In Basic Your Best Buy Inc. v. DirecTV Inc., a California Court of Appeal refused to dismiss a $83.7 million lawsuit against DirecTV Inc. The plaintiff, a marketer of DirecTV products, accused DirecTV of conspiring to restrain trade by suddenly ending its contract, threatening litigation, warning other DirecTV dealers not to buy the company’s assets, and then forcing the plaintiff to turn its assets over to DirecTV in a fire sale.
DirecTV moved to dismiss the suit underCalifornia’s anti-Strategic Litigation Against Public Participation (anti-SLAPP) law, which is designed to prevent lawsuits that target free speech. DirecTV argued that Basic’s complaint was based on protected pre-litigation conduct — its letter to Basic to cease-and-desist its attempts to offer its customers a choice to sign up with DirecTV’s competitors, and DirecTV’s statements to third parties in connection with its anticipated trademark litigation against Best.
After a California Superior Court Judge denied DirecTV’s motion, DirecTV appealed. The Appellate Court affirmed the lower court’s decision, holding that a contemplated or even pending lawsuit does not transform every subsequent written communication into a product of the litigation. Here, there was no evidence that DirecTV’s communications directing other dealers not to bid for Basic’s assets related to the substantive issues of DirecTV’s threatened trademark infringement litigation.