## Facts

- Miguel Mendoza managed a print and copy business owned by Guy Chow, creating disputes over alleged mismanagement, including unpaid employees, taxes, and bills.
- Reed K. Hamzeh, Chow’s attorney, sent Mendoza a May 6, 2009 demand letter accusing Mendoza of fraud, conversion, and breach of contract, and asserting damages exceeding $75,000.
- The letter demanded repayment and cooperation, and stated that if Mendoza did not comply, Hamzeh would file suit and report Mendoza to the California Attorney General, Los Angeles District Attorney, Internal Revenue Service (for tax fraud), the Better Business Bureau, and customers and vendors.
- Mendoza sued Hamzeh for civil extortion, intentional infliction of emotional distress, and unfair business practices, alleging the letter threatened exposure to authorities and third parties unless he paid money.
- Hamzeh filed an anti-SLAPP motion under Cal. Code Civ. Proc. § 425.16, arguing the letter was protected petitioning activity and was privileged under Civ. Code § 47(b) and § 47(c).
- The trial court denied the anti-SLAPP motion and awarded Mendoza attorney’s fees, finding the motion meritless because extortionate communications are outside § 425.16.
- Hamzeh appealed the denial of the anti-SLAPP motion and the fee award.

## Issues

1. Whether the demand letter was protected activity under Cal. Code Civ. Proc. § 425.16 as a litigation-related communication.
2. Whether the letter constituted criminal extortion as a matter of law, placing it outside anti-SLAPP protection under the rule applied in *Flatley v. Mauro*.
3. Whether Civ. Code § 47(b) (litigation privilege) or Civ. Code § 47(c) (common-interest privilege) barred Mendoza’s claims at the anti-SLAPP stage.
4. Whether Mendoza was properly awarded attorney’s fees as the prevailing party on the anti-SLAPP motion, including fees on appeal.

## Decision

- The Court of Appeal affirmed the order denying Hamzeh’s anti-SLAPP motion.
- The court held the demand letter was criminal extortion as a matter of law because it coupled threats to report alleged wrongdoing to authorities and others with a demand for money.
- Because extortionate communications are not protected activity under § 425.16, Hamzeh failed the first step of the anti-SLAPP analysis.
- The court rejected reliance on litigation and common-interest privileges to defeat the claims at the motion-to-strike stage where the challenged conduct was extortion.
- The court affirmed the attorney’s fee award to Mendoza and held Mendoza was entitled to recover reasonable fees and costs on appeal, to be set by the trial court.

## Legal Principles

- California anti-SLAPP protection does not apply to communications that constitute criminal extortion as a matter of law, even if framed as prelitigation settlement demands.
- A demand for payment that is expressly conditioned on threats to report the target to law enforcement, regulatory authorities, or other third parties can satisfy the elements of extortion.
- Litigation-related privileges under Civ. Code § 47(b) and § 47(c) do not require striking a complaint at the anti-SLAPP stage when the challenged communication is extortionate.
- A plaintiff who prevails in opposing an anti-SLAPP motion may recover attorney’s fees and costs under § 425.16(c), including reasonable fees and costs incurred on appeal.

## Conclusion

The court held that a demand letter threatening reports to governmental agencies and other third parties unless the recipient pays money is extortion as a matter of law, which defeats anti-SLAPP protection and prevents litigation-related privileges from disposing of the case on a motion to strike; the prevailing plaintiff was entitled to attorney’s fees, including on appeal.


Mendoza v. Hamzeh, 155 Cal. Rptr. 3d 832 (Cal. Ct. App. 2013)