ENTERTAINMENT CAREER CONNECTION INC v. THE BETTER BUSINESS BUREAU OF THE SOUTHLAND INC

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Court of Appeal, Second District, California.

ENTERTAINMENT CAREER CONNECTION, INC., Plaintiff and Appellant, v. THE BETTER BUSINESS BUREAU OF THE SOUTHLAND, INC., Defendant and Respondent.

B218169

-- March 24, 2011

Cooley, Godward, Kronish, Seth A. Rafkin and Joseph S. Leventhal for Plaintiff and Appellant. Leopold, Petrich & Smith and Walter R. Sadler for Defendant and Respondent.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Plaintiff and appellant Entertainment Career Connection, Inc. (ECC) filed an action against defendant and respondent The Better Business Bureau of the Southland, Inc. (the BBB), based on the BBB's unfavorable rating of ECC's business.   The BBB filed a special motion to strike the complaint under the anti-SLAPP statute,Code of Civil Procedure section 425.16,1 which the trial court granted.   On appeal from the judgment in favor of the BBB, ECC contends:  1) the anti-SLAPP statute does not apply under the exemption for commercial speech (§ 425.17, subd. (c));  2) the BBB's evaluation of ECC is not an issue of public interest;  3) the trial court erred by reconsidering evidentiary rulings and excluding certain evidence;  4) ECC made a prima facie showing of facts to support finding intentional and negligent interference with prospective economic advantage, including evidence of economic relationships with identifiable third parties;  5) ECC made a prima facie showing of facts to support finding the BBB's rating scheme constitutes an unfair business practice in violation of California's unfair competition law (UCL) (Bus. & Prof.Code, § 17200 et seq.);   and 6) the trial court should have allowed ECC to submit additional evidence in support of its claims.   We allowed the parties to submit supplemental letter briefs as to whether ECC demonstrated standing to maintain a UCL action as required under Business and Professions Code section 17204.

We conclude that the BBB's ratings are not exempt from the anti-SLAPP statute under the exemption for commercial speech (§ 425.17, subd. (c)), and therefore, the anti-SLAPP statute applies in this case.   We also find that the consumer information provided by the BBB's ratings is an issue of public interest.   ECC failed to demonstrate a probability of prevailing on its causes of action, because there is no evidence that ECC suffered any economic loss, and the trial court did not abuse its discretion with respect to its evidentiary rulings.   Therefore, we affirm.

FACTS AND PROCEDURAL BACKGROUND2

The BBB

The BBB is a nonprofit public benefit corporation formed under Corporations Code section 5110 et seq., and exempt from taxation under section 501(c)(6) of the Internal Revenue Code (26 U.S.C. § 501(c)(6)).3  The BBB states its goals are to advocate truth in advertising, promote integrity in the performance of business services, and enhance public confidence in business through voluntary self-regulation.   The BBB provides several services free to the public, including public reports on the reliability of different businesses.

Businesses pay membership dues to the BBB, which constitutes approximately 90 percent of the BBB's annual revenue to pay its operating expenses.   Businesses may apply for membership in the BBB, subject to approval by the BBB's board of directors.   Members agree to adhere to certain rules in the operation of their businesses.   Members pay a registration fee of $30 and annual membership fees that range from $365 per year to approximately $8,000 per year.

The BBB employs approximately 95 people.   Approximately 33 employees process consumer complaints.   Approximately 35 employees are membership representatives who solicit membership and renewals from businesses.   Membership representatives earn commissions on the memberships and renewals they sell, or minimum wage, whichever is greater.

The BBB's Resolution of Complaints and Evaluation of Businesses

The BBB assists consumers to resolve complaints.   The BBB accepts complaints about transactions by letter, facsimile (fax), telephone, or online.   The BBB forwards the complaints to the businesses with the expectation that the businesses will make a good faith effort to resolve them.   If the BBB does not receive a response to its first notification of the business, it sends a second notification in the same manner.   If the consumer is not satisfied with the business's response, the BBB allows the consumer to provide a rebuttal.   The BBB forwards the rebuttal to the business for a final response.

The BBB issues reports on the reliability of different businesses.   The reports include information about the complaint experience with the company over the previous 36 months, any concerns about the company's advertising, any applicable licensing requirements, and governmental actions taken against the company, if any.   The BBB also rates the reliability of the company on a scale of 11 letter grades from AAA to F.

The BBB relies on a formula to generate the letter grade.   The formula adds or subtracts points based on 12 variables of different weight to create a composite score for a business.   One variable is the type of business being operated.   The BBB has classified approximately 7,000 businesses in categories from “1” to “5.” The highest ranking category is “1.” The BBB considers businesses in the “5” category to be consumer scams and deducts a significant number of points in its algorithm for these businesses.   The formula adds five points to the composite score if the business is a member of the BBB.

Consumers may request the BBB's report on a business for free by telephone, by mail, or on the internet.   The BBB's website explains its rating system as follows:  “The rating the Better Business Bureau assigns a business is determined by our composite score of such factors as its type of business, length of time in business, compliance with competency licensing requirements, complaint volume, complaint history, seriousness of complaints, how the company responds to complaints, and our experience with the company's industry in general.   The scoring system takes into account the importance we feel each factor is to the company's reliability.  [¶] The highest rating assigned to a company is AAA;  the lowest is F. Between those two ratings are nine others in order from higher to lower.” 4

“Our rating of a company and our reliability report on a company reflect our conclusions and opinion about the company based upon information in our files and our experience with the company.   Neither the rating nor the report is a guarantee of reliability.   Readers should not rely solely upon a company's rating, but should read and consider the entire report, including complaint and response details, before deciding whether or not to do business with the company.”

The BBB's Evaluation of ECC

James Petulla founded ECC in 1983 to provide work experience to students interested in a career in the entertainment industry.   ECC receives tuition in exchange for arranging apprenticeships.   The BBB received complaints from customers about ECC's services, and ECC did not respond to the complaints.   In preparing a reliability report on ECC, the BBB characterized ECC as a “career counseling” service.   The BBB has had negative experiences with companies that charge a fee to help clients obtain work in the entertainment industry, so the BBB ranks this type of career counseling business as category “4.” Based on its formula, the BBB gave a “D” rating to ECC.

In 2005, Petulla learned that the BBB had given a “D” rating to ECC. Petulla contacted the BBB for more information about the rating.   The BBB employee Gary Almond told Petulla that customer complaints had been sent to the wrong address and agreed to raise ECC's rating to “CC.”

Almond's offer was generous under the BBB's algorithm.   A category “4” business that had been in existence more than 20 years with no complaints against it, but which was not a member of the BBB and the BBB lacked full information on the company, would receive a “CC” rating under the BBB's formula, based on a composite score of 75.   In fact, the highest rating that a category “4” business could receive under the formula without being a member of the BBB is “BB,” which is the fifth rating from the top, corresponding to a composite score of 85 points.   The highest rating that a category “4” business can receive if it is a BBB member is “A,” based on a composite score of 90 points.

Petulla believed ECC's rating was unfair.   He called the BBB to speak to Almond again about the rating.   The conversation became heated and ended with Almond yelling at Petulla.   In September 2005, the BBB lowered ECC's rating to “F.” The report on the BBB website did not reflect that any new customer complaints or other information had been received by the BBB.

ECC's Chief Operating Officer Brian Kraft was concerned ECC's low rating would cause ECC to lose customers.   He instructed ECC's employees to notify him of potential students who informed the company that they decided not to enroll in an ECC course who discussed the BBB's rating and those potential students whom ECC counselors strongly suspected did not enroll due to the BBB's rating of the company.

On July 13, 2006, the BBB report for ECC on its website continued to show an “F” rating.   The report described the nature of ECC's business and the complaint history.5  The report stated:  “This company is not a member of the Better Business Bureau.   This fact does not disparage the company in any way.”   In addition, the report stated that no question about the truth of the company's advertising had come to the BBB's attention.

ECC's Attorney Seth Rafkin wrote a letter to the BBB, dated July 24, 2006, seeking to work with the BBB to improve ECC's rating.   Rafkin described ECC's business.   He explained that ECC enrolls approximately 1,080 clients in a 36-month period and the complaints received by the BBB represented less than two percent of ECC's clients.   Based on the information in the BBB's report, ECC had performed as requested or provided a full or partial refund as to 17 of the 19 complaints.   He noted the statement in the report that no question had been raised about the truth of ECC's advertising.   Rafkin asked the BBB to reconsider its rating of ECC, provide dates for the complaints referred to in the report posted online, provide any additional information that contributed to the rating other than the complaints, and advise ECC of any specific actions that the BBB would like ECC to consider to improve its rating.

The BBB president, William Mitchell, responded by letter.   He provided the dates of the complaints that had been received.   He stated that the BBB's rating system relies on the complaints received and does not take the volume of the company's business into consideration.   He stated, “In the case of ECC, their ‘F’ rating is warranted due to the seriousness of the complaints we have received.   They are misrepresenting their services and fail to provide all of the benefits they promise.”   Mitchell accused ECC of claiming to be headquartered in Reno in order to obtain a new report from the Reno office.   Mitchell also stated that he had some concerns about ECC's advertising practices based on statements that he found misleading when he reviewed ECC's website.  (Under the BBB's algorithm, ten points are subtracted from a company's composite score for minor concerns about advertising.)

ECC responded to Mitchell's letter by requesting copies of the complaints and other information.   Mitchell provided copies of the complaints, which he characterized as containing a pattern of serious allegations.   He also stated that the report on ECC did not include the request to modify misleading advertising, because the BBB was giving ECC an opportunity to rectify the advertising.   If ECC failed to correct the advertising, it would be included in the BBB's report on the business.

The Complaint

On April 2, 2007, ECC filed a complaint against the BBB for defamation, trade libel, intentional and negligent interference with economic relations, and unfair competition based on the BBB's rating activities.   The complaint alleged that the BBB's “F” rating of ECC in September 2005 represented that the BBB was aware of facts that show ECC meets the BBB's definition of an “F” rating.   The BBB's records contained no information to justify the lowest rating, because the records showed that ECC had responded to all but one of the complaints against it and agreed to perform as requested by the customer or provided a refund as to all but two of the complaints, the truth of ECC's advertising had not been called into question, and the BBB's records stated that it knew of no other matter or practice relating to ECC that would assist the consumer in considering ECC.

The complaint listed 27 people who had been prepared to enroll with ECC, but decided not to enroll after visiting the BBB's website and seeing the “F” rating of the business.   The BBB continues to post the “F” rating of ECC on its website and lists an address for ECC that ECC has never used.

The BBB knew or should have known that ECC had relationships with third parties that would have resulted in a future economic benefit to ECC in the form of tuition.   The BBB's conduct was intended to disrupt these relationships, or the BBB failed to act with reasonable care in its rating and reporting on ECC. The relationships were disrupted and the damage to ECC's reputation and loss of tuition exceeded $250,000.   The BBB acted with malice in retribution for ECC challenging the BBB's rating.

In addition, the BBB's statements constitute an unfair business practice within the meaning of Business and Professions Code section 17200.   ECC sought injunctive relief to prevent the BBB from making these statements, or similar statements, and to refrain from rating ECC for two years.

Initial Proceedings on the Anti-SLAPP Motion

On June 8, 2007, the BBB filed an anti-SLAPP motion stating that the complaint was based on the BBB's exercise of its free speech rights in connection with an issue of public interest.   The BBB argued that its report on ECC consisted of privileged opinion and comment.   Moreover, ECC could not prove that the BBB's statements were false, because the BBB received complaints about ECC, ECC's advertising is misleading, ECC is not in compliance with California licensing requirements, the complaints against ECC contain especially egregious accusations, and the career counseling industry is known for questionable business practices.   The BBB also argued that ECC is a limited purpose public figure and ECC could not prove the BBB acted with malice.   In addition, the BBB argued that ECC failed to plead all of the elements required for intentional or negligent interference with prospective economic advantage or unfair business practices under Business and Professions Code section 17200.

On June 19, 2007, ECC filed an opposition to the motion to strike.   Among the evidence that ECC submitted in support of its opposition was the declaration of ECC's chief operating officer.   Kraft instructed ECC's employees to notify him when potential students decided not to enroll that either discussed the BBB's rating or counselors strongly suspected did not enroll due to the rating.   Kraft declared:  “The names of those potential students include:  Jason Kin, Leo Delgado, Richard Gizzi, Chris Bauer, Natalie Potter, Brian Miller, Ben Burgeson, Blanca Rodriguez, Cindy Rosario, Ben Holt, Rayapu Kakorlapudi, Jahrael Browne, Hilary Garrett, Ted Sarandos, Todd Spencer, William Meeks, Joe Balogna, Delvon Frye, Scott Miller, Carol Nixx, Brian Singer, Jackie Sanchez, Sonia Bower, Marc Stuart, Rayce Malone, Melisa St. Prix, [and] Mattias Vellutina.   There are many additional potential students we now also suspect did not enroll because of the BBB rating.”

On June 25, 2007, the BBB filed a reply and objections to ECC's evidence.   The BBB objected to the names of potential students and suspicions concerning additional potential students on the grounds that it was hearsay and lacked relevance and foundation.   On July 9, 2007, the trial court overruled the objections with regard to the 27 names of potential students, but sustained objections to Kraft's statement that ECC suspects many additional potential students did not enroll because of the BBB's rating.

A hearing on the special motion to strike was continued to allow ECC to conduct limited discovery.   On November 9, 2007, ECC filed a supplemental opposition to the motion to strike.   The BBB also filed a supplemental pleading in support of its motion to strike.

On January 4, 2008, the trial court found that the commercial speech exception to the anti-SLAPP provisions applied under section 425.17, subdivision (c).  The court entered an order denying the anti-SLAPP motion on February 5, 2008.

Proceedings After Denial of the Anti-SLAPP Motion

Discovery and other proceedings continued in the case.   On July 21, 2008, ECC voluntarily dismissed its causes of action for defamation and trade libel without prejudice.   The remaining causes of action incorporated the defamation and trade libel allegations by reference.

On October 20, 2008, ECC filed a motion for a preliminary injunction seeking to prevent the BBB from rating ECC while the action was pending.   In support of the motion, ECC submitted Kraft's declaration again.

The BBB opposed the motion for a preliminary injunction and filed objections to ECC's evidence.   The BBB objected again to the paragraph of Kraft's declaration providing names of 27 “potential students” and ECC's suspicions about additional potential students.   A hearing was held on November 18, 2008, and the trial court took the matter under submission.

This court considered a petition filed by the BBB for an alternative writ of mandate to vacate the order denying the anti-SLAPP motion, concluded the commercial speech exception did not apply in this case, and issued an alternative writ to the trial court on November 25, 2008.   On December 3, 2008, the court vacated its order denying the anti-SLAPP motion and set a hearing date for further proceedings on the anti-SLAPP motion.   The court instructed the parties to file supplemental briefs on the limited issue of whether ECC was entitled to assert the claims that had been voluntarily dismissed.   In addition, the minute order stated in pertinent part:  “The Court is considering ordering the parties to:  (1) submit new moving, opposing, and reply briefs which omit all arguments concerning [section] 425.17 and which omit reference to all evidence successfully objected to;  and (2) resubmit the previously submitted declarations with all successfully-objected-to evidence stricken through or otherwise redacted.   The Court would not permit the assertion of any expanded or new arguments to adduce any new evidence of any nature.   The goal is to refine and cull the voluminous documents already filed in connection with the special motion to strike to what properly belongs before the Court in light of its prior evidentiary rulings and the disposition of the [section] 425.14 issue.”

On December 5, 2008, the trial court denied ECC's motion for a preliminary injunction.   In ruling on the parties' objections to evidence submitted in connection with the motion for a preliminary injunction, the court sustained the BBB's objections to the paragraph of Kraft's declaration including both the 27 names of potential students and the suspicions that there were additional potential students.

On February 5, 2009, the trial court issued a proposed order to assist the parties in advance of a hearing on the anti-SLAPP motion the following week.   The proposed order would direct the parties to submit new briefs and evidentiary submissions in connection with the anti-SLAPP motion, omitting arguments based on section 425.17 and evidence to which objections had been sustained.   The proposed order specifically stated:  “No party may offer any new evidence of any nature.”

A hearing was held on February 11, 2009.   The BBB noted that there were inconsistent evidentiary rulings and asked which rulings applied for the purposes of the anti-SLAPP submissions.   The trial court stated that the most recent rulings in connection with the preliminary injunction governed.   ECC's attorney acknowledged the court's minute orders stating that new evidence would not be permitted, but argued, “I believe there is new evidence that we have been laboring over in opposing the motion․  I can't think of any reason why the plaintiff should be precluded as a matter of law from offering whatever evidence it can[, b]ecause its burden is to do exactly that.”

The trial court asked:  “Are you going to make me an offer of proof as to what that new evidence will be?”   ECC's attorney stated:  “[T]here is an article in the Los Angeles Times about the Better Business Bureau that-it contains some admissions from the spokesman of the Better Business Bureau about the rating system.  [¶] There had also been a number of companies that have contacted my client and me with strikingly similar complaints.   And we also have a [Business and Professions Code section] 17200 claim that goes to unfair business practices.   Evidence of that applying to us and other companies obviously makes it more likely than not that we'd prevail.”   The BBB responded that the newspaper article was hearsay.   In addition, the BBB argued that ECC was aware of the other companies much earlier, because ECC mentioned adding a class action or additional plaintiffs almost a year earlier, but never followed through.   The court stated:  “I realize reliance on a newspaper article probably would result in sustaining an objection on hearsay grounds.   So if that's the offer of proof, I'm going to stand by the evidence rule I have.”

ECC's attorney replied:  “That's not the offer of proof.   The offer of proof is I'm showing that that has been said.   I don't think it would be hearsay if it's a statement from somebody.   The article can be authenticated and the statement is-” The trial court disagreed.   ECC's attorney suggested:  “We know of other companies who have suffered from the same process.   We can get from the other companies-” The court stated:  “Your request is denied.   We're going to stick with the evidence we have.”   ECC's attorney asked for the basis of the court's ruling.   The court stated that ECC was attempting to go beyond the four corners of the complaint and the evidence offered contained multiple layers of objectionable hearsay.   ECC argued that statements from the presidents of other companies would not be hearsay.   ECC's attorney stated in pertinent part:  “Your Honor, we have a [Business and Professions Code section] 17200 fair business practices claim.   The declarations from other companies suffering from the same practice are relevant to that seeking injunctive relief.”   The court ruled:  “The request to expand the evidence is denied.”   ECC's attorney stated:  “I will submit a written offer of proof with our opposition as to the evidence we would offer.”

Proceedings on the Revised Anti-SLAPP Motion

On April 9, 2009, the BBB filed a revised anti-SLAPP motion as ordered by the court.   The BBB argued that it had met its burden to show the anti-SLAPP statute applied and ECC could not plead and prove its remaining causes of action.   The BBB submitted Mitchell's declaration.   Mitchell declared that the BBB received over 75 consumer complaints between 1992 and 2007 about ECC and related entities owned and operated by Petulla, which include Career Connection 2000, Film Connection, TV Connection, Radio Connection, and Recording Connection.   The BBB submitted an appendix of the 75 complaints.   The BBB submitted detailed declarations from 12 ECC customers who had filed complaints with the BBB in the past 36 months.   The BBB also submitted promotional material from ECC's website.

On April 20, 2009, ECC filed an opposition to the anti-SLAPP motion.   ECC argued that the trial court should not have precluded ECC from introducing further evidence to meet its burden to prevent dismissal of its claims at the pleading stage.   ECC argued that the BBB's rating conduct was not speech in connection with a public issue, or if it was, ECC had established a prima facie case as to each cause of action.   ECC stated that the evidence showed the BBB retaliated against ECC for challenging its rating, did not have information to support the “F” rating of ECC, misleads the public by stating that not being a BBB member did not disparage a company, falsely tells the public that the BBB does not take business volume into account, uses a rating system that leads to grossly misleading results between the evaluations of members and non-members, and fails to inform the public that ECC's entire industry had been predetermined as a bad type of business and the extent to which ratings of certain industries are downgraded.

In support of the opposition, ECC submitted Petulla's declaration describing ECC and his contacts with the BBB. ECC also submitted the rating explanation provided on the BBB's website and the algorithm used by the BBB to determine ratings.   ECC submitted the BBB's report as it appeared on the website on July 13, 2006.   ECC submitted the letters that ECC wrote to the BBB seeking to improve ECC's rating, as well as the BBB's responses.

ECC submitted Mitchell's deposition testimony explaining the funding and operations of the BBB. In addition to facts stated above, Mitchell provided the following information.   The BBB has approximately 25,000 members.   In 2006, the BBB's revenue were approximately $9 million and revenue was slightly higher in 2007.

Mitchell explained that the main page of the BBB's reliability report on a company lists the complaint experience for the past 36 months, but the BBB does not limit its review to 36 months in analyzing whether a company has received an accurate rating.   The BBB may also take into account the complaint experience of another company owned by the same individual.   Nowhere on the report can a reader find out that the BBB has predetermined ECC to be in a suspect industry category.

ECC submitted the declaration of a former student who complained to the BBB in May 2004, received services from ECC, and is pleased with ECC's performance.   In June 2004, she advised the BBB that her complaint was resolved and she was satisfied with ECC's services.   In November 2007, she received a letter from the BBB with a declaration to sign that was not accurate, because it did not state that she told the BBB that she was satisfied with ECC's response and their services.   In addition, the declaration stated that she did not receive a promised refund, when in fact, she was not promised a refund.

ECC's attorney also submitted his declaration containing an offer of proof as to the additional evidence that ECC wanted to submit.   He attached five newspaper articles concerning the BBB's rating system.   He declared that declarations from more than 10 companies that had contacted them would attest to similar unfair treatment and grading by Better Business Bureaus.   He also declared:  “Prior to and during the course of this litigation, Plaintiff ECC has been contacted by numerous individuals stating that they would have enrolled in an ECC program but for the [BBB] report.   Business records confirming a portion of these contacts exist.”

A hearing was held on the motion to strike on May 1, 2009.   On May 28, 2009, the trial court issued its ruling granting the motion to strike in full.   On June 10, 2009, the court entered a judgment of dismissal in favor of the BBB and against ECC. ECC filed a timely notice of appeal from the judgment.6  Following entry of judgment, the court granted the BBB's motion for attorney fees and costs and inserted in the order and amended judgment, an award of attorney fees and costs to the BBB in the amount of $283,693.65.

DISCUSSION

Applicable Law and Standard of Review

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 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.”  “ ‘The anti-SLAPP statute arose from the Legislature's recognition that SLAPP suit plaintiffs are not seeking to succeed on the merits, but to use the legal system to chill the defendant's first amendment right of free speech.’  [Citation.]”  (Nguyen-Lam v. Cao (2009) 171 Cal.App.4th 858, 866-867.)

The trial court engages in a two-step process to determine whether to grant or deny a section 425.16 motion to strike.  (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier ).)   The court first decides whether the defendant has made a threshold showing that the acts at issue arose from protected activity. (§ 425.16, subd. (b)(1);  Navellier, supra, at p. 88.)   The defendant must demonstrate that the underlying act arises from one of the following protected activities:  (1) written or oral statements made before a legislative, executive, or judicial proceeding;  (2) written or oral statements made in connection with an issue under consideration or review by a legislative, executive, or judicial body;  (3) written or oral statements made in a place open to the public or in a public forum in connection with an issue of public interest;  or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest. (§ 425.16, subd. (e).)  Once the defendant meets this burden, then the court determines whether the plaintiff has demonstrated a probability that he or she will prevail on the claim. (§ 425.16, subd. (b)(1);  Navellier, supra, at p. 88.)

To show a probability of success on the merits of the action, “ ‘the plaintiff “must demonstrate that 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.” ’   [Citations.]”  (Navellier, supra, 29 Cal.4th at pp.   88-89) “In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (§ 425.16, subd. (b)(2).)  “The filing of a notice of motion under the anti-SLAPP statute generally will stay all discovery in the action. (§ 425.16, subd. (g).)  Nonetheless, a plaintiff opposing an anti-SLAPP motion cannot rely on allegations in the complaint, but must set forth evidence that would be admissible at trial.  [Citation.]  Precisely because the statute (1) permits early intervention in lawsuits alleging unmeritorious causes of action that implicate free speech concerns, and (2) limits opportunity to conduct discovery, the plaintiff's burden of establishing a probability of prevailing is not high:  We do not weigh credibility, nor do we evaluate the weight of the evidence.   Instead, we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law.  [Citation.]  Only a cause of action that lacks ‘even minimal merit’ constitutes a SLAPP.  [Citation.]”  (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699-700 (Overstock ).)

On appeal, we independently review whether section 425.16 applies and whether plaintiff has a probability of prevailing on the merits.  (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999;  Lieberman v. KCOP Television, Inc. (2003) 110 Cal.App.4th 156, 163-164.)  “[We] review a ruling on an evidentiary objection in connection with a special motion to strike for abuse of discretion.  [Citation.]”  (Hall v. Time Warner, Inc. (2007) 153 Cal.App.4th 1337, 1348, fn. 3.)

Section 425.17, Subdivision (c)

ECC contends that the speech at issue is exempt from the anti-SLAPP statute under the commercial speech exemption provided in section 425.17, subdivision (c).  We disagree.

Section 425.17, subdivision (c) provides the following exemption from the anti-SLAPP statute for certain commercial speech:  “Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services, including, but not limited to, insurance, securities, or financial instruments, arising from any statement or conduct by that person if both of the following conditions exist:  [¶] (1) The statement or conduct consists of representations of fact about that person's or a business competitor's business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services, or the statement or conduct was made in the course of delivering the person's goods or services.  [¶] (2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer․”

The California Supreme Court recently explained that section 425.17, subdivision (c) exempts a cause of action arising from commercial speech from the anti-SLAPP law when:  “(1) the cause of action is against a person primarily engaged in the business of selling or leasing goods or services;  (2) the cause of action arises from a statement or conduct by that person consisting of representations of fact about that person's or a business competitor's business operations, goods, or services;  (3) the statement or conduct was made either for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person's goods or services or in the course of delivering the person's goods or services;  and (4) the intended audience for the statement or conduct meets the definition set forth in section 425.17[, subdivision] (c)(2).”  (Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 30 (Simpson ).)

In Simpson, supra, 49 Cal.4th at page 20, a wood screw manufacturer filed a complaint for defamation, trade libel, false advertising, and unfair business practices against an attorney, based on his newspaper advertisement.   The advertisement stated that owners of wood decks built with screws manufactured by several companies, including Simpson, might have certain legal rights and be entitled to compensation.  (Id. at p. 18.)   The advertisement suggested calling the attorney to investigate potential claims.   The attorney filed an anti-SLAPP motion to strike the complaint.  (Ibid.)

The Supreme Court found that Simpson's complaint was not exempt from the anti-SLAPP statute under the commercial speech exemption of section 425.17, subdivision (c).  (Simpson, supra, 49 Cal.4th at p. 17.)   A cause of action must arise from a person's representation about that person's or a competitor's “business operations, goods, or services” to be exempt from the anti-SLAPP statute. (§ 425.17, subd. (c).)  Each of Simpson's causes of action was based on the allegation that the attorney's advertisement communicated that Simpson's screws are defective.  (Simpson, supra, at p. 30.)   The representation that Simpson's screws are defective is not “about” the attorney's or his competitor's business operations, goods, or services.   (Ibid.) It was a statement about Simpson's goods.  (Ibid.)

The common theme of the allegations in this action is that the BBB's business rating scheme resulted in false or misleading representations about ECC's business to potential customers of ECC's services, causing damage to ECC. The evidence does not show that the BBB is primarily engaged in the business of selling memberships.   Even were we to conclude that selling memberships is the BBB's primary activity, the statements at issue were not representations of fact about the BBB's or a business competitor's business operations, goods, or services to a potential buyer of the BBB's services.   The representations were made to potential customers of ECC. ECC is not a business competitor of the BBB. The BBB's speech is not the type of commercial speech exempted from the anti-SLAPP statute under the definition provided by section 425.17, subdivision (c).

Applicability of Section 425.16

ECC contends the anti-SLAPP statute does not apply because the BBB's ratings are not statements made in connection with an issue of public interest.   This is incorrect.

The anti-SLAPP statute does not provide a definition for “a public issue” or “an issue of public interest,” and “it is doubtful an all-encompassing definition could be provided.”  (Weinberg v. Feisel (2003) 110 Cal.App.4th 1122, 1132.)   However, the Legislature intended that there be “some attributes of the issue which make it one of public, rather than merely private, interest.”  (Ibid.)

“The most commonly articulated definitions of ‘statements made in connection with a public issue’ focus on whether (1) the subject of the statement or activity precipitating the claim was a person or entity in the public eye;  (2) the statement or activity precipitating the claim involved conduct that could affect large numbers of people beyond the direct participants;  and (3) whether the statement or activity precipitating the claim involved a topic of widespread public interest.  [Citations.]”  (Wilbanks v. Wolk (2004) 121 Cal.App.4th 883, 898 (Wilbanks ).)

“ ‘A few guiding principles may be derived from decisional authorities.   First, “public interest” does not equate with mere curiosity.  [Citations.]  Second, a matter of public interest should be something of concern to a substantial number of people.  [Citation.]  Thus, a matter of concern to the speaker and a relatively small, specific audience is not a matter of public interest.  [Citation.]  Third, there should be some degree of closeness between the challenged statements and the asserted public interest [citation];  the assertion of a broad and amorphous public interest is not sufficient [citation].   Fourth, the focus of the speaker's conduct should be the public interest rather than a mere effort “to gather ammunition for another round of [private] controversy․”  [Citation.]  ․ A person cannot turn otherwise private information into a matter of public interest simply by communicating it to a large number of people.  [Citations.]’  [Citation.]”  (Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534, 1546-1547.)

“Consumer information, ․ at least when it affects a large number of persons, ․ generally is viewed as information concerning a matter of public interest.  Paradise Hills Associates v. Procel (1991) 235 Cal.App.3d 1528 [,] although not itself a section 425.16 case, noted that the First Amendment protected a consumer's statements about the quality of a seller's products and service and her unhappiness with them, finding, in part, that the statements concerned a matter of public interest.  ‘Courts have recognized the importance of the public's access to consumer information.  “The growth of ‘consumerism’ in the United States is a matter of common knowledge.   Members of the public have recognized their roles as consumers and through concerted activities, both private and public, have attempted to improve their ․ positions vis-vis the [suppliers] and manufacturers of consumer goods.   They clearly have an interest in matters which affect their roles as consumers, and peaceful activities, such as plaintiffs', which inform them about such matters are protected by the First Amendment.”  [Citation.]'  [Citations.]”  (Wilbanks, supra, 121 Cal.App.4th at pp. 898-899.)

For purposes of applying section 425.16, subdivision (e)(4), the BBB's reports on businesses, including ECC, were made to assist consumers in selecting reliable companies with which to do business.   By its own admission, ECC engaged in over 1000 consumer transactions over a period of 36 months.   The number of people and substantial cost of ECC's services is certainly great enough to make the issue one of public concern within the meaning of section 425.16, subdivision (e)(4).

ECC Failed to Show a Probability of Prevailing

We next examine whether ECC submitted admissible evidence demonstrating a probability of prevailing on any of the remaining causes of action alleged in the complaint.   We conclude that the trial court did not abuse its discretion with respect to its evidentiary rulings and ECC failed to submit evidence necessary to demonstrate a probability of prevailing.

A. Excluded Evidence

ECC contends the trial court abused its discretion by excluding evidence that the court had initially ruled was admissible.   At issue is the portion of Kraft's declaration listing the names of 27 individuals who decided not to enroll in ECC courses who had either mentioned the BBB rating to an ECC employee or ECC employees suspected the BBB rating was a determining factor in the individual's decision.   We find no abuse of discretion.

The plaintiff must demonstrate a probability of prevailing “through ‘competent and admissible evidence.’  [Citations.]  Thus, declarations that lack foundation or personal knowledge, or that are argumentative, speculative, impermissible opinion, hearsay, or conclusory are to be disregarded.   [Citation.]”  (Gilbert v. Sykes (2007) 147 Cal.App.4th 13, 26.)  “[E]vidence leading only to speculative inferences is irrelevant.”  (People v. Kraft (2000) 23 Cal.4th 978, 1035.)

“ ‘A trial court's exercise of discretion in admitting or excluding evidence ․ will not be disturbed [on appeal] except on a showing the trial court exercised its discretion in an arbitrary, capricious, or patently absurd manner that resulted in a manifest miscarriage of justice․’  [Citations.]”   (San Lorenzo Valley Community Advocates for Responsible Education v. San Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 1356, 1419.)   “[E]ven where evidence is improperly excluded, the error is not reversible unless ‘ “it is reasonably probable a result more favorable to appellant would have been reached absent the error.  [Citations.]”  [Citation.]’   [Citations.]”  (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431-1432.)

In considering the revised anti-SLAPP motion, the trial court excluded the portion of Kraft's declaration listing names of 27 individuals who did not enroll with ECC who either mentioned the BBB's rating to ECC employees or ECC employees suspected the BBB rating was a determining factor in the decision not to enroll.   The court's ruling is clearly correct, as Kraft's statement is based on multiple layers of inadmissible hearsay.   The statements made by third parties to ECC employees are hearsay and the statements made by ECC employees to Kraft about their conversations with potential customers are also hearsay.   No exception has been shown to apply to these statements.   In addition, the suspicions of ECC employees to explain the decisions of potential customers are purely speculative, and therefore, irrelevant.   The court did not abuse its discretion by excluding this evidence.

ECC was also not prejudiced by the timing of the trial court's reconsideration of its evidentiary ruling.   Had court sustained the BBB's objections to Kraft's declaration in connection with the initial proceedings on the anti-SLAPP motion, ECC would have had no opportunity to present further evidence on this issue.   However, as a result of the court's initial rulings, ECC had the opportunity to conduct additional discovery into all aspects of the case.   ECC was alerted to the deficiencies of Kraft's declaration when the court excluded portions in connection with a different motion in December 2008.   Although the court had instructed the parties not to provide additional evidence in connection with the revised anti-SLAPP proceedings, ECC had months to obtain and prepare admissible evidence, requested permission in oral and written arguments to submit additional evidence, and filed a written offer of proof, which the court considered.   We find no abuse of discretion by the court, or prejudice to ECC, with regard to the evidentiary ruling excluding this portion of Kraft's declaration.

B. Interference with Prospective Economic Advantage

ECC contends that the evidence showed a probability that it will prevail on the merits of its causes of action for intentional and negligent interference with prospective advantage.   We disagree.

“ ‘The tort of intentional or negligent interference with prospective economic advantage imposes liability for improper methods of disrupting or diverting the business relationship of another which fall outside the boundaries of fair competition.’  [Citation.]”  (San Jose Const., Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1544.)  “[It] protects the same interest in stable economic relationships as does the tort of interference with contract, though interference with prospective advantage does not require proof of a legally binding contract.  [Citation.]”  (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

The elements of the tort of intentional interference with economic advantage are:  “ ‘(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff;  (2) the defendant's knowledge of the relationship;  (3) intentional acts on the part of the defendant designed to disrupt the relationship;  (4) actual disruption of the relationship;  and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.’  [Citations.]”  (Pacific Gas & Electric Co. v. Bear Stearns & Co., supra, 50 Cal.3d at p. 1126, fn. 2.)

Similarly, “[t]he tort of negligent interference with prospective economic advantage is established where a plaintiff demonstrates that (1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff;  (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship;  (3) the defendant was negligent;  and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship.  (See 5 Witkin, Summary of Cal. Law (9th ed.   1988) Torts, §§ 661-662, pp. 755-758;  BAJI No. 7.82.1.)”   (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 786.)

“A plaintiff must establish an existing relationship to establish a claim for intentional interference with prospective economic advantage.  (Korea Supply Co. v. Lockheed Martin Corp., [ (2003) 29 Cal.4th 1134, 1164];  Roth v. Rhodes (1994) 25 Cal.App.4th 530, 546 [allegation that defendant interfered with relations with future customers was insufficient].)”  (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1291 [home buyer contended seller's conduct depressed home's value and impaired ability to refinance, but failed to show existing relationships with potential purchasers or lenders that were disrupted by seller's conduct].)  “ ‘Plaintiff must establish an actual economic relationship or a protected expectancy with a third person, not merely a hope of future transactions.’  [Citation.]”  (Janda v. Madera Community Hosp. (E.D.Cal.1998) 16 F.Supp.2d 1181, 1189-1190.)

The sole evidence in this case of ECC's economic relationships with third parties was provided in Kraft's declaration.   The evidence admitted by the trial court showed that Kraft instructed ECC employees to notify him of potential customers who decided not to enroll in an ECC course who either discussed the BBB's rating or employees strongly suspected did not enroll due to the BBB's rating of the company.   Kraft's instructions to employees are not sufficient to prove any existing relationships with third parties were disrupted as a result of the BBB's “F” rating of the business.   ECC failed to demonstrate a probability of prevailing on its causes of action for interference with prospective economic advantage.

C. The UCL

ECC contends that it has shown a probability of prevailing on its cause of action for violation of the UCL. We conclude that ECC has failed to demonstrate any economic loss, which is required to maintain an action for unfair competition under the UCL.

The UCL defines “unfair competition” as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law (§ 17500 et seq.) ].” (Bus. & Prof.Code, § 17200.)  “The UCL's purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.  [Citation.]”  (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949 (Kasky ).)  “By defining unfair competition to include also any ‘unfair or fraudulent business act or practice’ ( [Bus. & Prof.Code,] § 17200, italics added), the UCL sweeps within its scope acts and practices not specifically proscribed by any other law.”  (Ibid.)

A private action for relief under the UCL can be brought only “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.”  (Bus. & Prof.Code, § 17204.)   In other words, the plaintiff “must demonstrate some form of economic injury.”  (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323.)

“Because elements for standing ‘are not mere pleading requirements but rather an indispensable part of the plaintiff's case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.  [Citations.]’  (Lujan v. Defenders of Wildlife (1992) 504 U.S. 555, 561.)”  (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1345.)   In opposition to an anti-SLAPP motion, the plaintiff cannot simply rely on the allegations in the complaint, but must set forth evidence that would be admissible at trial.  (Overstock, supra, 151 Cal.App.4th at pp. 699-700.)   The plaintiff must submit admissible evidence that they have suffered injury in fact and lost money or property as a result of the unfair competition in order to show a reasonable probability of prevailing on the merits of a UCL claim.  (See Stewart v. Rolling Stone LLC (2010) 181 Cal.App.4th 664, 690 [evidence of damage to reputation did not demonstrate injury in fact and lost money or property, and therefore, the plaintiffs failed to show a reasonable probability of prevailing on UCL claim].)

In this case, there is no admissible evidence that ECC lost money or property as a result of the BBB's rating.   ECC did not submit any declarations from individuals who decided against enrolling in ECC's program based on the BBB's report.   There is no evidence that the revenue of the business decreased or the value of the business was reduced as a result of the BBB's rating.   ECC failed to show a probability of prevailing on its cause of action under the UCL.

ECC's reliance on Overstock, supra, 151 Cal.App.4th at page 716, to argue that the plaintiff's evidentiary burden does not include standing, is misplaced.   The Overstock court, in reviewing an order denying an anti-SLAPP motion, concluded that the economic losses alleged in the plaintiff's complaint met the standing requirements of the UCL. It was undisputed, however, that the plaintiff submitted evidence in connection with the anti-SLAPP motion that established the economic losses alleged in the complaint.   The sole question considered was whether such losses were sufficient to meet the standing requirement.   The holding in Overstock has no application in this case.

D. Offer of Proof

ECC contends that the trial court abused its discretion by precluding the parties from submitting additional evidence in connection with the revised anti-SLAPP motion.   ECC's written offer of proof concerned newspaper articles about the BBB, evidence that other companies had similar experiences, and the declaration of ECC's attorney that business records exist confirming contacts “by numerous individuals stating that they would have enrolled in an ECC program but for the Better Business Bureau report.”   We find no abuse of discretion.

As stated above, we review the trial court's exclusion of evidence for an abuse of discretion.  (San Lorenzo Valley Community Advocates for Responsible Education v. San Lorenzo Valley Unified School Dist., supra, 139 Cal.App.4th at p. 1419.)  “ ‘To preserve an evidentiary ruling for appellate review, the proponent of the evidence must make an offer of proof regarding the anticipated testimony.  [Citation.]  The offer of proof must address the “substance, purpose, and relevance of the excluded evidence” (Evid.Code, § 354, subd. (a)), and must set forth the actual evidence to be produced and not merely the facts or issues to be addressed and argued [citation].   The trial court may reject a general or vague offer of proof that does not specify the testimony to be offered by the proposed witness.  [Citations.]’  [Citations.]”  (Bowman v. Wyatt (2010) 186 Cal.App.4th 286, 329.)   Even when evidence has been improperly excluded, it must be shown that a reasonably more favorable result would have been reached.  (Tudor Ranches, Inc. v. State Comp. Ins. Fund, supra, 65 Cal.App.4th at pp. 1431-1432.)

The trial court did not abuse its discretion by excluding the evidence offered by ECC. The newspaper articles about the BBB that were attached to ECC's offer of proof constituted inadmissible hearsay.   We note that the articles would not have provided any evidence that ECC suffered an economic loss as a result of the BBB's rating.   The court did not abuse its discretion by excluding the newspaper articles.

ECC offered to submit declarations from other companies who have been negatively affected by the BBB's practices.   Evidence of other companies' experience with the BBB was not relevant to the issues in this case.   In addition, declarations from other companies would not have provided any evidence that ECC suffered economic loss.   The trial court did not abuse its discretion by excluding declarations from other companies.

The trial court also did not abuse its discretion by excluding evidence of business records confirming statements by third parties.   The documents were not submitted in connection with the offer of proof.   As described, the documents contained multiple layers of hearsay.   Assuming the documents qualify as business records, the statements of ECC employees in the report would be admissible.   However, the statements of third parties which are incorporated in the business records constitute a second level of hearsay which is not admissible for the truth of the statements under any exception.   We find no abuse of discretion with respect to the court's evidentiary rulings.

DISPOSITION

The judgment is affirmed.   Respondent The Better Business Bureau of the Southland, Inc., is awarded its costs on appeal.

KRIEGLER, J.

I concur:

ARMSTRONG, Acting P. J.

Entertainment Career Connection, Inc. v.

Better Business Bureau of the Southland, Inc.

MOSK, J., Concurring,

I concur.

I do not agree that it is clear that the evidentiary rulings in summary proceedings are reviewed under an abuse of discretion standard of review.   (See Reid v. Google, Inc. (2010) 50 Cal.4th 512, 535.)   The majority agrees with the trial court evidentiary rulings as a matter of law.   Thus, there was no need to also invoke the abuse of discretion standard of review.

Plaintiff may establish a cause of action for wrongful interference with prospective business advantage with “an economic relationship, either actual or potential, with any buyer when the defendants' allegedly tortious acts took place.”  (Westwood Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 525.)   The required certainty for proof of damages was not shown here with admissible evidence.   For that reason, I concur in the majority opinion.

FOOTNOTES

1.  FN1. “SLAPP is an acronym for ‘strategic lawsuit against public participation.’ ”  (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.) All further statutory references are to the Code of Civil Procedure unless otherwise stated.

2.  FN2. “On appeal from an order denying a motion to strike, we do not weigh the evidence but accept as true all evidence favorable to the plaintiff.   (Consumer Justice Center v. Trimedica International, Inc. (2003) 107 Cal.App.4th 595, 605.)”  (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 694, fn. 7.)

3.  FN3. Section 501(c)(6) of the Internal Revenue Code, title 26, exempts the following organizations from taxation:  “Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues ․, not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.”

4.  FN4. The ratings are defined on the website as follows:  “AAA An exemplary rating.   This means that nothing in our files causes us to have any doubt about the company's reliability.  [¶] AA An extremely high rating.   The condition that lowers this grade from AAA is not what we believe to be a significant one.  [¶] A An excellent rating.   A company with this rating may not rate higher because of a greater number of rate-lowering factors, but we do not consider them to be factors that would likely adversely affect consumer transactions.  [¶] BBB A very high rating.   A company with this rating would not have a significant number of complaints or other considerations that could pose a problem to consumers.  [¶] BB A high rating.   The company would generally have demonstrated good business-consumer relations, and we would expect any consumer complaints not to be of a serious nature and to be satisfactorily handled by the company.  [¶] B A good rating that still implies reputability.   The rating may relate to length of time in business, a past problem that's been corrected, or something else that does not cause problems for consumers.   We believe a company with this rating would generally conduct business and respond to any complaints satisfactorily.  [¶] CCC A good rating.   We would expect nothing less than a satisfactory business transaction, but read our full report to determine if you have any questions or concerns.  [¶] CC Average rating.   We would expect consumer transactions to be satisfactory.   Since each transaction is individual, read our full report to determine if you have questions or concerns.  [¶] C Acceptable rating.   We know of no reason not to do business with this company.   If the level of this rating relates to anything specific that we know might be of concern to customers, it is stated in this report.   Read our full report to determine if you have questions or concerns.  [¶] D We have enough concerns about this company (for example, their offer, customer complaints, advertising, etc.) that we recommend caution in doing business with it.  [¶] F We strongly question the company's reliability for reasons such that they have failed to respond to complaints, their advertising is grossly misleading, they are not in compliance with the law's licensing or registration requirements, their complaints concern especially serious allegations, or the company's industry is known for its fraudulent practices.  [¶] NR ‘NR’ is displayed when the BBB is conducting system maintenance.”

5.  FN5. The report showed that 19 complaints had been filed against ECC in the previous 36 months.   ECC had responded by making a full refund in one case, making a partial refund in 2 cases, and agreeing to perform in accordance with the contract as to 14 complaints.   In one case, ECC relied on the terms of the agreement with the customer to refuse to make an adjustment.   One complaint was unanswered.   The BBB explained the complaint experience as follows:  “Complaints allege failure to provide services as represented, and not contacting clients to provide assistance.   Clients complain that the company fails to issue certificates, provide job placement assistance, or finals grades, calls are not returned, and delays in starting the mentoring services without explanation.  [¶] The company responds to complaints by agreeing to place a client in recording studios, offering to provide job placement assistance, and sending out certificates.   Generally the company fails to provide explanations as to why services were not originally provided.”

6.  FN6. On September 28, 2010, ECC filed a request for judicial notice of two items:  1) an unrelated action against the BBB by a law firm;  and 2) an editorial published online by the Orange County Register commenting on information published by an anonymous author on a website critical of the BBB. We deny ECC's request for judicial notice of the unrelated action, because it is irrelevant to the issues in this case.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1135, fn. 1 [to take judicial notice, the matter must be relevant to a material issue].)   We deny ECC's request for judicial notice of the editorial, because the truth of the contents of the editorial is not a proper matter for judicial notice and the fact that the editorial was published is irrelevant to the issues in this case.  (All One God Faith, Inc. v. Organic and Sustainable Industry Standards, Inc. (2010) 183 Cal.App.4th 1186, 1198, fn. 12.)On November 23, 2010, ECC filed a request for judicial notice of a television program about the BBB, statements made by the BBB, a letter from the Connecticut Attorney General, and a newspaper article published in the Los Angeles Times.   We decline to take judicial notice of these materials, as none of them are relevant to the dispositive issues on appeal.

MOSK, J.

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