the diversion of resources and
economic injury.”
As to Sparta, Veeva alleges it hired a number of former Sparta
employees, including Sanjay Goswami in January 2017, John Marshall in
May 2017, and Joby George in February 2018. Veeva also offered a job to
former Sparta employee “Jane Roe,” who accepted but later withdrew due to
Sparta’s NCA/NDA. Veeva alleges there is an actual controversy over the
legality and enforceability of the Sparta NCA/NDA as it relates to Veeva’s
recruitment and/or employment of former and current Sparta employees. As
“[e]vidence” of this controversy, Veeva alleges that Sparta has “accused Veeva
of intentionally interfering with the Sparta non-compete/NDA by stating that

5
it will defend and indemnify employees accused of violating [Sparta’s]
unlawful agreement by working for Veeva.” Veeva further alleges that
Sparta sent letters to Veeva’s CEO claiming that Veeva’s employment of
Marshall and George would violate the NCA/NDAs, and threatening to
enforce its rights under the NCA/NDAs.
Veeva alleges that in light of the Sparta NCA/NDA, Veeva did not
assign Marshall to any of his former Sparta clients, including those based in
California, which made Marshall less productive than he otherwise would
have been. Veeva also incurred attorney fees and costs in response to
Sparta’s litigation threats concerning Marshall and George and Sparta’s
filing of the New Jersey actions. Veeva further alleges “the diversion and
loss” of “economic resources,” including “valuable management time and
other resources recruiting Jane Roe,” and “additional management time and
. . . recruiting costs in finding and hiring a different candidate.”
The CSAC asserts four causes of action for declaratory relief and three
causes of action under the UCL. In the first cause of action, Veeva alleges
there is an actual controversy “concerning Veeva’s right to recruit
Defendants’ current and former employees,” notwithstanding “the employees’
place[s] of residence or the existence of a non-compete/NDA.”6 Veeva seeks a
declaratory judgment that it had the right to solicit and recruit Mateo, Pepe,
Rizzo, Zacchone, Goswami, George, and Roe, as well as “other current and
former employees” of defendants.

6 It is implied in the CSAC that Mateo, Rizzo, Marshall, and George do
not reside in California, as Veeva alleges these individuals are “employed in
California within the meaning of California law” because they travel
regularly to California, report to California-based executives, regularly
interact with Veeva personnel in California and/or clients with operations in
California.

6
 The second cause of action for declaratory relief alleges an actual
controversy “over Veeva’s right and obligation to indemnify and/or defend
former Medidata and Sparta employees who face threatened or actual
litigation arising from their employment with Veeva in alleged violation of
the Medidata or Sparta non-compete/NDA.” Veeva alleges it has an
obligation under Labor Code section 2802 as well as the right and desire to
defend and indemnify its employees when faced with threatened or actual
litigation from defendants arising from posttermination NCA/NDAs, but
defendants consider this to be illegal “ ‘interference.’ ”
The third cause of action alleges an actual controversy over
“[d]efendants’ right to require employees to sign non-compete/NDAs that
include in their scope the provision of services in California within the
meaning of California law, as well as the enforceability of these Agreements
as to employees employed ‘in California’ within the meaning of California
law.” Veeva seeks declaratory judgments that defendants violate California
law when they enter into NCA/NDAs that include within their scope the
provision of services in California to a California-based employer.
The fourth cause of action alleges an actual controversy “over
Defendants’ right to seek enforcement of their standard non-compete/NDAs
that include in their scope the provision of services in California to a
California-based employer. Such efforts at enforcement include threatened
and actual litigation against Veeva for interference with these non-
competes/NDAs.”
In the fifth, sixth, and seventh UCL causes of action, Veeva alleges that
defendants engage in unfair competition when they: “require employees to
enter into the standard non-compete/NDAs that inhibit Veeva’s ability to
recruit their employees to provide services in California to a California

7
employer within the meaning of California law” (fifth cause of action); “enter
into post-termination non-compete agreements with employees that include
in their scope the provision of services in California for a California-based
employer” (sixth cause of action); and “threaten to or actively seek to enforce
their standard non-competes/NDAs that include in their scope the provision
of services in California” (seventh cause of action). In each of these claims,
Veeva alleges it has suffered an injury in fact as a result of defendants’ unfair
competition by incurring defense and litigation costs, diverting resources,
incurring recruiting and administrative costs, and spending excessive
management and attorney time as a result of Defendants’ unfair
competition.7
In September 2019, the trial court overruled defendants’ demurrers to
the CSAC and supplemental complaint.
The hearing on the anti-SLAPP motions (pending since August 2018)
was continued several times until the matter was finally heard on October
23, 2019. The trial court granted the anti-SLAPP motions in part as to the
fourth cause of action for declaratory relief and seventh cause of action under
the UCL, finding that these claims arose from protected activity because they
targeted defendants’ enforcement of the NCA/NDAs, and that the claims
were barred by the litigation privilege. The court denied the anti-SLAPP
motions as to the remaining causes of action.

7 The supplemental complaint contains new allegations regarding events
in the New Jersey actions, including Sparta’s dismissal of its New Jersey
complaint against Veeva and George with prejudice, and modifications that
Medidata made to its standard NCA/NDA after the filing date of this action,
including a “California Exclusion” and a “Non-Competitive Activities
Exception.”

8
 Defendants appealed from the partial denial of their anti-SLAPP
motions, while Veeva cross-appealed from the partial granting of the motions.
The appeals were consolidated for purposes of briefing, oral argument, and
decision.
DISCUSSION
Section 425.16 authorizes a special motion to strike causes of action
that arise from any act in furtherance of the moving defendant’s “right of
petition or free speech under the United States Constitution or the California
Constitution in connection with a public issue.” (§ 425.16, subd. (b)(1).) The
anti-SLAPP law “allows defendants to request early judicial screening of
legal claims targeting free speech or petitioning activities” (Wilson v. Cable
News Network, Inc. (2019) 7 Cal.5th 871, 880–881), and its provisions must
be construed broadly (§ 425.16, subd. (a)).
Resolution of an anti-SLAPP motion involves potentially a two-prong
inquiry. First, the moving defendant must make a prima facie showing that
the challenged claim or claims arise from the defendant’s constitutionally
protected free speech or petition rights. (Baral v. Schnitt (2016) 1 Cal.5th
376, 381–382, 396 (Baral).) If the defendant makes this showing, the burden
shifts to the plaintiff to demonstrate the claim’s merit by establishing a
probability of success. (Id. at p. 396.) We review de novo a trial court’s
decision to grant or deny an anti-SLAPP motion. (Flatley v. Mauro (2006) 39
Cal.4th 299, 325–326 (Flatley); Navellier v. Slatten (2003) 106 Cal.App.4th
763, 768.) We do not weigh the evidence, and we accept “ ‘ “ ‘as true the
evidence favorable to the plaintiff’ ” ’ ” and evaluate “ ‘ “ ‘the defendant’s
evidence only to determine if it has defeated that submitted by the plaintiff
as a matter of law. ’ ” ’ ” (Feldman v. 1000 Park Lane Associates (2008) 160
Cal.App.4th 1467, 1478 (Feldman).)

9
 A. Timeliness of Hearing
Before addressing the merits of this appeal, we first consider Veeva’s
procedural argument that the anti-SLAPP motions were not timely heard by
the trial court. Section 425.16, subdivision (f) (425.16(f)), specifies that an
anti-SLAPP motion “shall be scheduled by the clerk of the court for a hearing
not more than 30 days after service of the motion unless the docket
conditions of the court require a later hearing.” As set forth above,
defendants filed and served their motions in August 2018, and the hearing on
the motions was continued several times to October 23, 2019. In its October
24 order, the trial court rejected Veeva’s argument that the anti-SLAPP
motions should be denied as untimely, stating “[t]he Court routinely hears
anti-SLAPP motions outside of the 30-day window due to the conditions of
the Court’s docket.”
Veeva relies on Greka Integrated, Inc. v. Lowrey (2005) 133 Cal.App.4th
1572 (Greka) for the position that defendants have the burden of showing
that docket conditions required a later hearing. But Greka relied on a former
version of section 425.16(f) that has since been amended, as well as decisional
authority that was explicitly overruled by the amendment. (Greka, at
pp. 1577–1578, citing Decker v. U.D. Registry, Inc. (2003) 105 Cal.App.4th
1382 (Decker) and Fair Political Practices Com. v. American Civil Rights
Coalition, Inc. (2004) 121 Cal.App.4th 1171 (Fair Political Practices Com.);
see Stats. 2005, ch. 535, § 3 [expressing Legislature’s intent to overrule
Decker and Fair Political Practices Com.].) As of 2005, section 425.16(f)
places the burden on the court clerk, rather than the movant, to schedule the
hearing on the anti-SLAPP motion within the 30-day window. (Chitsazzadeh
v. Kramer & Kaslow (2011) 199 Cal.App.4th 676, 685, fn. 7 (Chitsazzadeh).
Accordingly, section 425.16(f) does not justify denial of an anti-SLAPP motion

10
solely because the moving party failed to ensure the timely scheduling of a
hearing. (Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1349
(Hall).)
Veeva next argues it is “self-evident” that the delay in this case was not
justified by the trial court’s docket conditions. According to Veeva, the delay
is attributable to the court making various other orders such as instructing
Veeva to correct the deficiencies in the second amended complaint and ruling
on Veeva’s motion to file a supplemental complaint. Medidata responds that
these delays were due to Veeva’s decision to add factual allegations to its
second amended complaint that went beyond the scope of leave to amend.
The point is well-taken. We are not inclined to find in Veeva’s favor on the
docket conditions exception due to delays occasioned by Veeva’s own pleading
deficiencies and the trial court’s willingness to allow their correction.
Veeva also complains that the delay was caused by the trial court
ruling on defendants’ demurrers before the anti-SLAPP motions. But Veeva
cites no authority requiring trial courts to prioritize an anti-SLAPP motion
before a demurrer, particularly where, as here, the moving defendant elects
to proceed with the demurrer first. (See Oakland Bulk & Oversized
Terminal, LLC v. City of Oakland (2020) 54 Cal.App.5th 738, 751 [trial court
did not err in sustaining demurrer with leave to amend even though anti-
SLAPP motion was pending but hearing was scheduled for after demurrer
hearing].) Indeed, the anti-SLAPP statute’s timing requirements are
generally intended to provide a speedy remedy to moving defendants. (See
Chitsazzadeh, supra, 199 Cal.App.4th at p. 682.)
We acknowledge the delay of over a year between defendants’ service of
the anti-SLAPP motions and the hearing on said motions was significant.
We also do not endorse any invocation of the docket conditions exception

11
based on the trial court’s “routine[]” practice as opposed to actual conditions
that reasonably preclude a timely hearing. That said, we do not lightly
question the trial court’s inherent authority to manage its own docket (see
Walker v. Superior Court (1991) 53 Cal.3d 257, 267), and based on the
arguments and record before us, we conclude Veeva fails to show an abuse of
discretion in the trial court’s refusal to deny the anti-SLAPP motions as
untimely. We now proceed to our de novo review of the anti-SLAPP motions.
B. First Prong—Arises from Protected Activity
To satisfy the first step of the anti-SLAPP analysis, a defendant must
demonstrate “that the ‘conduct by which plaintiff claims to have been injured
falls within one of the four categories described in subdivision (e) [of section
425.16]’ [citation], and that the plaintiff’s claims in fact arise from that
conduct [citation].” (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th
610, 620.) As relevant here, the categories of protected conduct include
statements made before a judicial proceeding and those in connection with an
issue under consideration by a judicial body. (§ 425.16, subd. (e)(1), (2).)
There appears to be no dispute that defendants’ statements, writings,
and pleadings in the New Jersey and federal actions constituted protected
activity under section 425.16, subdivision (e)(1) and (2), or that defendants’
prelitigation correspondences such as the letter to Zacchone were “made ‘in
anticipation of litigation “contemplated in good faith and under serious
consideration” ’ ” to merit anti-SLAPP protection. (See Neville v. Chudacoff
(2008) 160 Cal.App.4th 1255, 1268.) The dispute concerns whether Veeva’s
causes of action are actually based on this protected activity.
“A claim arises from protected activity when that activity underlies or
forms the basis for the claim. [Citations.] Critically, ‘the defendant’s act
underlying the plaintiff’s cause of action must itself have been an act in

12
furtherance of the right of petition or free speech.’ [Citations.] . . . ‘[T]he
focus is on determining what ‘the defendant’s activity [is] that gives rise to
his or her asserted liability—and whether that activity constitutes protected
speech or petitioning.’ ” (Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1063 (Park).) “In deciding whether a
lawsuit is a SLAPP action, the trial court must distinguish between speech or
petitioning activity that is mere evidence related to liability, and liability that
is based on speech or petitioning activity.” (Gotterba v. Travolta (2014) 228
Cal.App.4th 35, 42 (Gotterba).) “In short, in ruling on an anti-SLAPP motion,
courts should consider the elements of the challenged claim and what actions
by the defendant supply those elements and consequently form the basis for
liability.” (Park, at p. 1063.) When relief is sought based on allegations of
protected and unprotected activity, the allegations of unprotected activity are
disregarded at the first stage, as are allegations of protected conduct that are
“ ‘merely incidental’ or ‘collateral’ ” or “that merely provide context, without
supporting a claim for recovery[.]” (Baral, supra, 1 Cal.5th at p. 394.)
1. Declaratory Relief Causes of Action
“An anti-SLAPP motion lies against a complaint for declaratory relief,
among other types of causes of action.” (Gotterba, supra, 228 Cal.App.4th at
p. 40.)8 “In order to state a claim for declaratory relief, there must be an
‘actual controversy’ relating to the legal rights and duties of the parties.”

8 We reject Veeva’s contention that its declaratory relief claims are
outside the scope of the anti-SLAPP law because the statute targets “causes
of action,” not remedies. Marlin v. Aimco Venezia, LLC (2007) 154
Cal.App.4th 154 (Marlin) provides no assistance to Veeva, as it merely held
that the anti-SLAPP statute did not apply to a “prayer for an injunction,” and
the court otherwise addressed the merits of an anti-SLAPP motion against a
declaratory relief cause of action. (Marlin, at pp. 160–162.)

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(Country Side Villas Homeowners Assn. v. Ivie (2011) 193 Cal.App.4th 1110,
1118, citing Code Civ. Proc., § 1060.)
a. First, Second, and Third Causes of Action
As set forth above, the first cause of action alleges a controversy
between the parties concerning Veeva’s right to recruit defendants’ current
and former employees, notwithstanding the NCA/NDAs and the employees’
places of residence outside California. The third cause of action alleges a
controversy over defendants’ right to require employees to sign NCA/NDAs
that include in their scope the provision of services in California within the
meaning of California law. These claims are not based on defendants’
protected litigation activities, but rather, on the effect and scope of
defendants’ NCA/NDAs as to Veeva, a California-based employer, who wants
to recruit and hire defendants’ employees.
Defendants urge a contrary conclusion, highlighting repeated
references in the CSAC and supplemental complaint to the federal and New
Jersey actions. However, we agree with Veeva that these allegations of
litigation conduct merely point to evidence that the alleged controversies
exist. (See Gotterba, supra, 228 Cal.App.4th at p. 42 [attorney’s letters
threatening litigation over contract dispute were merely evidence that
controversy existed].)
Park is instructive in this regard. The Supreme Court held that a
discrimination claim brought by a university professor who was denied
tenure did not arise from the university’s protected statements and
communications during the official tenure process. Employing an elements-
focused approach, Park held that the elements of the discrimination claim
“depend not on the grievance proceeding, any statements, or any specific
evaluations of him in the tenure process, but only on the denial of tenure

14
itself and whether the motive for that action was impermissible.” (Park,
supra, 2 Cal.5th at p. 1068.) The university’s protected statements “may
supply evidence of animus, but that does not convert these statements
themselves into the basis for liability.” (Ibid.) In so holding, Park approved
of a formulation by the trial court in that case that the plaintiff “ ‘could have
omitted allegations regarding communicative acts or filing a grievance and
still state the same claims.’ ” (Ibid.)
Similarly, in City of Cotati v. Cashman (2002) 29 Cal.4th 69 (City of
Cotati) the Supreme Court held that a state court declaratory relief action
filed by the City of Cotati alleging a controversy with mobilehome park
owners over the constitutionality of a rent stabilization ordinance did not
arise out of protected activity even though it was filed in response to the
owners’ prior federal court declaratory relief action challenging the
constitutionality of the same ordinance. (City of Cotati, at p. 71.) As the
court explained, “the mere fact an action was filed after protected activity
took place does not mean it arose from that activity. The anti-SLAPP statute
cannot be read to mean that ‘any claim asserted in an action which arguably
was filed in retaliation for the exercise of speech or petition rights falls under
section 425.16, whether or not the claim is based on conduct in exercise of
those rights.’ ” (City of Cotati, supra, 29 Cal.4th at pp. 76–77.) “[A] claim
filed in response to, or in retaliation for, threatened or actual litigation is not
subject to the anti-SLAPP statute simply because it may be viewed as an
oppressive litigation tactic. [Citation.] That a cause of action arguably may
have been triggered by protected activity does not entail that it is one arising
from such.” (Id. at p. 78.)
Park and City of Cotati clearly illustrate why Veeva’s first and third
causes of action do not arise from defendants’ protected activity in the federal

15
and New Jersey actions. While these claims may have been in response to or
triggered by defendants’ prelitigation letters and lawsuits, the claims
themselves arise not from those activities but from the underlying dispute
over whether Business and Professions section 16600 applies to defendants’
NCA/NDAs when California-based Veeva recruits and hires from defendants’
employee pool. Indeed, had Veeva and the named employees been so
inclined, they could have brought such declaratory relief claims preemptively.
(See, e.g., Advanced Bionics Corp. v. Medtronic, Inc. (2002) 29 Cal.4th 697,
701 [preemptive declaratory relief suit by employee and California-based
employer against former Minnesota employer to declare noncompete
agreement void under Business and Professions Code section 16600].) Or
viewed another way, Veeva could simply have “ ‘omitted allegations
regarding [defendants’ litigation activities] and still state the same claims’ ”
for declaratory relief regarding the effect and scope of defendants’ NCA/NDAs
when their former employees are recruited and hired by a California-based
employer. (Park, supra, 2 Cal.5th at p. 1068.)
Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459 (Lunada) and
CKE Restaurants, Inc v. Moore (2008) 159 Cal.App.4th 262 (CKE) do not
persuade us otherwise. In Lunada, a consumer and her attorneys served
notice on the manufacturer of a dietary supplement, alleging the company
violated the Consumer Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.)
through false and misleading advertising. (Lunada, at pp. 465–466.) The
manufacturer then filed a complaint against the consumer and her attorneys
seeking a judicial declaration regarding the accuracy and legality of the
manufacturer’s advertising. (Id. at p. 467.) The consumer and her attorneys
filed an anti-SLAPP motion, which the trial court granted. (Id. at p. 468.)

16
 In affirming, the appellate court rejected the manufacturer’s argument
that its declaratory relief claim arose not from the CLRA notice and
correspondences between counsel, but from the dispute as to whether the
company had violated the CLRA. (Lunada, supra, 159 Cal.App.4th at
pp. 471–478.) The court reasoned that not only did the company’s
“declaratory relief action refer[] extensively to the CLRA Notice and
[counsel’s] letter (id. at p. 472), but “the CLRA Notice was required under the
CLRA before an action for damages could be filed and thus is part of the
litigation process. But for the CLRA Notice and demand letters, there would
be no dispute. . . . In construing the anti-SLAPP statute broadly, as we must
do [citation], we believe that the CLRA Notice and correspondence not only
preceded and triggered the declaratory relief action, but they were also the
basis of the cause of the action.” (Id. at p. 473.)
CKE similarly held that a plaintiff’s declaratory relief action arose from
the defendant’s service of a statutorily-required notice. There, the defendant
and her attorneys served a restaurant (CKE) with a 60-day notice under the
Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65)
claiming the restaurant’s french fries contained a cancer-causing chemical
that the restaurant failed to disclose as required by law. (CKE, supra, 159
Cal.App.4th at pp. 265–266.)9 CKE responded by threatening to file a
declaratory relief action unless the 60-day notice was withdrawn, and then
filing a complaint for a declaratory judgment that none of its food products
reached the risk threshold for required notice under Proposition 65. (CKE, at

9 Proposition 65 generally requires businesses to provide notice of
knowingly exposing an individual to a chemical known to cause cancer.
(CKE, supra, 159 Cal.App.4th at pp. 265–266.) A potential violator must be
given 60 days’ notice of a suspected violation before a lawsuit can be filed.
(Ibid.)

17
p. 266.) The trial court granted the defendants’ anti-SLAPP motion, and the
appellate court affirmed. In concluding the action arose from protected
activity, the appellate court reasoned, “CKE directly challenged the merits of
the 60-day notice by referring to and quoting from the 60-day notice. CKE
requested a judicial determination that its food products complied with
Proposition 65. Instead of using the 60-day period to avoid litigation, CKE
used it to commence litigation. Moreover, CKE threatened to sue
respondents unless they withdrew their notice. CKE’s action arose entirely
from the filing of the Proposition 65 notice. The trial court recognized this,
stating, ‘without the Notice, there would have been no actual, present
controversy, and no controversy at all.’ ” (CKE, at p. 271.)
To the extent Lunada and CKE suggest that a complaint’s “extensive[]”
references to a defendant’s protected litigation conduct are enough to satisfy
the first anti-SLAPP prong (Lunada, supra, 230 Cal.App.4th at p. 472; CKE,
supra, 159 Cal.App.4th at p. 271), we respectfully disagree. We do not think
such references, however extensive they may be, dispense with the first prong
inquiry of determining what conduct actually underlies the basis for the
challenged claims. (See Park, supra, 2 Cal.5th at p. 1068 [although
discrimination complaint alleged university’s comments and statements
during grievance proceeding and tenure process, complaint arose from
decision to deny tenure, not communications leading to it]; San Ramon Valley
Fire Protection Dist. v. Contra Costa County Employees’ Retirement Assn.
(2004) 125 Cal.App.4th 343, 354 [“fact that a complaint alleges that a public
entity’s action was taken as a result of a majority vote of its constituent
members does not mean that the litigation challenging that action arose from
protected activity, where the measure itself is not an exercise of free speech
or petition”], cited with approval in Park, at p. 1064.)

18
 In any event, Lunada and CKE are distinguishable in that they
involved prelitigation notices that were statutory prerequisites to filing suit.
Indeed, Lunada distinguished City of Cotati on this basis, observing that in
City of Cotati, “the protected activity amounted only to a prior lawsuit,
[while] the protected activities here included a CLRA Notice, without which
there would be no controversy.” (Lunada, supra, 230 Cal.App.4th at p. 475.)
“The typical prelitigation demand letters involving liability are not
prerequisites to filing lawsuits seeking damages.” (Lunada, at pp. 476–477.)
Here, the alleged protected acts “amounted only to . . . prior lawsuit[s]” (id. at
p. 475) and “typical prelitigation demand letters,” not statutorily-required
acts that created the controversies alleged in the first and third causes of
action (id. at p. 476).
The second cause of action presents a closer call, but we ultimately
conclude it, too, does not arise from protected activity. In alleging a
controversy over Veeva’s right and obligation to indemnify and defend its
employees “who face threatened or actual litigation” from defendants, the
second cause of action may very well have been brought “in response to”
defendants’ litigation conduct. But that is not sufficient to trigger anti-
SLAPP protection. (City of Cotati, supra, 29 Cal.4th at p. 78.) The claim
itself arises not from any controversy over defendants’ protected litigation
conduct, but from a controversy regarding Veeva’s statutory obligations and
rights pursuant to Labor Code section 2802.
For these reasons, we conclude the trial correctly found that the first,
second, and third causes of action do not arise from protected activity.
b. Fourth Cause of Action
The fourth cause for declaratory relief alleges an actual controversy
“over Defendants’ right to seek enforcement of their standard non-

19
compete/NDAs” as to the identified employees and other current or former
employees. The allegations regarding defendants’ “enforcement” efforts are
reasonably construed as referring to defendants’ prelitigation and litigation
statements as detailed throughout the CSAC. This means the fourth cause of
action is based on defendants’ enforcement of the NCA/NDAs in prelitigation
and litigation statements and writings. The claim accordingly arises from
protected activity.
Veeva attempts to avoid this conclusion by arguing that the “principal
thrust” or “gravamen” of the fourth cause of action is not defendants’
enforcement efforts but their use of illegal NCAs/NDAs.10 The alleged
enforcement efforts, Veeva contends, are merely “evidence of Defendants’
anti-competitive scheme.” We are not persuaded, as Veeva simply cannot
allege an actual controversy in the fourth cause of action without the
allegations of defendants’ enforcement efforts. If we omit such allegations,
there would be no controversy alleged. (See Park, supra, 2 Cal.5th at
p. 1068.) The enforcement efforts are not simply evidence of another
controversy; rather, the alleged controversy is whether defendants have the
right to engage in those very efforts. Accordingly, the trial court correctly
found that the fourth cause of action arises from protected activity.

10 In supplemental briefing, defendants contend the Supreme Court in
Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995 (Bonni) rejected the
“gravamen” approach on the first stage of the anti-SLAPP analysis.
Defendants read Bonni too broadly. The high court rejected a narrower
contention that where a single cause of action alleges multiple factual bases,
a court may consider whether the gravamen of the entire cause of action is
based on protected activity rather than engage in the “claim-by-claim”
approach employed by most appellate courts since Baral. (Bonni, at
pp. 1010–1012.) Here, Veeva does not seek to use the gravamen approach in
the manner rejected in Bonni.

20
 2. UCL Causes of Action
To state a claim under the UCL, the plaintiff must allege that the
defendant committed an “unlawful, unfair or fraudulent business act or
practice.” (Bus. & Prof. Code, § 17200.) The UCL “ ‘ “borrows” violations of
other laws and treats them as unlawful practices’ that the unfair competition
law makes independently actionable.” (Cel-Tech Communications, Inc. v. Los
Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) Standing to sue
under the UCL “extends to ‘a person who has suffered an injury in fact and
has lost money or property as a result of the unfair competition[.]” (Kwikset
Corp. v. Superior Court (2011) 51 Cal.4th 310, 321.)
We conclude the seventh cause of action arises from protected activity.
Veeva alleges that defendants violate the UCL “when they threaten to or
actively seek to enforce their standard non-competes/NDAs that include in
their scope the provision of services in California.” Without the allegations of
defendants’ enforcement efforts, there would be no act of unfair competition
alleged in the seventh cause of action. (Park, supra, 2 Cal.5th at pp. 1063,
1068.)
For the remaining UCL claims, however, we reach a different
conclusion. Neither the fifth nor sixth cause of action is based on defendants’
protected activities. Rather, these claims allege that defendants engage in
unfair competition by requiring employees to enter NCA/NDAs that include
the provision of services to a California-based employer.
Defendants contend the first prong is met because Veeva alleges that
its injury in fact for purposes of UCL standing consists of “defense fees and
costs to date” incurred in the New Jersey and federal actions. Veeva
responds that the injury in fact requirement is not an “element” of a UCL
claim for purposes of the Park test. We think Veeva has the better position

21
here. Assuming, without deciding, that the UCL’s injury in fact requirement
is germane to Park’s elements-based approach, Veeva’s allegation of incurred
defense costs is not essential to state a UCL claim because Veeva alleges
other forms of injury in fact, e.g., diverted resources, recruiting and
administrative costs, decreased productivity. Thus, Veeva’s fifth and sixth
causes of action do not depend on the allegations of protected litigation
conduct to state a claim. (Park, supra, 2 Cal.5th at p. 1068.) Nor are the
discrete allegations of incurred defense costs subject to being stricken under
the Baral approach, as they do not independently support a right to relief—
that is, Veeva does not seek to recover its defense costs incurred in the
federal and New Jersey actions as restitution in the UCL causes of action.
Under Baral, only allegations of protected activity that “support[] a claim for
recovery” are subject to the anti-SLAPP statute. (Baral, supra, 1 Cal.5th at
p. 394.) Accordingly, we agree with the trial court that the fifth and sixth
causes of action do not arise from protected activity.
To summarize, the trial court correctly found that the first, second,
third, fifth, and sixth causes of action did not arise from protected activity,
and that the fourth and seventh causes of action did. Thus, the burden shifts
to Veeva to show a probability of success on the fourth and seventh causes of
action.
C. Second Prong—Probability of Success
“To demonstrate a probability of prevailing on the merits, the plaintiff
must show that the complaint is legally sufficient and must present a prima
facie showing of facts that, if believed by the trier of fact, would support a
judgment in the plaintiff’s favor.” (Hall, supra, 153 Cal.App.4th at p. 1346.)
“Only a ‘ “minimum level of legal sufficiency and triability” ’ is needed to
satisfy the second prong of the anti-SLAPP statute. [Citation.] The evidence

22
favorable to the plaintiff is accepted as true, while the defendant’s evidence is
evaluated to determine if it defeats the plaintiff’s claim as a matter of law,
e.g., on grounds of privilege or immunity.” (Castleman v. Sagaser (2013) 216
Cal.App.4th 481, 490.)
Defendants raise a host of challenges to Veeva’s ability to show
probable success on its claims. Medidata argues there is no case or
controversy because (1) Veeva lacks standing to seek a judicial determination
on NCA/NDAs to which it is not a party, (2) Medidata has not prevented any
former employee from working for Veeva, and (3) Medidata already complies
with California law. Medidata further contends that for purposes of the UCL
Veeva did not suffer any economic injury because of Medidata, and that there
are no exceptional circumstances to support an antisuit injunction that
extends to defendants in a foreign jurisdiction. For its part, Sparta contends
that Veeva’s attempt to apply Business and Professions Code section 16600
beyond California’s borders is at odds with recent Supreme Court decisions
addressing the applicability of Labor Code section 226’s wage statement
requirements for employers of flight attendants who do not perform a
majority of their work in any one state. (See Ward v. United Airlines, Inc.
(2020) 9 Cal.5th 732; Oman v. Delta Air Lines, Inc. (2020) 9 Cal.5th 762.)
Additionally, both defendants contend that Veeva’s claims are barred by the
litigation privilege of Civil Code section 47, subdivision (b). We need not
address each and every one of these contentions, as we agree that Veeva’s
fourth and seventh causes of action are barred by the litigation privilege.
Civil Code section 47, subdivision (b), provides in pertinent part that
“[a] privileged publication or broadcast is one made . . . [i]n any (1) legislative
proceeding, (2) judicial proceeding, (3) in any other official proceeding
authorized by law, or (4) in the initiation or course of any other proceeding

23
authorized by law[.]” The privilege is “relevant to the second step in the anti-
SLAPP analysis in that it may present a substantive defense a plaintiff must
overcome to demonstrate a probability of prevailing.” (Flatley, supra, 39
Cal.4th at p. 323.) “This privilege is absolute in nature, applying ‘to all
publications, irrespective of their maliciousness.’ ” (Action Apartment Assn.,
Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241.) “Any doubt about
whether the privilege applies is resolved in favor of applying it.” (Kashian v.
Harriman (2002) 98 Cal.App.4th 892, 913 [Kashian].)
“The usual formulation is that the privilege applies to any
communication (1) made in judicial or quasi-judicial proceedings; (2) by
litigants or other participants authorized by law; (3) to achieve the objects of
the litigation; and (4) that have some connection or logical relation to the
action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212 (Silberg).) The
privilege has been held to cover the filing of pleadings (Contreras v. Dowling
(2016) 5 Cal.App.5th 394, 415; see Kashian, supra, 98 Cal.App.4th at
pp. 920–921), and prelitigation demand letters (see Blanchard v. DIRECTV,
Inc. (2004) 123 Cal.App.4th 903, 920–922).
Veeva contends the litigation privilege does not apply here because
Veeva asserts only declaratory relief and UCL claims that do not seek to hold
defendants liable in tort. While courts have generally stated that the
litigation privilege bars “ ‘ “tort actions based on privileged communications,
excepting only the tort of malicious prosecution” ’ ” (Lunada Biomedical,
supra, 230 Cal.App.4th at p. 479, some italics added, citing McClintock v.
West (2013) 219 Cal.App.4th 540, 554), application of the privilege has not
been limited to tort actions. (See Feldman, supra, 160 Cal.App.4th at
pp. 1495–1498 [applying litigation privilege to breach of contract and UCL
claims].) As the Supreme Court explained in Rubin v. Green (1993) 4 Cal.4th

24
1187, “[i]f the policies underlying [Civil Code] section 47(b) are sufficiently
strong to support an absolute privilege, the resulting immunity should not
evaporate merely because the plaintiff discovers a conveniently different
label for pleading what is in substance an identical grievance from identical
conduct as that protected by [Civil Code] section 47(b).” (Rubin, supra, 4
Cal.4th at pp. 1202–1203 [applying litigation privilege to UCL claim].)
Here, if we look past the labeling of the fourth and seventh causes of
action, it is clear the litigation privilege would apply. These claims are based
on defendants’ efforts to enforce the NCA/NDAs, which include their
communicative acts of serving prelitigation letters demanding that
defendants’ former employees honor the NCA/NDAs and their filing of
pleadings in the federal and New Jersey actions alleging violations of the
NCA/NDAs. All of these communicative acts were made to achieve the
objects of litigation and have some connection or logical relation to the federal
and New Jersey actions. (Silberg, supra, 50 Cal.3d at p. 212.) Moreover, the
policies underlying the privilege (e.g., allowing access to courts without fear
of harassing derivative actions) would be furthered by application of the
privilege. (Feldman, supra, 160 Cal.App.4th at pp. 1485–1486.) Simply
labeling these claims as brought under the UCL and Declaratory Judgment
Act does not avoid the litigation privilege. Because we must resolve any
doubts in favor of applying the litigation privilege (Kashian, supra, 98
Cal.App.4th at p. 913), we conclude it applies to Veeva’s declaratory relief
and UCL claims.
Veeva further contends the privilege should not apply to the UCL
claims based because the litigation privilege arguably conflicts with
California’s pro-competition laws like the UCL. In support of this contention,
Veeva observes that courts have found exceptions to the litigation privilege

25
based on “irreconcilable conflicts between the privilege and other coequal
state laws.” (People v. Persolve, LLC (2013) 218 Cal.App.4th 1267, 1274
(Persolve).) “The recognition of these exceptions has been guided by the
‘ “rule of statutory construction that particular provisions will prevail over
general provisions.” ’ [Citation.] If a statute is more specific than the
litigation privilege and would be significantly or wholly inoperable if the
privilege applied, the privilege will not shield violations of that statute.”
(Persolve, at p. 1274.)
In Persolve, the court recognized an exception to the litigation privilege
for UCL claims based on California’s Rosenthal Fair Debt Collection
Practices Act (Civ. Code, § 1788 et seq.) and the federal Fair Debt Collection
Practices Act (15 U.S.C. § 1692 et seq.), both of which prohibit unfair or
deceptive acts or practices in the collection of consumer debts. In so doing,
Persolve reasoned that “[a]pplying the privilege to unlawful practices based
on specific violations of the California Act and the Federal Act would
effectively render the protections afforded by those acts meaningless.”
(Persolve, supra, 218 Cal.App.4th at pp. 1276–1277.) Persolve distinguished
two cases, Rubin, supra, 4 Cal.4th 1187, and People ex rel. Gallegos v. Pacific
Lumber Co. (2008) 158 Cal.App.4th 950 [UCL action by district attorney
alleging lumber company committed fraud during administrative
proceedings]), because in those cases, “application of the litigation privilege
did not render the prohibitions underlying the unfair competition claims
significantly or wholly inoperable.” (Persolve, at p. 1277.)
Unlike the borrowed consumer debt statutes in Persolve, which
specifically prohibited the very conduct underlying the UCL claims, the
borrowed statute here—Business and Professions Code section 16600—does
not specifically prohibit prelitigation and litigation activities to enforce

26
noncompete agreements. Furthermore, application of the litigation privilege
would not render Business and Professions Code section 16600 “significantly
or wholly inoperable” (Persolve, supra, 218 Cal.App.4th at p. 1277), and
Veeva’s surviving claims in the CSAC demonstrate that the two can be
reconciled. That is, a California-based employer who recruits or hires an
individual subject to an NCA/NDA executed in another state and who wishes
to challenge the agreement on the grounds that it illegally includes within its
scope the provision of services in California can allege declaratory relief and
UCL claims based on the dispute over the legality and scope of the
NCA/NDA, while avoiding any challenge to the former employer’s
prelitigation or litigation efforts to enforce that agreement.
On the record before us, there appears no irreconcilable conflict
between the Civil Code section 47, subdivision (b), litigation privilege and
Business and Professions Code section 16600, and thus, no exception to the
privilege for the fourth and seventh causes of action. Accordingly, Veeva fails
to show a probability of success on these claims.
D. Attorney Fees and Costs
Veeva requests an award of attorney fees and costs against defendants
for prosecuting a frivolous appeal. According to Veeva, even if this court
partially affirms the trial court’s decision as to the fourth and seventh causes
of action, it should still award Veeva its attorney fees and costs for
defendants’ frivolous appeal as to the court’s ruling on the remaining claims.
Section 425.16, subdivision (c)(1), provides in pertinent part that “[i]f
the court finds that a special motion to strike is frivolous or is solely intended
to cause unnecessary delay, the court shall award costs and reasonable
attorney’s fees to a plaintiff prevailing on the motion, pursuant to Section
128.5.” “ ‘Frivolous in this context means that any reasonable attorney would

27
agree the motion was totally devoid of merit.’ ” (L.A. Taxi Cooperative, Inc. v.
The Independent Taxi Owners Assn. of Los Angeles (2015) 239 Cal.App.4th
918, 932 (L.A. Taxi); see § 128.5, subd. (b)(2) [“ ‘Frivolous’ means totally and
completely without merit or for the sole purpose of harassing an opposing
party”].)
While appellate attorney fees under section 425.16, subdivision (c), are
recoverable (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47
Cal.App.4th 777, 785), Veeva’s request, presented in its respondent’s brief
and not by motion with a supporting declaration, does not comply with
California Rules of Court, rule 8.276(b)(1).11 (See FEI Enterprises, Inc. v.
Yoon (2011) 194 Cal.App.4th 790, 807 [declining to consider sanctions request
on appeal for failure to comply with rule 8.276(b)(1)].)
Veeva’s citation to Changsha Metro Group Co., Ltd. v. Peng Xufeng
(2020) 57 Cal.App.5th 1 (Changsha Metro) does not persuade us that rule
8.276 is inapplicable to a request for fees for a frivolous anti-SLAPP appeal.
In Changsha Metro, the court held it was proper for a plaintiff to request
sanctions for a frivolous anti-SLAPP motion in its opposition brief because
the interplay between the 21-day safe harbor requirement for section 128.5
sanctions motions, the time limits for opposition briefs (§ 1005, subd. (b)), and
the 30-day clock for hearings on anti-SLAPP motions (§ 425.16, subd. (f))
made the separate motion requirement impracticable. That rationale simply
has no application here.
Veeva further contends that rules 8.278 (costs on appeal) and 3.1702
(claims for statutory and contractual attorney fees), not rule 8.276, govern a
request for attorney fees arising from a frivolous anti-SLAPP appeal. We are
not convinced, as rule 8.276 explicitly governs appeals that are frivolous or

11 Further rule references are to the California Rules of Court.

28
solely to cause delay. (Rule 8.276(a).) Meanwhile, rule 3.1702 provides no
assistance to Veeva, as it also requires the filing of a motion to claim attorney
fees on appeal. (Rule 3.1702(b), (c).)
In any event, even assuming a separate motion was not required,
Veeva fails to demonstrate its entitlement to sanctions under section 425.16,
subdivision (c). We see no basis to conclude the appeals were brought “solely”
to cause “unnecessary” delay (§ 425.16, subd. (c)(1)), nor do we find that
defendants’ appeals were “totally and completely without merit” from the
standpoint of a reasonable attorney. (§ 128.5, subd. (b)(2) [defining
“frivolous”]; L.A. Taxi, supra, 239 Cal.App.4th at p. 932.) Defendants’
arguments were objectively sound and rooted in published—albeit
distinguishable—authorities. Accordingly, we deny Veeva’s request for
attorney fees.
DISPOSITION
The order on defendants’ anti-SLAPP motions is affirmed. Veeva’s
request for appellate attorney fees under section 425.16, subdivision (c) is
denied. In the interests of justice, each party shall bear its own costs on
appeal.

29
 _________________________
Fujisaki, J.

WE CONCUR:

_________________________
Tucher, P. J.

_________________________
Petrou, J.

A158736, A159062

30