Planned Parenthood LA v. Gonzalez

Filed 4/12/07 Planned Parenthood LA v. Gonzalez CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 TWO

APPEAL from an order of the Superior Court of Los Angeles County. Ronald M. Sohigian, Judge. Affirmed.

Schuler & Brown, Jack. M. Schuler, Sam D. Ekizian and Maurice S. Newman for Cross-defendant and Appellant.

Fields & Israel, Gary D. Fields, Arlette B. Bolduc; Munger, Tolles & Olson, Kathleen M. McDowell and Freya K. Russell for Cross-complainant and Respondent.

* * * * * *

Planned Parenthood Los Angeles (PPLA) terminated P. Victor Gonzalez (Gonzalez), from his position as vice-president of finance and administration in 2004. Gonzalez sued for wrongful termination in violation of public policy, claiming his termination was in retaliation for identifying illegalities in PPLAs administrative procedures and operations. Gonzalez attached over 200 pages of internal PPLA documents and files to his first amended complaint. During discovery, PPLA learned that Gonzalez was in possession of additional PPLA writings, which it claimed were confidential and proprietary. PPLA filed a cross-complaint for conversion, misappropriation and breach of confidentiality. Gonzalez moved to strike the cross-complaint under Code of Civil Procedure section 425.16^[1]as a strategic lawsuit against public participation (SLAPP). Gonzalez appeals the trial courts denial of his anti-SLAPP motion.

FACTUAL AND PROCEDURAL BACKGROUND

First Amended Complaint

Gonzalez was employed by PPLA as its vice-president of finance and administration from December 2002 through his termination on March 9, 2004. Gonzalez sued PPLA in March 2005 and in June 2005 filed a first amended complaint (FAC) alleging wrongful termination in violation of public policy, unfair business practices, false promise, and breach of the implied covenant of good faith and fair dealing. The FAC alleged that he was terminated to prevent his disclosure of improprieties in PPLAs practices, which jeopardized PPLAs ability to continue receiving governmental money and to maintain is [sic] continuing status as a nonprofit organization . . . . Gonzalez alleged that PPLA improperly inflated the cost of medications, surreptitiously engaged in lobbying in violation of IRS guidelines, mishandled donations and filed false financial statements. Gonzalez also complained of national origin, race and gender discrimination. Gonzalezs FAC appended over 200 pages of exhibits that included PPLA technology implementation strategies, internal reports to the PPLA finance committee, internal PPLA e-mails, including communications exchanged with legal counsel marked confidential and minutes of internal meetings.

Cross-complaint

In October 2005, PPLA sought an injunction against Gonzalez based on its contention that he had wrongfully misappropriated its confidential writings.^[2] Because PPLA had filed no claim against Gonzalez that supported injunctive relief, its request was denied. PPLA cross-complained in January 2006, alleging causes of action for misappropriation and breach of confidentiality, conversion, and declaratory relief. The cross-complaint alleged that Gonzalez contractually agreed not to divulge confidential information, that PPLA owned all writings with respect to its operations, services and programs, and that Gonzalez stole confidential PPLA writings, made them public and failed to return them when he was terminated, keeping them for dissemination to anyone who might be interested in gaining inside knowledge concerning or related to [PPLA].

Preliminary Injunction

Based on its cross-complaint, PPLA sought a preliminary injunction to have Gonzalez and his counsel return all PPLA writings that it claimed were being used in support of plaintiffs counsels firms greater agenda against PPLA. PPLA claimed that in addition to the FAC exhibits, Gonzalez wrongfully possessed additional boxes and a CD-ROM of confidential PPLA writings but that it was not certain of the extent of Gonzalezs holdings. PPLA requested the return of all originals and copies as well as documents created by Gonzalez or his counsel based on the PPLA writings, the removal of the offending exhibits and all references to them from the FAC and the sealing of exhibits already contained in the court file. PPLA also asked that Gonzalez and his counsel be restrained from further use and dissemination of the writings and that they provide a list of all persons, organizations and Web sites to whom the writings had been provided. At the hearing of the matter, PPLA emphasized that it wanted the documents very simply because we feel that we have a right to know what the other side has.

Gonzalez opposed the preliminary injunction arguing that PPLA wished only to prevent his prosecution of his wrongful termination lawsuit and to interfere with a related qui tam case . . . being investigated by the Federal Bureau of Investigation, U.S. Attorney Generals Office and the Office of the California State Attorney General. He argued, in part, that as a recipient of governmental funding, PPLA did not have a legitimate expectation of confidentiality in the financial documents, that his counsel had already returned all documents to PPLA and that he was no longer in possession of any documents but that [h]is qui tam lawyer has all relevant records. Gonzalez expressed a concern that any injunctive relief be fashioned so as not to interfere with the qui tam lawsuit.

On March 23, 2006, the court granted in part an injunction that instituted a procedure whereby it would review documents in camera in order to evaluate Mr. Gonzalezs contentions regarding the public interest involved and reasonable expectation of privacy, so that the balancing of all the pertinent factors can be accomplished. The court ordered Gonzalez to provide PPLA by April 7, 2006 a detailed index and description of the writings in Mr. Gonzalez[s] or Mr. Gonzalez[s] attorneys possession, custody, or control, taken from Planned Parenthood at any time . . . . The description was to state how and when Gonzalez obtained each writing and reveal to whom he had disseminated the writings and was to be accompanied by Gonzalezs and his attorneys declarations attesting under penalty of perjury that the indexes and descriptions provided were complete and correct. Gonzalez was also to prepare a log of any documents to which he claimed a privilege. After PPLA had the opportunity to assess which documents it wished the court to review in detail, the index and privilege logs were to be filed with the court by April 14, 2006 and the documents were then to be filed by April 19. The order set an additional hearing for May 9, 2006 regarding the other writings claimed to be subject to injunction, including those allegedly provided to [qui tam counsel] or any other person or entity (except for a governmental agency) . . . . In the meantime, the order precluded Gonzalez from using the writings referred to in his opposition papers except for delivery and/or presentation to a governmental agency and for use in the preparation and presentation of his case in the present suit. The court denied PPLAs request that the exhibits to the FAC be sealed.

Anti-SLAPP Motion

Before the court ruled on the motion for a preliminary injunction, Gonzalez filed his anti-SLAPP motion on March 10, 2006 supported by his own declaration^[3]and the declarations of his attorney and expert witnesses.^[4] PPLA based its opposition on the declaration of Martha Swiller, who served as PPLAs executive vice-president, CEO and senior vice-president, to which Gonzalez raised no evidentiary objections. The court applied the two-pronged analysis applicable to SLAPP motions under Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67 (Equilon); namely, that Gonzalez bore the burden of proving his actions were of the type protected under section 425.16 and that PPLA bore the burden of proving a likelihood of success on the merits of its cross-complaint. The court ruled that Gonzalez met his burden of proving that the acts underlying PPLAs causes of actions against him were in furtherance of his right to petition or free speech. The court nevertheless denied the motion because it found that PPLA met its burden of proving a likelihood of success on the merits of its cross-complaint. Relying on the Gonzalez and Swiller declarations, the court ruled that there was a reasonable probability that Gonzalezs unauthorized copying, downloading and retaining PPLA writings breached the confidentiality terms of the employee handbook and that the writings were PPLAs property, thus forming the basis for its misappropriation and breach of confidentiality, conversion, and declaratory relief causes of action. This ruling was issued on April 10, 2006 and included a request that the parties promptly notify the court of any appeal so that it could consider the scope of the automatic stay.

Gonzalez appealed on April 13, 2006, three days before he was to deliver the disputed writings, indexes, logs and declarations to the trial court for in camera review pursuant to the preliminary injunction. On January 29, 2007, PPLA filed a motion pursuant to California Rules of Court, rule 8.276(e)(A) to sanction Gonzalez for filing a frivolous appeal. Gonzalez filed his reply brief on the same day.^[5]

DISCUSSION

I. Contentions on Appeal and Standard of Review

Gonzalez contends PPLA provided insufficient admissible evidence to support the conclusion that it had a reasonable likelihood of prevailing on its cross-complaint and as such, the trial courts denial of his motion must be reversed. Specifically, he contends that the Swiller declaration contains inadmissible and unsubstantiated statements, PPLA did not establish that his taking of the documents was unauthorized, he had a right and a duty to disclose the writings to his attorney and the public regardless of the confidentiality agreement, and his actions were protected by Labor Code section 1102.5 and Government Code section 12653. He also contends that a conversion claim cannot be stated as a matter of law when copies rather than original documents are taken.

In addition to responding to each of Gonzalezs contentions, PPLA argues that the trial courts partial granting of its request for a preliminary injunction conclusively established its likelihood of success on its cross-complaint.

We review the trial courts ruling on the anti-SLAPP motion de novo. (Brenton v. Metabolife Internat., Inc. (2004) 116 Cal.App.4th 679, 684.)

II. Anti-SLAPP Analysis

A. PPLAs Burden of Proof

Section 425.16 is aimed at curbing SLAPP lawsuits, defined as those brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. ( 425.16, subd. (a).) Section 425.16, subdivision (b)(1) establishes a two-step process for determining whether an action should be stricken pursuant to an anti-SLAPP motion. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).) First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. [Citation.] (Ibid.) A defendant meets this burden by demonstrating that the conduct underlying the plaintiffs cause of action falls under one of the categories listed in section 425.16, subdivision (e). (Navellier, supra, at p. 99.) Second, the court must determine whether the plaintiff has demonstrated a probability of prevailing on the claim, by stating and substantiating a legally sufficient claim. If the plaintiff meets that burden, his action will not be stricken as a SLAPP. (Ibid.)

Here, the trial court ruled and no party contests that Gonzalez made his prima facie case that his acts were subject to section 425.16, subdivision (e) under the first prong of the analysis. The burden then shifted to PPLA to prove it had a reasonable probability of prevailingon its cross-complaint. (Navellier, supra, 29 Cal.4th at p. 88.) This prong of the analysis exists to prevent the anti-SLAPP statute itself from becoming a weapon to chill the exercise of protected petitioning activity by people with legitimate grievances. (Equilon, supra, 29 Cal.4th at p. 65.) PPLA was not required to prove its case in order to meet its burden. Rather, PPLAs burden consisted of demonstrating that its cross-complaint was 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. [Citations.] (Navellier, supra, at p. 89.) PPLA needed only to show that its cross-complaint had minimal merit. (Id. at pp. 89, 95, fn. 11.)^[6]

B. PPLAs Evidence

In deciding the question of potential merit, the court considers the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based. ( 425.16, subd. (b)(2).)^[7] The evidence relied upon must be admissible. (Gallant v. City of Carson(2005) 128 Cal.App.4th 705, 710.) The court does not weigh the credibility or comparative probative strength of competing evidence. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 (Wilson).) Based on the Gonzalez and Swiller declarations, the trial court held that PPLA had demonstrated a reasonable probability of success as to each of its three causes of action. As discussed below, we agree.

1. Waived Evidentiary Objections

Gonzalez argues that the Swiller declaration is replete with hearsay, speculation, matters outside the scope of her personal knowledge, argument, and matters asserted without proper foundation. But he raised no evidentiary objection to the declaration below, thus waiving any such objection on appeal.^[8] (Broden v. Marin Humane Society (1999) 70 Cal.App.4th 1212, 1226, fn 13.) We therefore consider the declaration in its entirety and independently review whether the evidence supports the trial courts factual findings that: Mr. Gonzalez agreed to the rules and regulations in the employee handbook about confidentiality and that all written materials about Planned Parenthoods operations, programs, and services originating from its employees are Planned Parenthoods property. Mr. Gonzalez copied documents that were subject to this agreement. Planned Parenthood did not authorize Mr. Gonzalez to take any writings from Planed [sic] Parenthoods premises or to publish any of these writings. Mr. Gonzalez made copies of these writings, downloaded them to his home computer, and did not return these writings to Planned Parenthood after he was fired. We consider each of these factual findings in turn.

2. Gonzalez Agreed to PPLA Rules and Regulations

The Swiller declaration stated that Gonzalez signed an employee handbook acknowledgment form, thereby confirming that he had received the PPLA employee handbook and understood that it was his responsibility to read, comply with and conform to the policies, rules and regulations as described in the handbook. The declaration attached a copy of the acknowledgment form signed by Gonzalez. This evidence amply substantiates the fact that Gonzalez agreed to abide by the policies set forth in the handbook.

3. PPLA Confidentiality Provisions

The Swiller declaration attested to the following confidentiality provisions of the PPLA handbook: PPLA institutes a no tolerance policy regarding any breach of the Confidentiality Policy. Breach constitutes grounds for immediate separation from or termination of employment. All information obtained from or concerning . . . clients, employees, and donors is privileged information. Neither employees nor volunteers should divulge any information concerning . . . another employee, client, or donor to outside sources without written permission of the . . . employee, client, or donor. The handbook defined clients as including all PPLA employees. The PPLA Electronic Communications Policy stated that PPLAs e-mail system is for business use only and [n]o one may access, or attempt to obtain access, to anothers electronic communications without appropriate authorization. The Swiller declaration attached pertinent sections of the PPLA handbook. Those attachments contained additional details with respect to PPLAs policies, including a warning that any of the following would be subject to discipline: Breaching client, . . . employee, donor or other confidentiality. . . . Unauthorized access to, or use of, confidential information. . . . The handbook also stated in the confidentiality policy, that [t]he confidential relationship between PPLA and each of its employees, . . . clients, and/or donors is a fundamental and basic principle, which has long been practiced. For this reason it is essential for every member of our staff, paid or volunteers, to respect and maintain the confidential aspect of our business.

This evidence demonstrated that Gonzalez agreed to abide by a confidentiality policy that required him to keep internal PPLA writings confidential.

4. PPLA Property Provisions

The Swiller declaration attached this portion of the employee handbook entitled Ownership of Copyright or Other Material: All graphics audio visual and written materials related to the operations, programs, and services of Planned Parenthood Los Angeles, which originate from employees of the Agency, are property of the Agency. This established that Gonzalez agreed that PPLA employees writings about PPLA operations were PPLA property.

5. Gonzalez Took PPLA Writings

The Gonzalez declaration stated, in part, Typically, I would maintain a backup of all documents created . . . . In addition to this I had to take work home, and make copies of e-mails in order to study, research, review, and prepare responses, away from the office . . . to this effect many copies were made to effectuate work, correct work, and keep as platform from whence to do the accounting . . . . All documents, with few glaring exceptions, and of marginal importance to the case, are copies and not originals, where electronic copies were made they are obviously copies. Where there was need to store these temporarily, these were stored in my personal computer at home. . . . floppies were used to transport the files from my computer at PPLA to my computer at home . . . . documents would be brought home with me . . . . Had I been requested during the relevant period, before litigable issues began to flare up and after it became very apparent that PPLA was making me a scapegoat and turned a potentially friendly departure into an acrimonious one, that I had to return material, I would have done so.

The Swiller declaration stated that she reviewed the documents attached to the FAC and a list of the contents of a CD-ROM provided by Gonzalez and found that all of those writings were confidential and proprietary to PPLA.

We agree that these portions of the Gonzalez and Swiller declarations support a finding that Mr. Gonzalez copied documents that were subject to this agreement. . . . Mr. Gonzalez made copies of these writings, downloaded them to his home computer, and did not return these writings to Planned Parenthood after he was fired.

6. Unauthorized

Swillers declaration stated that during the relevant time period she was either the acting CEO or senior vice-president of PPLA. She declared that she never gave Gonzalez permission or the authority to remove any documents from the premises of PPLA. Nor did she authorize him to use and/or publish any of the documents and data he unlawfully removed from PPLA premises, including off PPLAs computer system. Swiller also declared: As far as I am aware, Gonzalez has not obtained the permission of any of the authors of the documents/reports/e-mails, which he has attached as exhibits or which are found on the CD-ROM, to use and/or publish their documents/reports/e-mails.

Gonzalez argues that Swillers declaration does not establish a lack of authority because it does not state that no one else at PPLA authorized Gonzalezs taking of the writings. But that argument ignores the confidentiality and proprietary policies that made essentially all employee writings generated in the scope of employment and concerning PPLA operations confidential and proprietary to PPLA. In light of those policies and Swillers high rank within PPLA, her statement that neither she nor anyone of whom she was aware gave Gonzalez permission to deviate from the written policies is sufficiently broad to minimally establish that Gonzalezs activities were unauthorized.

In his declaration Gonzalez contradicted Swiller, stating that he was impliedly authorized to take the writings because he needed to backup all documents that he created, the fact that he could not stay late at the PPLA office which was in a high-crime area necessitated his taking work home, the demands of his job required working long hours and weekends at home and he needed the documents to facilitate that work, and Swiller knew of these practices and never objected to his taking documents from the office. But these attestations merely raised factual disputes that neither the trial court nor we are required to resolve at this stage of the litigation. Rather, for the purpose of assessing the probability of PPLAs success on the merits, we credit its evidence without weighing credibility or resolving factual disputes. (Wilson, supra, 28 Cal.4th at p. 821.) We are thus satisfied that PPLA established that Gonzalezs taking of the disputed writings was unauthorized.

Having concluded that PPLA established these facts, we next consider whether the facts form a sufficient legal basis for PPLAs three causes of action.

C. Misappropriation-Breach of Confidentiality

The elements of a claim for misappropriation under California law consist of the following: (a) the plaintiff invested substantial time, skill or money in developing its property; (b) the defendant appropriated and used the plaintiffs property at little or no cost to the defendant; (c) the defendants appropriation and use of the plaintiffs property was without the authorization or consent of the plaintiff; and (d) the plaintiff can establish that it has been injured by the defendants conduct. [Citations.]^[9] (United States Golf Assn. v. Arroyo Software Corp. (1999) 69 Cal.App.4th 607, 618.) Equitable protection against trade secret misappropriation is given even though there is, ordinarily, no protectible property right. In the absence of copyright or patent, disclosed ideas may be copied by proper means. But where they are kept secret by the user, and are obtained improperly by the defendant, the tort is committed . . . . (13 Witkin, Summary of Cal. Law (10th ed. 2005) Equity, 81, p. 375.) The record substantiates the following facts, which constitute a prima facie showing of misappropriation.

1. PPLAs Investment

The documents attached to the FAC and those identified in the CD-ROM index attached to the Swiller declaration evidence substantial investments in time and effort by PPLA employees in their preparation. For example, exhibit 2 to the FAC is a draft IT Enterprise Implementation Strategy. This is a 24-page document that includes statistics, flow charts, tables and other information. Exhibit 3 is a report from Gonzalez as vice-president of finance to the finance committee. This is a six-page document that summarizes the state of the budget, various regulatory issues, revenues, purchasing and inventory, and an information technology systems review. Exhibits 4 through 14 consist largely of internal e-mails, memoranda and letters written by PPLA employees about PPLA operations. The exhibits also contain minutes of meetings. The index to the CD-ROM likewise lists PowerPoint presentations, accountings, audits, financial status reports and the like. These are all matters that in the normal course of any business take substantial employee time and effort to compile and create. Without exhaustively describing each document here, our review of the record more than satisfies us that PPLA established that it invested substantial time, skill and money in developing the writings.^[10]

2. Little Cost to Gonzalez

The Gonzalez declaration establishes that he took electronic copies of many of the disputed writings, copied others and took some originals. These activities typically generate little or no cost.

3. Unauthorized

We have already explained our conclusion that the Swiller declaration establishes a lack of authorization.

4. PPLAs Injury

The most obvious injury to PPLA was the public disclosure of confidential business documents which, even if they do not substantiate illegalitiesan issue which we do not reach in this appealpotentially impact PPLAs reputation. Additionally, the unique posture of this case impacts PPLAs burden of demonstrating injury. At the time the trial court ruled on the anti-SLAPP motion, PPLA had just received Gonzalezs index identifying the documents he had and to whom he had disseminated them and the court had not yet received the index. Indeed, the very purpose of the preliminary injunction was to fully inform PPLA of Gonzalezs documents and the extent of his dissemination of them and to allow the trial court an in camera review of the documents. Another injury that PPLA suffered, therefore, was the deprivation of information it needed for the underlying lawsuit. (See Conn v. Superior Court (1987) 196 Cal.App.3d 774, 781 [defendants have, and have always had, the right to keep their own documents until met with proper discovery requests or ordered to disclose them by the Court].) That deprivation also made it impossible for PPLA to identify the full scope of its potential injuries at the time it filed its opposition to the motion because it did not yet know all of the documents taken, nor to whom the documents had been shown. (See FMC Corp. v. Capital Cities/ABC, Inc. (7th Cir. 1990) 915 F.2d 300, 303 (FMC) [when identity of pilfered documents was at issue in conversion claim, alleged converter who refused to divulge the documents bore the burden of proof].)

Gonzalez implies that PPLA cannot be injured by the disclosure of trade secrets because it is a nonprofit rather than a commercial concern. But that contention is contrary to the law, which recognizes that a nonprofit organization may hold trade secrets. (Religious Technology Center v. Netcom On-Line Com. (N.D.Cal. 1995) 923 F.Supp. 1231, 1251.)

Gonzalez also claims in his declaration without explanation that the materials in dispute here are not trade secrets. Of course, not all information kept secret by a business constitutes a trade secret. (Cal Francisco Inv. Corp. v. Vrionis (1971) 14 Cal.App.3d 318, 322.) But [t]here are some business formulae, compiled information, devices, or processes that, although not copyrighted, patented, or even novel, are kept as trade secrets of the user. (13 Witkin, Summary of Cal. Law (10th ed. 2005) Equity, 82, p. 377.) In Ernst & Ernst v. Carlson (1966) 247 Cal.App.2d 125, 128, the details of a firms accounting methods were considered trade secrets. The writings attached to the FAC and identified by the Swiller declaration contain compiled business information, descriptions of business processes, accounting and pricing information and are sufficient for a prima facie showing.

5. Breach of Confidentiality

California law also recognizes a cause of action for breach of confidence where an idea is imparted to and accepted by a defendant in confidence with the understanding that it will not be used by the defendant without plaintiffs permission and defendant makes unauthorized use of the idea. (Thompson v. California Brewing Co. (1957) 150 Cal.App.2d 469, 474.) The PPLA handbook established that information given to Gonzalez in the course of his duties as chief financial officer was given in confidence and his signature on the acknowledgement form established that he accepted the information in confidence. The Swiller declaration established that his disclosure of the information was unauthorized.

PPLA thus supplied a sufficient factual basis to support its misappropriation and breach of confidence cause of action. But Gonzalez raises legal challenges to PPLAs showing. He principally relies on Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294 (Fox Searchlight), Labor Code section 1102.5 and Government Code section 12653 in this regard, and we address each argument in turn.

We do not agree that Fox Searchlight, supra, 89 Cal.App.4th 294 undercuts PPLAs prima facie case for misappropriation and breach of confidence. In that case, an employer sued its former in-house counsel for breach of confidence based on her disclosure to her own lawyers of documentation from her former employer. The former in-house attorney sought to strike the lawsuit under section 425.16. The appellate court reversed the denial of the SLAPP motion. But the holding in Fox Searchlight was described by the court as pertaining to the narrow issue whether a former in-house counsel suing her employer for wrongful termination may divulge to her own attorney employer confidences obtained during the course of her employment. (Fox Searchlight, supra, at p. 308.) The court explicitly excluded from its holding the issue that is pertinent to the present analysis: we are not faced with, and do not decide, whether the former in-house counsel or her attorney can be held liable to the employer for the public disclosure of those confidences and communications. (Ibid.)

Gonzalez also relies on two statutory provisions that protect an employees right to report an employers violations of law, so-called whistleblower statutes. Labor Code section 1102.5^[11]and Government Code section 12653^[12]preclude an employer from making and enforcing any rule or policy to prevent an employee from disclosing the employers legal violations to the appropriate governmental agency. Both provisions also prohibit the employers retaliatory actions for any such reporting by an employee. But Gonzalezs reliance on these provisions at this stage of the analysis is unavailing. Unless those provisions defeat PPLAs prima facie case as a matter of law, they are not pertinent to the analysis at issue here. (Paul for Council v. Hanyecz (2001) 85 Cal.App.4th 1356, 1365, overruled on other groundsin Equilon, supra, 29 Cal.4th at p. 68, fn. 5.) Neither statute invalidates an employers confidentiality agreement of the type before us as a matter of a law. In fact, these types of agreements are routinely enforced in California. (Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1454.) Rather, application of the statutory provisions requires findings of fact that are premature. For example, Labor Code section 1102.5 requires a determination whether the employee has reasonable cause to believe that the information discloses a violation of the law. Whether Gonzalez was entitled or duty bound to document illegalities despite the confidentiality agreement, as he claims, is a question for later resolution in the underlying lawsuit. The same applies to Gonzalezs contention, raised for the first time in his reply brief, that the contract was illegal under Civil Code section 1668. That section prevents the enforcement of a contract that shields illegal behavior. Application of that section, though, is premature at this stage because it requires a finding that PPLAs activities were in fact illegal.

Finally, Gonzalez argues in his reply brief that PPLA cannot succeed on its cross-complaint because it is based on his attachment of PPLA documents as exhibits to his complaint, an act that he claims was privileged under Civil Code section 47, subdivision (b). Issues raised for the first time in a reply brief are waived. (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2006) 9:78.2, p. 9-24 (rev. # 1, 2006).) While we need not consider Gonzalezs late argument, we note that PPLA complained not only of the publication of its documents but also the taking and retention of them. PPLA also provided evidence that its cross-complaint encompassed more documents than those attached to the complaint. [T]he anti-SLAPP procedure may not be used like a motion to strike under [Code of Civil Procedure] section 436, eliminating those parts of a cause of action that a plaintiff cannot substantiate. Rather, once a plaintiff shows a probability of prevailing on any part of its claim, the plaintiff has established that its cause of action has some merit and the entire cause of action stands. Thus, a court need not engage in the time-consuming task of determining whether the plaintiff can substantiate all theories presented within a single cause of action and need not parse the cause of action so as to leave only those portions it has determined have merit. (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 106 (Mann), italics omitted.)

We agree with the trial courts conclusion that PPLA demonstrated a sufficient probability of success on its misappropriation and breach of confidence cause of action.

D. Conversion

Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiffs ownership or right to possession of the property; (2) the defendants conversion by a wrongful act or disposition of property rights; and (3) damages. (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066.) Gonzalez raises one challenge to PPLAs conversion claim, arguing that there can be no conversion by taking copies of documents when the owner retains originals or copies for his own use. Gonzalez relies on FMC, supra, 915 F.2d 300 which purports to apply California law. PPLA, on the other hand, contends that FMC does not accurately portray California law, which recognizes conversion claims for the deprivation of or interference with property rights in intangible property irrespective of whether the owner retains a copy.

We have not been provided nor have we found any published decision in California that applies the rule in FMC, and we decline to do so. To the contrary, California courts have recognized conversion claims based on the taking of copies of intangible personal property even when the owner retains an original or copy. In A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554 (A&M Records), the plaintiff who recorded musical performances and sold them as phonograph records and magnetic tapes stated a cause of action for conversion against one who duplicated plaintiffs recordings and sold them. Because the recordings were the intangible personal property of the plaintiff and the defendants piracy of them clearly interfered with plaintiffs property rights, there was a conversion. (Id. at p. 570; see also Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1565 [recognizes in dicta conversion of information recorded on floppy disk].) Had the property interest at stake in A&M Records been the tangible magnetic tape itself, then a presumption that the taking of a duplicate tape did not interfere with the owners use of the original could logically be applied. But when the valuable property interest is the exclusive right to the contents of the tape, then the duplication of that content is an interference so significant as to constitute a conversion. (A&M Records, supra, at p. 1066.) Thus, PPLA demonstrated a probability of success on its conversion claim despite the fact that many of the writings were merely copies.^[13]

E. Declaratory Relief

The declaratory relief cause of action is derivative of the other two, and PPLA has met its burden with respect to it for the reasons already discussed.

F. The Courts Prior Ruling on the Preliminary Injunction

Having concluded that PPLA met its burden of demonstrating a likely probability of success on the merits, we need not reach PPLAs contention that the prior ruling on the preliminary injunction conclusively established probable merit of its claims pursuant to Thomas v. Quintero (2005) 126 Cal.App.4th 635, 663664.

G. PPLAs Motion for Sanctions

PPLA seeks sanctions for the filing of a frivolous appeal. PPLA contends that Gonzalez has prosecuted this appeal for improper motives and that any reasonable attorney would agree that it totally and completely lacks merit. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) We disagree. Although the appeal is not meritorious, we do not find that it is frivolous.

DISPOSITION

The order is affirmed. PPLAs motion for sanctions is denied. PPLA is entitled to costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_____________________, J.

DOI TODD

We concur:

____________________________, P. J.

BOREN

____________________________, J.

ASHMANN-GERST

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^[1] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

^[2] As did the trial court, we use the term writing as broadly defined by Evidence Code section 250: Writing means handwriting, typewriting, printing, photostating, photographing, photocopying, transmitting by electronic mail or facsimile, and every other means of recording upon any tangible thing, any form of communication or representation, including letters, words, pictures, sounds, or symbols, or combinations thereof, and any record thereby created, regardless of the manner in which the record has been stored.

^[3] For the purposes of the anti-SLAPP motion, both parties relied on their declarations filed with respect to the preliminary injunction motion.

^[4] PPLA objected on the ground the declarations contained legal argument rather than facts. The court sustained the objection with respect to portions of his attorneys declaration.

^[5] The reply brief was filed late, in violation of the mandatory deadline established by California Rules of Court, rule 8.212(a)(3). Nevertheless, we exercise our discretion and consider it.

^[6] Gonzalez mischaracterizes without citation PPLAs burden as requiring a showing of a substantial probability of success . . . .

^[7] Gonzalez argues that PPLA does not cite a single case supporting its conclusion that the aforementioned depositions [declarations of Gonzalez and Swiller] provide the necessary foundation to establish probability of prevailing on the causes of action. That is contrary to the controlling statutory provision that anticipates that proof will be submitted by affidavits. ( 425.16, subd. (b)(2).)

^[8] The Swiller declaration was originally filed by PPLA in support of its motion for preliminary injunction along with a declaration of Arlette Bolduc. We note that Gonzalez raised evidentiary objections to the Bolduc declaration. The record contains no such objection to the Swiller declaration.

^[9] Gonzalez complains that PPLA did not address the individual elements of its misappropriation-breach of confidentiality below. But it is axiomatic that an appellate court reviews the result, not the reasoning of the trial court. Thus, regardless of whether the individual elements were briefed by the parties or addressed by the court, we will affirm if those elements are satisfied by the record before us. (Rickley v. County of Los Angeles (2004) 114 Cal.App.4th 1002, 1009.)

^[10] We also note that at the time of its decision, the trial court did not yet have all of the disputed writings before it, and that the filing of this appeal by Gonzalez likely stayed delivery of those documents to the court pursuant to the preliminary injunction.

^[11] Labor Code section 1102.5 states in part: (a) An employer may not make, adopt, or enforce any rule, regulation, or policy preventing an employee from disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation. [] (b) An employer may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation. [] (c) An employer may not retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation.

^[12] Government Code section 12653 provides in part: (a) No employer shall make, adopt, or enforce any rule, regulation, or policy preventing an employee from disclosing information to a government or law enforcement agency or from acting in furtherance of a false claims action, including investigating, initiating, testifying, or assisting in an action filed or to be filed under Section 12652. [] (b) No employer shall discharge, demote, suspend, threaten, harass, deny promotion to, or in any other manner discriminate against, an employee in the terms and conditions of employment because of lawful acts done by the employee on behalf of the employee or others in disclosing information to a government or law enforcement agency or in furthering a false claims action, including investigation for, initiation of, testimony for, or assistance in, an action filed or to be filed under Section 12652.

^[13] We also note that the Gonzalez declaration states that some of the documents he took were originals. Even FMC recognizes a conversion claim with respect to those documents. (FMC, supra, 915 F.2d at p. 303 [original documents must be returned for it is axiomatic that property known to belong to another must be returned].) Under the Mann case cited above, that showing alone is sufficient. (Mann, supra, 120 Cal.App.4th at p.106 [if a plaintiff can show a probability of prevailing on any part of its claim, the cause of action is not meritless and will not be subject to the anti-SLAPP procedure].)