BioCorRx v. Calista Therapeutics CA4/3

Opinion

Filed 9/3/26 BioCorRx v. Calista Therapeutics CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

BIOCORRX INC. et al., Plaintiffs and Respondents, G065885 v. (Super. Ct. No. 30-2024-01420208)

CALISTA THERAPEUTICS, INC., OPINION et al., Defendants and Appellants.

Appeal from a prejudgment order of the Superior Court of Orange County, Andre Manssourian, Judge. Affirmed. Reich Radcliffe & Hoover, Richard J. Radcliffe and Marc G. Reich for Defendants and Appellants. Katz Ruby & Carle, Michael I. Katz and Byron H. Ruby for Plaintiffs and Respondents. * * * Defendants Calista Therapeutics, Inc. (Calista) and Dr. Andrew Mallon (collectively, defendants) appeal from an order denying their motion to strike the complaint of plaintiffs BioCorRx, Inc. (BioCorRx) and Lourdes Felix (collectively, plaintiffs) under California’s anti-SLAPP statute, Code of Civil Procedure1 section 425.16. Plaintiffs brought an action for intrusion into private affairs, recording of confidential information (Pen. Code, §§ 632, 637.2), and unfair business practices (Bus. & Prof. Code, § 17200 et seq.) against defendants based on Mallon’s secret recording of a BioCorRx board meeting and a separate meeting with Felix. The trial court denied defendants’ motion to strike, concluding that, although plaintiffs’ claims arose from defendants’ protected activity under the first prong of the anti- SLAPP statute, plaintiffs demonstrated a likelihood of success on the merits under the second prong. We conclude on our de novo review of the matter that plaintiffs’ claims regarding Mallon’s recording of the board meeting and his conversation with Felix did not arise from any protected activity.2 We further conclude that plaintiffs have demonstrated a likelihood of success on the merits of their third and fourth causes of action for recording confidential 1 All further statutory references are to the Code of Civil Procedure unless otherwise noted. 2 It appears that defendants only appeal the trial court’s denial of their anti-SLAPP motion as to the third and fourth causes of action for recording of secret information because neither their opening nor reply briefs challenge the denial of their motion as to any of the other causes of action. (See Cruz v. Tapestry, Inc. (2025) 113 Cal.App.5th 943, 953–954 [“‘“Even when our review on appeal ‘is de novo, it is limited to issues which have been adequately raised and supported in [the appellant’s opening] brief. [Citations.] Issues not raised in an appellant’s brief are deemed waived or abandoned”’”].)

2 information. Accordingly, we affirm the prejudgment order denying defendants’ anti-SLAPP motion.

FACTS A. Factual Background Mallon and his consulting firm Calista entered into a consulting agreement with BioCorRx. The underlying lawsuit centers around two secret recordings made by Mallon on March 15, 2023, one of a BioCorRx confidential board meeting and the other of a conversation with Felix, BioCorRx’s chief executive officer and chief financial officer, which occurred in her office directly after the board meeting’s conclusion. After the board meeting, Felix requested to speak with Mallon in her office to ask him to follow up with BioCorRx’s private sector auditor, Marcum LLP (Marcum), so that Marcum could finalize its 2022 financial audit. Mallon had not yet responded to Marcum’s audit confirmation letter regarding his invoices, which were needed as part of the audit. Mallon stated he had not responded to the confirmation letter because he thought some of its wording was inaccurate. After some discussion, Mallon eventually sent an e-mail to Marcum on March 18, 2023, that clarified the confirmation letter. Mallon conceded the following facts in his deposition: he made the two recordings; he was paid to do so by Calista; he did not notify any of the participants he was recording the conversations; he did not seek authorization from the other parties to record the conversations; and Calista had a policy of recording conversations for the benefit of the company. Mallon continued to work with BioCorRx for another year until the company terminated him in March 2024. He was terminated for alleged poor performance and suspicious behavior, which included taking special 3 implantable pellets to deliver to another researcher and requesting access to manufacturing blueprints for BioCorRx’s top addiction treatment, which was codenamed “BICX104.” Shortly after he was terminated, BioCorRx allegedly learned Mallon had stolen trade secret clinical data. BioCorRx also purportedly determined that Mallon was planning to compete with BioCorRx. B. Federal Court Litigation After Mallon refused to return the trade secret data and other confidential information, BioCorRx sued him in federal district court for misappropriation of trade secrets and other causes of action. (BioCorRx Inc. v. Calista Therapeutics, Inc. (C.D.Cal., July 1, 2024, No. 8:24-cv-00640-JVS (JDE)) 2024 U.S.Dist. Lexis 123268.) Mallon filed an anti-SLAPP motion in federal court, similar to the instant motion, in which he claimed there was an ongoing federal investigation of BioCorRx, and he was therefore entitled to protection from liability pursuant to the litigation privilege. In support of the motion, he submitted a declaration in which he admitted he recorded Felix. The district court denied the anti-SLAPP motion, concluding Mallon had failed to submit any admissible evidence of a federal investigation. (BioCorRx, Inc., 2024 U.S.Dist. Lexis 123268, p. *19.) Learning of the existence of the recordings for the first time, plaintiffs sought discovery of the recordings. However, before providing the recordings in discovery, Mallon appealed the denial of the anti-SLAPP motion, which stayed the federal court action. C. The Complaint Plaintiffs filed the instant case, alleging the following causes of action: two claims for intrusion into private affairs, one brought by BioCorRx against defendants based on the recording of the board meeting and the other brought by Felix against defendants based on the recording of the Felix 4 meeting (first and second claims for relief); two claims for recording of confidential information (Pen. Code, §§ 632, 637.2), one brought by BioCorRx against defendants based on the recording of the board meeting and the other brought by Felix against defendants based on the recording of the Felix meeting (third and fourth claims for relief); and one claim for unfair business practices (Bus. & Prof. Code, § 17200 et seq.) brought by plaintiffs against defendants (fifth claim for relief). The complaint alleged that Mallon made secret recordings of the board meeting and individual meeting with Felix to unfairly compete with BioCorRx’s business, in particular, its addiction treatments. During discovery, plaintiffs sought copies of any recordings of BioCorRx employees or directors. D. The Anti-SLAPP Motion Defendants filed an anti-SLAPP motion. In support of the motion, Mallon filed a declaration in which he claimed he secretly recorded Felix because he believed she was going to extort and blackmail him into concealing a fraudulent administrative fee scheme. Mallon alleged that the financial audit of BioCorRx by Marcum was actually “an official US Government financial audit/investigation.” In his declaration, Mallon contended he relied on information he received regarding an alleged administrative fee scheme from Robert Knutson, who was a friend of BioCorRx’s president Louis Lucido, but who had never been an employee, director, or officer of BioCorRx. Defendants also sought to invoke the litigation privilege on the ground that BioCorRx learned of Mallon’s secret recordings from the prior litigation. Plaintiffs filed an opposition to the anti- SLAPP motion, together with supporting declarations and evidentiary objections.

5 The trial court granted plaintiffs’ motion to temporarily lift the stay of discovery to take Mallon’s deposition. Mallon was also compelled to turn over a copy of his recordings. The trial court, relying on Mallon’s declaration that the Felix recording was made in connection with a potential investigation by the federal government into BioCorRx’s accounting practices, concluded the defendants provided sufficient evidence to show that the recording of Mallon’s meeting with Felix was protected activity under section 425.16, subdivision (e)(2) [protected conduct includes “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 particular, the court found that the recording of Felix “was made in connection with an investigation, or potential investigation, by the federal government into BioCorRx’s accounting practices, specifically its accounting of administrative fees, as well as to defend against potential ‘extortion’ by Felix.” However, the trial court found that “plaintiffs have presented sufficient . . . evidence to show a probability of prevailing on the merits of their claims.” The court also concluded that plaintiffs “provided sufficient evidence to rebut defendants’ Penal Code[ section] 633.5 defense, by presenting evidence that there was no actual or pending governmental investigation, but rather, the administrative fee dispute was in connection with an internal audit by BioCorRx’s retained accounting firm.” It also found that plaintiffs presented sufficient evidence to show that “any reliance by Mallon on information received from Robert Knutson was not reasonable, given that Knutson had no knowledge of, nor access to, any of BioCorRx’s 6 financial or accounting information, nor any knowledge of the company’s internal operations.” Finally, the court found that plaintiffs “presented sufficient evidence to show that the litigation privilege [did] not apply” because there was “no actual or pending governmental investigation” and there was “no evidence that defendants initiated litigation based on [the] recordings.” DISCUSSION I. ANTI-SLAPP LEGAL PRINCIPLES AND STANDARD OF REVIEW Section 425.16, subdivision (b)(1) provides, “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” This statute provides “‘a procedure for the early dismissal of what are commonly known as SLAPP suits . . .—litigation of a harassing nature, brought to challenge the exercise of protected free speech rights.’ [Citation.] A SLAPP suit is generally brought to obtain an economic advantage over the defendant, not to vindicate a legally cognizable right of the plaintiff.” (Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 40.) The Legislature has mandated that courts construe this statute “broadly” in favor of the moving party. (§ 425.16, subd. (a).) “Litigation of an anti-SLAPP motion involves a two-step process. First, ‘the moving defendant bears the burden of establishing that the challenged allegations or claims “aris[e] from” protected activity in which the 7 defendant has engaged.’” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009 (Bonni).) “Second, for each claim that does arise from protected activity, the plaintiff must show the claim has ‘at least “minimal merit.”’” (Bonni, supra, 11 Cal.5th at p. 1009.) This step of the anti-SLAPP analysis “has been described as a summary-judgment-like procedure. [Citation.] The court determines whether ‘“the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment.”’ [Citation.] The plaintiff ‘“may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence.”’ [Citation.] The defendant may submit evidence in support of its motion. [Citation.] However, ‘“[t]he court does not weigh evidence or resolve conflicting factual claims.”’ [Citation.] Rather, the court ‘“accepts the plaintiff’s evidence as true, and evaluates the defendant’s showing only to determine if it defeats the plaintiff’s claim as a matter of law. [Citation.] ‘[C]laims with the requisite minimal merit may proceed.’”’” (Billauer v. Escobar-Eck (2023) 88 Cal.App.5th 953, 962 (Billauer).) Conversely, “[i]f the plaintiff cannot make this showing, the court will strike the claim.” (Bonni, at p. 1009.) “On appeal, we review [an anti-SLAPP] motion de novo and independently determine whether the parties have met their respective burdens.” (Cross v. Cooper (2011) 197 Cal.App.4th 357, 371.) We employ the same two-step process used by the trial court. (Billauer, supra, 88 Cal.App.5th at p. 962.) “‘Only a [claim] that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute.’” (Ibid.)

8 II. THE CHALLENGED CLAIMS DO NOT ARISE FROM PROTECTED ACTIVITY Under step one, we first consider whether defendants made a threshold showing that the challenged claims in the complaint arise from an act in furtherance of defendants’ right of petition or free speech in connection with a public issue. (§ 425.16, subd. (b)(1).) In determining whether a claim arises from protected activity, a court must “‘consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.’” (Bonni, supra, 11 Cal.5th at p. 1009.) A claim “arises from” protected activity if any protected act supplies one or more elements of a claim. (Id. at p. 1010.) However, “a claim does not ‘arise from’ protected activity simply because it was filed after, or because of, protected activity, or when protected activity merely provides evidentiary support or context for the claim.” (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 621.) “Rather, a claim may be struck only if the speech or petitioning activity itself is the wrong complained of.” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1060.) “In deciding whether the initial ‘arising from’ requirement is met, a court considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89 (Navellier).) As noted, defendants only appeal the denial of their anti-SLAPP motion as to the third and fourth causes of action for recording of secret information in violation of Penal Code sections 633.5 and 637.2 based on Mallon’s recordings of the board meeting and his conversation with Felix.

9 Thus, we must determine whether any of the elements of plaintiffs’ claims for recording of secret information rely upon defendants’ protected activity. The anti-SLAPP statute lists four categories of conduct that constitute protected activity: “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) 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, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” (§ 425.16, subd. (e).) As noted, the trial court held that defendants made a sufficient showing under section 425.16, subdivision (e)(2), which 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.” We disagree with the trial court’s finding. Mallon’s act of secretly recording the board meeting and his conversation with Felix is clearly not a “written or oral statement or writing.” Mallon’s recording of the board meeting or of Felix might constitute “any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest”

10 under section 425.16, subdivision (e)(4).3 (Italics added.) (See Old Republic Construction Program Group v. The Boccardo Law Firm, Inc. (2014) 230 Cal.App.4th 859, 874 [“‘only one of the four categories of protected activity covers [noncommunicative] conduct (§ 425.16, subd. (e)(4) . . .)’”].) However, plaintiffs’ third and fourth causes of action for recording of secret information arise, not from the presentation of the contents of Mallon’s secret recordings, which, depending on the circumstances, might be a communicative act, but solely from the activity of making the audio recordings, which is noncommunicative conduct. The California Supreme Court has recognized the distinction between communicative acts and noncommunicative conduct in the context of the litigation privilege under Civil Code section 47, subdivision (b) (formerly subdivision (2)), which applies to a “publication or broadcast” made in the course of a judicial proceeding. (See Kimmel v. Goland (1990) 51 Cal.3d 202, 209–212 (Kimmel).) In Kimmel, the Supreme Court distinguished making a surreptitious recording, which is not protected by the litigation privilege, and publishing, broadcasting, or otherwise disclosing the contents of that recording, which may be protected. (Id. at pp. 209–212.) The Supreme Court stated that the distinction between “communicative acts” and “noncommunicative conduct” has “traditionally served as a threshold issue” in determining whether the litigation privilege applies. (Id. at p. 211.) Because the Supreme Court has analyzed the scope of section 425.16, subdivision (e)(1) and (2), by referring to the litigation privilege in Civil Code 3 We note that defendants’ opening and reply briefs cite section 425.16, subdivision (e)(4), but do not explicitly argue it applies to Mallon’s recordings.

11 section 47, subdivision (b), the distinction between communicative and noncommunicative acts is an appropriate consideration in determining whether an activity is protected under subdivision (e)(4). (See Flatley v. Mauro (2006) 39 Cal.4th 299, 322–323 (Flatley) [“[p]ast decisions of this court and the Court of Appeal have looked to the litigation privilege as an aid in construing the scope of section 425.16, subdivision (e)(1) and (2)”].) Moreover, even if the recording were a “communicative act,” we conclude that defendants have not shown that the recording was made “in connection with a public issue or an issue of public interest,” as required by section 425.16, subdivision (e)(4). “We are mindful that the definition of ‘public interest’ for purposes of the anti-SLAPP statute is to be, and has been, ‘broadly construed to include not only governmental matters, but also private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity.’” (Dual Diagnosis Treatment Center, Inc. v. Buschel (2016) 6 Cal.App.5th 1098, 1104.) We have reviewed Mallon’s transcript of his taped conversation with Felix. Even assuming the transcript is an accurate representation of the conversation, an assertion which plaintiffs dispute, the conversation regards Mallon’s failure to timely respond to Marcum’s audit confirmation letter regarding his invoices, which was preventing Marcum from finalizing its 2022 financial audit of BioCorRx. Mallon eventually sent an email to Marcum on March 18, 2023, that clarified the confirmation letter. There is nothing in this conversation that is remotely a matter of public interest. Furthermore, any claim that the recordings of the board meeting and the conversation with Felix concerned a “public issue or issue of public interest” is undermined by Mallon’s concession during his deposition that he “was in the habit of 12 recording all of [his] conversations” and that Calista had a corporate “policy” of routinely recording conversations for the benefit of the company. Furthermore, plaintiffs’ third and fourth causes of action do not arise out of Mallon’s alleged use or misuse of any illegal recordings. Rather, it arises entirely from Mallon’s act of allegedly illegally recording confidential conversations without obtaining either the board’s or Felix’s consent. Similarly, the complaint as a whole is narrowly pleaded and focused solely on Mallon’s conduct of recording various conversations and not on any subsequent possible expressive conduct related to the use of these recordings that might be protected under section 425.16, subdivision (e)(4). Accordingly, we conclude that Mallon’s secret recordings of the board meeting and his conversation with Felix did not arise from any protected activity in furtherance of either Mallon’s or Calista’s right of petition or free speech under the California or United States constitutions. III. THE TRIAL COURT’S FINDING THAT DEFENDANTS’ CONDUCT AROSE FROM PROTECTED ACTIVITY WAS NOT A FINDING THAT DEFENDANTS ACTED LAWFULLY Defendants assert that plaintiffs cannot demonstrate a probability of prevailing because the trial court found that defendants made the recordings in connection with an investigation and therefore the recording was lawful. Defendants rely on Timothy W. v. Julie W. (2022) 85 Cal.App.5th 648, 660–661 (Timothy W.) and Flatley, supra, 39 Cal.4th at pages 320–321, to argue that their conduct was not illegal. Timothy W. concluded that a defendant is not entitled to anti-SLAPP protection only where the conduct relied upon is “criminal as a matter of law” or alternatively, “‘where either 13 the defendant concedes the illegality of its conduct or the illegality is conclusively shown by the evidence.’” (Timothy W., supra, 85 Cal.App.5th at p. 660.) The trial court’s finding that the conduct arose from protected activity under section 425.16, subdivision (e)(2), does not mean the court found that Mallon lawfully made the recordings within the meaning of Penal Code section 633.5. Based on the narrow exception acknowledged in Timothy W., a finding that conduct constitutes protected activity under section 425.16, subdivisions (b)(1) and (e), is not the equivalent of a finding that Mallon acted lawfully in making the recordings.4 Therefore, the court properly went to the second step of the analysis—whether plaintiffs had shown a probability of prevailing. IV. PLAINTIFFS HAVE SHOWN A PROBABILITY OF PREVAILING AT TRIAL ON THEIR THIRD AND FOURTH CAUSES OF ACTION5 At step two of the anti-SLAPP analysis, the burden of proof shifts to plaintiffs to prove a probability of prevailing on their cause of action at trial. This requires plaintiffs to demonstrate that their cause of action is both legally sufficient (Grewal v. Jammu (2011) 191 Cal.App.4th 977, 989 [“plaintiff needs to show only a ‘minimum level of legal sufficiency and 4 Moreover, a trial court cannot resolve factual disputes by way of an anti-SLAPP motion. 5 We address the second prong for the sake of completeness even though we acknowledge it is not strictly necessary given our finding on the first prong. (Billauer, supra, 88 Cal.App.5th at p. 962 [“‘Only a [claim] that satisfies both prongs of the anti-SLAPP statute . . . is a SLAPP, subject to being stricken under the statute’”].)

14 triability’”]) and supported by a prima facie showing of facts sufficient to support a favorable judgment if the evidence submitted by plaintiffs is credited (Navellier, supra, 29 Cal.4th at pp. 88–89). Penal Code “[s]ection 632, part of California’s Invasion of Privacy Act . . ., prohibits the intentional recording of a ‘confidential communication’ without the consent of all parties to the communication.” (Hataishi v. First American Home Buyers Protection Corp. (2014) 223 Cal.App.4th 1454, 1463.) Penal Code section 632 imposes liability on “[a] person who, intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio.” (Id., subd. (a), italics added.) Penal Code section 632 defines the term “‘confidential communication’” to include “any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto, but excludes a communication made in a public gathering or in any legislative, judicial, executive, or administrative proceeding open to the public, or in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded.” (Id., subd. (c), italics added.) Here, plaintiffs presented sufficient evidence to demonstrate a probability of prevailing on the merits. Mallon conceded the following during his deposition: he intentionally recorded the board meeting and conversation with Felix; he never notified any of the participants, including Felix, that he was recording them; he was not authorized by Felix or any other participant 15 to record the conversations; and he made the recording using his cellular phone. Additionally, plaintiffs submitted declarations in opposition to defendants’ anti-SLAPP motion, explaining that they had a reasonable expectation of privacy at BioCorRx’s headquarters, which is generally closed to the public. The declarations also stated that BioCorRx’s board meetings are private and that it was not normal for consultants like Mallon to attend such meetings. Felix’s declaration stated that she was surprised to see Mallon at the board meeting because these meetings are “normally reserved only for BioCorRx’s officers and directors”; her discussion with Mallon after the board meeting in her private office was not planned in advance; and she did not realize that Mallon was recording their conversation. Plaintiffs also submitted sufficient evidence to defeat defendants’ Penal Code section 633.5 defense. Defendants’ anti-SLAPP motion asserted that they were justified in secretly recording the BioCorRx board meeting and conversation with Felix because Mallon reasonably believed that Felix intended to extort him. Penal Code section 633.5 provides an exception to liability under section 632 by providing that a “party to a confidential communication” is not prohibited “from recording the communication for the purpose of obtaining evidence reasonably believed to relate to the commission by another party to the communication of the crime of extortion, kidnapping, bribery, any felony involving violence against the person, [and] do[es] not render any evidence so obtained inadmissible in a prosecution for extortion, kidnapping, bribery, . . . or any crime in connection therewith.” (Pen. Code, § 633.5.) As a preliminary matter, we note that Penal Code section 633.5 appears applicable only as a defense in criminal proceedings, not as an 16 affirmative defense in a civil action, as here. (See Geragos v. Abelyan (2023) 88 Cal.App.5th 1005, 1030–1031 [holding that Penal Code section 633.5 does not apply as a defense to liability in a civil case].) Therefore, defendants are likely not entitled to invoke Penal Code section 633.5 as an affirmative defense in this civil matter. Even if they were, however, we agree with the trial court that plaintiffs submitted sufficient evidence to defeat defendants’ affirmative defense. First, defendants presented no evidence to support Mallon’s claim he secretly recorded his conversation with Felix because he objectively believed she was going to extort him. Felix’s declaration states that she “did not pressure intimidate, extort, blackmail, or coerce [Mallon] into making any statements.” In fact, Mallon continued to work with BioCorRx for approximately another year, despite his alleged fear of Felix’s extortion. Furthermore, our review of Mallon’s transcript of his conversation with Felix corroborates her declaration and provides no evidence of any attempt by Felix to extort Mallon. As noted, their conversation solely relates to Felix’s request that Mallon respond to Marcum’s letter regarding Calista’s invoices so that Marcum could complete its yearly financial audit of BioCorRx. Moreover, as found by the trial court, defendants failed to present any evidence that there was an “actual or pending governmental investigation” of BioCorRx. Instead, “the administrative fee dispute was in connection with an internal audit by BioCorRx’s retained accounting firm.” The court also found that Mallon’s alleged reliance on Robert Knutson that there was a pending federal governmental investigation or audit of BioCorRx “was not reasonable” because Knutson “had no knowledge of, nor access to, any of BioCorRx’s financial or accounting information, nor any knowledge of the company’s internal operations.”

17 Defendants also contend that plaintiffs cannot show a probability of prevailing because the litigation privilege applies. (Civ. Code, § 47.) Silberg v. Anderson (1990) 50 Cal.3d 205 states: “The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” (Id. at p. 212.) “Because the litigation privilege protects only publications and communications, a ‘threshold issue in determining the applicability’ of the privilege is whether the defendant’s conduct was communicative or noncommunicative. [Citation.] The distinction between communicative and noncommunicative conduct hinges on the gravamen of the action.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1058.) “The following acts have been deemed communicative and thus protected by the litigation privilege: attorney prelitigation solicitations of potential clients and subsequent filing of pleadings in the litigation [citation], and testimonial use of the contents of illegally overheard conversation [citation]. The following acts have been deemed noncommunicative and thus unprivileged: prelitigation illegal recording of confidential telephone conversations [citation]; eavesdropping on a telephone conversation [citation]; and physician’s negligent examination of patient causing physical injury [citation].” (Ibid.) Here, the litigation privilege does not apply for two reasons. First, Mallon’s recordings of the board meeting and his conversation with Felix were “noncommunicative.” Second, the recordings were not “made in judicial or quasi-judicial proceedings” because the recordings preceded the federal litigation. Therefore, we conclude that the litigation privilege does not bar plaintiffs’ third or fourth causes of action.

18 Accordingly, we conclude plaintiffs have met their burden to demonstrate a probability of prevailing at trial on their third and fourth causes of action. DISPOSITION The trial court’s prejudgment order is affirmed. Plaintiffs are entitled to recover their costs on appeal.

SCHWARM, J.* WE CONCUR:

DELANEY, ACTING P. J.

SCOTT, J.

*Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.