Jenni Rivera Enters., LLC v. Latin World Entm't Holdings, Inc.
Jenni Rivera Enters., LLC v. Latin World Entm't Holdings, Inc.
Opinion of the Court
These appeals arise from a dispute concerning a television production based on the life of the Mexican-American celebrity Jenni Rivera, who died in a plane crash in December 2012. The entity that controls most of Rivera's assets, Jenni Rivera Enterprises, LLC (JRE), entered into a nondisclosure agreement with Rivera's former manager, Pete Salgado, that restricted his disclosure and use of certain personal information about Rivera and her family. Alleging Salgado breached that agreement by disclosing information to the producers and the broadcaster of a television series based on Rivera's life, JRE sued Salgado and the program's producers for breach of contract, interference with contract, and inducing breach of contract. JRE also sued the program's broadcaster for interference with contract and inducing breach of contract. The defendants filed special motions to strike under Code of Civil Procedure section 425.16.
*774The producers argue JRE failed to demonstrate a probability of success on the merits of its causes of action. We conclude JRE satisfied its burden to demonstrate a prima facie case, with reasonable inferences from admissible evidence, that the producers had knowledge of the nondisclosure agreement before taking actions substantially certain to induce Salgado to breach the agreement. Therefore, we affirm the trial court's order denying the producers' special motion to strike.
The broadcaster makes similar arguments regarding JRE's case in chief, but also argues the First Amendment provides a complete defense because JRE's causes of action arise out of the broadcast of matters of public interest. Although First Amendment protection for newsgathering or broadcasting does not extend to defendants who commit a crime or an independent tort in gathering the information, it is undisputed the broadcaster did not know of the nondisclosure agreement at the time it contracted with the producers to broadcast the series, and JRE did not show the broadcaster engaged in sufficiently wrongful or unlawful conduct after it learned of the nondisclosure agreement to preclude First Amendment protection. Therefore, the First Amendment protected the broadcaster's use and broadcast of the information in the series, and we reverse the trial court's order denying the broadcaster's special motion to strike.
FACTUAL AND PROCEDURAL BACKGROUND
A. Salgado Signs a Nondisclosure Agreement
Rivera, born Dolores Janney Rivera, died at age 43 with five surviving children.
*130After her death, Rivera's family and heirs created JRE to own and manage Rivera's intellectual property and publicity rights. Rivera's sister, Rosa Rivera Flores, asked Salgado and others in Rivera's "inner circle" to sign nondisclosure agreements intended to prevent them from capitalizing on Rivera's fame by disclosing sensitive and potentially embarrassing private information. According to Flores, Salgado signed the nondisclosure agreement in September 2013 in her presence, and she signed the agreement on behalf of JRE.
Among other things, the agreement provided: "Recipient [Salgado] shall hold in a fiduciary capacity for the benefit of JRE ... all information, knowledge, and data relating to or concerned with their respective operations, business, financial affairs and personal affairs, including but not limited to personal affairs of [Rivera] ... ; and Recipient shall not disclose or divulge any such information, knowledge, or data to any person, firm, or corporation ... except as may otherwise be required in connection with the business and affairs of JRE provided that JRE or its designees provide written *775authorization prior to release ...." The agreement also stated the Recipient may not "use for [himself] or others, disclose or divulge to other[s] including third parties, confidential information ... includ[ing] without limitation any and all information and/or data related to the business and personal affairs of [Rivera]." The agreement stated its provisions remained "applicable after the termination of the agreement for any reason whatsoever."
B. The Producers Make a Television Series About Rivera
In March 2016 a company owned by Salgado entered into a coproduction agreement with BTF Venture S.A. de C.V., the parent company of BTF Media, LLC (BTF), and with Dhana Media, Inc. to develop, produce, and deliver television programming (the Series) based on an unpublished manuscript by Salgado titled "Her Real Name was Dolores" (the Coproducers Agreement).
*131In May 2016 Flores learned from press releases that Salgado was working with Univision Communications Inc. and Univision Networks & Studios, Inc. (collectively, Univision) on a television series called "Su Verdadero Nombre Era Dolores" ("Her Real Name Was Dolores"). One of the press releases stated the Series "reveals the true woman behind the music and the headlines as told by her former manager, a man she publicly referred to as her fifth brother, Pete Salgado.... [F]ans will get Pete's previously untold perspective *776on the woman he knew.... Salgado ... promises to reveal the uncensored and fascinating life story of the real woman behind the music, glamour and fame."
Also in May 2016 BTF signed a term sheet with Univision to develop, produce, and broadcast the Series. The term sheet stated the Series would be "based on a currently-unpublished book (Book) written by [Salgado] based on the life of singer [Rivera]." The term sheet required BTF to deliver 26 episodes for the Series in four installments from January 9, 2017 to January 30, 2017 and anticipated Univision would begin broadcasting the Series no later than January 16, 2017. The term sheet required Univision to pay BTF in installments as well, beginning 10 days after execution of the term sheet and ending upon final delivery of all episodes. BTF agreed in the term sheet to report to Univision at least semimonthly on various aspects of the production, and BTF represented and warranted that, among other things, each episode of the Series would not infringe the contractual rights of any third party.
On September 8, 2016 Univision announced it had commenced production of the Series. A press release stated the Series would be "based on the book written by executive producer Pete Salgado, who worked closely with [Rivera] in her last years of life and promises to reveal many secrets."
C. JRE Sends Cease and Desist Letters and Files Two Lawsuits
Shortly after discovering Salgado was involved in the Series, JRE sent Salgado and the Producers a cease and desist letter dated June 3, 2016. The letter included a copy of the nondisclosure agreement JRE claimed Salgado signed and asserted the agreement prevented Salgado from disclosing information regarding Rivera's business, financial, and personal affairs. The letter accused Salgado of breaching the agreement by making disclosures to Univision and other third parties, asked Salgado to inform the Producers and Univision they were not authorized to create a television program based on confidential information about Rivera supplied by Salgado, and demanded Salgado refrain from further using information he agreed not to disclose.
*132*777Salgado responded later that same day by claiming the nondisclosure agreement attached to the cease and desist letter was "a poorly executed forgery." Through his attorney, Salgado stated that he did not sign the nondisclosure agreement and that someone must have "cut out or copied his signature from another document and pasted it onto the signature block." The Producers did not respond to the cease and desist letter. In response to Salgado's letter, JRE stated through its attorneys, in a letter also delivered to representatives of the Producers, that JRE had the original nondisclosure agreement with Salgado's signature on it and that a witness could identify the time and place Salgado signed the agreement.
On September 12, 2016 JRE filed a complaint against Salgado and the Producers alleging breach of contract and breach of fiduciary duty against Salgado and interference with contract and inducing breach of contract against the Producers.
JRE alleged that the past and future wrongful conduct by Salgado and the Producers "devalued the information and inhibited JRE's ability to utilize some or all of the information about Ms. Rivera and her story for the benefit of JRE and, most importantly, Ms. Rivera's children. For example, the wrongful conduct has devalued opportunities for an authorized book about Ms. Rivera or an authorized television show about Ms. Rivera." JRE sought damages, equitable relief, and punitive damages in connection with the cause of action for interference with contract.
Also on September 12, 2016 JRE sent Univision a copy of the complaint against Salgado and the Producers and the attached nondisclosure agreement. Univision responded on September 23, 2016 and reiterated Salgado's claim the nondisclosure agreement was a forgery. On December 28, 2016 JRE sent Univision a copy of a December 21, 2016 restraining order the trial court issued against Salgado. The restraining order enjoined Salgado from violating *778the terms of the nondisclosure agreement, including by disclosing information protected by the agreement or using such information for himself or others. In its letter accompanying the restraining order, JRE asserted Univision "has and continues to interfere with the [nondisclosure agreement] and induce its breach. As the [trial court] has made clear, any reliance on Salgado's unfounded assertions about his signature's authenticity is unreasonable given the strong evidence of the validity of the [nondisclosure agreement]."
The Series premiered on Univision on January 15, 2017, and Rivera's sister confirmed her belief the Series included information known only to Rivera's family, Salgado, and a small number of individuals *133who were not involved with the Series. On February 6, 2017 JRE filed a complaint against Univision for interference with contract and inducing breach of contract. The complaint alleged Univision knew of Salgado's nondisclosure agreement no later than September 12, 2016, but continued to induce Salgado to "disclose secrets covered by the [nondisclosure agreement] by providing him with a financial incentive to disclose such secrets, a platform to disclose such secrets, and the prestige of serving as an executive producer on a television show broadcast on Univision in which he could air such secrets." JRE alleged that, as a result of Univision's alleged "actual and ongoing breach or disruption of the contractual relationship between JRE and Salgado," JRE was entitled to actual damages, restitution, disgorgement, and punitive damages.
D. The Producers and Univision File Special Motions To Strike
The Producers and Univision filed special motions to strike the complaints under section 425.16. In the first step of the section 425.16 analysis, they argued the complaints arose from protected activity because developing, producing, and broadcasting a television series are acts in furtherance of the right to free speech. In the second step, the Producers argued JRE could not show a probability of prevailing on the merits because the Producers did not have knowledge of the nondisclosure agreement "before the development of the Series" or before BTF entered into the term sheet with Univision. The Producers argued they "could not have intended to induce a breach of a then-unknown contract." The Producers argued that, once they learned of the existence of the nondisclosure agreement, they did not know whether it was authentic or enforceable. They claimed that, after receiving the June 3, 2016 cease and desist letter, "Salgado signed a notarized affidavit under penalty of perjury declaring that: (1) he never signed the NDA [nondisclosure agreement]; (2) there is no agreement restricting him from discussing his personal and professional dealings with Ms. Rivera; and (3) the signature on the NDA provided by [JRE's] counsel to [the Producers] did not belong to him." Thus, according to the Producers, even if JRE could ultimately prove the nondisclosure agreement was legitimate, JRE could not show the Producers intended to *779induce a breach of contract because the Producers "subjectively (and reasonably) believed Salgado's representations that no valid contract existed." The Producers also argued their conduct could not have caused Salgado to breach the nondisclosure agreement because the Producers' allegedly wrongful conduct occurred after Salgado had allegedly breached the agreement.
Univision argued JRE could not show a probability of prevailing on the merits because JRE had not shown the Series included confidential information provided by Salgado, Univision did not know about the nondisclosure agreement "at the time [Univision] negotiated and entered into the license agreement in May 2016 with BTF," there was no evidence Univision interfered with Salgado's nondisclosure agreement, and California's Uniform Trade Secrets Act ( Civ. Code, § 3426.1 ) (UTSA) and the First Amendment barred JRE's tort claims against Univision. Univision argued the First Amendment provides blanket protection for the publication or broadcast of truthful information about a matter of general public interest like the Series.
In response to both motions JRE did not contest the defendants' showing that JRE's causes of action arose from protected conduct under the first step of the section 425.16 analysis. JRE argued, however, that section 425.16 requires only a *134prima facie showing of "minimal merit" and that JRE had produced sufficient admissible evidence to satisfy that standard. JRE argued that, even if the Producers and Univision did not know about the nondisclosure agreement at the time they entered into contracts relating to the production of the Series, they had notice of the agreement no later than June 3, 2016 and September 12, 2016, respectively, and they induced Salgado to breach the agreement and interfered with it throughout the production. For example, JRE argued Salgado continued to breach the nondisclosure agreement *780after the Producers and Univision had knowledge of the agreement because the Producers paid Salgado for his continued involvement in making the Series, Univision continued to provide financing for producing the Series, and both the Producers and Univision agreed to credit Salgado as a co-producer of the Series.
In support of its argument that Salgado continued to use and disclose confidential information to the Producers and Univision after they had knowledge of the nondisclosure agreement, JRE pointed to Salgado's admission in an affidavit that his manuscript was not complete as late as August 2016, the Producers' concession that they "expended considerable time and financial resources developing and producing the Series" after May 2016, and the BTF term sheet with Univision, which provided for ongoing payments to BTF (and indirectly to Salgado) throughout the production. Based on this and other evidence, JRE argued the trial court could reasonably infer that Salgado used and disclosed confidential information in connection with the production after the Producers and Univision had knowledge of the nondisclosure agreement. JRE responded to Univision's First Amendment and UTSA defenses by asserting that the First Amendment did not protect Univision from liability for "infringing upon [JRE's] contractually-granted rights" and that the disclosures by Salgado were not "trade secrets."
Following separate hearings on the special motions to strike, the trial court denied the motions to strike JRE's causes of action for interference with contract and inducing breach of contract. The Producers and Univision timely appealed.
DISCUSSION
A. Section 425.16
"A strategic lawsuit against public participation ... is one which 'seeks to chill or punish a party's exercise of constitutional rights to free speech and to petition the government for redress of grievances.' " ( Contreras v. Dowling (2016)
Section 425.16 "does not insulate defendants from any liability for claims arising from the protected rights of petition or speech. It only provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity." ( Baral v. Schnitt (2016)
The second step requires a " 'summary-judgment-like' " analysis. ( Baral, supra , 1 Cal.5th at p. 384,
The court accepts the plaintiff's evidence as true and evaluates the defendant's showing "only to determine if it defeats the plaintiff's claim as a matter of law." ( Baral, supra , 1 Cal.5th at p. 385,
*136Whitehall v. County of San Bernardino (2017)
We review de novo an order granting or denying a special motion to strike under section 425.16. ( Park v. Board of Trustees of California State University, supra , 2 Cal.5th at p. 1067,
B. JRE Made a Prima Facie Showing Sufficient To Sustain a Favorable Judgment on Its Causes of Action Against the Producers for Interference with Contract and Inducing Breach of Contract
"The elements of a cause of action for intentional interference with contractual relations are '(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.' " ( Redfearn v. Trader Joe's Co. (2018)
The tort of inducing breach of contract requires proof of a breach, whereas the tort of interference with contractual relations requires only proof of interference. (See Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990)
*783Heritage Provider Network, Inc. v. Superior Court (2008)
1. The Existence of a Valid Contract
JRE alleged the nondisclosure agreement between JRE and Salgado precluded Salgado from disclosing or using certain confidential information about Rivera. The Producers did not argue in their special motion to strike that JRE could not make a prima facie factual showing on the existence of this contract. The trial court found JRE made a prima facie showing the agreement was valid and enforceable, and the Producers do not challenge this aspect of the court's order.
2. Knowledge of the Nondisclosure Agreement
"To recover damages for inducing a breach of contract, the plaintiff need not establish that the defendant had full knowledge of the contract's terms. Comment i to Restatement of Second of Torts, section 766, ... states: 'To be subject to liability [for inducing a breach of contract], the actor must have knowledge of the contract with which he is interfering and of the fact that he is interfering with the performance of the contract.' " ( Little v. Amber Hotel Co. (2011)
a. JRE Made a Sufficient Showing the Producers Knew of the Agreement Before They Allegedly Interfered with and Induced Salgado To Breach It
JRE alleged and provided evidence the Producers knew of the nondisclosure agreement no later than June 3, 2016, when JRE sent the cease and desist letter attaching the agreement. The Producers concede they received the letter at that time. They argue, however, that JRE failed to present evidence showing they knew of the nondisclosure agreement "when they began developing the Series" and that any subsequently acquired knowledge is not relevant to JRE's causes of action. JRE's causes of action, however, are not limited to conduct that occurred when production of the Series began. Under the terms of the nondisclosure agreement, Salgado had a continuing *784obligation not to disclose or use confidential information about Rivera. In addition, JRE submitted evidence the Producers knew of the nondisclosure agreement and its likely authenticity before or very soon after production of the Series began in September 2016.
The Producers suggest they cannot be liable for inducing any breach of the nondisclosure agreement that occurred after the first time JRE claims Salgado breached the agreement, which may have occurred as early as February 2016, when Salgado met with the Producers and Univision. But successive causes of action for breach of contract may arise from a single contract with continuing obligations. (See § 1047 ["[s]uccessive actions may be maintained upon the same contract or transaction, whenever, after the former action, a new cause of action arises therefrom"]; Yates v. Kuhl (1955)
The nondisclosure agreement imposed a continuing obligation on Salgado not to disclose or use confidential information about Rivera without JRE's consent. (See Bakst v. Community Memorial Health System, Inc. (C.D.Cal., Mar. 7, 2011, Case No. CV 09-08241 MMM-FFMx)
The Producers argue that California law does not recognize a cause of action for interference with or inducing a breach of contract based on a theory of partial, continual, or ongoing breaches of contract and that any such theory does not apply to the facts of this case. Indeed, none of the parties has identified a California case endorsing a cause of action for interference with or inducing a breach of a contract that imposed a continuing obligation, and several federal authorities applying California law have acknowledged the absence of authority on this issue. (See, e.g., Wolf v. Travolta (C.D.Cal. 2016)
But in Boon Rawd Trading Intern. Co., Ltd. v. Paleewong Trading Co., Inc. (N.D.Cal. 2010)
The other cases cited by the Producers did not involve allegations of partial breaches of a contract that imposed continuing obligations. (See *140Effs v. Sony Pictures Home Entertainment, Inc. (Fla.Dist.Ct.App. 2016)
b. The Producers' Remaining Arguments Do Not Defeat JRE's Prima Facie Showing of Knowledge
The Producers argue that, even if knowledge of the nondisclosure agreement acquired subsequent to the Coproducers Agreement is relevant, JRE's cease and desist letter did not give the Producers sufficient knowledge of the agreement. The Producers contend they reasonably doubted the authenticity and enforceability of the agreement because Salgado declared under penalty of perjury that he never signed the agreement, that there was no agreement restricting him from discussing his personal experiences with Rivera, and that his signature on the agreement was a forgery.
The Producers' argument, however, does not demonstrate, as a matter of law, that they did not have the requisite knowledge of the nondisclosure agreement to avoid liability for inducing its breach or interfering with it. Instead, based on reasonable inferences from the evidence submitted by JRE, the trier of fact could conclude the Producers had knowledge of the nondisclosure agreement before they induced Salgado to breach it or otherwise interfered with it. (See Oasis West Realty, supra , 51 Cal.4th at p. 822,
The Producers also argue they cannot be liable for inducing the breach of or interfering with the nondisclosure agreement because such liability would require them to rescind the Coproducers Agreement. The Producers, however, do not identify any provision of that agreement that necessarily conflicted with the nondisclosure agreement (and the Producers elected to provide only a redacted version of the Coproducers Agreement). Nothing in the redacted agreement precluded the Producers from producing a television program about Rivera that did not include confidential information sourced from Salgado or rely on Salgado's use of such information.
3. Intentional Acts Designed To Induce a Breach of or Disrupt the Contract
The third element of the tort of intentional interference with contract requires the plaintiff to plead and prove the " ' "defendant's intentional acts [were] designed to induce a breach or disruption of the contractual relationship." ' " ( Korea Supply Co. v. Lockheed Martin Corp. (2003)
JRE contends the following intentional acts by the Producers made interference with the nondisclosure agreement substantially certain to occur: (1) making payments to Salgado throughout the production of the Series; (2) giving *789Salgado credit as an executive producer of the Series; and (3) marketing the Series to promote Salgado's role in its production and his forthcoming book. The Producers concede they made payments to Salgado "on an ongoing basis throughout the production of the Series" and gave Salgado credit as an executive producer of the Series. Combined with press releases mentioning Salgado's forthcoming book and a web of interrelated commercial agreements concerning the Series between Salgado, his company, the Producers, and Univision, this evidence supports a reasonable inference that the Producers induced Salgado to participate in the production of the Series.
The Producers argued in the trial court and argue on appeal that, even if they made payments to Salgado throughout the production of the Series or gave him an executive producer credit when the Series aired, they did so "pursuant to contracts entered into before [the Producers] learned about the alleged NDA." The Producers cite Imperial Ice Co. v. Rossier (1941)
Moreover, a defendant is not immune from liability for intentional inference with contract merely because the defendant exercised rights under another contract. ( Webber v. Inland Empire Investments, Inc. (1999)
The Producers also argue they could not have intended to interfere with or induce a breach of the nondisclosure agreement because they reasonably relied on Salgado's representations that he never signed the agreement and that no contract restricted his involvement in the Series. The Producers cite 1-800 Contacts, Inc. v. Steinberg (2003)
*144promptly contested the reasonableness of the Producers' reliance on Salgado's representations and provided evidence from which a trier of fact could reasonably infer the Producers, at best, willfully ignored Salgado's contractual obligations. In contrast, the defendant in 1-800 Contacts had no reason to question the reassurances it received that its conduct would not interfere with the contract. (See id. at p. 586,
4. Actual Breach or Disruption of the Contract
The Producers do not argue JRE failed to present evidence of a breach or interference with the nondisclosure agreement. Indeed, the trial court's ruling on the Producers' special motion to strike stated the Producers "appear to concede that, if they knew of the NDA [when they signed the Coproducers Agreement] they could potentially face liability for the causes of action at issue." On appeal the Producers do not contest the trial court's characterization of their position or argue JRE failed to present evidence Salgado breached the nondisclosure agreement after the Producers had knowledge of it.
Moreover, as the trial court found, Salgado undoubtedly made additional disclosures of the same information to others during the production of the Series, and Salgado undoubtedly "used" protected information without JRE's authorization. Given the breadth of the nondisclosure agreement's restrictions *792on Salgado's use and disclosure of protected information, it is a reasonable inference from the admissible evidence that Salgado breached the agreement after the Producers had knowledge of it.
5. Resulting Damage
a. Causation
"Determining whether a defendant's misconduct was the cause in fact of a plaintiff's injury involves essentially the same inquiry in both contract and tort cases. [Citations.] 'The test for causation in a breach of contract ... action is whether the breach was a substantial factor in causing the damages.' [Citation.] Similarly, in tort cases, 'California has definitively adopted the substantial factor test ... for cause-in-fact determinations. [Citation.] Under that standard, a cause in fact is something that is a substantial factor in bringing about the injury.' " ( Tribeca Companies, LLC v. First American Title Ins. Co. (2015)
The substantial factor test originated in the Restatement (Second) of Torts ( Potter v. Firestone Tire & Rubber Co. (1993)
JRE contends the Producers caused Salgado to breach the nondisclosure agreement by providing him "financial enticements ... on an ongoing basis throughout the production of the Series" and various "professional benefit[s], including executive producer credit and promotional opportunities, all of which helped Salgado market his forthcoming book about Rivera and bolstered Salgado's standing in the entertainment industry. The evidence in the record suggests the Producers agreed to many of these "enticements" before they knew about the nondisclosure agreement. But once they knew of the agreement, the Producers' continued payments to Salgado were a substantial factor in bringing about Salgado's continued breaches. To determine whether JRE made the minimal showing of causation sufficient to establish a prima facie case, we need only ask whether Salgado would have continued to cooperate with the production and marketing of the Series had he not continued to receive payments and assurances of a platform from which to publicize and exploit confidential information about Rivera. The most reasonable inference from the evidence is that he would not. And, as stated, while the Producers' continued performance of their contractual obligations to Salgado may have been legally justified under the circumstances, the Producers did not assert this affirmative defense.
The Producers argue JRE cannot show their actions were a substantial factor in bringing about Salgado's alleged breaches because Salgado allegedly breached the agreement by writing an unpublished manuscript about his experiences with Rivera, would have breached the agreement anyway, and repudiated the agreement before the Producers allegedly induced him to breach it. For the most part, these arguments fail because they do not take account of the continuing nature of Salgado's obligations under the nondisclosure agreement and his repeated breaches of the agreement.
The Producers suggest Salgado had already breached the nondisclosure agreement before they began production of the Series by drafting an unpublished manuscript of a book about his experiences with Rivera. Merely drafting the manuscript without sharing it with anyone, while possibly a breach of Salgado's obligation not to "use" protected information, would not result in any damages to JRE. It is a fair inference from the evidence, however, that Salgado breached the agreement for the first time no later than May 2016, when BTF and Univision signed the term sheet, which required BTF to deliver a copy of *146Salgado's manuscript to Univision "[p]romptly *794following the full execution of this Agreement."
As the trial court recognized, a "disclosure of one piece of protected information does not mean that there is no breach when another item is disclosed; a disclosure to a small number of individuals does not mean that there is no breach when the same information is published to others through a widely available book or television program." The Producers' argument explains why this is so: "Given that Salgado had already authored the manuscript and was looking for a production partner at the time that he approached [the Producers], [the Producers] could not be and are not the 'but for' cause of his breach." But Salgado did not disclose his manuscript to millions of television viewers. At most, by the time the Producers learned of the nondisclosure agreement, Salgado had disclosed the manuscript and its contents to potential publishers, the Producers, Univision, and perhaps other potential partners. The Producers accepted Salgado's invitation to become his "production partner," thereby enabling Salgado to disclose at least the confidential information in his manuscript to a much larger audience than his unpublished manuscript had. Taking the Producers' argument to its logical end would preclude JRE from recovering from Salgado (not to mention the Producers) for damages caused by Salgado's far more damaging disclosures.
*795For the same reason, that Salgado may have breached the nondisclosure agreement in the future by publishing his manuscript does not mean the Producers' actions were not a substantial factor in bringing about the disclosure of Rivera's secrets to a national broadcast audience.
Finally, the Producers argue Salgado never intended to honor his obligations under the nondisclosure agreement and disavowed those obligations by (1) representing and warranting he was not bound *147by any contract that would impair his involvement in the Series, (2) signing a notarized affidavit to that effect, and (3) continuing to deny he ever signed the nondisclosure agreement. The Producers' arguments do not establish, as a matter of law, their actions were not a substantial factor in bringing about Salgado's alleged breach of the nondisclosure agreement by disclosing and using confidential information for the purpose of producing, marketing, and broadcasting a "tell-all" story about Rivera. While Salgado may have found other partners to facilitate his alleged breaches of contract had the Producers not been involved, JRE made a showing of minimal merit on the element of causation.
b. Damages
As discussed, JRE alleged the Producers' interference with Salgado's nondisclosure agreement negatively affected the value of the information protected by the agreement and the ability of JRE to use the information for its purposes. JRE further alleged the Producers' interference limited JRE's economic opportunities to publish a book or produce or sell a television show or series about Rivera containing the information. The Producers did not argue in their special motion to strike that JRE could not make a prima facie factual showing of its damages. The trial court did not address this element in its ruling, and the Producers do not argue on appeal that JRE did not make a sufficient prima facie showing on damages.
C. The First Amendment Bars JRE's Causes of Action Against Univision
Unlike the Producers, Univision argued in the trial court the First Amendment barred JRE's causes of action because the Series was "a truthful account of a newsworthy event about a public figure." The trial court disagreed, concluding JRE met its burden to show at this stage of the proceedings Univision's actions constituted an "independent tort" that was not protected under the First Amendment as "routine reporting techniques." ( Nicholson v. McClatchy Newspapers (1986)
*7961. The Scope of First Amendment Protection for Newsgathering Techniques Used To Acquire Truthful, Newsworthy Information
" '[S]peech on public issues occupies the highest rung of the hierarchy of First Amendment values, and is entitled to special protection.' " ( Snyder v. Phelps (2011)
"The right to speak and publish," however, "does not carry with it the unrestrained right to gather information." ( Zemel v. Rusk (1965)
In Cohen v. Cowles Media Co. (1991)
*797"While refusing to recognize a broad privilege in newsgathering against application of generally applicable laws, the United States Supreme Court has also observed that 'without some protection for seeking out the news, freedom of the press could be eviscerated.' " ( Shulman, supra , 18 Cal.4th at p. 236,
In Nicholson, supra ,
2. There Was No Evidence Univision Unlawfully Acquired Confidential Information About Rivera
Univision argues the First Amendment provides a complete defense to causes of action for interference with contract and inducing breach of contract when they arise out of the publication of "a truthful account of a newsworthy event about a public figure." ( Nicholson, supra , 177 Cal.App.3d at p. 516,
Courts determine whether the media obtained information lawfully by considering whether the media obtained the information by "routine reporting techniques" or "traditional means of news-gathering." (See Florida Star,
California courts have not determined where intentionally interfering with a nondisclosure agreement falls on this continuum.
We need not decide the broad question whether the torts of inducing a breach of contract and interfering with a contract are "independent torts" such that the First Amendment can never provide a defense to such claims when they arise from conduct that leads to the publication or broadcast of truthful and newsworthy information. Here, it is uncontroverted Univision had no knowledge of the nondisclosure agreement at the time it entered into the license agreement with BTF. The evidence of Univision's actions, after it learned of the nondisclosure agreement, that arguably contributed to Salgado's continued breaches of the agreement consisted of continuing to pay license fees to BTF and promoting Salgado's involvement with the Series. Even if those actions were sufficient to serve as the basis of liability for tortious interference, they are not sufficiently "wrongful" or "unlawful" to overcome the First Amendment newsgathering and broadcast privileges. (See Bartnicki v. Vopper,
*801DISPOSITION
The order denying Univision's special motion to strike is reversed, and the matter *152is remanded with directions to enter a new order granting Univision's special motion to strike. The order denying the Producers' special motion to strike is affirmed. Univision is to recover its costs on appeal in case No. B284358, and JRE is to recover its costs on appeal in case No. B279739.
We concur:
PERLUSS, P. J.
STONE, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Undesignated statutory references are to the Code of Civil Procedure.
Salgado joined the producers' special motion to strike, but dismissed his appeal from the trial court's order denying the motion to strike the causes of action against him for breach of contract and breach of fiduciary duty.
Latin World Entertainment Holdings, Inc. and its Chief Executive Officer, Luis Balaguer, were not parties to the Coproducers Agreement, but JRE alleged that Balaguer was an executive producer of and the "driving force behind" the production and development of the Series and that Balaguer's declaration in support of the special motion to strike concedes he and Latin World Entertainment Holdings were involved in "developing" the Series. We refer collectively to BTF, Dhana Media, Latin World Entertainment Holdings, and Balaguer as the "Producers."
The record includes a heavily redacted version of the Coproducers Agreement. We deny JRE's motion for judicial notice of an unredacted version of this agreement that was not before the trial court. (Mechling v. Asbestos Defendants (2018)
An affidavit Salgado signed August 3, 2016 also refers to a term sheet between Salgado, his company Tuyo Media Group, Inc., and BTF concerning the Series. That term sheet included an unfortunately titled "accompanying letter of inducement." The record does not include the term sheet or the letter of inducement.
The September 8, 2016 press release included in the record is in Spanish and states: "Esta producción estará basada en el libro que escribió el productor ejecutivo Pete Salgado, quien trabajó muy de cerca con la cantante en sus últimos años de vida y promete revelar muchos secretos."
The complaint alleged a fifth cause of action against both Salgado and the Producers for violation of Business and Professions Code section 17200. The trial court granted the special motion to strike that cause of action, and JRE does not challenge this ruling.
Section 425.16, subdivision (b)(1), provides: "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 Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim."
Most of the cases addressing whether successive, partial breaches of a contract may support a cause of action for inducing breach of contract or interference with a contract arise in the context of a dispositive motion based on the statute of limitations. In such cases courts determine whether a cause of action alleging a breach or wrongful conduct outside the limitations period caused the statute of limitations to run for conduct occurring within the limitations period or whether there is a separate accrual date for each breach. (See generally 6 Callmann on Unfair Competition, Trademarks & Monopolies (4th ed. 2004) § 23:32.)
Hill v. Progress Co. (1947)
The court in D'Arcy stated: "The wrong, therefore, was not continuing. The damage or injury that had been inflicted may have continued to develop during successive tax periods, but it did not result from repeating wrongful conduct." (D'Arcy, supra , 129 S.W.3d at p. 30.)
On October 20, 2016 Salgado conceded the signature on the nondisclosure agreement was his. In support of his special motion to strike, Salgado argued instead that the fourth page of the agreement, which included his signature, was not attached to the rest of the document at the time he signed it.
JRE also alleges the Producers agreed to give or share with Salgado certain intellectual property rights in the Series and allowed Salgado to use Rivera's confidential information without taking measures to ensure compliance with the nondisclosure agreement. JRE presented no admissible evidence of an agreement between the Producers and Salgado regarding intellectual property rights and cites no authority for the proposition that failing to stop someone from breaching a nondisclosure agreement constitutes an intentional act in support of a cause of action for intentional interference with that agreement.
Whether the Producers can justify their interference with the nondisclosure agreement by characterizing their conduct as mere performance of contractual obligations presents the affirmative defense of justification. (See Quelimane Co. v. Stewart Title Guaranty Co. (1998)
It is also a reasonable inference from the evidence that Salgado breached the nondisclosure agreement by disclosing his manuscript to a publisher. Contrary to the Producers' assertions, however, it appears the manuscript was not actually published before Univision began broadcasting the Series. Urdaneta conceded that in December 2016 consumers could only preorder the book.
JRE cites numerous cases that it asserts have imposed liability for intentional interference with contract "even when the tort is committed in the service of producing expression ultimately protected by the First Amendment." In none of those cases, however, did the defendants assert the First Amendment as a defense. (See Cussler v. Crusader Entertainment, LLC (2012)
Cases alleging intentional interference with contract or economic relations based on commercial disparagement or defamation require plaintiffs to show malice or injurious motive. (See, e.g., Blatty v. New York Times Co. (1986)
Justice Mosk suggested in another context that the tort for inducing breach of contract could be "reformulated" to avoid any conflict with the First Amendment by requiring plaintiffs to demonstrate some element of independent wrongfulness, such as misrepresentation or physical coercion. (See Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995)
Because we agree the First Amendment bars JRE's causes of action, we need not consider whether the UTSA also bars them.
Reference
- Full Case Name
- JENNI RIVERA ENTERPRISES, LLC, and v. LATIN WORLD ENTERTAINMENT HOLDINGS, INC., and Jenni Rivera Enterprises, LLC, and v. Univision Communications Inc., and
- Cited By
- 24 cases
- Status
- Published