Ronald J. PETERS, Cross–Complainant and Appellant, v. Mark SAUNDERS, Cross–Defendant and Respondent.
The trial court granted a special motion to strike the cross-complaint in this action based on California's SLAPP suit statute.1
FACTS AND PROCEEDINGS BELOW
This appeal is the latest battle between two groups of certified shorthand reporters: the California Reporting Alliance (CRA or Alliance) led by Peters and the Court Reporters' Action Fund (CRAF) led by Saunders. We discussed the dispute between these organizations and their members in detail in Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 33 Cal.Rptr.2d 438 and Wilcox v. Superior Court, supra, and therefore we only summarize it here.
The dispute between the parties involves the practice of “direct contracting” under which a certified shorthand reporter or reporter agency contracts with a major consumer of reporters' services, such as an insurance company, for the exclusive right to report depositions taken by attorneys representing that consumer. In August 1992 Saunders and other reporters filed the underlying action against Peters and other reporters alleging “direct contracting” as practiced by defendants constituted an unfair business practice and intentional interference with plaintiffs' economic advantages and existing contracts. Peters and the other defendants filed a cross-complaint against Saunders and other reporters alleging defamation and unlawful restraint of trade.
One of the cross-defendants, Wilcox, claimed the cross-complaint was a SLAPP suit and brought a special motion to strike under California's SLAPP statute, Code of Civil Procedure section 425.16.2 The trial court denied the motion to strike and Wilcox sought review by way of petition for writ of mandate. We granted the writ and directed the trial court to strike the cross-complaint in its entirety as to Wilcox. (Wilcox, supra, 27 Cal.App.4th at p. 831, 33 Cal.Rptr.2d 446.) We held Wilcox met her burden of showing the claims against her arose from acts in furtherance of her right of petition or free speech while Peters and the other cross-complainants failed to establish a probability of prevailing on their defamation and business tort claims against Wilcox. (§ 425.16, subdivision (b); 27 Cal.App.4th at pp. 825–830, 33 Cal.Rptr.2d 446.)
Following our decision in Wilcox, cross-defendant Saunders brought a motion under the SLAPP statute to strike the cross-complaint as to him. Saunders based the motion on the pleadings and his declaration. Peters and the other cross-complainants opposed the motion and filed counter-declarations. The trial court took Saunders' motion under submission and subsequently issued an order striking the cross-complaint. Peters appeals.3
I. SAUNDERS MADE A SUFFICIENT SHOWING THE CROSS–COMPLAINT AGAINST HIM AROSE FROM ACTS IN FURTHERANCE OF HIS RIGHTS OF PETITION AND FREE SPEECH IN CONNECTION WITH A PUBLIC ISSUE.
In order to allow prompt exposure and dismissal of SLAPP suits, section 425.16, subdivision (b) 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 or California Constitution in connection with a public issue shall be subject to a special motion to strike․” An act in furtherance of a person's “right of petition or free speech” includes “any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body ․ or any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest.” (§ 425.16, subd. (e).) It is conceded for purposes of this litigation direct contracting is a public issue within the meaning of section 425.16, subdivisions (b) and (e). (Wilcox, supra, 27 Cal.App.4th at p. 821, 33 Cal.Rptr.2d 446.)
The defendant seeking to dismiss a cause of action under the SLAPP statute bears the initial burden of showing the cause of action arises from “any act ․ in furtherance of the [defendant's] right of petition or free speech ․” (§ 425.16, subd. (b).) Peters argues if Saunders had confined himself to acts in support of the litigation against CRA or to criticism of “direct contracting” he might have been able to make a prima facie showing the cross-complaint arose out of protected constitutional activity. However, Saunders went beyond acts in furtherance of his rights of petition or free speech “in connection with a public issue” and engaged in a defamatory attack on Peters personally as well as an attempt to coerce other reporters into boycotting Peters and CRA.
Peters submitted the declarations of four shorthand reporters in support of his argument that some of Saunders' acts were not in furtherance of the rights of petition and free speech on a public issue.
Elizabeth Devine–Hall described a telephone conversation she had with Saunders in April 1992, prior to the filing of the lawsuit. In this conversation Saunders “tried to discourage [Ms. Devine–Hall] from remaining a member of [CRA]” by telling her “there was going to be a lawsuit and that he did not want to see [her] damaged as a result.” Saunders also told Ms. Devine–Hall if she did not resign from CRA he would not speak to her any more and “he would not be able to recommend [her] agency.” In addition, Saunders asked Ms. Devine–Hall if she would be interested in participating in a group of reporters he was setting up to compete with CRA.
The declaration by Karen Abbott described a shorthand reporters' meeting she attended at a hotel in Los Angles in June or July of 1992, shortly before the lawsuit was filed. Saunders was in charge of the meeting. An attorney addressed the group describing grounds for a potential lawsuit against CRA and an insurance company based on direct contracting. Saunders then told the group it would cost between $2,000 and $2,500 per person to join the lawsuit. Saunders read the group a list of reporter agencies he claimed were members of CRA. Ms. Abbott cannot remember if Saunders specifically urged the group not to do business with these agencies but “he strongly implied that we were not to accept work from, or refer work to, those agencies.”
Jeri Burnett described a letter she allegedly received from Saunders in May 1993, nine months after the lawsuit was filed. The letter stated “reporters could lose their licenses by reporting depositions pursuant to a contract with an insurance company.” The letter also stated “CRA members are illegally contracting with insurance companies.”
Saunders statements as described in the Devine–Hall, Abbott and Burnett declarations fall within the category of statements “made in connection with an issue [i.e. direct contracting] under consideration or review by a legislative, executive or judicial body.” (§ 425.16, subd. (e).) Saunders' remarks at the shorthand reporters' meeting may also come within the category of statements “made in a place open to the public or a public forum in connection with an issue of public interest.” (Ibid.)
Peters also submitted the declaration of a shorthand reporter, Susan Harris, who described a telephone conversation she had with Saunders in September 1992, a month after the complaint was filed. According to Harris, Saunders first mentioned the lawsuit against CRA and then went on to tell her “working for CRA was like working for the Mafia;” her firm “would never get paid by CRA;” and “CRA had lost an account with Aetna Insurance because Aetna caught Ron Peters at fraud and double-billing.” Saunders also said Peters “ ‘bilks' insurance companies,” “is not a certified reporter” and described Peters as “a crook.” 4
Peters contends Saunders' statements to Harris were defamatory and not in furtherance of Saunders' First Amendment rights. We agree these statements by Saunders were not made “in connection with” the CRA litigation or the public issue of direct contracting. However, to invoke the SLAPP statute Saunders does not have to show every statement he made about Peters was made in furtherance of his First Amendment rights. He only needs to show the defamation cause of action arises “from any act ․ in furtherance of [his] right of petition or free speech.” (§ 425.16, subd. (b); emphasis added.) Requiring the defendant in a SLAPP suit to show every act complained of was in furtherance of his First Amendment rights would be inconsistent with the stated legislative purpose of the statute to address “lawsuits brought primarily to chill the valid exercise of constitutional rights ․” (§ 425.16, subd. (a); emphasis added.)
Because the restraint of trade and defamation causes of action rest, in part, on acts done in connection with the public issue of “direct contracting,” Saunders satisfied the statutory requirement for invoking the special motion to strike.
II. PETERS HAS MADE A SUFFICIENT SHOWING IN SUPPORT OF HIS DEFAMATION CAUSE OF ACTION.
Once the defendant shows one or more causes of action arose from acts in furtherance of his right of petition or free speech the burden shifts to the plaintiff to establish “a probability that the plaintiff will prevail” on those causes of action. (§ 425.16, subd. (b).) In Wilcox we held that to establish a probability of success the plaintiff must (1) “demonstrate the complaint is 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” and (2) “meet the defendant's constitutional defenses ․ by showing the defendant's purported constitutional defenses are not applicable to the case as a matter of law or by a prima facie showing of facts which, if accepted by the trier of fact, would negate such defenses.” (27 Cal.App.4th at p. 824, 33 Cal.Rptr.2d 446.)
Of particular relevance to the present appeal, we held in Wilcox the plaintiff must base his prima facie showing on admissible evidence. We specifically rejected Peters' argument the plaintiff need only demonstrate the existence of sufficient evidence in order to establish a prima facie case. (27 Cal.App.4th at p. 830, 33 Cal.Rptr.2d 446.)
Evidence of Saunders' defamatory statements is contained in the declaration of Susan Harris. The Harris declaration states “Mark Saunders called me [on the telephone]” and said, among other things, Peters “is not a certified reporter,” he had been caught “at fraud and double-billing,” he “ ‘bilks' insurance companies,” he is a “crook” and working for his organization is “like working for the Mafia.” With the exception of the reference to the Mafia, these statements clearly were defamatory because they charged Peters with criminal activity and tended directly to injure him in his profession, trade or business as a court reporter and head of a court reporter agency. (Civ.Code § 46.) 5
Saunders objected to the statements in the Harris declaration as hearsay. The trial court did not explicitly rule on this objection. After hearing oral argument on the motion to strike, the court took the matter under submission and later issued a minute order granting the motion without explanation. Thus, we cannot determine from the record whether the trial court admitted the Burnett and Harris declarations or excluded them on hearsay or other grounds.
The statements are not hearsay. Clearly, Peters was not introducing Saunders' defamatory statements to prove the truth of the matters stated. Therefore, the only way the trial court's ruling striking the defamation claim can be upheld is if the Harris declaration was excludable on some ground other than hearsay.
Saunders suggests such an alternative ground exists in Harris' lack of personal knowledge the defamatory telephone call actually came from Saunders. (Evid.Code § 702.) We agree. Under the SLAPP statute, a showing in support of a cause of action must “be made by competent evidence within the personal knowledge of the declarant.” (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 654, 49 Cal.Rptr.2d 620.) Ms. Harris states in her declaration: “Mark Saunders called me.” She provides no information showing how she knew it was Saunders to whom she was speaking. (Cf. People v. Hess (1970) 10 Cal.App.3d 1071, 1078, 90 Cal.Rptr. 268.) Her conclusory statement the information in her declaration is within her personal knowledge does not fill in this gap. (Fisher v. Cheeseman (1968) 260 Cal.App.2d 503, 506, 67 Cal.Rptr. 258.)
It has long been the rule in California an appellate court will not look behind the trial court's judgment to review its reasoning. This rule is often referred to as the “rule of nonreviewability.” A century ago our Supreme Court pronounced, “No rule of decision is better or more firmly established by authority, nor one resting on a sounder basis of reason and propriety, than that a ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason.” (Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329, 48 P. 117.) This rule of nonreviewability applies to the exclusion of evidence. If evidence is excluded on an improper objection, or the trial court excludes evidence on its own motion, the exclusion will be upheld if the evidence was inadmissible for any reason. (Davey v. Southern Pacific Co., supra, 116 Cal. at p. 330, 48 P. 117; Philip Chang & Sons Associates v. La Casa Novato (1986) 177 Cal.App.3d 159, 173, 222 Cal.Rptr. 800.) Here, evidence of the defamatory statements was inadmissible because Harris failed to allege facts demonstrating her personal knowledge Saunders made the statements.
In our original opinion in this appeal, our analysis ended at this point because we determined a proper ground existed for the exclusion of the evidence and, without this evidence, Peters could not establish a prima facie case of defamation. On petition for rehearing, however, Peters urged there should be an exception to the rule of nonreviewability in cases where the appellant shows (1) he lacked actual or constructive notice of the defect in the evidence; (2) if he had notice of the actual defect in the evidence he could have cured it or supplied substitute evidence; and (3) it is reasonably probable he would have obtained a more favorable result in the proceeding if the evidence had been admitted. We granted rehearing to consider this and other points raised by Peters.
As the present case demonstrates, it is common in motion practice, where the facts and arguments are presented principally in writing, for one party to object to another party's evidence but for the trial court never to rule explicitly on the objection. Typically, the trial court reviews the parties' legal memoranda and declarations, hears argument on the motion and either rules from the bench or takes the matter under submission and later issues its ruling in the form of a minute order. These rulings rarely address evidentiary issues raised by the parties. Thus, whatever evidentiary rulings the trial court makes, it makes in private. It may decide to accept or reject an evidentiary objection raised by a party or it may determine on its own motion an item of evidence is admissible or inadmissible for a reason not raised by any party.6
Affirming the judgment in such a case on the ground the trial court reached the correct result no matter how it got there would be consistent with the long-established and well-recognized rule of nonreviewability discussed above. Nevertheless, there is merit to Peters' argument it is unfair to apply the rule in this case because he had no way of knowing the trial court (or this court) was going to rule the declaration inadmissible for lack of personal knowledge. Saunders did not raise this ground below nor was it ever mentioned by the trial court. The ground was first raised on appeal, after it was too late to correct the defect. Peters asserts had he known of this ground for objection in the trial court he could have filed a supplemental declaration showing declarant Harris did have personal knowledge she was speaking to defendant Saunders on the telephone. (See discussion below, pp. 701–702.)
Notwithstanding the historical basis and sound reasons for the rule of nonreviewability, precedent exists for the kind of exception urged by Peters.
In Davey, supra, the appellant argued for an exception to the rule on grounds similar to those urged by Peters in the present case. Davey brought a personal injury action against Southern Pacific after she fell between the rails of its track into an excavation negligently left open and unprotected by defendant. The complaint alleged Southern Pacific was negligent in leaving exposed and unprotected a dangerous excavation on a public street. The evidence Davey offered at trial, however, showed the excavation was on the private property of Southern Pacific, but at a point where the public was privileged to pass. Southern Pacific objected to Davey's evidence on the ground it was “ ‘irrelevant, immaterial, and incompetent.’ ” The trial court sustained the objection and granted Southern Pacific's motion for nonsuit. (116 Cal. at p. 328, 48 P. 117.)
On appeal, Davey argued the trial court erred in excluding her evidence on the general objection it was irrelevant, immaterial and incompetent. Southern Pacific responded even if it had objected on the wrong ground in the trial court, the evidence was properly rejected on the ground of material variance between the pleadings and the proof at trial and therefore the judgment should be affirmed. Davey acknowledged there was an obvious material variance but contended the question of variance “was not raised in the court below; that no such specific objection was there made, nor was it fairly included within the general objection interposed; that had it been called to the attention of counsel for appellant at the time the evidence was offered, plaintiff would have had an opportunity to conform her pleading to the proof, and thus have obviated the objection; and ․ respondent should not now be heard to make such objection for the first time in this court, and thus cut off plaintiff's right to so amend, and have her case tried upon its merits.” (116 Cal. at pp. 328–329, 48 P. 117.)
The Supreme Court acknowledged the specific objection of material variance was not raised at trial and “the objection there made, and the ruling had, would seem to have proceeded upon a different theory from that upon which respondent now rests.” (116 Cal. at p. 329, 48 P. 117.) Nevertheless, relying on the general rule discussed above, the court held where the trial court excludes evidence “the ruling will be sustained, if the evidence was for any reason inadmissible.” (Id. at p. 330, 48 P. 117.) As to appellant's argument for an exception to the rule, the court responded exclusion of the plaintiff's evidence was entirely her fault. Not only was the defect in the evidence “so manifest that it should have been perceived without suggestion; but, moreover, it was suggested, although not in express terms, by the objection made.” (Id. at p. 332, 48 P. 117.)
It is important to note the court in Davey did not reject the appellant's argument in principle; it only said the argument was not supported by the facts in that particular case. Thus, Davey left the door open for reversal of a judgment based on exclusion of the appellant's evidence where there was no objection to the evidence or the only ground of objection was improper, the actual defect in the evidence was not “manifest” or “suggested by the objection made,” the defect in the evidence could have been cured if the appellant had been on notice of it and it is reasonably probable the appellant would have obtained a more favorable result in the proceeding if the evidence had been admitted.
In Lawless v. Calaway (1944) 24 Cal.2d 81, 147 P.2d 604, the Supreme Court did make an exception to the rule of nonreviewability for reasons very much like those urged in Davey. The issue in Lawless was whether a judgment of nonsuit could be upheld on appeal on grounds other than those specified at trial. Respondent relied on the traditional rule a reviewing court will uphold the judgment if it is right even if the trial court's reasons are wrong. The Supreme Court declined to apply that doctrine to nonsuits, explaining: “The doctrine is sound and salutary in most situations since it prevents a reversal on technical grounds where the cause was correctly decided on the merits. But this is not true as applied to nonsuits, for such a doctrine would frequently undermine the requirement that a party specify the ground upon which his motion for nonsuit is based in order to afford the opposing party an opportunity to remedy the defects in proof. It seems obvious that the doctrine intended solely to uphold judgments correct on the merits should not be permitted to produce the opposite result.” Therefore, the court concluded, “[t]he correct rule is that grounds not specified in a motion for nonsuit will be considered by an appellate court only if it is clear that the defect is one which could not have been remedied had it been called to the attention of plaintiff by the motion. This rule is complementary to the requirement that a party specify the grounds upon which his motion for nonsuit is based.” (Id. at p. 94, 147 P.2d 604.)
Another exception to the rule of nonreviewability holds the appellate court will not affirm a judgment on the basis of a theory not advanced in the trial court which involves controverted questions of fact or mixed questions of law and fact. The rationale for this exception is the appellant has not had an opportunity to present evidence contradicting the new theory because he was not on notice the theory would be relied upon. (Cramer v. Morrison (1979) 88 Cal.App.3d 873, 887, 153 Cal.Rptr. 865; Pacific Gas & E. Co. v. Peterson (1969) 270 Cal.App.2d 434, 439, 75 Cal.Rptr. 673.) Still other exceptions to the rule have been recognized which we will not detail here but are discussed elsewhere. (See 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 262, p. 269.)
The exceptions noted above rest on the premise it is fundamentally unfair to rule against a party without telling him what the defect in his case is and giving him an opportunity to cure it. This is the same premise which requires the opponent to state his specific objection to the evidence or the objection is waived. “To require this is simply a matter of fairness and justice” because if attention is called to the particular objection counsel would be “advised directly what the particular complaint against the [evidence] was, and, if he deemed it tenable, could have withdrawn the inquiry or reframed his question to obviate the particular objection.” (Bundy v. Sierra Lumber Co. (1906) 149 Cal. 772, 776, 87 P. 622.) 7
A ruling excluding evidence on a ground not raised in the trial court is analogous to a ruling granting a nonsuit on a ground not raised in the trial court because it undermines the requirement a party specify its objection to evidence in a manner which “clearly informs ․ the proponent of the defect to be corrected.” (Rupp v. Summerfield (1958) 161 Cal.App.2d 657, 662, 326 P.2d 912). It is also analogous to affirming a judgment on a theory not advanced in the trial court involving contested facts because the opponent was denied notice and an opportunity to present evidence to counter the theory raised for the first time on appeal.
Considerations of fair play, therefore, lead us to conclude the correct rule should be an appellate court will uphold the exclusion of evidence on grounds not raised in the trial court except in cases where the appellant can show the defect in the evidence was neither “manifest” or at least “suggested” by the opponent's objection; the defect could have been cured if it had been called to the proponent's attention; and it is reasonably probable the proponent of the evidence would have obtained a more favorable ruling had he or she been afforded the opportunity to cure the defect or supply substitute evidence.
Sound policy reasons support this exception. The rule a reviewing court will uphold the trial court's ruling if it reached the correct result, regardless of how it got there, is justified because “it prevents a reversal on technical grounds where the cause was correctly decided on the merits.” (Lawless v. Calaway, supra, 24 Cal.2d at p. 94, 147 P.2d 604.) Thus, the rule should apply in circumstances where the reviewing court can have confidence in the outcome, i.e. that “the cause was correctly decided on the merits.” But where the procedures in the trial court undermine the reviewing court's confidence in the outcome, the rule should not apply. As the court explained in Lawless, the rule of nonreviewability is intended to uphold judgments correct on the merits. It should not be permitted to produce the opposite result. (Ibid.) In Lawless, the court found, on a motion for nonsuit, failure to afford the plaintiff a fair opportunity to remedy defects in its proof undermined confidence the cause was correctly decided. In the present case, the plaintiff was denied a fair opportunity to know and correct the defects in his proof on the defamation claim thereby undermining confidence the cause was correctly decided on the merits.
The principle argument against the exception we recognize here is that it would permit reversal in cases where admittedly the evidence was properly excluded thus turning the concept of reversible error upside down. In addition, it could be argued the exception would flood the appellate courts with appeals from every losing party who had an evidentiary ruling go against it and impose unreasonable delay and expense in obtaining a final resolution of the parties' dispute.
We believe the exception discussed here is consistent with traditional notions of fundamental fairness which should be an appellate court's chief guide and that the exception can be applied without disrupting the appellate process or unfairly burdening either party.
The argument the exception permits reversal where there is no error to reverse is based on a misunderstanding of the theory underlying the exception. The “error” being reversed is not the ruling excluding the evidence but the failure to afford the proponent notice and an opportunity to cure the defect which causes the evidence to be inadmissible. This error is prejudicial, i.e. reversible, if, as we have said, the appellant can show he could have cured the defect had he been given the opportunity to do so and it is reasonably probable he would have received a more favorable result had his evidence been admitted.
The narrow exception we have framed will not unduly burden the respondent, the trial court or the Court of Appeal.
Occasions to apply the exception will seldom arise because only rarely will affirmance of the judgment depend on whether the trial court correctly excluded an item of evidence offered by the appellant. Even in those rare cases, in order to invoke the exception the appellant will have to show lack of notice of the grounds for exclusion, curability and prejudice. The showing necessary to invoke the exception can usually be made on the basis of the trial court record and the briefs on appeal. In some cases, such as the one before us, the appellant will have to go outside the record to establish that had he known of the actual defect in the evidence he could have cured it or supplied substitute evidence. The authority and procedure for making such a showing in the Court of Appeal already exists in section 909 and California Rules of Court, rule 23, subdivision (b). Alternatively, the Court of Appeal could remand the curability issue to the trial court for determination.
The exception will arise even less frequently if trial courts, before excluding evidence on a ground not raised by a party, give the proponent notice of the alternative ground for exclusion and an opportunity to respond. Furthermore, there would be no need for the exception at all in motion practice if the Legislature provided across-the-board, as it has with respect to motions for summary judgment, that all objections to the form and substance of supporting and opposing declarations shall be first made in the trial court and not on appeal. (§ 437c, subd. (d); Stats.1990, ch. 1561, § 1.)
To summarize our holding: if the excluded evidence was inadmissible for any reason an appellate court should uphold the exclusion except in cases where the appellant can show the defect in the evidence was neither “manifest” or at least “suggested” by the opponent's objection, the defect could have been cured if it had been called to the proponent's attention and it is reasonably probable the proponent of the evidence would have obtained a more favorable ruling if he or she had been afforded the opportunity to cure the defect or supply substitute evidence.
In this instance the trial court struck the cross-complaint in its entirety. We do not reach the question whether the exception should apply to rulings which do not terminate the action.
In the present case, the first requirement is met because the defect in Harris' declaration, failure to demonstrate personal knowledge it was Saunders speaking on the telephone, was not suggested by making a hearsay objection to evidence of the conversation nor was the defect so obvious “it should have been perceived without suggestion.” (Davey, supra, 116 Cal. at p. 332, 48 P. 117.) In Davey, the court concluded the objection to the plaintiff's evidence as “irrelevant” was at least technically correct because the evidence “had no tendency to establish the facts” alleged in the complaint and was sufficient to put the plaintiff on notice of the material variance between the complaint and the evidence offered. (Id. at pp. 330, 332, 48 P. 117.) Here, as we have previously explained, Harris' declaration clearly was not hearsay because it was not offered to prove the truth of the statements attributed to Saunders, nor should the hearsay objection have alerted counsel to the true defect in the declaration.8 The true defect, Harris' failure to demonstrate personal knowledge she was speaking to Saunders, is not the kind of “obvious” or “manifest” defect which should have been perceived without the necessity for a specific objection. The declaration clearly demonstrated Harris' personal knowledge of the conversation because she was a party to it. Her failure to state the reasons she knew it was Saunders on the other end of the conversation is more in the nature of an understandable oversight than a manifest defect in proof.
In order to determine whether the defect in the declaration could have been cured at the time the motion to strike was heard, we treated a supplemental declaration by Harris filed in this court as a motion to produce additional evidence under California Rules of Court, rule 23, subdivision (b). We afforded Saunders an opportunity to respond to the motion. Having considered the supplemental declaration and the response thereto, we are satisfied Peters has met his burden of showing the defect could have been cured if it had been called to his attention at the time of the hearing. Indeed, Saunders' response concedes this point.
Prejudice is established because the evidence of Saunders' statements to Harris was necessary to make a prima facie case of defamation. The statements Peters was “caught ․ at fraud and double-billing,” he “ ‘bilks' insurance companies,” and he “is not a certified reporter” are defamatory per se and establish Peters' entitlement to general damages. Had the trial court admitted evidence of these statements it would have had to find a prima facie case of defamation. The element of fault was established through Saunders' own declaration in which he denied making the statements contained in the Harris declaration. If Harris' testimony is credited it necessarily follows Saunders was at least negligent in failing to learn whether the statements were false, since he cannot have verified the truth of statements he denies making. There were no constitutional defenses for Peters to overcome because, as we have explained, the statements Saunders made to Harris were not made “in connection with” the CRA litigation or the public issue of direct contracting.
Summing up, it was error to exclude the Harris declaration as hearsay. Although the declaration was excludable for lack of personal knowledge, Saunders cannot rely on this ground on appeal because this ground was not manifest or suggested by Saunders' hearsay objection, Peters could have supplied evidence of Harris' personal knowledge had he been on notice of this defect and Peters would have defeated the motion to strike had he been afforded the opportunity to cure the defect. For these reasons the ruling striking the defamation/slander cause of action is reversed.
III. THE TRIAL COURT ERRED IN STRIKING THE CAUSE OF ACTION FOR UNFAIR COMPETITION BASED ON SAUNDERS' ATTEMPT TO ENGAGE IN A SECONDARY BOYCOTT.
Peters' cross-complaint alleges Saunders is engaged in a restraint of trade in violation of the Cartwright Act (California's anti-trust law) as well as statutes prohibiting unfair trade practices and unfair competition. (Bus. & Prof.Code §§ 16700 et seq., 17000 et seq.) 9 He seeks damages and injunctive relief. For the reasons explained below, we conclude Peters made a prima facie showing for injunctive relief under the unfair competition statute based on Saunders' attempt to restrain trade in violation of the Cartwright Act.
According to the cross-complaint and Peters' declaration, most reporter agencies are small companies which do not employ reporters directly but rather subcontract with independent, freelance reporters to handle assignments as they arise. These independent reporters typically accept work from a number of reporter agencies. Without the availability of these independent reporters, many reporter agencies, including Peters', would be unable to undertake their clients' assignments. Peters claims Saunders is attempting to drive him out of business by coercing independent reporters not to do business with him. Saunders' alleged coercive activities include threatening not to do business with reporters who do business with Peters.
The Cartwright Act prohibits two or more persons from combining to do certain specified anti-competitive acts including creating or carrying out restrictions on trade or commerce and preventing competition in the sale or purchase of any commodity. (§ 16720, subds. (a), (c).) In order to succeed on a cause of action under the Cartwright Act, the plaintiff must prove the formation and operation of a conspiracy or combination; illegal acts done pursuant to this conspiracy; a purpose to unlawfully restrain trade; and injury to the plaintiff's business or property. (Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 119, 81 Cal.Rptr. 592, 460 P.2d 464; G.H.I.I. v. MTS, Inc. (1983) 147 Cal.App.3d 256, 265, 195 Cal.Rptr. 211.)
Unfair competition is defined as “any unlawful, unfair or fraudulent business act or practice․” (§ 17200.) As we explained in Saunders v. Superior Court, supra, the unfair competition statute “borrows” violations of other laws and treats them as unlawful practices independently actionable under section 17200. (27 Cal.App.4th at p. 839, 33 Cal.Rptr.2d 438.) Violations of the Cartwright Act are unlawful business practices under section 17200. (People v. National Association of Realtors (1981) 120 Cal.App.3d 459, 474, 174 Cal.Rptr. 728.) A private litigant is not entitled to damages under section 17200 but may seek injunctive relief under section 17203 which provides: “Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction.”
The declaration of Elizabeth Devine–Hall reports a telephone call she received from Saunders in which he told her unless she resigned from CRA “he would not be speaking to [her] anymore and he would not be able to recommend [her] agency.” 10 In other words, Saunders threatened to stop sending work to Devine–Hall unless Devine–Hall agreed to stop accepting work from Peters.
The Devine–Hall declaration describes what is often referred to as an indirect or “secondary” boycott. (Jomicra, Inc. v. California Mobile Home Dealers Assn. (1970) 12 Cal.App.3d 396, 401, 90 Cal.Rptr. 696; People v. Santa Clara Valley Bowling Etc. Assn. (1965) 238 Cal.App.2d 225, 237, 47 Cal.Rptr. 570.) In a secondary boycott, the defendant and the target are competitors who do not engage in any transactions among themselves, so the defendant cannot remove the target from competition by refusing to deal with it. Instead, the defendant uses the threat of economic sanctions to coerce the suppliers or customers it shares with the target to refuse to deal with the target, thus denying the target access to the goods or buyers it needs to compete with the defendant. (Note, Three Exceptions to the Per Se Rule Against Boycotts (1985) 65 B.U.L.Rev 165, 170.; and see e.g. Klor's v. Broadway–Hale Stores (1959) 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741.) Here, Saunders threatened to refuse to deal with Devine–Hall unless she refused to deal with Peters thus attempting through economic coercion on Devine–Hall to affect Peters' labor supply.
For a secondary boycott to violate the antitrust laws the defendant need not conspire with fellow competitors against the target competitor. A boycott by a single trader constitutes the necessary combination in restraint of trade if it is carried out through coercion, threats or intimidation upon the target's suppliers. (Albrecht v. Herald Co. (1968) 390 U.S. 145, 149–150, 88 S.Ct. 869, 871–872, 19 L.Ed.2d 998; Klor's v. Broadway–Hale, supra, 359 U.S. at p. 209, 79 S.Ct. at p. 707; G.H.I.I. v. MTS, supra, 147 Cal.App.3d at pp. 268–269, 195 Cal.Rptr. 211 and cases cited therein.) Nor is it necessary the coercion actually result in the supplier refusing to do business with the target. (Cf. Associated Press v. United States (1945) 326 U.S. 1, 12, 65 S.Ct. 1416, 1420, 89 L.Ed. 2013.) A would-be boycotter may be enjoined from attempting to violate the antitrust laws. (Lorain Journal v. United States (1951) 342 U.S. 143, 144–145, 72 S.Ct. 181, 182, 96 L.Ed. 162; Jomicra, Inc. v. California Mobile Home Dealers Assn., supra, 12 Cal.App.3d at pp. 398–399, 90 Cal.Rptr. 696 [association enjoined from “attempting or threatening” a secondary boycott].) Thus, in order to make out a prima facie case of secondary boycott, Peters did not have to show Saunders previously had referred Devine–Hall's agency to anyone, although the trier of fact could reasonably infer this from Saunders' statement. The threat of economic coercion is enough. It is not necessary to show Devine–Hall took the threat seriously or that the coercion actually resulted in Devine–Hall refusing to do business with Peters.
The principal issue before us is whether Saunders' attempt to organize a boycott should be treated as a “per se” violation of the Cartwright Act or reviewed under the “rule of reason” standard. As the United States Supreme Court explained in Northern Pac. Ry. Co. v. United States (1958) 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545: “[T]here are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiries as to the precise harm they have caused or the business excuse for their use.” Indirect or secondary boycotts have traditionally been held to fall within this “pernicious” category of practices which means they are presumed to be unlawful restraints of trade without the necessity of analyzing their economic effects and possible justifications.
Klor's v. Broadway–Hale, supra, remains the leading federal case on secondary boycotts.11 Klor's was a small retailer of household appliances located next to a Broadway department store which sold the same goods. Klor's complaint alleged Broadway–Hale used its huge buying power to coerce manufacturers and distributors of well known brands not to sell to Klor's or to sell only at discriminatory prices and highly unfavorable terms. This concerted refusal to deal seriously handicapped Klor's ability to compete with Broadway and resulted in a great loss of profits, goodwill, reputation and prestige. (359 U.S. at p. 209, 79 S.Ct. at p. 707.) Broadway–Hale did not dispute these allegations but submitted unchallenged evidence there were hundreds of other retailers, some within a few blocks of Klor's, which sold many competing brands of appliances, including those whose manufacturers refused to sell to Klor's. The trial court granted summary judgment to Broadway–Hale, concluding the controversy was a “purely private quarrel” between Klor's and Broadway–Hale which had no affect on the market for household appliances. The Ninth Circuit affirmed on the same rationale. (Id. at p. 210, 79 S.Ct. at p. 708.)
The Supreme Court took an entirely different view of the dispute between Klor's and the Broadway. The Court framed the issue as whether “a group of powerful businessmen may act in concert to deprive a single merchant, like Klor, of the goods he needs to compete effectively.” (359 U.S. at p. 210, 79 S.Ct. at p. 708.) In answering this question, the Court referred to its earlier decisions recognizing there were “classes of restraints which from their ‘nature or character’ were unduly restrictive, and hence forbidden by both the common law and the [Sherman Act]. * * * Group boycotts, or concerted refusals by traders to deal with other traders, have long been held to be in the forbidden category.” (Id. at pp. 211–212, 79 S.Ct. at pp. 708–709.) Such a boycott, the Court found, was plainly disclosed by the allegations in Klor's complaint. “This is not a case of a single trader refusing to deal with another, nor even of a manufacturer and a dealer agreeing to an exclusive distributorship.” Rather, the complaint alleged “a wide combination consisting of manufacturers, distributors and a retailer.” (Id. at pp. 212–213, 79 S.Ct. at pp. 709–710.) The harm in this combination was that it took from Klor's “its freedom to buy appliances in an open and competitive market and drives it out of business as a dealer in the [manufacturers'] products” while at the same time it deprived “the manufacturers and distributors of their freedom to sell to Klor's at the same prices and conditions made available to Broadway–Hale, and in some instances forbids them from selling to it on any terms whatsoever.” (Id. at p. 213, 79 S.Ct. at p. 710.) The restraint on trade Broadway–Hale imposed on the manufacturers, distributors and its targeted competitor had by its “ ‘nature’ and ‘character’ a ‘monopolistic tendency.’ ” (Ibid.)
Furthermore, the Court held, a concerted refusal to deal “is not to be tolerated merely because the victim is just one merchant whose business is so small that his destruction makes little difference to the economy. Monopoly can as surely thrive by the elimination of such small businessmen, one at a time, as it can by driving them out in large groups.” For this reason, “the Sherman Act has consistently been read to forbid all contracts and combinations which tend to create a monopoly, whether the tendency is a creeping one or one that proceeds at full gallop.” (359 U.S. at pp. 213–214, 79 S.Ct. at p. 710 (internal quotes, citations and footnote omitted).) (See also, Fashion Guild v. Trade Comm'n. (1941) 312 U.S. 457, 465, 61 S.Ct. 703, 706, 85 L.Ed. 949 in which the Court applied the per se rule to strike down an agreement by a manufacturer's guild not to sell to retailers who pirated their original dress designs.)
The leading California case on secondary boycotts is People v. Santa Clara Valley Bowling Etc. Assn., supra (hereafter Santa Clara Bowling). In that case the defendants, two associations of bowling establishment proprietors, adopted rules providing only bowlers who confined their league bowling to member establishments could participate in tournaments sponsored or conducted by those establishments. Defendants subsequently amended these rules to provide a bowler had to participate in at least one league in a member establishment in order to participate in a member establishment's tournaments. The trial court found these tournament eligibility rules had no adverse effect on competition for league bowlers between member and nonmember establishments but concluded, nevertheless, the original rules constituted a secondary boycott in violation of the Cartwright Act because “they constituted agreements to coerce bowlers to refrain from dealing with [nonmember establishments].” (238 Cal.App.2d at p. 237, 47 Cal.Rptr. 570.) Based on the reasoning of Klor's, the Court of Appeal held both the original and modified rules were per se illegal restraints of trade. The court concluded the fact the tournament eligibility rules had no effect on “competition was not relevant.” (Ibid.) “The gravamen of the offense against the Cartwright Act,” the court held, “is the mere formation of the combination or conspiracy for the unlawful purpose of restraining trade.” (Id. at p. 238, 47 Cal.Rptr. 570.) The court found the original rules “were adopted for the primary purpose of inducing league bowlers bowling in leagues in nonmember houses to cease doing so and thus suppress the competition from nonmember establishments.” (Id. at pp. 238–239, 47 Cal.Rptr. 570.) The modified rule was just as objectionable even though it did not totally preclude a bowler from bowling in a nonmember establishment. The distinction between the two versions was “one of degree only and not of purpose.” (Id. at p. 239, 47 Cal.Rptr. 570.)
In Jomicra, Inc. v. California Mobile Home Dealers Assn., supra, the plaintiff, a mobile home dealer, brought an action for an injunction and damages under the Cartwright Act alleging defendant was attempting through economic sanctions to coerce businesses engaged in furnishing necessary services to mobile home dealers and parks not to deal with plaintiff. The Court of Appeal affirmed the trial court's preliminary injunction which “prohibit[ed] the Association and its members from imposing a secondary boycott on Jomicra․” (12 Cal.App.3d at p. 401, 90 Cal.Rptr. 696.) Citing Klor's as authority, the appellate court characterized defendant's conduct as a group boycott which was “illegal per se and against public policy.” (Id. at p. 402, 90 Cal.Rptr. 696.)
Although the California Supreme Court has not addressed directly the question whether the per se rule or the rule of reason should apply in secondary boycott cases, its opinion in Marin County Bd. of Realtors, supra, strongly suggests it would find secondary boycotts illegal per se. In that case a board of realtors comprising 75 percent of the active brokers in the county denied nonmembers access to its multiple listing service. The court held this form of boycott was subject to the rule of reason because it was “not directly aimed at coercing third parties and eliminating competitors.” (16 Cal.3d at p. 932, 130 Cal.Rptr. 1, 549 P.2d 833.) The court distinguished boycotts subject to the per se rule from boycotts subject to the rule of reason on the basis the boycotts in Klor's and Fashion Guild involved “a particular type of predatory activity ․ aimed at coercing parties to adopt noncompetitive practices” while boycotts subject to the rule of reason involve refusals to deal which arise “only as a byproduct of the [parties'] agreement.” (Ibid.) The court cited Santa Clara Bowling as an example of a case in which the per se rule was properly applied because the trade associations intended to coerce bowlers into boycotting nonmember establishments and patronizing member establishments, thus suppressing the competition from nonmember establishments. (Id. at p. 933, fn. 9, 130 Cal.Rptr. 1, 549 P.2d 833.) 12
The present case differs from Klor's and other secondary boycott cases in one obvious respect. In every other case we have found, a substantial imbalance in economic power existed between the participants in the boycott and the targeted competitor. In Klor's, for example, the court described the defendants as a “wide combination” of “powerful businessmen” which included such major corporations as Broadway–Hale, General Electric, RCA and Zenith among others. In Fashion Guild, the defendant sold between 38 and 60 percent of all women's garments. In Santa Clara Bowling, the defendants controlled 87 and 88 percent of the bowling establishments in their respective jurisdictions. (238 Cal.App.2d at p. 228, 47 Cal.Rptr. 570.) It could be argued that while the economic power of the targeted competitor is irrelevant (Klor's, supra, 359 U.S. at p. 213, 79 S.Ct. at 710) the economic power of the boycotter is relevant because in order to fall within the proscription of the antitrust laws the boycott must “tend to create a monopoly” even if the tendency is only “a creeping one.” (Id. at pp. 213–214, 79 S.Ct. at 710.) Mark Saunders and Elizabeth Devine–Hall together can hardly be described as a “wide combination of powerful businessmen.” Nor is there any evidence to suggest that if Saunders were to eliminate Peters as a competitor his demise would turn out to have been Saunders' first creeping move toward monopoly of the shorthand reporting business.
If the only reason for condemning secondary boycotts was their tendency to lead to monopolies, then we would agree evidence of the defendants' economic power in relation to the danger of monopolization would be relevant. But the eventual creation of a monopoly is only one factor courts and commentators have cited as the reason secondary boycotts are illegal per se. Courts have been just as concerned about the immediate effect of the boycott on the targeted competitor and the neutral third parties coerced into joining the boycott. In Klor's, the Court listed three reasons for condemning the boycott in addition to its monopolistic tendency. The boycott deprived Klor's of its freedom to buy goods in an open, competitive market. It was likely to drive Klor's out of business. And, it deprived the manufacturers and distributors of their freedom to sell to Klor's. (359 U.S. at p. 213, 79 S.Ct. at 710.) Similarly, in condemning secondary boycotts our Supreme Court observed in Marin: “Another beneficiary of antitrust law is the competitor himself. The preservation of competition, while indirectly aiding society by producing lower prices and higher quality goods and services, directly aids the scrupulous trader by insuring him a fair opportunity to compete on the market.” (16 Cal.3d at p. 935, 130 Cal.Rptr. 1, 549 P.2d 833.) Secondary boycotts have also been criticized because they permit one competitor an advantage over his rival, not through “individual enterprise and sagacity,” (Associated Press v. United States, supra, 326 U.S. at p. 15, 65 S.Ct. at p. 1422) but through coercing the conduct of a neutral intermediary. (Comment, Use of Economic Sanctions By Private Groups: Illegality Under the Sherman Act (1962) 30 U. Chi. L.Rev. 171, 181.) Finally, secondary boycotts tend to polarize society by increasing the number of people aligned in a dispute and highlighting the existence of their conflict. (Heidt, Industry Regulation and the Useless Concept “Group Boycott” (1986) 39 Vand.L.Rev. 1507, 1587.) The hostility between the parties, their respective supporters and counsel in the present case amply demonstrate this aspect of a group boycott.
For the reasons explained above, we conclude Peters has made a prima facie showing of unlawful restraint of trade under the Cartwright Act. The remaining question is whether Peters has demonstrated entitlement to relief.
The Cartwright Act provides any person “injured in his or her business or property by reason of anything forbidden or declared unlawful by this [Act], may sue therefor․ Such action may be brought by any person who is injured in his business or property by reason of anything forbidden or declared unlawful by this [Act], regardless of whether such injured person dealt directly or indirectly with the defendant.” (§ 16750(a).) This latter provision has been interpreted to mean the plaintiff must have suffered injuries which were the direct result of the defendant's unlawful conduct and were the kind of injuries the antitrust laws were intended to prevent. (Cellular Plus, Inc. v. Superior Court (1993) 14 Cal.App.4th 1224, 1232–1233, 18 Cal.Rptr.2d 308.)
Peters' declaration states: “A number of CRA's insurer clients have terminated their relationships with CRA in the past 16 months․ These clients told us that they were terminating their relationship with CRA because they did not want to be named as defendants in plaintiffs' lawsuit. The loss of clients due to threats of suit by the Saunders plaintiffs has resulted in a large reduction in business․ Other potential clients also terminated their relationship with CRA, without giving a reason, after questioning us about this lawsuit.” Leaving aside the obvious hearsay objection to this declaration, the declaration shows any damage Peters suffered was the indirect result of Saunders' filing a lawsuit challenging Peters' “direct contracting”—a constitutionally protected petitioning activity which, under the Noerr–Pennington doctrine,13 cannot be the basis of an antitrust action if the threatened litigation is meritorious. (Coastal States Marketing, Inc. v. Hunt (5th Cir.1983) 694 F.2d 1358, 1367; Aircapital Cablevision, Inc. v. Starlink Communications Group, Inc. (D.Kan.1986) 634 F.Supp. 316, 326.) There is no contention here the underlying lawsuit brought by Saunders is a sham. In Wilcox, supra, Peters “contended using the threat of litigation to get the insurers to ‘back off’ from entering into contracts with CRA was an unlawful activity.” We noted we had found no authority to support this proposition where the threatened lawsuit is meritorious. (27 Cal.App.4th at p. 822 & fn. 6, 33 Cal.Rptr.2d 446.) We still haven't. Therefore, Peters is not entitled to damages under the Cartwright Act.
The showing Peters made would, however, entitle him to injunctive relief under section 17203 of the Unfair Competition Act which provides: “Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction.” The Devine–Hall declaration shows Saunders has engaged, or at least has proposed engaging, in unfair competition by organizing a secondary boycott in violation of the Cartwright Act. We note in 1992 the Legislature amended the definition of unfair competition to include “any unlawful, unfair or fraudulent business act or practice.” (Section 17200 as amended by Stats.1992, ch. 430, § 2, emphasis added.) The statute is no longer limited to a business practice, i.e. “a pattern of behavior” or “course of conduct” (see State of California ex rel. Van de Kamp v. Texaco, Inc. (1988) 46 Cal.3d 1147, 1170, 252 Cal.Rptr. 221, 762 P.2d 385) but applies to “any act” of unfair competition. Thus, under the statute as amended, Saunders' single act of proposing a secondary boycott to Devine–Hall is ground for injunctive relief.14
Finally, we agree with the trial court Peters has failed to establish a prima facie case of unfair trade practices.
The Unfair Practices Act prohibits locality discrimination, sales below cost and special rebate schemes. (§§ 17040–17045.) The Act makes it unlawful for a person to use threats, intimidation or boycotts to effectuate any violation of the Act or to solicit any violation of the Act. (§§ 17046, 17047.) Peters presented no evidence Saunders' conduct involved a pricing policy or marketing method proscribed by the Act. Thus he failed to demonstrate a probability of prevailing on this cause of action. (Cf. Lowell v. Mother's Cake & Cookie Co. (1978) 79 Cal.App.3d 13, 25, 144 Cal.Rptr. 664 [affirming dismissal of unfair trade practices cause of action for failure to allege conduct proscribed by the Act].) Even if the threat of legal action against anyone joining with CRA in direct contracting could somehow be construed as conduct prohibited under the Act, the Noerr–Pennington doctrine would bar Peters' suit. (See discussion, supra, pp. 706–707.)
The trial court's order striking Peters' cross-complaint as to Mark Saunders is reversed as to the third cause of action (unfair competition) and fifth cause of action (defamation/slander). In all other respects the order is affirmed. Each party to bear its own costs on appeal.
1. The acronym SLAPP stands for “strategic lawsuit against public participation.” SLAPPs can be described briefly as lawsuits lacking merit brought primarily for the purpose of chilling the defendant's exercise of the right to free speech and to petition the government for a redress of grievances. (Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 823, 33 Cal.Rptr.2d 446.) For a detailed discussion of SLAPPs see Wilcox, supra, 27 Cal.App.4th at pp. 815–817, 33 Cal.Rptr.2d 446.
2. All statutory references through part II of the discussion are to the Code of Civil Procedure unless otherwise noted.
3. Ordinarily, an appeal will not lie from an order striking the defendant's cross-complaint against the plaintiff. However, we elected to decide the issues raised by the granting of the SLAPP motion in order to avoid further delay which would prejudice respondents and would undermine the very purpose of the SLAPP statute, which is to permit rapid disposition of actions brought to chill the exercise of constitutional rights of free speech and petition. (See Wilcox, supra, 27 Cal.App.4th at p. 823, 33 Cal.Rptr.2d 446.)Peters' cross-complaint alleged causes of action in addition to defamation and restraint of trade, however he does not discuss these additional claims on appeal. Therefore he has waived any objections to the trial court's striking these causes of action.
4. We postpone our consideration of the admissibility of the Burnett and Harris declarations until we reach the question whether Peters made a prima facie showing in support of his defamation cause of action. (See Part II below.) For purposes of the present discussion, the result is the same whether or not the Burnett and Harris declarations were properly admitted.
5. As to Saunders' comparison of Peters' organization to the Mafia, an expression of opinion or an exercise in hyperbole is not defamatory. (Fletcher v. San Jose Mercury News (1989) 216 Cal.App.3d 172, 190–191, 264 Cal.Rptr. 699.) Clearly, the comparison of one organization to another expresses the opinion of the person making the comparison. (Holy Spirit Ass'n. v. Harper & Row Publishers (N.Y.Sup.Ct.1979) 101 Misc.2d 30, 420 N.Y.S.2d 56, 59 [comparison of “Moonies” to Nazis an expression of opinion not actionable as defamation].)
6. We are not suggesting the trial court should refrain from excluding inadmissible evidence on its own motion. A trial judge, after all, is not a bucket of rocks sitting behind the bench and the authority to exclude evidence on the court's own motion is well established. (3 Witkin, Cal.Evid. (3d ed. 1986) § 2032, p. 1994.) What we are suggesting is that trial courts should be cautious in exercising their authority to exclude evidence on their own motion when the proponent of the evidence does not have fair notice of the ground for exclusion. (See discussion below, pp. 700, 701.)
7. The situation would be different if the Harris declaration had been admitted and Saunders was the appellant. Under those circumstances, notions of fairness and justice would have required him to confine his argument to the hearsay objection he specifically raised at trial. To allow the appellant to assert a new objection to the evidence on appeal would not only deprive his opponent of the opportunity to cure the defect it would allow a party knowing of a defect in the evidence to take his chance on a favorable verdict with the power and intent to annul it should it go against him. (1 Wigmore on Evidence (Tillers rev. 1983) § 18, p. 793.)
8. Had the caller said, “Hello, this is Mark Saunders,” or words to that effect, an hearsay objection would lie if this statement was being offered to prove the caller was in fact Mark Saunders. However, no such statement was offered into evidence in this case.
9. All future statutory references are to the Business and Professions Code unless otherwise noted.
10. Ms. Devine–Hall states she had previously met Saunders. Therefore, the trier of fact could draw the inference she knew it was he on the telephone. (See discussion, supra, at p. 696.)
11. Federal cases interpreting the Sherman Act are applicable as an aid in interpreting California's antitrust statute. (Marin County Bd. of Realtors, Inc. v. Palsson (1976) 16 Cal.3d 920, 925, 130 Cal.Rptr. 1, 549 P.2d 833.)
12. To avoid confusion over terminology, it should be noted the Marin court used the term “indirect boycott” to refer to boycotts where the refusal to deal was only a byproduct of the agreement between the parties as compared to a “direct boycott” aimed at coercing parties to adopt noncompetitive practices. (16 Cal.3d at p. 932, 130 Cal.Rptr. 1, 549 P.2d 833.) Thus, when the court in Marin referred to “direct boycotts” it was referring to the type of combination in which the defendant attempts to shut off the target competitor's source of material or labor which is generally referred to as an indirect or “secondary” boycott.
13. Eastern Railroad Presidents Conf. v. Noerr Motor Freight, Inc. (1961) 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464; United Mine Workers v. Pennington (1965) 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626; California Transport v. Trucking Unlimited (1972) 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642.
14. Saunders argues the amendment to the statute did not take effect until January 1, 1993, and therefore it does not apply to his contact with Devine–Hall which occurred in 1992. As we have previously pointed out, however, the unfair competition statute is remedial in nature (see supra, p. 703) and therefore the general rule a statute does not apply retroactively is not applicable here. (Kuykendall v. State Bd. of Equalization (1994) 22 Cal.App.4th 1194, 1211, fn. 20, 27 Cal.Rptr.2d 783.) A statute which is remedial or procedural in nature “may be given effect as to pending and future litigation even if the event underlying the cause of action occurred before the statute took effect.” (Pacific Coast Medical Enterprises v. Department of Benefit Payments (1983) 140 Cal.App.3d 197, 204, 189 Cal.Rptr. 558.)
FRED WOODS, Associate Justice.
LILLIE, P.J., and GODOY–PEREZ, J.,* concur.