## Facts

- A minor plaintiff (through a guardian) brought a diversity putative class action under California consumer-protection statutes, alleging defendants unlawfully increased sales of the prescription drug Ritalin.
- Ritalin was alleged to be a Schedule II controlled substance commonly prescribed for ADD/ADHD; the plaintiff alleged he was prescribed and ingested it as a child.
- The complaint alleged a conspiracy among the drug manufacturer, a psychiatric association, and an advocacy organization to broaden and confirm the ADD/ADHD diagnosis to expand the market for Ritalin.
- The plaintiff alleged the manufacturer made substantial financial contributions to the association and advocacy group and did not adequately disclose those relationships.
- The district court dismissed the complaint for failure to plead fraud with particularity under Federal Rule of Civil Procedure 9(b), dismissed certain defendants under Rule 12(b)(6), granted defendants’ motions to strike under California’s anti-SLAPP statute, and awarded attorneys’ fees.
- The plaintiff appealed.

## Issues

1. When state-law consumer claims allege a unified course of fraudulent conduct as their basis, must they satisfy Rule 9(b) even if fraud is not a formal element?
2. In federal diversity actions, how should California’s anti-SLAPP procedure be applied consistently with the Federal Rules, particularly the “probability of prevailing” step?
3. If a cause of action mixes protected and unprotected conduct, may an anti-SLAPP motion strike the entire claim or only the protected portions?

## Decision

- The court affirmed in part, reversed in part, and remanded.
- It affirmed that Rule 9(b) applies to claims that “sound in fraud” because they rely on a unified course of fraudulent conduct.
- It held that non-fraud theories or allegations embedded within a broader claim are not automatically subject to Rule 9(b); deficient fraud averments are disregarded and the court then assesses whether a non-fraud claim remains under Rule 8.
- It reaffirmed that California’s anti-SLAPP statute applies in federal diversity cases, but ruled it cannot be used to bypass Rule 12(b)(6) pleading standards or Rule 56 summary-judgment standards.
- It held an anti-SLAPP motion must be directed to discrete claims or allegations arising from protected speech or petitioning; courts may strike protected-activity allegations without striking mixed, unprotected allegations.
- It reversed the blanket striking and dismissal of the entire complaint and the associated fee awards, requiring a narrower, claim-by-claim and allegation-by-allegation analysis on remand.

## Legal Principles

- A claim is subject to Rule 9(b) when it is “grounded in fraud” or “sounds in fraud,” meaning it relies entirely on a unified course of fraudulent conduct, even if fraud is not an element of the cause of action.
- When fraud is not an element, a plaintiff may plead both fraudulent and non-fraudulent theories; allegations not meeting Rule 9(b) are disregarded, and the court then evaluates whether the remaining non-fraud allegations state a claim under Rule 8.
- California’s anti-SLAPP statute applies in federal diversity cases as a substantive protection, including its burden-shifting framework and fee-shifting features, but its operation must conform to federal procedural standards.
- In federal court, the anti-SLAPP “probability of prevailing” inquiry is evaluated using Rule 12 and Rule 56 standards rather than as a separate, more demanding merits test.
- An anti-SLAPP motion may strike only claims, theories, or allegations that arise from protected speech or petitioning activity; it does not authorize striking unprotected allegations merely because they appear in the same cause of action.

## Conclusion

The Ninth Circuit required particularized pleading only for fraud-grounded portions of California consumer claims and limited anti-SLAPP strikes in federal court to protected-activity claims or allegations, reversing the district court’s across-the-board strike, dismissal, and fee awards and remanding for a narrower analysis.


Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003)