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Case Name: Shi v. Zhang, et al.


Case No.:
1-14-CV-267855
After full consideration of the evidence, the arguments and the authorities submitted by each
party, the court makes the following rulings:
This is an action for wrongful termination. On July 11, 2014, plaintiff Nan Shi
(Plaintiff or Shi) filed a complaint against defendants Maria Zhang (Zhang) and Yahoo!
Inc. (Yahoo!) asserting causes of action for sexual harassment in violation of FEHA,
intentional infliction of emotional distress, and wrongful termination. The complaint alleges
that Zhang is the Director of Engineering at Yahoo! (See complaint, IT-1, first through third
causes of action.) The complaint alleges that Zhang instructed Plaintiff to allow Zhang stay in
Plaintiffs temporary housing unit, and coerced Plaintiff into having sex despite Plaintiffs
protests. (Id.)
On July 16, 2014, Zhang filed a cross-complaint for defamation and intentional
infliction of emotional distress, alleging that Shis false accusations against Zhang to Yahoo!
and numerous third persons has caused Zhang to suffer injury to her professional reputation
and caused emotional distress.
Shi specially moves to strike the cross-complaint pursuant to Code of Civil Procedure
section 425.16.
Shis special motion to strike the third cause of action
In Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, the
California Supreme Court established the trial courts duty in ruling on an anti-SLAPP motion
to strike:
Section 425.16, subdivision (b)(1) requires the court to engage in
a two-step process. First, the court decides whether the
defendant has made a threshold showing that the challenged
cause of action is one arising from protected activity. The
moving defendants burden is to demonstrate that the act or acts
of which the plaintiff complains were taken in furtherance of the
[defendant]s right of petition or free speech under the United
States or California Constitution in connection with a public
issue, as defined in the statute. [Citation.] If the court finds
[that defendant has made its threshold showing], it then
determines whether the plaintiff has demonstrated a probability
of prevailing on the claim. Under section 425.16, subdivision
(b)(2), the trial court in making these determinations considers
the pleadings, and supporting and opposing affidavits stating the
facts upon which the liability or defense is based.
(Id. at 67.)

[I]n order to establish the requisite probability of prevailing [citation], the plaintiff
need only have stated and substantiated a legally sufficient claim. (Navellier v. Sletten
(2002) 29 Cal. 4th 82, 88, quoting Briggs v. Eden Council for Hope & Opportunity (1999) 19
Cal. 4th 1106, 1123.) Put another way, 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. (Id. at 88-89,
quoting Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.) Only a cause of
action that satisfies both prongs of the anti-SLAPP statutei.e., that arises from protected
speech or petitioning and lacks even minimal meritis a SLAPP, subject to being stricken
under the statute. (Id. at 89.)
Shi demonstrates that the cross-complaint arises from protected activity
The cross-complaint alleges that Shi falsely accused Zhang of forcing Shi to have sex
with Zhang to Yahoo! and numerous third parties. Shi concedes that any statements to third
parties would not constitute protected activity, but asserts that, as mixed causes of action, the
causes of action would nevertheless be subject to the protection of the anti-SLAPP statute.
(See Shis memorandum of points and authorities in support of special motion to strike the
cross-complaint (Shis memo), pp.6:2-24, 7:1-4.) Shi is correct. (See Salma v. Capon
(2008) 161 Cal.App.4th 1275, 1287 (stating that [a] mixed cause of action is subject to section
425.16 if at least one of the underlying acts is protected conduct, unless the allegations of
protected conduct are merely incidental to the unprotected activity).) Thus, the Court shall
determine whether Shis allegedly defamatory statements to Yahoo! employees constitute
protected activity.
Subdivision (e)(1) does not apply.
Subdivision (e)(1) protects any written or oral statement or writing made before a
legislative, executive, or judicial proceeding, or any other official proceeding authorized by
law. Shi contends that Comstock v. Aber (2012) 212 Cal.App.4th 931 held that an
employees report of sexual harassment to an HR manager is protected under subdivision (e)(1)
and/or (e)(2) of section 425.16. (Shis memo, p.8:10-12.) However, as to subdivision (e)(1),
the Comstock court specifically distinguished it from the argument made in Olaes v.
Nationwide Mutual Ins. Co. (2006) 135 Cal.App.4th 1501, in which the employer argued that
the investigation of harassment claimwas an official proceeding authorized by law [t]hat is
not Abers argument here, which is that her statements to Bush were protected because they
were statements prior litigation. (Comstock, supra, 212 Cal.App.4th at p.601.) In Olaes,
the court rejected the employers argument that [b]ecause an employers proceedings for
resolving sexual harassment complaints are legally requiredas well as being the first step in
the process of instituting a civil actionthey are other official proceedings authorized by
law, stating:
Despite Nationwides attempt to cast its sexual harassment
procedure as a quasi-governmental proceeding, the procedure
involved was designed and instituted by a private company.
Although, as Nationwide suggests, employers must take all
reasonable steps necessary to prevent harassment from occurring
under Government Code section 12940, subdivision (k), such a
duty does not automatically transform a private employer into an
entity conducting official proceedings.

As Olaes notes, a private employer possesses neither the powers


nor the responsibilities of a government agency. Instead, each
private employer develops its own idiosyncratic methods of
handling employee harassment complaints. The corporate
individuals implementing those procedures do not act in the
capacity of governmental officials performing an official duty.
Nor are the resulting proceedings reviewable by writ of mandate.
Despite Nationwides claims to the contrary, we cannot view a
corporations sexual harassment procedure as a quasi-judicial
proceeding.
(Olaes, supra, 135 Cal.App.4th at pp.1508-1509 (also stating that the fact that the private
companys personnel department is charged with implementing a harassment policy and
establishes procedures that mimic those of a governmental agency does not transform it into an
administrative body; also stating that Nationwides human resource specialist may indeed
be vested with discretion, apply California law regarding harassment, and make decisions
affecting the personal and property rights of the accused harasser [s]till, the human resource
specialist is not an administrative body possessing quasi-judicial powers).)
Shi is incorrect that Comstock held an employees report of sexual harassment to an
HR manager is protected under subdivision (e)(1), and it is clear that there is case authority
contrary to Shis assertion. Shis assertion is without merit.
Subdivision (e)(4) does not apply.
Subdivision (e)(4) protects any other conduct in furtherance of the exercise of the
constitutional right of free speech in connect with a public issue or an issue of public interest.
(See Code Civ. Proc. 425.16, subd. (e)(4).) Shi contends that the cross-complaint is subject
to subdivision (e)(4) of the anti-SLAPP law [because s]exual harassment and sexual
harassment in the workplace are clearly issues of interest and importance to employers,
employees and the general public at large. (Shis memo, pp.10:3-27, 11:1-27, 12:1-11.)
However, unlawful workplace activity below some threshold level of significance is not an
issue of public interest, even though it implicates a public policy. (Carpenter v. Jack in the
Box Corp. (2007) 151 Cal.App.4th 454, 472 (stating that it is well established that unlawful
workplace activity below some threshold level of significance is not an issue of public interest,
even though it implicates a public policy), quoting Rivero v. American Federation of State,
County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, 924.) In fact,
although the elimination of sexual harassment implicates a public interest, an investigation
by a private employer concerning a small group of people does not rise to a public interest
under section 425.16. (Olaes v. Nationwide Mutual Ins. Co. (2006) 135 Cal.App.4th 1501,
1511 (also stating that a dispute among a small number of people in a workplace does not
implicate a broader public interest subject to a motion to strike under section 425.16,
subdivision (e)).) Here, Shi concedes that the cross-complaint arises from her allegedly
defamatory statements made to Yahoo!, her employer. It is clear that subdivision (e)(4) does
not protect Shis allegedly defamatory statements.
However, subdivision (e)(2) applies.

Subdivision (e)(2) protects 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
other official proceeding authorized by law. In Comstock, supra, the court did find that
statements made to a HR manager were protected pursuant to subdivision (e)(2) because
Abers statements were necessary to address a commonly used affirmative defense by an
employer in a sexual harassment casea defense, not incidentally, that [the employer] has in
fact asserted against Aber here [and thus] were statements prior to litigation. (Comstock,
supra, 212 Cal.App.4th at pp.944-945.)
Here, Yahoo! has not filed an answer. However, according to the Comstock court,
statements to a HR manager are protected because they were statements prior to litigation,
necessary to defeat an affirmative defense that [the employer] could assert in [a] lawsuit.
(Id. at p.945 (emphasis added).) Thus, absent an exception to such protection, Shi has made a
threshold showing that the challenged cause of action is one arising from protected activity
pursuant to subdivision (e)(2).
The cross-complaint does not allege that it is based on the extortionate demand letter.
In opposition, Zhang contends that Shis statements are not protected because they
constitute extortion. In Flatley v. Mauro (2006) 39 Cal.4th 299, the defendant threatened to
publicly accuse Flatley of rape and to report and publicly accuse him of other unspecified
violations of various laws unless he settled by paying a sum of money to [accuser] Robertson
of which [attorney] Mauro would receive 40 percent. (Id. at p.329.) The Flatley court noted
that the definition for extortion pursuant to Penal Code section 518 is the obtaining of
property from another, with his consent induced by a wrongful use of force or fear. (Id. at
p.326.) Fear, for purposes of extortion may be induced by a threat, either: [] [] 2. To
accuse the individual threatened of any crime; or, [] 3. To expose, or impute to him any
deformity, disgrace or crime[.] (Id.) The Flatley court concluded that because the activity
forming the basis of Mauros motion to strike Flatleys action was extortion as a matter of law
and, therefore, not constitutionally protected activity for purposes of section 425.16, we further
conclude that the trial court did not err when it denied Mauros motion to strike. (Id. at
p.333.)
Here, Zhang provides evidence that demonstrates that Shis counsel, Matthew Fisher,
indeed sent a letter to Yahoo! demanding $1 million to settle the case, or he would file a
lawsuit on behalf of Shi. (See Frank decl., exh.D.) However, in Flatley, the action was based
on the demand letter and subsequent demands. (See Flatley, supra, 39 Cal.4th
at p.305 (stating that Flatleys action was based on a demand letter Mauro sent to Flatley on
behalf of Tyna Marie Robertson, a woman who claimed that Flatley had raped her, and on
subsequent telephone calls Mauro made to Flatleys attorneys, demanding a seven-figure
payment to settle Robertsons claims).) Here, the cross-complaint does not allege extortion or
claims based on the demand letter; rather, the cross-complaint alleges that Shi made false
sexual harassment claims to Yahoo! and received hundreds of thousands of dollars that she
would not have received since Yahoo! refrained from terminating her earlier due to the
seriousness of the allegations. Although the demand letter and subsequent communications
appear extortionate, it does not appear that the alleged statements upon which the crosscomplaint is based are extortionate as a matter of law pursuant to Flatley.

Thus, Shis statements made to Yahoo! are protected pursuant to subdivision (e)(2), and
the court must now determine whether Zhang has demonstrated a probability of prevailing on
the claim.
Zhang demonstrates a probability of prevailing on her claims in the cross-complaint.
As previously stated, the plaintiff need only have stated and substantiated a legally
sufficient claim. (Navellier v. Sletten (2002) 29 Cal. 4th 82, 88, quoting Briggs v. Eden
Council for Hope & Opportunity (1999) 19 Cal. 4th 1106, 1123.) Zhang asserts two causes of
action against Shi: defamation and intentional infliction of emotional distress.
The first cause of action for defamation
Libel is a false and unprivileged publication by writing, printing, picture, effigy, or
other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule,
or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure
him in his occupation. (Civ. Code 45.)
To demonstrate a probability of prevailing on her claims, Zhang presents emails from
Shi to various persons at Yahoo! regarding Shi. (See Frank decl., exhs. A and B.) In the
emails, Shi accuses Zhang of forc[ing Shi] to have sexual relationships with [Zhang] during
the time [Shi was] working at Yahoo. Zhang also presents three declarations submitted by
Shis lawyers from three individuals in China who state that Shi told them that Zhang had
forced Shi to have sex with Shi. (See Frank decl., exh. C.) Zhang also presents the demand
letter and subsequent communications regarding the demand. (See Frank decl., exhs. D-G.)
Additionally, Zhang presents her own declaration in which she states that the accusations by
Shi are false, have caused injury to her business reputation as well as emotional distress. (See
Zhang decl., 2-5.)
Zhang presents evidence that demonstrates that her defamation claim is both legally
sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable
judgment if the evidence submitted by Zhang is credited. Accordingly, the special motion to
strike the first cause of action for defamation is DENIED.
The second cause of action for intentional infliction of emotional distress
The elements for intentional infliction of emotional distress are: (1) extreme and
outrageous conduct by the defendant with the intention of causing, or reckless disregard of the
probability of causing, emotional distress; (2) the plaintiff's suffering severe or extreme
emotional distress; and (3) actual and proximate causation of the emotional distress by the
defendants outrageous conduct. (Davidson v. City of Westminister (1982) 32 Cal.3d 197,
209.)
The provided evidence demonstrates extreme and outrageous conduct by Shi made with
the intention of causing, reckless disregard of the probability of causing emotional distress.
Zhangs declaration demonstrates her emotional distress caused by Shi. Zhang presents
evidence that demonstrates that her intentional infliction of emotional distress claim is both
legally sufficient and supported by a sufficient prima facie showing of facts to sustain a
favorable judgment if the evidence submitted by Zhang is credited. Accordingly, the special

motion to strike the second cause of action for intentional infliction of emotional distress is
likewise DENIED.
Accordingly, Shis special motion to strike is DENIED in its entirety. Shis demand for
attorney fees and costs is also DENIED.
Shis objections are OVERRULED in their entirety. Although the Court
OVERRULES the objections to the declarations made by Xiaobing Chen, Yunping Gu and Pei
Shi and the demand letter and subsequent communications, the Court notes that the emailsto
which were not objectedis sufficient evidence to demonstrate that Shi published the
allegedly defamatory statements, and coupled with Zhangs declaration, the emails and
Zhangs declaration sufficiently demonstrate that the cross-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 Zhang is credited.

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