Case Name: Danning Jiang v. James Cai, et al.
Case No.: 2019-CV-341417

Motion for an Order to Allow Taking of Depositions by Plaintiff Danning Jiang

Factual and Procedural Background

This is an action for abuse of process. Plaintiff Danning Jiang (“Jiang” or “plaintiff”) is an attorney licensed in the State of California. (First Amended Complaint [“FAC”] at ¶ 1.) Defendant James Cai (aka Jingming Cai) is also an attorney licensed in the State of California and the owner of defendant SAC Attorneys LLP, a limited liability partnership (collectively, “Defendants”). (Id. at ¶¶ 2-3.) Defendants had previously represented an entity known as Chuangjia International Co. dba as TX Trading (“TX Trading”). (Id. at ¶ 5.) TX Trading is jointly owned by Jack Xu (“Xu”) and Shu Teng (“Teng”) as husband and wife. (Ibid.)

On May 31, 2016, on behalf of TX Trading, Defendants filed an interpleader complaint (case no. 16CV295764) against Xu, Teng, and Edadoc USA, Inc. (“Edadoc”). (FAC at ¶ 6.) Edadoc was a joint venture formed among Shenzhen Edadoc Technology Co., Ltd. (“Shenzhen”), Xu, and Teng. (Ibid.) TX Trading asserted in its complaint that a $58,439 fund withdrawn by Teng from Edadoc’s bank account was under dispute among the joint venture parties. (Ibid.) TX Trading did not deposit the interpleader funds and dismissed the complaint with prejudice on June 23, 2016. (Ibid.)

On June 16, 2016, attorney Jiang represented Edadoc and filed a cross-complaint against TX Trading, Xu, and Teng, alleging claims for breach of fiduciary duty, fraud, breach of contract, and declaratory relief. (FAC at ¶ 7.)

On July 28, 2016, Defendants, representing TX Trading, Xu, and Teng, filed a cross-complaint against Edadoc, adding as cross-defendants Jiang, Hansheng Ke (“Ke”), Shenzhen, and Changmao Tang (“Tang”). (FAC at ¶ 8.) Ke is the CEO of Edadoc and Tang is the CEO of Shenzhen. (Id. at ¶ 8, fns. 1-2.) Defendants subsequently amended the cross-complaint on three separate occasions. (Id. at ¶ 8.) As to these cross-complaints, Defendants sued Jiang for misrepresentation, negligence, breach of fiduciary duty and unfair competition. (Id. at ¶ 9.) Jiang believed these allegations were false and the parties thereafter engaged heavily in litigation. (Id. at ¶¶ 9-13.) During this time, attorney Jiang asked Defendants to drop the frivolous claims or he would pursue liability for malicious prosecution. (Id. at ¶ 9.)

On July 5, 2017, Defendants were substituted out and replaced by attorney James Li (“Li”). (FAC at ¶ 14.) Li filed a fourth amended cross-complaint (“4ACC”) removing harmful allegations against attorney Jiang. (Id. at ¶ 15.)

On March 29, 2018, TX Trading, Xu, and Teng dismissed their claims against Jiang with prejudice. (FAC at ¶ 16.)

On January 30, 2019, Jiang filed the operative FAC against Defendants alleging causes of action for: (1) abuse of process; (2) wrongful use of civil proceedings; and (3) unfair business practices (Bus. & Prof. Code, § 17200).

On April 16, 2019, Defendants filed an anti-SLAPP motion to each cause of action in the FAC. The hearing on the motion is set for July 2, 2019.

On April 25, 2019, plaintiff Jiang moved ex parte for an order to allow taking depositions of Defendants and their former clients. Or, in the alternative, an order shortening time to hear his motion for an order to allow taking depositions. The Court granted the alternative motion to shorten time so the motion can be heard on June 4, 2019.

Currently before the Court is plaintiff Jiang’s motion for an order to allow him to take depositions in support of his opposition to the anti-SLAPP motion. Defendants filed written opposition. Plaintiff Jiang filed reply papers. No trial date has been set.

Motion for an Order to Allow Taking of Depositions

Plaintiff Jiang seeks an order to allow him to take the depositions of Defendants and their former clients TX Trading, Xu, and Teng. Jiang argues the depositions are necessary to support his opposition to the pending anti-SLAPP motion.

Legal Standard

Upon the filing of an anti-SLAPP motion, “all discovery proceedings shall be stayed unless the court orders otherwise “for good cause.” (Code Civ. Proc., § 425.16, subd. (g); Simmons v. Allstate Ins. Co. (2001) 92 Cal.App.4th 1068, 1073.) “This language has been uniformly interpreted to provide a general stay on discovery in accordance with the statute’s overall purposes.” (Britts v. Super. Ct. (2006) 145 Cal.App.4th 1112, 1125; see Slauson Partnership v. Ochoa (2003) 112 Cal.App.4th 1005, 1021 [discovery stayed “to minimize the costs and burdens of unmeritorious litigation directed at free speech rights”]; see also Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179, 1190 [“[N]ot only did the Legislature desire early resolution to minimize the potential costs of protracted litigation, it also sought to protect defendants from the burden of traditional discovery pending resolution of the motion.”].)

If a plaintiff believes that he or she needs discovery to oppose an anti-SLAPP motion, Code of Civil Procedure section 425.16, subdivision (g) expressly requires the filing of a noticed motion. (Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1052.) A plaintiff may not simply oppose an anti-SLAPP motion by insisting that discovery is needed.

A plaintiff must show “good cause” before a court will permit discovery after the filing of an anti-SLAPP motion. (Code Civ. Proc., § 425.16, subd. (g).) In the context of an anti-SLAPP motion, “good cause” means only discovery relevant to the plaintiff’s burden of establishing a “reasonable probability of prevailing on the claim.” (Code Civ. Proc., § 425.16, subd. (b)(3).) The fact that “evidence necessary to establish the plaintiff’s prima facie case is in the hands of the defendant or a third party goes a long way toward showing good cause for discovery. But it is not the only factor. The trial court should consider whether the information the plaintiff seeks to obtain through formal discovery proceedings is readily available from sources or can be obtained through informal discovery. The court should also consider the plaintiff’s need for discovery in the context of the issues raised in the SLAPP motion. If, for example, the defendant contends the plaintiff cannot establish a probability of success on the merits because its complaint is legally deficient, no amount of discovery will cure that defect.” (The Garment Workers Center v. Super. Ct. (2004) 117 Cal.App.4th 1156, 1162.)

In addition, a plaintiff’s discovery request under subsection (g) must be denied if the discovery would not be relevant to the defenses raised in the special motion to strike. (See Tutor-Saliba Corp. v. Herrera (2006) 136 Cal.App.4th 604, 617-620 [denying discovery request under Section 425.16 where discovery sought would not affect resolution of special motion to strike].)

First Cause of Action: Abuse of Process

The first cause of action is a claim for abuse of process. The tort of abuse of process constitutes the use of a legal process against another to accomplish a purpose for which it is not designed. (Brown v. Kennard (2001) 94 Cal.App.4th 40, 44.) To prevail on an abuse of process claim, the plaintiff must allege and prove that (1) the defendant had an ulterior motive in using the processes of court, and (2) the defendant acted willfully in the use of the legal process for a purpose other than the one for which is was designed. (Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1168.)

According to the first cause of action, plaintiff Jiang alleges Defendants filed cross-complaints against him, took his deposition, and propounded written discovery for the purpose intimidating and harassing him. (FAC at ¶¶ 18-19.) Plaintiff Jiang thus suffered damages including mental distress because of this conduct. (Id. at ¶¶ 20-21.)

Here, plaintiff Jiang seeks the depositions of Defendants and their former clients to show that Defendants had an ulterior motive in filing and maintaining the cross-complaints in the prior action. For example, plaintiff intends to depose Defendants on topics such as: (1) general areas of law practice which compete with plaintiff’s; (2) previous encounters with plaintiff in matters as opposing counsels; (3) their knowledge of allegations against plaintiff; (4) circumstances surrounding the change of counsel; (5) former clients’ allegations in the 4ACC in the prior action; and (6) Defendants’ fee request in the anti-SLAPP motion. (Motion at p. 7.)
Plaintiff Jiang also intends to depose Defendants’ former clients on issues including the following: (1) plaintiff’s involvement in JV Agreement One and Two; (2) their state of mind in filing the initial cross-complaint against plaintiff and subsequent amendments; (3) how Defendants handled the allegations after knowing they were false; (4) circumstances surrounding the change of counsel; and (5) the monetary demand in their cross-complaints and monetary recovery. (Motion at p. 8.)

Plaintiff Jiang argues the depositions will show Defendants’ ulterior purposes by naming him as a cross-defendant for the purpose of ruining his reputation, intimidating and retaliating against him, and forcing him to resign from representation.

These depositions however do not show a probability of success on the merits of the abuse of process claim. This is because, as Defendants argue, the claim is barred by the litigation privilege. The litigation 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 “is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057.) The litigation privilege is interpreted broadly in order to further its principal purpose of affording litigants and witnesses the utmost freedom of access to the courts without fear or harassment in derivative tort actions. (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241.) The privilege is absolute and applies regardless of malice. (Id. at p. 1241.) The litigation privilege has been held to immunize defendants from tort liability based on abuse of process. (Silberg, supra, at p. 215.)

Here, the abuse of process claim is based on the filing of cross-complaints against plaintiff Jiang, taking his deposition, and propounding written discovery on him. (See FAC at ¶ 18.) Each of these acts are protected under the litigation privilege. (See Baker v. Littman (1956) 138 Cal.App.2d 510, 514, fn. 1 [filing of civil action subject to litigation privilege]; see also Sipple v. Foundation For Nat. Progress (1999) 71 Cal.App.4th 226, 242-243 (Sipple) [litigation privilege applies to discovery].) Since taking the depositions would not overcome the litigation privilege, plaintiff Jiang is unable to show a probability of success on his abuse of process claim. (See Blanchard v. DIRECTV, Inc. (2004) 123 Cal.APP.4th 903, 922 [denying discovery request where plaintiffs’ showing failed to demonstrate prima facie that they could overcome the litigation privilege].)

Even if the litigation privilege did not apply, plaintiff Jiang would still need to demonstrate that his abuse of process claim is legally sufficient to show a probability of prevailing on the merits. (See Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89 [plaintiff must demonstrate the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited].) Plaintiff Jiang here fails to properly allege that Defendants had an ulterior motive in pursuing the cross-complaints and subsequent discovery in the prior action. The allegation simply says that Defendants intentionally used this legal procedure to intimidate and harass Jiang. (See FAC at ¶ 19.) However, “[m]ere ill will against the adverse party in the proceedings does not constitute an ulterior or improper motive.” (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 876.) “[T]here is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” (Clark Equipment Co. v. Wheat (1979) 92 Cal.App.3d 503, 524.) Instead, “[t]he improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or payment of money, by use of the process as a threat.” (Id. at pp. 524-525.) As pled, plaintiff’s allegation closely resembles ill will and bad intentions which do not constitute an ulterior purpose and thus fails to state a claim for abuse of process. Since the claim is not legally sufficient, plaintiff Jiang fails to show a probability of success on the merits.

Furthermore, plaintiff Jiang seeks to depose Defendants and their former clients on issues that are not relevant to the abuse of process of claim. This includes Defendants’ general areas of law practice and their fee request in the anti-SLAPP motion. Also, allegations contained in the 4ACC in the prior action were prepared by different counsel, not Defendants. Again, any discovery order must be limited to issues raised by the anti-SLAPP motion. (Sipple, supra, 71 Cal.App.4th at p. 247.) These subject areas are beyond the scope of issues needed to oppose the pending anti-SLAPP motion.

Based on the foregoing, the Court declines to order taking depositions of Defendants and their former clients as to the first cause of action.

Second Cause of Action: Malicious Prosecution

The second cause of action is a claim for malicious prosecution. “A plaintiff must plead and prove three elements to establish the tort of malicious prosecution: a lawsuit (1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.” (Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 872-873.)

The second cause of action alleges: (1) Defendants were actively involved in bringing and continuing the lawsuit against plaintiff Jiang; (2) the lawsuit ended in Jiang’s favor; (3) no reasonable person in Defendants’ circumstances would have believed that there were reasonable grounds to bring the lawsuit against Jiang; (4) Defendants acted primarily for a purpose other than succeeding on the merits of the claim; and (5) Jiang was harmed. (FAC at ¶¶ 25-27.)

Plaintiff Jiang seeks the depositions of Defendants and their former clients to address the issues of lack of probable cause and malice with respect to the malicious prosecution claim. For example, plaintiff intends to depose Defendants on topics such as: (1) their ability to read and understand Chinese; (2) the factual basis of their allegations against plaintiff; (3) their knowledge of the differences between the two JV Agreements; and (4) investigations conducted on the allegations. (Motion at p. 10.)
Plaintiff Jiang also intends to depose Defendants’ former clients on factual information they provided to Defendants with respect to the filing of the cross-complaints, new facts discovered in the action, and new facts alleged in the 4ACC in the prior action. (Motion at p. 10.)

Here, the malicious prosecution claim is not legally sufficient as plaintiff Jiang fails to allege facts showing that Defendants maintained the underlying action with malice. “As an element of the tort of malicious prosecution, malice at its core refers to an improper motive for bringing the prior action.” (Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 451.) “Thus the cases speak of malice as being present when a suit is actuated by hostility or ill will, or for some purpose other than to secure relief. [Citations.]” (Id. at p. 452.) “It is also said that a plaintiff acts with malice when he asserts a claim with knowledge of its falsity, because one who seeks to establish such a claim ‘can only be motivated by an improper purpose.’ [Citation.]” (Ibid.) There are simply no facts alleged to support the element of malice to state a viable claim for malicious prosecution. The depositions therefore are irrelevant to resolving this pleading deficiency.

The Court therefore declines to order taking depositions of Defendants and their former clients as to the second cause of action.

Third Cause of Action: Unfair Business Practices

The third cause of action is a claim for unfair business practices under Business and Professions Code section 17200. “Because section 17200’s definition is ‘disjunctive,’ the statute is violated where a defendant’s act or practice is unlawful, unfair, fraudulent or in violation of section 17500.” (South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 878.)

According to the UCL claim, plaintiff Jiang alleges Defendants violated the following provisions of the California Penal Code: (1) Section 118(a) [false affidavits as to affiant’s testimony]; (2) Section 127 [subornation of perjury]; (3) Section 182 [a felony – criminal conspiracy]; and (4) Section 138 [a felony – taking or offering to take bribes by witness].) (FAC at ¶ 34.) As a result, plaintiff suffered substantial pecuniary losses and injury to his business reputation and accordingly seeks injunctive relief. (Id. at ¶ 34.)

Plaintiff Jiang seeks depositions to support the allegations of subornation of perjury and conspiracy in the UCL claim. Plaintiff intends to depose Defendants and their former clients regarding facts provided in framing the cross-complaints in the prior action, their communications, knowledge of falsity of the allegations, and the time frame for the knowledge.

Like plaintiff’s other claims, the UCL cause of action is not legally sufficient. There are no underlying facts alleged in the FAC to support any of the violations of the Penal Code attributed to Defendants in the UCL claim. The conduct which is previously alleged, meaning the filing of cross-complaints, taking of plaintiff’s deposition, and propounding of written discovery, which is incorporated into the UCL claim (see FAC at ¶ 30), are subject to the litigation privilege for reasons stated above. The depositions will not resolve the pleading deficiency or overcome the litigation privilege and are therefore irrelevant in opposing the pending anti-SLAPP motion.

The Court therefore declines to order taking depositions of Defendants and their former clients as to the third cause of action.

Disposition

The motion for an order to allow taking depositions is DENIED.