Teledyne RD Instruments v. Rowe Technologies CA4/1

Filed 5/17/13 Teledyne RD Instruments v. Rowe Technologies CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

TELEDYNE RD INSTRUMENTS, INC., et D062330
al.,

Plaintiffs, Cross-defendants and
Respondents, (Super. Ct. No. 37-2011-00096603-
CU-BT-CTL)
v.

ROWE TECHNOLOGIES, INC., et al.,

Defendants, Cross-complainants and
Appellants.

APPEAL from an order of the Superior Court of San Diego County, Timothy B.

Taylor, Judge. Reversed and remanded with directions.

DLA Piper US, Robert W. Brownlie and Veronica L. Jackson for Defendants,

Cross-complainants and Appellants.

Deforest, Koscelnik, Yokitis, Skinner & Berardinelli, Will S. Skinner and Walter

P. Deforest; Knobbe, Martens, Olson & Bear and Boris Zelkind, for Plaintiffs, Cross-

defendants and Respondents.
 This is an appeal from an order granting an anti-SLAPP1 motion and striking two

causes of action from a cross-complaint. We hold the stricken causes of action did not

arise from activity protected by the anti-SLAPP statute and therefore reverse.

I.

FACTUAL BACKGROUND

In August 2005, Teledyne Investment, Inc. (TII) entered into a stock purchase

agreement with RD Instruments, Inc. (RDI); the Rowe Family Trust; Francis Rowe; and

Elaine Rowe to buy all of the stock of RDI. After the stock purchase, RDI was renamed

Teledyne RD Instruments, Inc. (TRDI) and continued in the business of underwater

acoustics technology. TII later assigned its rights under the stock purchase agreement to

Teledyne Technologies, Incorporated (TDY). The stock purchase agreement contained

provisions that prohibited the sellers or their affiliates from competing with TRDI/TDY

and from soliciting its employees for five years (hereafter the noncompetition and

nonsolicitation clauses).

In September 2005, TDY employed Steven Rowe, Daniel Rowe, Steve Maier,

Mark Vogt, John Romeo, and Changle Fang. Each of them signed an agreement

promising "promptly [to] disclose to TDY all inventions, computer programs,

improvements, concepts, or discoveries which [he] may make, either solely or jointly

1 SLAPP is an acronym for strategic lawsuit against public participation, i.e., a
lawsuit "brought primarily to chill the valid exercise of the constitutional rights of
freedom of speech and petition for the redress of grievances." (Code Civ. Proc.,
§ 425.16, subd. (a); see Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th
53, 57 & fn. 1 (Equilon).)
2
with others, during [his] employment or within six months after termination of such

employment that may be within the existing or contemplated scope of TDY's business"

(hereafter the disclosure clause). Francis Rowe previously had signed an agreement with

RDI that contained a similar disclosure clause.

In September 2009, Rowe Technologies, Inc. (RTI) was formed. RTI competes

with TDY in the underwater acoustics technology business. By December 2009, Steven

Rowe, Daniel Rowe, Steve Maier, Mark Vogt, John Romeo, and Changle Fang were all

employees of RTI.

II.

PROCEDURAL BACKGROUND

In August 2011, TRDI; Teledyne RD Technologies (Shanghai) Co., Ltd.; and

TDY (collectively Teledyne) filed a complaint against RTI; Kunming Rowe Marine

Instruments Technology Development Co., Ltd.; the Rowe Family Trust; Francis Rowe;

Elaine Rowe; Steven Rowe; Daniel Rowe; Steve Maier; Mark Vogt; John Romeo; and

Changle Fang (collectively Rowe). Teledyne sought damages and injunctive relief for

breach of contract, misappropriation of trade secrets, unfair competition, and several

other torts.

Rowe answered the complaint, and, after filing procedurally improper

counterclaims that were stricken by the trial court (see Code Civ. Proc., § 428.80

[counterclaims abolished]), filed a cross-complaint against Teledyne. In the cross-

complaint, Rowe alleged the disclosure clause was unenforceable because it interfered

with the proprietary rights of a competitor who had hired a former TDY employee, and

3
made it more expensive for the competitor to hire such an employee. Rowe also alleged

the noncompetition and nonsolicitation clauses unfairly restricted competition and

employee mobility because the five-year restriction was longer than reasonably necessary

to protect TDY's investment. According to Rowe, Teledyne "filed [its] sham suit for

anticompetitive and strategic reasons," namely, "to increase a perceived rival's costs and

to divert its perceived rival's resources from product development." In the first and

second causes of action of the cross-complaint, Rowe alleged the noncompetition,

nonsolicitation, and disclosure clauses violated Business and Professions Code section

166002 and the unfair competition law (UCL; Bus & Prof. Code, § 17200 et seq.); and it

sought a declaration of their unenforceability and a permanent injunction against their

enforcement.

Teledyne filed a special motion to strike the first and second causes of action of

Rowe's cross-complaint under the anti-SLAPP statute. Teledyne argued those claims

were subject to the statute because they arose from Teledyne's act of filing a complaint

against Rowe. Teledyne further argued Rowe could not demonstrate a probability of

success on the merits because (1) the challenged claims are barred by the litigation

privilege (see Civ. Code, § 47, subd. (b)(2) [publication or broadcast in judicial

proceeding is privileged]); (2) the noncompetition and nonsolicitation clauses are

necessary to protect Teledyne's investment and do not restrain competition for an

2 Business and Professions Code section 16600 provides: "Except as provided in
this chapter, every contract by which anyone is restrained from engaging in a lawful
profession, trade, or business of any kind is to that extent void."
4
unreasonably long time period; and (3) the disclosure clause is necessary to protect

Teledyne's trade secrets.

Rowe opposed Teledyne's special motion to strike. Rowe argued its first and

second causes of action did not trigger the anti-SLAPP statute because those claims arose

from Teledyne's use of illegal agreements to restrict employee mobility and competition,

and the allegation that Teledyne filed its action as part of a plan to drive Rowe from the

market was "only incidental to the principal thrust of [those claims]." Rowe also argued

it had a probability of prevailing on the challenged claims for three reasons: (1) the

litigation privilege did not apply because Rowe could prove the claims without reference

to Teledyne's lawsuit; (2) the disclosure clauses were void under Business and

Professions Code section 16600 and interpretive case law; and (3) Teledyne's use of the

void disclosure clause constituted an unlawful business practice under the UCL.

The trial court granted Teledyne's special motion to strike. The court ruled:

"The gravamen of the [first] and [second] counts alleged in the cross-
complaint is the protected filing of the complaint. The Rowe parties are the
masters of their own pleadings, and chose to allege in paragraph 36 of the
cross[-]complaint that plaintiffs 'filed this sham suit for anticompetitive and
strategic reasons.' Defendants were, o[f] course, free to attempt to
demonstrate as a defensive matter that the restrictive covenants they signed
in 2005 . . . were illegal and/or unenforceable; indeed, they so alleged in
their affirmative defenses. What they were not free to do, however, was (in
effect) sue plaintiffs for having sued them. This is classic SLAPP
territory."

The court also ruled Rowe could not show a probability of prevailing on its first and

second causes of action because they were barred by the litigation privilege (Civ. Code,

§ 47, subd. (b)(2)) and the Noerr-Pennington doctrine (Mine Workers v. Pennington

5
(1965) 381 U.S. 657, 670 ["Joint efforts to influence public officials do not violate the

antitrust laws even though intended to eliminate competition."]; Eastern R. Conf. v.

Noerr Motors (1961) 365 U.S. 127, 138 [antitrust laws do not apply to "solicitation of

governmental action with respect to the passage and enforcement of laws"]). Finally, the

court ruled Teledyne was entitled to attorney fees under the anti-SLAPP statute, and

ordered it to file a fee motion.

Rowe filed a timely notice of appeal from the order granting Teledyne's anti-

SLAPP motion. (See Code Civ. Proc., §§ 425.16, subd. (i), 904.1, subd. (a)(13) [order

granting anti-SLAPP motion is appealable].)

III.

DISCUSSION

Rowe contends the trial court erred by granting Teledyne's special motion to strike

because the causes of action of the cross-complaint for violations of Business and

Professions Code section 16600 and the UCL do not arise from any act protected by the

anti-SLAPP statute, and neither cause of action is completely barred by the litigation

privilege or the Noerr-Pennington doctrine. Teledyne contends the trial court ruled

correctly because Rowe sued Teledyne for suing Rowe, and the challenged causes of

action fail as a matter of law. Both parties seek an award of attorney fees on appeal.

As we shall explain, the two causes of action challenged by Teledyne did not arise

from any protected activity and thus were not subject to being stricken under the anti-

SLAPP statute. We therefore reverse the order granting Teledyne's special motion to

6
strike and remand the matter to the trial court for a determination of Rowe's entitlement

to attorney fees on appeal.

A. General Principles Governing Anti-SLAPP Motions

Under the anti-SLAPP statute, a cause of action against a person "arising from any

act of that person in furtherance of the person's right of petition or free speech under the

United States or the California Constitution in connection with a public issue" is subject

to a special motion to strike unless the party asserting the claim establishes a probability

of prevailing on the merits. (Code Civ. Proc., § 425.16, subd. (b)(1).) As pertinent to

this appeal, an act in furtherance of the constitutional right of petition or free speech

includes any statement made in a judicial proceeding or in connection with an issue under

consideration by a judicial body. (Id., § 425.16, subd. (e)(1), (2).) "Thus, statements,

writings and pleadings in connection with civil litigation are covered by the anti-SLAPP

statute, and that statute does not require any showing that the litigated matter concerns a

matter of public interest." (Rohde v. Wolf (2007) 154 Cal.App.4th 28, 35.)

When a party files a special motion to strike, the anti-SLAPP statute requires the

court to engage in a two-step process. First, the court determines whether the moving

party has made a threshold showing that the challenged cause of action arises from

protected activity. (Equilon, supra, 29 Cal.4th at p. 67.) The moving party's burden is to

show the act from which the challenged cause of action arises is within the scope of one

of the categories listed in Code of Civil Procedure section 425.16, subdivision (e).

(Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).) Second, if the court finds the

moving party has made such a showing, it determines whether the nonmoving party has

7
shown a probability of prevailing on the claim, by pleading a legally sufficient claim and

supporting it with evidence that, if credited, would be sufficient to sustain a judgment.

(Id. at pp. 88-89.) In making these determinations, the court considers the pleadings and

any affidavits supporting or opposing the motion. (Code Civ. Proc., § 425.16,

subd. (b)(2).) "Only a cause of action that satisfies both prongs of the anti-SLAPP

statute—i.e., that arises from protected speech or petitioning and lacks even minimal

merit—is a SLAPP, subject to being stricken under the statute." (Navellier, at p. 89.) We

review an order granting an anti-SLAPP motion de novo. (Oasis West Realty, LLC v.

Goldman (2011) 51 Cal.4th 811, 820; Johnson v. Ralphs Grocery Co. (2012) 204

Cal.App.4th 1097, 1103.)

B. Analysis of Teledyne's Anti-SLAPP Motion

The first step of our de novo review is to determine whether the causes of action

Teledyne moved to strike "aris[e] from" an act in furtherance of its constitutional right of

petition or free speech within the meaning of the anti-SLAPP statute. (Code Civ. Proc.,

§ 425.16, subd. (b)(1).) The statutory phrase "cause of action . . . arising from" (ibid.)

means the moving party's act underlying the nonmoving party's cause of action "must

itself have been an act in furtherance of the right of petition or free speech" (City of

Cotati v. Cashman (2002) 29 Cal.4th 69, 78 (Cotati)). "In the anti-SLAPP context, the

critical consideration is whether the cause of action is based on the [moving party's]

protected free speech or petitioning activity." (Navellier, supra, 29 Cal.4th at p. 89.)

"The principal thrust of the claim, in terms of any 'allegedly wrongful and injury-causing

conduct . . . that provides the foundation for the claim,' will determine the applicability of

8
the anti-SLAPP statutory scheme." (Young v. Tri-City Healthcare Dist. (2012) 210

Cal.App.4th 35, 55 (Young).) Teledyne had the burden to show the challenged causes of

action arose from activity protected by the anti-SLAPP statute; and to determine whether

Teledyne met that burden, we examine the pleadings and any affidavits submitted in

connection with the anti-SLAPP motion. (Code Civ. Proc., § 425.16, subd. (b)(2);

Navellier, at pp. 88-89.)

In its cross-complaint, Rowe complained of Teledyne's use of allegedly illegal

contractual provisions. In the first paragraph, Rowe alleged the disclosure clause

"improperly interferes" with the mobility of former Teledyne employees; and for that

reason, the clause is void under Business and Professions Code section 16600 and its use

constitutes an unlawful and unfair business practice under the UCL. In the second

paragraph, Rowe similarly alleged that the noncompetition and nonsolicitation clauses

"unreasonably and unlawfully restrict[] competition for five years," and their use

therefore constitutes an unfair and unlawful business practice under the UCL. Rowe

further alleged that Teledyne "filed this sham suit for anticompetitive and strategic

reasons," and that the timing of the suit and the assertion of "claims based on

unenforceable and unlawful agreements that restrain employee mobility and

competition[] demonstrate [Teledyne's] use of litigation as a sham to increase a perceived

rival's costs and to divert its perceived rival's resources from product development." All

of these allegations were expressly incorporated into the first cause of action for violation

of section 16600 and the second cause of action for violation of the UCL. As part of

these causes of action, Rowe sought a judgment declaring the challenged contractual

9
provisions void and unenforceable and an injunction prohibiting Teledyne from enforcing

or using them.

In a declaration submitted in opposition to the anti-SLAPP motion, Daniel Rowe,

the chief executive officer of RTI, stated that he had signed an agreement containing the

disclosure clause when previously employed by TRDI. Mr. Rowe further stated that he is

in charge of RTI's hiring, and he would not want to hire an individual who was required

to disclose to a competitor any inventions the individual created for RTI.

In responses to interrogatories from Teledyne, which were attached to a

declaration of Teledyne's counsel submitted in support of the anti-SLAPP motion, Rowe

stated the facts supporting its contentions that Teledyne had violated Business and

Professions Code section 16600 and the UCL.3 In the responses, Rowe explained how

3 Rowe contends the interrogatory responses should not be considered because they
are neither pleadings nor affidavits, the only types of documents specifically mentioned
in Code of Civil Procedure section 425.16, subdivision (b)(2). We disagree. The
responses were attached as an exhibit to a declaration that was executed in California
under penalty of perjury and thus was legally equivalent to an affidavit. (Code Civ.
Proc., § 2015.5; Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1050.) In any event, on an
anti-SLAPP motion the parties may "tender evidence of specific facts in the form of
affidavits, or admissible discovery material." (Nesson v. Northern Inyo County Local
Hospital Dist. (2012) 204 Cal.App.4th 65, 77, italics added; see Code Civ. Proc.,
§ 2030.410 [propounding party may use interrogatory answer against responding party at
trial "or any other hearing in the action"].)
Rowe also contends the responses were given to interrogatories seeking the facts
underlying the procedurally improper counterclaims and were rendered a nullity when the
trial court struck the counterclaims. Again, we disagree. Rowe cites no authority to
support this contention. Moreover, Rowe reasserted the procedurally improper
counterclaims in a procedurally proper cross-complaint, and it does not contend the facts
underlying its two pleadings differed in any material way. Rowe is thus bound by its
responses. (See Thoren v. Johnston & Washer (1972) 29 Cal.App.3d 270, 275
["responses to interrogatories are binding upon the party responding"]; Universal
10
the disclosure clause made it "less attractive" for a competitor to hire a former Teledyne

employee purportedly bound by the clause and also interfered with the proprietary rights

of a competitor that hired a former Teledyne employee who then made an invention

within six months of departing from Teledyne. Rowe also stated that the five-year term

of the noncompetition and nonsolicitation clauses was excessive because, "[b]ased on the

annual sales of products, [Teledyne] recouped [its] investment well before five years and

then some."

Examination of the allegations of the cross-complaint, the declaration of Daniel

Rowe, and the interrogatory responses submitted in connection with the special motion to

strike reveals that the gravamen or principal thrust of Rowe's first two causes of action is

that the disclosure, noncompetition, and nonsolicitation clauses are illegal and

unenforceable. Teledyne's use of these clauses thus constitutes the " 'allegedly wrongful

and injury-causing conduct . . . that provides the foundation for the claim[s].' " (Young,

supra, 210 Cal.App.4th at p. 55.) In other words, the first and second causes of action of

Rowe's cross-complaint are "based on" Teledyne's business practice of inserting allegedly

unlawful provisions in its contracts. (Navellier, supra, 29 Cal.4th at p. 89.) Since this

business practice occurred years before Teledyne sued Rowe, Rowe's claims do not

"aris[e] from any act of [Teledyne] in furtherance of [its] right of petition or free speech"

within the meaning of the anti-SLAPP statute. (Code Civ. Proc., § 425.16, subd. (b)(1);

see City of Alhambra v. D'Ausilio (2011) 193 Cal.App.4th 1301, 1309 (D'Ausilio)

Underwriters Ins. Co. v. Superior Court (1967) 250 Cal.App.2d 722, 731 ["sworn
statement as to the contention of the party in answer to a relevant interrogatory is
binding"].)
11
[declaratory relief claim involving actual dispute between parties regarding validity of

contract provision was not a SLAPP].)

In support of its contrary conclusion that Rowe's first and second causes of action

fall within "classic SLAPP territory," the trial court cited paragraph 36 of the cross-

complaint, where Rowe alleged that Teledyne "filed this sham suit for anticompetitive

and strategic reasons." Teledyne cites several other references to its lawsuit in Rowe's

cross-complaint and interrogatory responses to argue the trial court properly granted the

anti-SLAPP motion. In paragraph 37 of the cross-complaint, Rowe alleged: "Filing this

action at the time [it] did, as well as alleging claims based on unenforceable and unlawful

agreements that restrain employee mobility and competition, demonstrate [Teledyne's]

use of litigation as a sham to increase a perceived rival's costs and to divert its perceived

rival's resources from product development." Similarly, in paragraph 53, Rowe alleged:

"On information and belief, [Teledyne] filed this suit as a sham to increase [Rowe's] costs

and delay product development. Therefore, such act is unlawful and unfair within the

meaning of [the UCL]." In paragraphs 44 through 47, which concerned its request for

declaratory relief, Rowe alleged the existence of an actual controversy consisting of

Teledyne's claims that Rowe breached the disclosure, noncompetition, and

nonsolicitation clauses and Rowe's cross-claims that those clauses are unenforceable. In

its interrogatory responses, Rowe stated that "the true purpose of the litigation is to use

the litigation process, as opposed to an outcome of the process, to increase defendants'

costs." Based on these various statements, Teledyne argues that it "could not be . . .

12
clearer" that its lawsuit "caused the controversy," and that Rowe's cross-complaint "is an

attempt to inhibit [Teledyne's] pursuit of [its] right of petition." We are not persuaded.

Teledyne's filing of its lawsuit against Rowe did not cause or give rise to the first

two causes of action of Rowe's cross-complaint so as to subject them to a special motion

to strike. To be sure, the act of filing a complaint constitutes an act in furtherance of the

constitutional right of petition that is protected by the anti-SLAPP statute. (Code Civ.

Proc., § 425.16, subd. (e)(1); Navellier, supra, 29 Cal.4th at p. 90.) But the fact that

Rowe's cross-complaint "was filed after protected activity took place," or "arguably may

have been 'triggered' by protected activity," does not mean the cross-complaint arose

from that activity for purposes of the anti-SLAPP statute. (Navellier, at p. 89; see also

Cotati, supra, 29 Cal.4th at pp. 76-77 ["But the mere fact an action was filed after

protected activity took place does not mean it arose from that activity."].) Indeed, "[t]he

Legislature expressly has provided that a cross-action may 'arise[] out of the same

transaction, occurrence, or series of transactions or occurrences as the cause of action

which the plaintiff alleges' [citations], rather than out of that cause of action itself."

(Cotati, at p. 77; see also Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th

628, 651 ["A compulsory cross-complaint on a 'related cause of action' against the

plaintiff [citation] would rarely, if ever, qualify as a SLAPP suit arising from petition

activity."].)

Here, the actual controversy giving rise to both parties' pleadings is their dispute

over the validity of the disclosure, noncompetition, and nonsolicitation clauses. By its

complaint, Teledyne seeks to enforce the clauses against Rowe; and by its cross-

13
complaint, Rowe seeks to void the clauses. The transactions giving rise to the dispute

occurred well before and existed independent of Teledyne's commencement of litigation

against Rowe. Therefore, Rowe's first and second causes of action did not "aris[e] from"

Teledyne's lawsuit and were not subject to a special motion to strike. (Code Civ. Proc.,

§ 425.16, subd. (b)(1); see Cotati, supra, 29 Cal.4th at p. 80 [plaintiff's state court action

for declaratory relief filed in response to defendants' similar federal court action was not

subject to anti-SLAPP statute because both actions arose out of parties' dispute over

constitutionality of ordinance]; Kajima Engineering & Construction, Inc. v. City of Los

Angeles (2002) 95 Cal.App.4th 921, 933 (Kajima) [cross-complaint not subject to anti-

SLAPP statute because it arose out of same business transactions from which complaint

arose and did "not arise 'out of the litigation process itself' "].)

We also reject Teledyne's related argument that the multiple references to its

"sham" litigation contained in Rowe's cross-complaint and interrogatory responses

indicate Rowe is trying to stifle petitioning activity protected by the anti-SLAPP statute.

A party to an ordinary private dispute cannot invoke the anti-SLAPP statute simply

because the challenged pleading contains some references to the party's protected speech

or petitioning activity. (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th

181, 188.) If the reference to protected activity is only incidental to a cause of action

essentially based on nonprotected activity, the anti-SLAPP statute does not apply.

(Baharian-Mehr v. Smith (2010) 189 Cal.App.4th 265, 272 (Baharian-Mehr).) "In

deciding whether an action is a SLAPP, the trial court should distinguish between

(1) speech or petitioning activity that is mere evidence related to liability and (2) liability

14
that is based on speech or petitioning activity." (Graffiti Protective Coatings, Inc. v. City

of Pico Rivera (2010) 181 Cal.App.4th 1207, 1214-1215.) Hence, the court must focus

on " '[t]he allegedly wrongful and injury-producing conduct . . . that provides the

foundation for the claim.' [Citation.] If the core injury-producing conduct upon which

the [challenged] claim is premised does not rest on protected speech or petitioning

activity, collateral or incidental allusions to protected activity will not trigger application

of the anti-SLAPP statute." (Hylton v. Frank E. Rogozienski, Inc. (2009) 177

Cal.App.4th 1264, 1272.)

The repeated references to Teledyne's purportedly improper litigation activities

contained in Rowe's cross-complaint and interrogatory responses were merely collateral

or incidental to its causes of action. "For purposes of anti-SLAPP analysis, . . . an alleged

act is incidental to a claim, and incidental to any unprotected activity on which the claim

is based, only if the act is not alleged to be the basis for liability." (Wallace v. McCubbin

(2011) 196 Cal.App.4th 1169, 1183.) Thus, to determine whether or not a reference to

protected activity is merely incidental, "[t]he question should be whether the [nonmoving

party] is seeking relief from the [moving party] for its protected communicative acts."

(Young, supra, 210 Cal.App.4th at p. 55.) Here, in its cross-complaint and interrogatory

responses Rowe disparaged Teledyne's lawsuit as a "sham" and asserted the lawsuit was

designed to increase Rowe's costs, but it did not seek damages or any other form of relief

for Teledyne's litigation activity. Rather, on the two causes of action targeted by the anti-

SLAPP motion, Rowe sought only a declaratory judgment that the disclosure,

noncompetition, and nonsolicitation clauses were void and unenforceable and a

15
permanent injunction prohibiting Teledyne from enforcing or using such clauses.4 Thus,

Rowe's cross-complaint "does not allege that [Teledyne's] filing of [its] lawsuit gives rise

to any additional liability, but that the lawsuit evidenced [Teledyne's anti-competitive use

of the challenged contractual provisions]." (Aguilar v. Goldstein (2012) 207 Cal.App.4th

1152, 1161.) In other words, Rowe's references to Teledyne's lawsuit "purport to

describe [Teledyne's] pattern and practice with respect to [using the challenged

contractual provisions] in general; they do not seek to impose liability based on acts taken

in furtherance of [Teledyne's] right to petition the courts for the wrongs allegedly

committed by [Rowe] with regard to [breaches of those provisions]." (Kajima, supra, 95

Cal.App.4th at p. 931.) Accordingly, because Rowe's "mention of protected activity is

'only incidental' to a business dispute based on nonprotected activity," the anti-SLAPP

statute does not apply. (Baharian-Mehr, supra, 189 Cal.App.4th at p. 273; see also Wang

v. Wal-Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790, 809 [anti-SLAPP

statute inapplicable when "overall thrust of the complaint challenges the manner in which

the parties privately dealt with one another . . . and does not principally challenge the

collateral activity of pursuing governmental approvals"].)

We are not persuaded to reach a different conclusion by any of the cases Teledyne

cites in support of its contention the anti-SLAPP statute applies to Rowe's cross-

4 We reject Teledyne's suggestion that the prayer for damages and attorney fees in
Rowe's cross-complaint indicates Rowe was seeking to hold Teledyne liable for its
litigation activity. Rowe sought damages and fees only in connection with its claims for
common law unfair competition, trade libel, and interference with prospective economic
advantage. Those claims are not at issue on this appeal, however, because they were not
the subject of Teledyne's anti-SLAPP motion.
16
complaint. Teledyne relies on Equilon, supra, 29 Cal.4th at pages 57, 67, and CKE

Restaurants, Inc. v. Moore (2008) 159 Cal.App.4th 262, 271, where the appellate courts

held declaratory relief actions filed in response to Proposition 65 intent-to-sue notices

were SLAPP's because the service of such a notice is protected activity, and without the

notices there would have been no basis for the plaintiffs to seek declaratory relief

regarding their compliance with Proposition 65. Similarly, in Navellier, supra, 29

Cal.4th 82, also cited by Teledyne, the plaintiffs sued the defendant for fraudulent

inducement of a release negotiated in an earlier federal lawsuit and for breach of the

release. Our Supreme Court held the anti-SLAPP statute applied because "but for the

federal lawsuit and [the defendant's] alleged actions taken in connection with that

litigation, plaintiffs' present claims would have no basis." (Id. at p. 90.) Here, however,

if Teledyne had not sued Rowe, the first two causes of action of Rowe's cross-complaint

would still have a basis, namely, the parties' business dispute over the validity and

enforceability of the disclosure, noncompetition, and nonsolicitation clauses.

Other cases on which Teledyne relies are also not on point. For example, in Mann

v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 104, we held the anti-

SLAPP statute applied when reports to governmental agencies, a petitioning activity

protected by the anti-SLAPP statute, "formed a substantial part of the factual basis" of the

challenged claims. Likewise, in Raining Data Corp. v. Barrenechea (2009) 175

Cal.App.4th 1363, 1368-1369, 1371, a cross-complaint was held to be a SLAPP because

two of its causes of action "by definition ar[o]se from the protected activity of [the

plaintiff's] filing of its complaint," the "remaining causes of action present[ed] a classic

17
case of mixed claims of protected and nonprotected activity," and the cross-complaint

"include[d] a single specific allegation of [the plaintiff's] conduct causing harm to

defendants that [was] not directly related to [the] filing of the complaint." As we have

already explained, however, Rowe's references to Teledyne's lawsuit in the cross-

complaint and interrogatory responses did not form a substantial part of the causes of

action challenged by Teledyne's anti-SLAPP motion. The references were merely

incidental to claims the principal thrust of which was that Teledyne uses the disclosure,

noncompetition, and nonsolicitation clauses unlawfully to restrict competition.

In sum, we conclude the trial court erred when it ruled the gravamen of Rowe's

claims for violations of Business and Professions Code section 16600 and the UCL was

Teledyne's filing its complaint against Rowe and, on that basis, struck the claims pursuant

to the anti-SLAPP statute. Since those claims did not arise from any activity by Teledyne

that is protected by the anti-SLAPP statute, we need not, and do not, decide whether

Rowe satisfied its burden to show a probability of prevailing on those claims. (See, e.g.,

Cotati, supra, 29 Cal.4th at pp. 80-81 [declining to decide whether nonmoving party

established probability of prevailing when its claim did not arise from protected activity];

Young, supra, 210 Cal.App.4th at p. 59 [same].) As a further consequence of our

holding, Teledyne was not the prevailing party entitled to attorney fees incurred in

connection with the anti-SLAPP motion. (Code Civ. Proc., § 425.16, subd. (c)(1); People

ex rel. Strathmann v. Acacia Research Corp. (2012) 210 Cal.App.4th 487, 505.) The trial

court's contrary determination thus constituted error.

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C. Attorney Fees on Appeal

As noted earlier, both parties have requested an award of attorney fees on appeal.

A nonmoving party who defeats an anti-SLAPP motion is entitled to recover reasonable

attorney fees if the trial court finds the motion was "frivolous" or "solely intended to

cause unnecessary delay." (Code Civ. Proc., § 425.16, subd. (c)(1).) A statute that

authorizes an award of attorney fees for trial court proceedings also includes fees for

appellate proceedings unless the statute specifically provides otherwise. (D'Ausilio,

supra, 193 Cal.App.4th at p. 1309; Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499.)

The anti-SLAPP statute "does not preclude recovery of appellate attorney fees; hence

attorney fees recoverable under the statute include appellate fees." (Carpenter v. Jack in

the Box Corp. (2007) 151 Cal.App.4th 454, 461.) As the prevailing party on appeal,

Rowe is entitled to recover attorney fees reasonably incurred in prosecuting this appeal if

the trial court finds Teledyne's anti-SLAPP motion was frivolous or filed solely to cause

unnecessary delay. On remand, the trial court shall make this determination and shall

determine the amount of fees (if any) to be awarded upon motion by Rowe.

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 DISPOSITION

The order granting Teledyne's special motion to strike under the anti-SLAPP

statute and determining Teledyne was entitled to attorney fees is reversed. On remand,

upon motion by Rowe the trial court shall determine Rowe's entitlement to attorney fees

incurred in connection with this appeal.

IRION, J.

WE CONCUR:

MCCONNELL, P. J.

HUFFMAN, J.

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