Filed 1/27/22 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE FALCON BRANDS, INC., et. al., Cross-complainants and Appellants, G059477 v. (Super. Ct. No. 30-2020-01128818) MOUSAVI & LEE, LLP, et. al., OPINION Cross-defendants and Respondents. Appeal from an order of the Superior Court of Orange County, Craig Griffin, Judge. Affirmed in part, reversed in part. Armstrong Law Group and John Armstrong for Cross-complainants and Appellants. Kaufman Dolowich Voluck, Andrew J. Waxler, Courtney E. Curtis-Ives and Jennifer E. Newcomb for Cross-defendants and Respondents. * * * Lawyers argue for a living. Some do more than argue. They lace their settlement demands with threats. When does such activity cross the line and become professional misconduct? That is the fundamental question presented in this case. Falcon Brands, Inc. and Coastal Harvest II, LLC (collectively Falcon) appeal here from an order granting respondent’s special motion to strike both causes of action in Falcon’s cross-complaint pursuant to Code of Civil Procedure section 425.16 (the anti-SLAPP law). The cross-complaint alleges extortion and intentional interference with a contract against attorney Amy Mousavi and her law firm, Mousavi & Lee, LLP (collectively Mousavi). Falcon argues Mousavi’s e-mail settlement demands, described in detail below, which are the focus of Falcon’s cross-complaint, were not entitled to protection under the anti-SLAPP law because they constituted illegal attempts to force Falcon into settling the underlying matter. The trial court rejected this argument and granted Mousavi’s anti-SLAPP motion. We reverse as to the first cause of action for extortion because we conclude Mousavi’s e-mail settlement demands, when considered in context, were not protected speech in light of the Supreme Court’s ruling in Flatley v. Mauro (2006) 39 Cal.4th 299 (Flatley). Rather, Mousavi’s escalating series of threats ultimately transformed what had been legitimate demands into something else: extortion. We therefore conclude Falcon’s first cause of action is not protected by the anti-SLAPP law as a result of the well-established “Flatley rule.” We affirm as to the second cause of action, intentional interference with a contract. That cause of action arises out of Mousavi’s actual revelation of damaging information about Falcon to Falcon’s merger partner. Falcon does not contend the revelations were illegal as a matter of law. The revelations were made in furtherance of Mousavi’s contemplated litigation. The trial court correctly concluded the revelations were protected by the litigation privilege. Consequently, they are also protected by the anti-SLAPP statute. 2 FACTS Falcon is in the cannabis business. Beginning in 2017, Mousavi’s client, Nick Honard, worked for Falcon both as a contractor who earned commissions, and as an employee. Honard was fired by Falcon in August 2019. Falcon claims it terminated Honard after it learned he had submitted fraudulent expense reimbursement requests and hired an employee without Falcon’s knowledge or authorization. On September 6, 2019, attorney Mousavi e-mailed a letter to Falcon’s counsel, announcing she had been retained to represent Honard with respect to his potential claims for wrongful termination, misclassification of employment, failure to pay …
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