Yan v. Chinese Daily News

Filed 7/12/07 Yan v. Chinese Daily News CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEALS from orders of the Superior Court of Los Angeles County.

C. Edward Simpson, Judge. Affirmed in part and reversed in part.

Law Office of John Derrick, John Derrick; Inter-Pacific Law Group, Inc., and Arthur J. Liu, for Plaintiffs and Appellants.

Manatt, Phelps & Phillips, LLP, Donald R. Brown, Henry C. Wang, Yi-Chin Ho, and Lara M. Krieger, for Defendants and Respondents.

_______________

The Chinese Daily News was sued for libel and related causes of action arising out of a newspaper article concerning the kidnapping of Bingzhang Wang. The Chinese Daily News prevailed in its motion under Code of Civil Procedure section 425.16, the anti-SLAPP (strategic lawsuits against public participation) statute, and was awarded attorney fees. In two consolidated appeals, appellants argue (1) that the court erred in granting the anti-SLAPP motion because they established a probability of prevailing on the merits and (2) that the attorney fees award was not reasonable.

We conclude that appellants fail to show a probability of prevailing on the merits because the allegedly defamatory article is privileged under Civil Code section 47.[1] We also hold that the attorney fees award is not supported by substantial evidence. We affirm the order granting the anti-SLAPP motion and reverse the order granting attorney fees.

FACTUAL AND PROCEDURAL BACKGROUND

The Parties

One appellant, Qingxin Yan, and one defendant, Hongboa Zhang (who is not a respondent in the current appeal), founded the Zhong Gong movement. Yan describes them as former business and domestic partners. When their relationship ended, a flury of litigation commenced. The other appellant, Qi Zhang, is the sister of Qingxin Yan and describes herself as the girlfriend of Bingzhang Wang.

According to appellants, Bingzhang Wang, Qi Zhang, and Yue Wu (a nonparty) were abducted in Vietnam and taken into China. Bingzhang Wang, who was sentenced to life in prison, remains incarcerated in China. Qi Zhang and Yue Wu were released.

Also according to appellants, Hongboa Zhang employs Yungjun Zhou. Zhou prepared two reports about the kidnapping of Bingzhang Wang. Included in Zhous lengthy report is the conclusion that Yan Qingxin and Zhang Qi are still the major suspects in Wang Bingzhangs entrapment and arrest. Zhou summarized the second report at a meeting that appellants describe as a press conference, which was attended by Lian Yi Wang, a reporter for the Chinese Daily News (CDN). CDN, the only respondent in this appeal, published a story related to Bingzhang Wangs kidnapping.[2]

Lian Yi Wangs Article Published in the Chinese Daily News

The allegedly defamatory article is short and we quote it in its entirety. (The names in the article are listed last name first.)

On the 17th, approximately two-dozen members of the local Anti-Political-Persecution Alliance of China, Inc. announced the arrival of the second volume of Wang Bingzhang incident stage report and raised their suspicions that Wang Bingzhang was abducted and arrested by the Chinese Communist Party. Zhou Yongjun, the author of the report, stated that he would welcome objections from all the mentioned and even welcome a personal investigation of himself. He said that finding the truth is the only way to prevent the Communist Party from adapting the same scheme to others.

A year ago, Zhou Yongjun presented his investigation process in the first volume of the Wang Bingzhang incident stage report. At the same time, he also claimed that Wang Bingzhang was set up and arrested rather than kidnapped. Also he suggested that Zhang Qi, who had been arrested with Wang Bingzhang at the same time, and her sister Yan Qingxin, were the two most likely suspects in planning and executing this entrapment. This time, on the eve of the second anniversary of Wang Bingzhangs life in prison sentencing, Zhou Yongjun presented the second volume of the investigation report. In it, he pointed out that he spent the last year visiting the Golden Triangle in the Southeast Asia and commissioned an investigation in Northern Vietnam to gather more evidence. The newly offered evidence includes: people believed that Yan Qingxin had only provided support of US$50,000 before Wang Bingzhangs trip to Vietnam, but actually there was an additional US$100,000. Zhang Qi, a self-proclaimed pro-democracy activist and Wang Bingzhangs fiance, not only showed no effort in rescuing Wang but also refused to use Wangs money to pay for the rescue mission. With the political asylum status, Zhang Qi had come back to the US successfully and visited China again. The geology and climate of the Beilun River as described by Zhang Qi in the kidnap plot do not match the reality. Also, it does not make sense that the parties never mentioned the luggage left in Mong Cai. Wang Bingzhangs activities in the Golden Triangle and personal relationships were also different from the descriptions by some people. Zhou Yongjun said that Wangs parents were on the verge to sell their house to raise money for Wang Bingzhangs rescue and that now they depend on the financial support of the pro-democracy activists. In addition, evidence such as the response from the Vietnam government which reads in Northern Vietnam Quang Ninh Province, there was no hotel registration record showing that the three including Wang Bingzhang and Zhang were ever there points out that a kidnapping in broad daylight has never happened in Mong Cai.

Zhou Yongjun also said that when he was at the Golden Triangle in June last year, he visited the Guomintang veterans who hosted Wang Bingzhang. He said that the rumor that Wang Bingzhang was planning a military revolution and was betrayed by the Guomintang special agents because he wanted to rebuild the Republic of China was nothing but a farfetched rumor meant to distract people from the Communist Partys plot.

Trial Court Proceedings

Appellants alleged causes of action for libel, intentional infliction of emotional distress and negligent infliction of emotional distress against CDN. Each cause of action was based on the publication of the article. According to appellants, the article was tantamount to an accusation that they engaged in criminal conduct because it asserts that they are the main suspects in Bingzhang Wangs kidnapping.

In their anti-SLAPP motion, CDN argues that [t]he article accurately describes what Zhou said at the meeting, and attributes all of the statements to Zhou. CDN also argued, among other things, that the article is privileged under section 47.

The trial court granted CDNs anti-SLAPP motion and awarded the newspaper attorney fees. The court dismissed all claims with respect to CDN.

Appellants timely appealed from the order granting the anti-SLAPP motion and from the separate order awarding CDN attorney fees. The parties agree that Qi Zhang, Bingzhang Wang, and Yue Wu are well known in the Chinese community and that the abduction of Zhang, Wang, and Wu has been reported on extensively. Appellants separately appealed from an order awarding CDN attorney fees and the two appeals were consolidated.

DISCUSSION

I. The Article Is a Privileged Publication

The threshold issue is whether the article is a privileged publication under section 47, subdivision (e). If it is, appellants cannot carry their burden of demonstrating a probability of prevailing on the causes of action alleged against CDN, each of which is based on the article. (1-800 Contacts Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 584 [plaintiff has burden to make a prima facie showing of facts that would merit a favorable judgment].) Because appellants conceded the article arose from activities protected by the anti-SLAPP statute, we need not consider that requirement.

Section 47 provides: A privileged publication or broadcast is one made: [] . . . [] (e) By a fair and true report of (1) the proceedings of a public meeting, if the meeting was lawfully convened for a lawful purpose and open to the public, or (2) the publication of the matter complained of was for the public benefit. Appellants argue section 47 does not apply because (1) the article described a press conference, not a public meeting; (2) the article focused on the written report, not the presentation at the meeting; and (3) the article was not fair and true. None of these arguments has merit.

First, appellants argument that because Zhou presented his findings at a press conference, there was no public meeting within the definition of section 47 is contrary to our Supreme Courts holding in Kilgore v. Younger (1982) 30 Cal.3d 770 (Kilgore). The Supreme Court expressly concluded that a press conference fell within the ambit of the public meeting described in section 47. (Id. at p. 796.) Although as appellants argue, in this case the press sat in one room and the public sat in another room, the rationale of Kilgore is not contingent on the seating arrangement. In Kilgore, the public was invited by way of the media. (Id. at p. 776.) Similarly, here, the public was invited by way of the media, even though members of the public were also present and seated in a different room.

Second, appellants make much of Lian Yi Wangs citation to Zhous written report in the following passage: This time, on the eve of the second anniversary of Wang Bingzhangs life in prison sentencing, Zhou Yongjun presented the second volume of the investigation report. In it, he pointed out that he spent the last year visiting the Golden Triangle in the Southeast Asia and commissioned an investigation in Northern Vietnam to gather more evidence. (Italics added.) Lian Yi Wang then summarized what is described as evidence, but it is not clear whether this summary is from the written report or Zhous oral presentation, or both.

Assuming that the article summarized the evidence in the report, CDN does not lose the protection of section 47. In Kilgore, the press conference described a report that identified Kilgore as owning and operating  a wire service in the Los Angeles area that provides information on sporting events to bookmakers in California and throughout the United Sates.  (Kilgore, supra, 30 Cal.3d at p. 774.) The report was distributed to the news media at a press conference. (Id. at p. 775.) Then the newspaper stated that Kilgore was among the persons listed in the report with no indication that Kilgores name was specifically identified at the press conference. Here, just as in Kilgore, the report was the subject of the public meeting. Indeed, (when making a different point) appellants underscore the evidence that the content of the report was consistent with the content of the public meeting. Therefore, the reference to the contents of the report the very subject of the public meeting does not remove the article from the protection of section 47.

Finally, appellants argue that the article was not a fair and true representation of the report. (This is where appellants highlight evidence that the report and public meeting were consistent.) Appellants, however, apply the wrong standard. Once the correct standard is applied, the article is fair and true even though it is not a complete summary of the report or a precise description of the report.

The medias responsibility lies in ensuring that the gist or sting of the reportits very substanceis accurately conveyed. [Citation.] Moreover, this responsibility carries with it a certain amount of literary license. (McClatchy Newspapers, Inc. v. Superior Court (1987) 189 Cal.App.3d 961, 975-976.) Instead of applying the foregoing standard, appellants fault CDN for (1) deleting the word probably; (2) using the phrase showed no effort instead of failed to be on the frontline in rescuing; (3) failing to identify Shi Lei as a third suspect; (4) using the term evidence instead of allegation; (5) referring to Qi Zhang as a self-proclaimed pro-democracy activist; (6) failing to make clear that Zhang also was suspected of participating in the kidnapping.

Although the article could have been more complete and more precise, appellants have not shown the article is inconsistent with the gist of the report. CDN was entitled to a certain degree of flexibility/literary license. . . . (Readers Digest Assn. v. Superior Court (1984) 37 Cal.3d 244, 262, fn. 13.) CDN was neither required to quote the report verbatim nor to include every detail of the lengthy written report.[3] The article provides a brief summary of the gist of the report. The information that is allegedly defamatory to appellants is contained in the report in addition to the article.

II. The Attorney Fees Award Must Be Reversed

CDN initially sought $232,405 in attorney fees and subsequently requested $254,995. CDNs motion indicated that Donald R. Brown worked 79.8 hours, Henry C. Wang worked 85.9 hours, Yi-Chin Ho worked 369 hours and Lydia Mendoza worked 60.8 hours. Their respective rates were $510, $410, $385, and $190. Declarations attached to the motion described the experience of the attorneys and law student and some of the tasks they performed. No further printout of time or explanation for these hours was provided. In a footnote, CDN stated, Due to concerns about privilege, the News has submitted a comprehensive summary rather than the actual bills themselves. Should the Court prefer to examine the actual bills, the News will make them available either in camera or with appropriate redactions. In a declaration, Brown opined that the rates charged were similar to those charged by other large firms in the Los Angeles area.

The court appointed Judge John Ouderkirk, retired, as a referee because the trial court judge could not determine a reasonable amount of attorney fees based on the documents provided in the motion and did not want to pull a number out of the air. Judge Ouderkirk recommended that fees be awarded in the amount of $251,365. In a report, he explained that respondents counsel produced redacted billing sheets. Counsel for CDN agreed to allow the referee to review the entire file. The referee spent six hours reviewing the bills. He concluded the rates charged by the attorneys were reasonable and the hours charged by the attorneys were reasonable, for a total of $240,116.50. The referee further indicated that $11,249 was a reasonable amount of expenses. The referee discounted the work of Mendoza, a summer associate. The trial court found that the referee did a thorough job in determining the amount of fees and adopted the recommendation.

A.     No Substantial Evidence Supports The Fee Award

The standard of review on issues of attorneys fees and costs is abuse of discretion. The trial courts decision will only be disturbed when there is no substantial evidence to support the trial courts findings or when there has been a miscarriage of justice. If the trial court has made no findings, the reviewing court will infer all findings necessary to support the judgment and then examine the record to see if the findings are based on substantial evidence. (Finney v. Gomez (2003) 111 Cal.App.4th 527, 545, fns. omitted.) Arguably, this deferential standard of review is inapplicable here because it is based on the principle that the  experienced trial judge is the best judge of the value of professional services rendered in his court.  (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1095.) Here, the referee, who had no familiarity with the case, determined the reasonableness of attorney fees. However, we need not further consider the appropriate standard of review because even under the deferential standard, the attorney fee award must be reversed.

The party seeking fees should submit evidence supporting the hours worked and rates claimed. (Hensley v. Eckerhart (1983) 461 U.S. 424, 433; see also Asbestos Claims Facility v. Berry & Berry (1990) 219 Cal.App.3d 9, 24 [conclusory factual assertions insufficient], disapproved on another ground in Kowis v. Howard (1992) 3 Cal.4th 888, 896.)[4] The evidence should allow the court to consider if the cases are overstaffed, if the hours were reasonably expended and how much time was spent on particular claims. (Hensley v. Eckerhart, supra, 461 U.S. at p. 433; ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at p. 1020.)

A few cases hold that substantial evidence supports a fee award even absent itemized billing reports. For example, in Weber v. Langholz (1995) 39 Cal.App.4th 1578, 1587, the court found a declaration containing the number of hours (between 90 and 103) and a description of the work done sufficient for the trial court to make its own evaluation of the reasonable worth of the work done in light of the nature of the case. . . . (Ibid.) Therefore, although generally, a fee request . . . should be documented in great detail, in that particular case, which involved the award of summary judgment, the record contained substantial evidence to support the $21,000 attorney fee award. (Ibid.)

In Steiny & Co. v. California Electric Supply Co. (2000) 79 Cal.App.4th 285, the court stated, [a]n attorneys testimony as to the number of hours worked is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records. (Id. at p. 293.) The Steiny court cited to Martino v. Denevi (1986) 182 Cal.App.3d 553 for that proposition. In Martino, the court considered an award of $40,000 in attorney fees. It found the evidence insufficient to support such an award because [t]he only evidence presented in support of the motion for attorney fees was the attorneys request for a flat fee for services rendered. No documents, such as billing or time records, were submitted to the court, nor was an attempt made to explain in more than general terms, the extent of services rendered to the client. (Id. at pp. 559-560.) In reaching this conclusion, the Marino court stated that [i]n California, an attorney need not submit contemporaneous time records in order to recover attorney fees. . . . (Id. at p. 559.) CDN relies heavily on this statement.

Although providing contemporaneous records may not always be possible, it is the preferred practice. (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1096, fn. 4.) It allows the losing party and the court to consider the necessity of the work done and the reasonableness of the time spent. For example, in Macias v. Hartwell (1997) 55 Cal.App.4th 669, another case involving an anti-SLAPP motion, the court considered an award of $44, 445 (less than one-fifth the amount awarded in this case). (Id. at p. 671.) The court found that the trial court reviewed the itemized billings and limited the award for fees to the anti-SLAPP motion. (Id. at p. 676.) It held that substantial evidence supports the reasonableness of the fee award. (Id. at p. 676.) By reviewing the itemized billing, the trial court was able to limit the award of fees to those generated in bringing the anti-SLAPP motion and the appellate court found the fee award to be supported by substantial evidence.

In Maughan v. Google Technology, Inc. (2006) 143 Cal.App.4th 1242, a more recent case, the prevailing party in an anti-SLAPP motion sought $112,288 in attorney fees. (Id. at p. 1248.) The trial court awarded $23,000 in fees. (Id. at p. 1245.) The court discounted the fee request based on its analysis of how much time it believed attorneys should spend on an anti-SLAPP motion. (Id. at p. 1249.) The appellate court upheld the award finding that the trial court adequately relied on its own experience in handling similar cases; there was no discovery and few court hearings, and that the  time sheets attached to the motion are somewhat vague in their descriptions of what precisely defense counsel was doing for the claimed amount of time. (Id. at p. 1251.)

Although, declarations filed by attorneys may, in certain cases, constitute substantial evidence to support an attorney fee award, here there was no evidence to support the substantial attorney fee award. The trial court concluded that it could not ascertain a reasonable fee award for the anti-SLAPP motion without pull[ing] a number out of the air. The declarations state the total number of hours worked and identify certain tasks but fail to provide any link between the time and the tasks, making it impossible to determine if the time spent was reasonable. Here, in contrast to Weber, the trial court made clear it could not determine the reasonableness of the request based only on counsels declarations. Although detailed time reports may not be necessary in every case, here the trial court was relegated to pull[ing] a number out of the air. None of the information reviewed by the referee is included in the record and therefore none is subject to our review. The record evidence does not show that the attorney fee award of over $250,000 is reasonable.

B. The Procedure Deprived Appellants of the Opportunity to Meaningfully Challenge the Fees

The trial court ordered the parties to a referee because the motion for attorney fees did not contain adequate support. The referee apparently had the opportunity to review redacted and unredacted bills. In contrast to the referee, appellants were never provided the opportunity to review CDNs actual bills. This procedure deprived appellants of the opportunity to meaningfully challenge the attorney fees requested.

CDNs argument underscores this very problem. It argues that appellants challenges were speculative. All that they [appellants] came forward with were boilerplate objections about duplicative billing and excessive hours, and suggestions of arbitrary reduction in attorney time. Based on the information CDN provided appellants, they could raise only speculative challenges because CDN failed to provide specifics and provided only boilerplate descriptions of work completed. Appellants could not challenge the reasonableness of the attorney time because it is impossible to determine the time any CDN attorney spent on any particular task or whether every task billed was related to the anti-SLAPP motion. Significantly, the referee found that appellants have failed to present any admissible evidence that the fees were unreasonable or that the work performed was unnecessary, duplicative or otherwise improper, without acknowledging that appellants were hamstrung in their ability to make that showing.

Here, CDN declined to provide itemized bills due to concerns about privilege. In other contexts [w]hen a party asserting a claim invokes privilege to withhold crucial evidence, the policy favoring full disclosure of relevant evidence conflicts with the policy underlying the privilege. Courts have resolved this conflict by holding that the proponent of the claim must give up the privilege in order to pursue the claim. Where privileged information goes to the heart of the claim, fundamental fairness requires that it be disclosed for the litigation to proceed. (Steiny & Co. v. California Electric Supply Co., supra, 79 Cal.App.4th at p. 292; see also Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 128.)

In the context of attorney fees requests, courts have found redacted bills sufficient in order to allow a party to preserve the attorney client privilege. (See e.g. Farber v. Bay View Terrace Homeowners Assn. (2006) 141 Cal.App.4th 1007, 1014.) However, CDN was required to provide enough information for appellants to meaningfully assess if the case was overstaffed and if the hours were reasonably expended. Providing access to the bills only to the referee, who reviewed some but not all of them, deprived appellants of a fair procedure.

Finally, CDN seeks fees incurred in this appeal. There were two consolidated appeals. CDN prevailed in the appeal from the order granting its anti-SLAPP motion. It is entitled to fees incurred in that appeal. (Morrow v. Los Angeles Unified School Dist. (2007) 149 Cal.App.4th 1424, 1446.) The amount of fees is to be determined by the trial court upon a noticed motion. (Ibid.) CDN did not prevail in the appeal from the order awarding attorney fees and is not entitled to appellate fees for that appeal.

DISPOSITION

The order granting CDNs anti-SLAPP motion is affirmed and CDN is entitled to attorney fees for that appeal. The order awarding CDN attorney fees is reversed. Each party to bear her or its own costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COOPER, P. J.

We concur:

RUBIN, J.

FLIER, J.

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[1] Undesignated statutory citations are to the Civil Code.

[2] The other defendants are Hongbao Zhang, Yungjun Zhou, Anti-Political-Persecution Alliance of China, Inc., Tianhuaculture.net, Chinesejudgment.com, World Journal, Inc., and Sing Tao Newspapers Los Angeles, Ltd. None was a party to the anti-SLAPP motion filed by the Chinese Daily News and therefore none is a party to this appeal. Other causes of action were alleged against these defendants but they are not relevant to this appeal.

[3] Because we find the article is privileged, we need not consider appellants other arguments with regard to the anti-SLAPP motion.

[4] Hensley concerns civil rights litigation under 42 United States Code section 1988. The award of fees arising under that statute is analogous to the award of fees in an anti-SLAPP motion. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1018.)