Key Points
- The First District, Division Four, affirmed an order that struck a fired physician's peer-review-based allegations but refused to strike his entire complaint against The Permanente Medical Group.
- Claims resting exclusively on unprotected activity do not clear step one of the anti-SLAPP analysis, even if the defendant argues they are legally insufficient, and must be challenged by demurrer.
- Incorporating all prior allegations into each count does not make every claim rest on the protected peer-review allegations.
- The court rejected the argument that Baral applies only when the defendant concedes a prima facie case, distinguished Norman v. Ross and Medical Marijuana, and treated Simmons v. Allstate as a pre-Baral decision.
- Under Bonni I, the patient-care restriction, termination recommendation and terminations were unprotected disciplinary acts, and the claims based on them survived the motion.
A California appeals court on Friday refused to throw out a fired physician's entire lawsuit against The Permanente Medical Group, holding that the state's anti-SLAPP law cannot be used to strike claims that rest only on unprotected conduct, even when the defendant says those claims are legally deficient.
The First Appellate District, Division Four, affirmed an Alameda County Superior Court order that struck most of the allegations in Dr. James Peros's complaint aimed at the medical group's peer review proceedings but declined to dismiss the rest of his suit. Justice Goldman wrote the opinion, joined by Acting Presiding Justice Streeter and Judge Gordon of the San Francisco Superior Court, sitting by assignment.
The anti-SLAPP statute, Code of Civil Procedure section 425.16, allows early dismissal of a strategic lawsuit against public participation, meaning a claim arising from protected speech or petitioning, without leave to amend. The panel held that other claims must be attacked by demurrer, a procedure that allows a court to grant leave to amend. "The procedure for attacking such a claim is a demurrer," Goldman wrote.
Peros, a gay man and licensed physician, worked for and held shares in the medical group for about 15 years, according to the opinion's account of his verified complaint. He alleged bias against gay men and said that after he reported misconduct by a heterosexual physician, he was told to drop his inquiries.
In October 2021, the group placed Peros on paid administrative leave, restricting him from patient care, while it investigated allegations of illegal drug use. In May 2022, the physician in charge of the matter recommended that he be fired. That December, Peros sent a letter asserting he had been constructively discharged, and the group treated it as a resignation while also firing him for violating its sick leave policy.
At a peer review hearing in March 2023, Peros refused to answer questions about drug use, and the panel deemed him to have accepted the restriction and the termination recommendation.
Peros sued on seven causes of action, including retaliation for opposing illegal activities under Labor Code section 1102.5, discrimination under the Unruh Civil Rights Act, misrepresentation and breach of fiduciary duty. The medical group moved to strike the entire complaint, arguing that every claim rested on the peer review process and related communications.
Under the statute's two-step procedure, the defendant first identifies claims supported by allegations of protected activity, and the plaintiff must then show those claims are legally sufficient and factually substantiated. Judge Elizabeth Riles struck most of the peer review allegations at the second step, along with the misrepresentation claims. But she found that some retaliation and discrimination claims rested only on unprotected acts, such as the patient-care restriction and the terminations, and declined to strike them.
On appeal, the group argued that no cognizable claim remained once the protected allegations were removed, and that letting Peros amend after a demurrer would undermine the statute's goal of quick dismissal.
The panel relied on Baral v. Schnitt, a 2016 California Supreme Court decision holding that one cause of action can contain several claims and that an anti-SLAPP motion "does not reach the claims based on unprotected activity." It also cited the high court's 2021 decision in Bonni v. St. Joseph Health System, which concluded that disciplinary decisions made in connection with peer review, such as suspending or terminating hospital privileges, are not protected.
"A claim that does not rest on protected activity—regardless of whether it is otherwise arguably defective—does not clear the step-one threshold and thus is not within the anti-SLAPP statute's purview," Goldman wrote.
The court rejected the group's argument that every claim targeted peer review because Peros's complaint incorporated all preceding allegations at the start of each count. "Plaintiffs commonly use this convention so that they do not repeat the same story under every new heading," Goldman wrote, adding that the practice "does not mean that each claim within a count rests on every preceding allegation."
The panel rejected the group's reading of Baral as limited to cases in which the defendant concedes a prima facie case. It distinguished Norman v. Ross, a 2024 decision ordering a screenwriter's entire complaint stricken, because protected activity supplied an element of every claim there. "In the present case, unlike in Norman, some claims do not advance past the step-one threshold to step two," Goldman wrote.
The medical group raised the prospect that what the court called a "cunning plaintiff" could plant inadequate unprotected-activity allegations in a complaint aimed at protected activity to keep it from being stricken in full. "In our view, the anti-SLAPP statute does not prevent a plaintiff from doing so," Goldman wrote, adding that claims a plaintiff cannot fix by amendment will ultimately be dismissed.
Quoting Baral, the court said the statute's central purpose is to screen out meritless claims arising from protected activity before discovery. "The statute is not concerned with weeding out deficient claims that arise from unprotected activity," Goldman wrote.
The panel found a 2020 decision, Medical Marijuana, Inc. v. ProjectCBD.com, not on point because all the claims there arose from protected conduct, and noted that Simmons v. Allstate Ins. Co., a 2001 ruling barring amendment, predated Baral. The court agreed with Peros that its reading of Baral "advances the dual goals of preserving a plaintiff's ability to seek relief on unprotected grounds and shielding a defendant's protected activities."
In an unpublished portion of the opinion, the panel also upheld the trial court's refusal to strike several specific allegations, including those about a panel member removed after voir dire revealed she had lied under oath.
Peros was represented by Eduardo G. Roy of Prometheus Partners. Louise Ann Fernandez of Bartko Pavia represented The Permanente Medical Group.
The panel awarded Peros his costs on appeal. It did not decide whether he could prevail on his unprotected-activity claims, and it declined to consider a demurrer ruling the trial court issued after the anti-SLAPP order, calling that ruling outside the scope of the appeal.