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Court of Appeal:
Suit Against Ex-City Politico for Extortion May Continue
Denial of Anti-SLAPP Motion Affirmed, Though Judge Linfield’s Reasoning Is Rejected
By a MetNews Staff Writer
The Court of Appeal for this district yesterday affirmed the denial of an anti-SLAPP motion filed by a political consultant/lobbyist who is being sued by a multi-state marijuana outfit for extortion, claiming it was denied a license to manufacture and sell its products in the City of Commerce because it refused to pay the man a kickback.
Presiding Justice Dennis M. Perluss of Div. Seven authored the opinion, which was not certified for publication. While agreeing that the motion pursuant to Code of Civil Procedure §425.16 was correctly denied, Perluss’s reasoning differed from that of the trial judge, Los Angeles Superior Court Judge Michael Linfield.
Div. Seven on March 15, in an unpublished opinion by Alameda Superior Court Judge Noël Wise, sitting on assignment, upheld the denial of such an anti-SLAPP motion by the city, which, it is alleged by plaintiff From the Earth, has denied it due process.
The plaintiff alleges in its complaint:
“This action is based upon the tortious and corrupt conduct of the defendant City of Commerce illegally conspiring with a convicted felon and disgraced former Bell city councilmember, defendant Beltran, to develop a plan in which each would profit off the issuance of marijuana dispensary licenses in the city of Commerce. Specifically, defendant City of Commerce would grant or deny qualified cannabis business license applications based upon whether or not the applicants engaged the lobbying services of defendant Beltran, who in turn agreed to pay kickback to defendant City of Commerce’s city council members. When Plaintiff would not agree to the illegal kickbacks demanded by defendant Beltran, defendant Beltran intervened in Plaintiffs application process to tortiously conspire with defendant City of Commerce to illegally deny Plaintiffs cannabis license application.”
Threats Alleged
The pleading avers that early in the application process, on Nov. 7, 2018, the city advised From the Earth it was deemed a qualified applicant. Right after that, it says, Beltran phoned and threatened that unless his services were engaged, the application would not be acted upon favorably.
The complaint sets forth that the plaintiff did not respond, in part because Beltran has “a reputation for attempting to illegally assert his influence in cities that are awarding cannabis licenses for his own personal gain.”
Attached to the complaint is a contract for his services which Beltran emailed the plaintiff on Nov. 30, 2018 at 4:39 p.m. It provides for payment to him of $50,000 upon the city granting a permit, with monthly payments of $2,500 commencing 60 days after that, and specifying that if the business were to be sold, there would be an assumption of the obligations to Beltran by the buyer or payment to him of 10 percent of the purchase price.
Kintu Patel is the owner of From the Earth and Arrion Jafari is a principal. Within minutes after the email from Beltran arrived—at 4:46 p.m.—there came one from the city with the salutation, “Hello Arrion/Kintu/Mario.”
The city’s “Commercial Cannabis Permit Team” gave the plaintiff the go-ahead in that email to apply for a temporary permit. However, after From the Earth advised the city not to include Beltran in communications as he had not been retained, its application for a permit was rejected.
Opposition to Beltran’s anti-SLAPP motion was bolstered by a declaration from Patel attesting to the accuracy of the pled allegations.
Linfield’s Ruling
In denying Beltran’s special motion to strike, Linfield found that the conduct in issue does not stem from protected speech, thus not satisfying the first prong of §425.16. He said:
“The issue presented here is simple: is an alleged extortion scheme protected by the anti-SLAPP statute. The answer is equally simple: No.”
Linfield explained:
“Defendant fails to meet his initial burden to make a prima facie showing that the gravamen of Plaintiff’s allegations against Defendant are protected by Code of Civil Procedure section 425.16. Contrary to Defendant’s assertion, the gravamen of Plaintiffs claim against him are not based on speech or writing made in connection with an issue under review or consideration by an official proceeding with the City of Commerce’s city council. Instead, the gravamen of Plaintiffs claim against Defendant Beltran is that Defendant Beltran made telephonic and written threats to Plaintiff, threatening that if Plaintiff did not use Defendant Beltran’s lobbying services, then Defendant Beltran would retaliate against Plaintiff and ensure that Defendant City of Commerce would deny the cannabis licenses Plaintiff applied to receive from Defendant City of Commerce….
“Defendant has failed to meet his initial burden to demonstrate how these allegations, central to Plaintiffs claim for extortion against Defendant, arise from protected activity pursuant to the anti-SLAPP statute.”
Perluss disagreed with Linfield’s premise that the action is not based on protected conduct. Although the California Supreme Court held in its 2006 decision in Flatley v. Mauro that “[e]xtortion is not a constitutionally protected form of speech,” he said, that holding applies only if the defendant admits criminal conduct or it is conclusively established. “That is not the case here,” the presiding justice wrote. “Far from admitting his conduct was illegal, Beltran has expressly denied he made the threatening statements described in Patel’s declaration.”
Going beyond the first prong, which he said is met, Perluss proceeded to determine whether the plaintiff has shown a probability of prevailing on the merits, which would defeat an anti-SLAPP motion, declaring:
“Beltran’s actions, if proved at trial, would support a finding of attempted extortion under Penal Code sections 518, 519 and 523. Accepting this evidence as true, as we must when evaluating a section 425.16 special motion to strike, From The Earth has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment.
“Beltran’s response is insufficient to defeat From The Earth’s evidentiary showing. His denial that he made threatening statements suggesting unlawful interference with the City’s evaluation of From The Earth’s license application if he was not retained as a lobbyist, as described by Patel, of course, merely established a conflict that cannot be resolved at this stage of the proceedings. Similarly, although Beltran’s specific intent to commit extortion, an element of the crime, was not established by Patel’s declaration, it may be reasonably inferred from the statements and conduct attested to by Patel, at least for purposes of establishing the extortion claim’s minimal merit.”
The case is From The Earth v. Beltran, B310055.
Beltran in 2009 pled guilty to three counts of failing to file campaign financial disclosure forms and one count of failing to deposit donations paid by cash, misdemeanors, and was placed on four years of probation and, as a condition of the deal, resigned from office and was barred from running for four years. He allegedly used moneys intended to go to his reelection campaign for a personal purpose: funding his defense in a prosecution for filing a false police report, of which he was convicted in 2007.
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