Superior Court of California FEB 02 2024 County of Los Angeles oe sen ai ast By: J. Marquez, Deputy Case No.: 23STCV 10045 WEATHER GROUP, LLC, et al.;. DEPARTMENT 45 Plaintiffs, vs. een CtTORDER MCDONALD'S USA, LLC; Action Filed: 05/04/23 Trial Date: None Set Defendant. Hearing date: February 2, 2024 Moving Party: Defendant McDonald’s USA, LLC Responding Party: Plaintiffs Weather Group, LLC and Entertainment Studios Networks, Inc. (1) Special Motion to Strike (Anti-SLAPP Motion) (2) Demurrer to Complaint ‘The court considered the moving, opposition, and reply papers. The court GRANTS Defendant's special motion to strike under CCP § 425.16 as to the first and only cause of action of the Complaint, Defendant's demurrer to the Complaint is MOOT. Background Plaintiffs Weather Group, LLC and Plaintiff Entertainment Studios Networks, Inc. filed this action on May 4, 2023 against defendant McDonald's USA, LLC, alleging a cause of action for Fraud - False Promise (Civ. Code § 1711). oy The Complaint alleges the following: Prominent American corporations promised to take an active role in remedying racial injustice after George Floyd’s murder ignited nationwideprotests. (Compl., { 1.) Defendant only pledged $1 million despite one of the largest public corporations in America. (Id. at { 2.) Plaintiffs are part of a conglomerate of related media companies (“AMG" or “Allen Media Group”), all owned by Byron Allen, an African American entrepreneur. (Id. at 4.) AMG is by far the largest African American-owned media company in the country, with Plaintiffs representing over 90 percent of that category. (Id. at {9.) Allen created the Black Owned Media Matters movement after the George Floyd murder to address racial discrimination and systemic racism in media. (Id. at { 5.) AMG informed Defendant in March 2021 that AMG had been victims of racial discrimination in contracting in violation of 42 U.S.C. § 1981. (Id. at] 6.) Defendant announced its “Four-Year Plan” in May 2021 to deflect from these serious allegations. (/d. at J 7.) Defendant's plan included a commitment to increase its spending with Black Owned Media from two to five percent by 2024. (Id.) In reliance on Defendant's commitment, Plaintiffs spent considerable time and effort to put together a proposal for Defendant to advertise across their portfolio. (Jd. at [ 9.) Defendant rebuffed Plaintiffs and proposed to spend only a tiny fraction of its advertising budget on Plaintiffs’ properties. (id. at | 10.) Defendant's allocation left it well short of its public commitment. (Id.) In 2021 and afterwards, Defendant was not spending anywhere close to two percent of its national advertising budget on Black Owned Media under any definition. (Id. at { 12.) Defendant should now be spending under its “four-year plan” four percent of its national advertising budget on Black Owned Media, but Defendant is nowhere near meeting that commitment. (Id. at { 13.) Defendant filed a special motion to strike (“anti-SLAPP motion”) with respect to the Complaint on June 22, 2023. Plaintiffs filed an opposition on December 1, 2023. Defendant replied on December 7, 2023. Defendant filed a demurrer to the Complaint on June 20, 2023. Plaintiffs filed an opposition on December 1, 2023, Defendant replied on December 7, 2023.Legal Standard Anti-SLAPP Motion Defendant filed a special motion to strike under CCP § 425.16, which is also known as the anti-SLAPP (“strategic lawsuit against public participation”) statute. “The anti-SLAPP procedures are designed to shield a defendant’s constitutionally protected conduct from the undue burden of frivolous litigation.” (Baral v. Schnitt (2016) 1 Cal. Sth 376, 393.) “The anti-SLAPP statute does not insulate defendants from any liability for claims arising from the protected rights of petition or speech. It only provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity.” (Id. at 384.) “Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success.” (Baral, supra, | Cal.Sth at 384, citation omitted.) The California Supreme Court has “described this second step as a ‘summary- judgment-like procedure,’ The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It 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. *{C]laims with the requisite minimal merit may proceed.’ ” (Id. at 384-385, citations omitted.) Demurrer When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it i 3@ 3S 3 lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v, Superior Court (1984) 153 Cal. App.34 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) Evidentiary Objections ffs’ Obj S The court rules on Plaintiffs’ evidentiary objections in support of their opposition to Defendant's anti-SLAPP motion as follows: L Karen Ding’s Declaration in Support of Defendant’s Reply in Support of Its Anti- SLAPP Motion: SUSTAINED ~ Plaintiffs object to this evidence on the ground that it is new evidence accompanying the Reply. Defendant asserts that the exhibit attached to this declaration could not be included in the moving papers because it was previously subject to a protective order. New evidence generally cannot accompany reply papers, but this is a matter that rests within the trial court’s discretion. (See Jay v. Mahaffey (2013) 218 Cal. App.4th 1522, 1537-38 [The general rule of motion practice, which applies here, is that new evidence is not permitted with reply apers.”}; San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316 [Whether to consider evidence not referenced in the moving party’s separate statement rests with the sound discretion of the trial court... ..”].) Since Plaintiffs could not respond to this new evidence and it is ultimately not determinative of the outcome of the ruling, the court finds it is proper to sustain Plaintiffs’ objection.Defendant’s Objections The court rules on Defendant's evidentiary objections in support of its anti-SLAPP motion as follows: Schecter Declaration, Ex. C (Letter from Plaintiffs’ counsel to McDonald's): SUSTAINED - Hearsay. 2. Schecter Declaration, Ex. D (Restaurant Business Online aticley: SUSTAINED ~ Hearsay. 3. Schecter Declaration, Ex. E (Sonnenfeld article): SUSTAINED ~ Hearsay. 4. Galatt Declaration, J 11: OVERRULED. 5. Galatt Declaration, $] 12-18: OVERRULED. 6. Galatt Declaration, 4 25: OVERRULED. 7. Galatt Declaration, {9 26-28: OVERRULED 8. Galatt Declaration, $ 32-34: OVERRULED 9. Galatt Declaration, $M] 35-36, 38-40: OVERRULED. Discussion Anti-SLAPP Mc Defendant McDonald’s USA, LLC moves to strike, pursuant to CCP § 425.16, the first and only cause of action for fraud — false promise (Civ. Code § 1711) of the Complaint, filed by plaintiffs Weather Group, LLC and Plaintiff Entertainment Studios Networks, Inc. Defendant contends Plaintiffs’ cause of action arises out of protected activity because it is based on Defendant's May 2021 press release describing Defendant's goal to increase its national advertising spending on Black-owned businesses, which was part of a national dialogue about racial inequality and systemic racism, Defendant argues the press release is a public statementregarding an issue of public interest under CCP § 425,16(e)(3) and that the “commercial speech” exemption does not apply. Defendant asserts Plaintiffs cannot show a probability of prevailing con the merits because Plaintiffs cannot prove an actionable false promise, that Defendant did not perform or did not intend to perform, that Defendant intended to induce reliance, that Plaintiffs reasonably relied on the press releases, and that Plaintiffs suffered damages proximately caused by the alleged false promise Plaintifis contend Defendant's press release falls within the “commercial speech” ‘exemption and is not protected activity because it made a factual representation about Defendant’s advertising operations to increase the sales of its goods. Plaintiff argues that statements about business operations can constitute “commercial speech” even when public interest issues are involved and that Defendant cannot insulate itself simply by maintaining its statements contributed to the national discussion about race. Plaintiffs assert, even if Defendant's statements are protected, Plaintiffs can show a probability of prevailing on the merits of their claim because Defendant's promise was false when made based on Defendant's own data. Plaintiffs maintain that Defendant's statements were intended to induce reliance by the public and that Plaintiffs actually and justifiably relied on Defendant's false representations by spending considerable time and effort on investment proposals to Defendant. I. Conduct in Furtherance of Right of Petition or Free Speech CCP § 425.16(e) states: “As used in this section, ‘act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a Public issue’ includes: (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 *S 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 exer 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.” “[T]he statute requires the defendant to make a prima facie showing the plaintiff's suit arises ‘from any act of [defendant] in furtherance of [defendant's] right of petition or free speech under the United States or California Constitution in connection with a public issue.’ (§ 425.16, subd. (b).) The defendant may meet this burden by showing the act which forms the basis for the plaintiff's cause of action was a written or oral statement made before a legislative, executive, or judicial proceeding; or such a statement in connection with an issue under consideration or review by a legislative, executive, or judicial body; or such a statement was made in a place open to the public or a public forum in connection with an issue of public interest. (§ 425.16, subd. (©).)” (Wilcox v. Superior Court (1994) 27 Cal. App.Ath 809, 820, disapproved on other grounds by Equilon Enterprises v. Consumer Cause, Inc. (2002) 29, Cal.4th 53.) “The Supreme court has clarified that ‘arising from’ means ‘based on.’ (Citation.] This element of the first step of the anti-SLAPP analysis is sometimes referred to as the ‘nexus’ requirement. [Citations.] Conduct constitutes ‘protected activity,’ if it falls within one of the categories set out in section 425.16, subdivision (¢).” (Laker v. Board of Trustees of California State University (2019) 32 Cal. App.Sth 745, 760.) a. Public Statement Regarding an Issue of Public Statement The statements at issue ii this matter are those made in Defendant's press release on May 20, 2021, which states, in relevant part: McDonald's USA today announced bold new investments to further reflect its diverse customers, crew members and communities in its marketing.Over the next four years, the company and Owner/Operators are accelerating the allocation of advertising dollars to diverse-owned media companies, production houses and content creators. McDonald's total investment in diverse-owned partners — including Black, Hispanic, Asian Pacific American, Women and LGBTQ-owned platforms — will more than double, moving from 4% to 10% of national advertising spend between 2021 and 2024. Spend with Black-owned properties, specifically, will increase from 2% to 5% of national advertising spend over this time period. (Galatt Decl., 25, Exh. A, p. 1.) “In deciding whether the ‘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.’ ” (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79, quoting CCP § 425.15(b)(2).) In anti-SLAPP analysis, the plaintiff's pleaded facts are accepted as true. (See Central Valley Hospitalists v. Dignity Health (2018) 19 Cal.App.Sth 203, 217 (“And we accept as true CVH's pleaded facts.”].) “A plaintiff's complaint ultimately defines the contours of the claims.” (Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.Sth 924, 936.) “As the Supreme Court earlier instructed, at this first step of the anti-SLAPP analysis, ‘the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them.” [Citation.]” (Central Valley Hospitalists, supra, 19 Cal.App.Sth at 217, italics in original, quoting Baral, supra, | Cal.Sth at 396.) The Complaint alleges “McDonalds stated in 2021 that it was spending 2% of its national advertising budget on Black Owned Media, which was a lie, and it committed that the spend would reach 5% by 2024.” (Compl., { 11.) Plaintiffs allege “McDonald’s made a material misrepresentation when it stated that it would increase its spend with Black Owned Media from 2% im 2021 to 5% in 2024.” (Id. at 4 59.) The Complaint alleges “McDonald’s made this promise with no intention to honor it” and that “McDonald’s intended to defraud the general public, itsshareholders and investors, the government, and Black Owned Media, including Plaintiffs.” (Id. at {{ 60-61.) Here, it does not appear Plaintiffs dispute that Defendant's May 20, 2021 press release ‘was a public statement made in connection with a public issue, The Complaint itself alleges that, “[alfter the murder of George Floyd ignited nationwide protests, prominent American corporations promised to take an active role in remedying racial injustice.” (Compl., { 1.) Plaintiffs assert in their Opposition that “[Defendant’s] promise, announced on McDonald’s, website, was a result of outrage over the death of George Floyd and a broad reckoning about racial injustice that swept the country.” (Opposition, 5:6-8.) Further, Plaintiffs argue Defendant's statements in its press release may constitute “commercial speech” even if when public interest issues are involved, (Id. at 15:8-22.) In addition, it does not appear Plaintiffs dispute that th use of action arises out of Defendant's May 20, 2021 press release statements, Plaintiffs’ allegations indicate Defendant made a material misrepresentation when Defendant stated in its May 20, 2021 press release that it will increase its advertising spending on Black Owned Media from two percent in 2021 to five percent in 2024. (See Compl. #4 7, 59.) Plaintiffs allege Defendant intended to defraud the general public and Black Owned Media, including Plaintiffs. (Id. at { 61.) It is apparent from Plaintiffs’ allegations and the evidence presented that Plaintiffs’ cause of action arises from the statements in Defendant's May 20, 2021 press release. Under CCP §§ 425.16(€)(3) and (4), protected activity includes “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 “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.” Despite Defendant's press release being written public statements in connection with a public issue or an issue of public interest, Plaintiffs maintain the statements arenevertheless unprotected because they fall within the “commercial speech” exemption of the LAPP statute. Accordingly, the court proceeds to consider whether the May 20, 2021 press release falls within the “commercial speech” exemption of the anti-SLAPP statute. b. “Commercial Speech” Excemption “The commercial speech exemption, like the public interest exemption, ‘is a statutory exemption to section 425.16" and ‘should be narrowly construed.’ [Citations.}" (Simpson Strong- Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 22.) This exemption is found in CCP § 425.17(¢), which states: (©) Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services, including, but not limited to, insurance, securities, or financial instruments, arising from any statement or conduct by that person if both of the following conditions exist: (1) The statement or conduct consists of representations of fact about that Person’s or a business competitor's business operations, goods, or services, that is made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services, or the statement or conduct was made in the course of delivering the person’s goods or services. (2) The intended audience is an actual or potential buyer or customer, or a person likely to repeat the statement to, or otherwise influence, an actual or potential buyer or customer, or the statement or conduct arose out of or within the context of a regulatory approval process, proceeding, or investigation, except where the statement or conduct was made by a telephone corporation in the course of a proceeding before the California Public Utilities Commission and is the subject of a lawsuit brought by a competitor, notwithstanding that the conduct or statement concerns an important public issue. (Emphasis added.) 10The court does not find that the “commercial speech” exemption applies here. The plain language of the statute indicates that the statement at issue must be “made for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in, the person’s goods or services. ...” (CCP § 425.17(¢)(1), emphasis added.) Nowhere in the May 20, 2021 press release does it mention anything about Defendant's goods or services. Specifically, the press release mentions nothing regarding any of Defendant's food products. The press release also does not connect Defendant's stated commitment to increase advertising dollars to diverse-owned companies with Defendant’s own products or services. Plaintiffs fail to show present any evidence establishing a connection between Defendant's press release statements and its food products. Plaintiffs maintain that Defendant's press release is connected to its goods because Defendant knows diversity initiatives are important to consumers and can lead to increased profit margi Plaintiffs present a publication from Defendant's website titled “2022-2023 Global Diversity, Equity and Inclusion Report.” (Schecter Decl., 2, Exh. A.) Plaintiffs point to statements in this publication that state: Throughout our history, we have sought to embed diversity, equity and inclusion into every layer of our System and foundation. We do this because it’s good for business, it's the right thing to do, and because it enables us to deliver inclusive experiences people expect and love from McDonald’s. (id., Exh. A, p. 4. [2022-23 Publication, p. 3].) Plaintiffs fail to show that such broad statements about diversity initiatives being “good for business” are sufficient to show Defendant made its May 20, 2021 press release “for the purpose of obtaining approval for, promoting, or securing sales or leases of, or commercial transactions in” Defendant's food products. Being “good for business” can mean any number of things, such as establishing goodwill, rather than specifically promoting or securing the sales of ulDefendant's food products. Plaintiffs appear to suggest that even a business's statements made to establish goodwill are sufficient to fall within the “commercial speech” exemption. Plaintiffs argue: “The goal of the Promise was to avoid negative press from a high-profile racial discrimination lawsuit and to convince actual and potential customers that .. . [Defendant] is a company deserving of their business. (Citation.] Similarly, Nike [in Kasky v. Nike (2002) 27 Cal.4th 939 (Kasky)] made the statements at issue to convince actual and potential customers that, because Nike was committed to fair labor practices, Nike was deserving of their business. As the Kasky court found these statements to be examples of ‘commercial speech,” so too should this Court ....” (Opposition, 10:14-21.) The court notes that Kasky is not an anti-SLAPP case and mentions nothing about CCP § 425.17(c) and the “commercial speech” exemption. Accordingly, court finds that Plaintiffs reliance on Kasky to draw conclusions on the “commercial speech” exemption in CCP § 425.17(¢) in this anti-SLAPP matter is misplaced. The Court of Appeal has drawn the same conclusion, indicating that “Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 119 Cal.Rptr.2d 296, 45 P.3d 243, does not involve a special motion to strike under section 425.16 and therefore is not helpful to appellant on the issue of whether this action comes within the anti-SLAPP statute.” (Kronemyer v. Internet Movie Database Inc. (2007) 150 Cal.App.4th 941, 948.) Further, the plain language of the statute states that the exemption applies when the statement at issue consists of “representations of fact about that person’s or a business competitor's business operations, goods, or services.” (See CCP § 425.17(c)(1).) The Court of Appeal in Navarro v. IHOP Properties, Inc. (2005) 134 Cal. App.4th 834 (“Navarro”) expressly held that “[a] promise is not a representation of fact, but an agreement to take certain actions in the future.” (Id. at 841.) Plaintiffs attempt to distinguish Navarro by asserting that the decision turned on the fact that the promises there were not related or made to induce a commercial 12transaction. (Opposition, 12:3-8.) However, this argument does not address or refute the Court of Appeal’s conclusion that a promise is not a representation of fact under the anti-SLAPP statute. In addition, as discussed above, the “commercial speech” is to be “narrowly construed.” (Simpson Strong-Tie Co., Inc., supra, 49 Cal.4th at 22.) Consistent with this principle, the California Supreme Court stated that “the language of section 425.17, subdivision (c) and subsequent case law indicate that the provision exempts ‘only a subset of commercial speech’—specifically, comparative advertising.” (FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.Sth 133, 147 (FilmOn.com Inc.), emphasis added.) None of the evidence presented shows Defendant’s May 20, 2021 press release was an advertisement for its products. Plaintiffs do not argue that the press release was an advertisement. As discussed above, the press release does not even mention any of Defendant's food products. Plaintiffs fail to provide evidence demonstrating that Defendant issued the press release as an advertisement promoting or securing, the sales of Defendant's food products. Given the narrow construction of the “commercial speech” exemption, as discussed in FilmOn.com Inc., the court finds Plaintiffs do not establish that the May 20, 2021 press release is unprotected “commercial speech” under the anti-SLAPP statute, Il. Probability of Prevailing on the Merits Since Defendant meets its burden of showing that the alleged statements or conduct in Plaintiffs’ first and only cause of action is protected under the anti-SLAPP statute, the burden now shifts to Plaintiffs to establish by competent and admissible evidence that they have a probability of prevailing on the merits of their claim, “{T]he 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.’ ” (Wilson v. 1Ba i Parker, Covert & Chidester (2002) 28 Cal 4th 811, 821, quoting Matson v. Dvorak (1995) 40 Cal. App.4th 539, 548.) Defendants contend Plaintiffs cannot establish a probability of prevailing on the merits of their claim because they cannot show (1) a clear, unambiguous promise Defendant made to Plaintiffs; (2) that Defendant did not perform on any promise; (3) that Defendant did not intend to perform on any promise at the time it was made; (4) that Defendant made any promise with an intent to induce reliance; (5) that Plaintiffs reasonably relied on the press release; and (6) that Plaintiffs suffered any damages proximately caused by the alleged false promise. Plaintiffs contend that they have a probability of prevailing on the merits of their claim because they can show (1) Defendant made a knowingly false representation in its promise based on Defendant's own data; (2) Defendant intended for its promise to induce reliance since Defendant's goal was to promote the sales of its goods and to appease other Black Owned Media, its own shareholders, regulators, and others in the hopes that a mass boycott would be avoided; and (3) Plaintiffs reasonably relied on Defendant's false representations to their detriment since other major corporations were making real promises to advance racial equity at that time and Plaintiffs sustained out-of-pocket damages on putting together proposals to Defendant. “The elements of promissory fraud (i.e, of fraud or deceit based on a promise made without any intention of performing it) are: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent not to perform at the time the promise was made; (3) intent to deceive or induce the promisee to enter into a transaction; (4) reasonable reliance by the promisee; (5) nonperformance by the party making the promise; and (6) resulting damage to the promise.” (Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1453.) 4Plaint ts bring their false promise claim under Civ. Code § 1711, which states: “One. who practices a deceit with intent to defraud the public, or a particular class of persons, is deemed to have intended to defraud every individual in that class, who is actually misled by the deceit.” The court finds Plaintiffs fail to establish by competent and admissible evidence that they have a probability of prevailing on the merits of their claim. The court finds the evidence is insufficient to make a prima facie showing that: (1) Defendant did not perform on a promise or made a promise with no intention of performing at the time it was made; (2) Defendant intended to induce Plaintiffs to enter into a transaction, specifically Plaintiffs’ proposals to Defendant; or (3) Plaintiffs reasonably relied on a promise. a. Nonperformance or Intent Not to Perform Plaintiffs offer in support of their Opposition the declaration of Darren Galatt, the Chief Revenue Officer of Allen Media Group (AMG), which is a group of media companies that includes plaintiffs Weather Group, LLC and Entertainment Studios Networks, Inc. (Galatt Decl., { 1.) Galatt attests AMG constitutes more than 90 percent of African American-owned and controlled media in the U.S. (Id. at { 11.) Galatt declares he has personal knowledge of how Defendant deploys its advertising budgets through serving as AMG’s VP of Ad Sales and now Chief Revenue Officer. (/d. at { 12.) Galatt attests it is his understanding Defendant spends in excess of $1 billion annually on advertising and marketing. (Id. at { 13.) Galatt declares Defendant did not spend two percent of its national advertising budget with Black Owned Media in 2021. (Id. at 26.) Galatt attests Defendant did not spend three or four percent of this budget with Black Owned Media in 2022 or 2023, respectively. (Id.) Galatt declares, even using Defendant's own data, Defendant was not spending the portions of its budget with Black Owned Media as Defendant committed to do. (Id. at ${{ 27-28.) Galatt attests 15that, in relying on Defendant's representations, AMG prepared and submitted a proposal to Defendant for $30 million in advertising spending. (Id. at { 29.) Galatt declares Defendant largely rejected the proposal and only agreed to spend a fraction of the amount it promised to spend. (Id. at { 31.) Galatt attests that, for Defendant to honor its promise, Defendant must spend approximately $25 million annually with Black Owned Media by 2024, but Defendant is not committed to spending anywhere close to that amount. (Id. at { 40.) ‘The court finds Plaintiffs’ evidence fail to make a prima facie showing of Defendant's nonperformance or intent not to perform at the time the alleged promise was made. The May 20, 2021 press release states, in relevant part, that Defendant is “accelerating the allocation of advertising dollars to diverse-owned media companies, production houses and content creators. McDonald's total investment in diverse-owned partners . .. will more than double, moving from 4% to 10% of national advertising spend between 2021 and 2024. Spend with Black-owned properties, specifically, will increase from 2% to 5% of national advertising spend over this time period.” (Galatt Decl., { 25, Exh. A, p. 1, emphasis added.) As Defendant points out, this action was filed before 2024 and this year just begun and has not passed. It is unclear how Plaintiffs can make a prima facie showing of Defendant’s nonperformance when its deadline period has not even passed. Galatt attests Defendant must spend at least $25 million with Black Owned Media by 2024 to honor its promise. (Galatt Decl., 4 40.) Galatt declares Defendant is not committing to spend anywhere close to that amount with Black Owned Media. (/d.) Even assuming arguendo that Plaintiffs’ assertions are true, Defendant still has about 11 months remaining in this year to perform on its promise and commit to spending the necessary amount with Black Owned Media. Itis purely speculative to conclude Defendant will not perform on its promise even if Defendant hhas not yet committed the amount needed in spending. The court notes that Defendant's Vice President of U.S. Customer Engagement, Caleb Pearson, attests Defendant plans to spend in 162024 five percent of its national adve ing budget with Black-owned media companies, production houses, and content creators. (Pearson Decl., { 20.) Further, Defendant's former Chief Marketing and Digital Customer Experience Officer from May 2017 to November 2021 and current Global Chief Marketing Officer for McDonald’s Corporation, Morgan Flatley, attests that Defendant sets its ambition at five percent to be achieved by the end of 2024 because it was found to be feasible based on their analyses and discussions with their agency partners. (Flatley Decl., { 7.) Outside purely speculative statements, Plaintiffs provide no evidence demonstrating that Pearson’s and Flatley’s statements regarding Defendant's 2024 national advertising budget are necessarily false. Plaintiffs also fail to entirely resolve the fact that the May 20, 2021 press release does not involve only an allocation of advertising dollars to “media companies”—it also includes allocating advertising spending to “production houses and content creators.” Pearson’s declaration specifically indicates that the allocation of Defendant's national advertising budget is to “Black-owned media companies, production houses and content creators.” (See Pearson Decl., 4M 17-20.) The press release sets no specific proportion that Defendant is to allocate its advertising dollars among these three categories listed. Plaintiffs provide no evidence establishing that Defendant promised specific percentages to apportion its advertising dollars between these three categories. Here, Plaintiffs are media companies, not production houses or content creators, (See Galatt Decl., $¥{ 1, 5-11.) As mentioned above, Galatt states in his declaration that Defendant agreed to spend an amount with AMG that was less than AMG’, proposal. (See id. at { 31.) It is possible Defendant spent its remai ing advertising dollars on production houses and content creators, which is entirely consistent with the alleged promise in the May 20, 2021 press release. Plaintiffs assert Defendant does not use its national advertising budget to pay production houses and content creators. (Opposition, 6:10-11.) Plaintiffs argue Defendant uses its marketing 7budget, not its national advertising budget, to spend on production houses and content creators. (Id. at 6:11-12.) However, Plaintiffs present no evidence for this. Plaintiffs only provide Galatt’s declaration, who attests that, “{iJn [his] experience, advertising agencies do not use advertising budgets to purchase from production houses and content creators, which cannot deliver ratings.” Galatt Decl., { 38.) Galatt declares that, “[iJnstead, spend by companies like McDonald’s with production houses and content creators comes from marketing budgets.” (Id. at { 39.) These statements are speculative. Plaintiffs do not show Defendant is precluded from using its own national advertising budget to spend on production houses and content creators. Galatt’s declaration only goes to how companies spend their advertising budgets in his experience. But, Defendant's process is not necessarily the same. Pearson states in his declaration that Defendant spent 2.3 percent of its national advertising budget with Black-owned media companies, production houses, and content creators in 2021, spent 3.3 percent in 2022, is on pace to spend four percent in 2023, and plans to spend five percent in 2024. (Pearson Decl., $1 17-20.) Plaintiffs fail to identify anything that specifically prevents Defendant from allocating dollars, from its national advertising budget on production houses and content creators. Since Plaintiffs cannot show Defendant's nonperformance, Plaintiffs also fail to establish Defendant's intent to not perform at the time it made the alleged promise (or any damages proximately caused therefrom). Plaintiffs contend that intent can be inferred because Defendant's representations were false at the time they were made, as Defendant was not spending two percent of its national advertising budget with Black Owned Media in 2021. Again, Plaintiffs fail to meet their burden of proof. Plaintiffs’ only evidence is Galatt’s declaration, which states that Defendant was not spending two percent with Black Owned Media in 2021. (Galatt Decl., | 26.) Galatt’s statements again do not preclude Defendant from meeting its promise by allocating money to production houses and content creators instead. Further, while Plaintiffs show AMG constitutes more than 90 percent of African American-owned and controlled media in the U.S. 18(see Galatt Decl., 44 11, 18), AMG does not constitute all of such companies. Itis entirely possible Defendant allocated significant advertising dollars to an African American-owned and controlled media company that is not within AMG. Plaintiffs’ evidence does not preclude such a possibility. Given Plaintiffs’ evidence is insufficient to make a prima facie showing that Defendant's representations are necessarily false, the court finds Plaintiffs fail to otherwise demonstrate intent. Plaintiffs do not provide statements from any of Defendant’s decisionmakers themselves demonstrating that Defendant never intended to meet its promise at the time it issued the press release. Flatley attests he was part of the team that developed Defendant’s Four-Year Plan and believes it was a serious commitment to advance diverse-owned companies across the marketing supply chain. (Flatley Decl., 44 3, 8.) Pearson declares Defendant took steps following the May 20, 2021 announcement to carry out the Four-Year Plan. (Id. at 15.) Plaintiffs provide no evidence or statements from any member who was involved in the Four-Year Plan demonstrating that Defendant never had intentions of meeting its commitment. b. Intent to Induce Reliance To establish a claim for false promise, the claimant must show an “intent to deceive or induce the promisee to enter into a transaction.” (See Behnke, supra, 196 Cal.App.4th at 1453.) Defendant argues that Plaintiffs fail to identify or prove the “particular act” that Defendant sought to induce. The court agrees. ‘The May 20, 2021 press release does not identify any specific acts an African American- ‘owned and controlled media company must partake in to receive advertising spending from Defendant. Plaintiffs provide no evidence demonstrating Defendant ever intended media companies to put together advertising spending proposals for Defendant. Indeed, Plaintifis fail to "show precisely what actions Defendant attempted to defraud Plaintiffs into undertaking. The 8 19press release describes no process and, instead, leaves it entirely open for Defendant to decide how it wanted to increase and allocate its advertising spending. Plaintiffs submit no evidence that Defendant ever reached out to Plaintiffs with any guarantees or benchmarks to induce Plaintiffs to put together a costly proposal. Pearson attests Defendant's advertising agencies use a standardized evaluation process to determine if poten media partners should be recommended for and included in Defendant's annual national media plan. (Pearson Decl., { 6.) Plaintiffs fail to show Defendant communicated its evaluation process and any sort of guarantees to Plaintiffs to induce them to spend the time and resources to put together a proposal. Without such evidence, Plaintiffs do not establish Defendant intended to induce Plaintiffs to take any specific action. At best, Plaintiffs demonstrate that they took it upon themselves to make a pitch for Defendant's advertising. spending and were disappointed when Defendant rejected their proposals. Pearson describes the reasons why Plaintiffs’ proposals failed to meet Defendant's selection criteria. (See Pearson Decl., | 10-12.) The evidence presented does not show Defendant intended to defraud Plaintiffs by inducing their reliance without any intentions of meeting Defendant's commitment. c. Reasonable Reliance Finally, Plaintiffs do not show they reasonably relied on the May 20, 2021 press release or any statements by Defendant. As discussed above, the press release does not establish how Defendant’s national advertising budget would be apportioned among media companies, production houses, and content creators. Plaintiffs fail to show it was reasonable for them to assume, based on the press release, that Defendant would allocate its advertising spending only or almost all to media companies instead of production houses and content creators. The press release does not describe any benchmarks, guarantees, or processes for Plaintiffs to rely upon and to reasonably expect Defendant would necessarily accept their proposals. Plaintiffs present 208 no evidence that their proposals met Defendant's selection criteria and that Defendant rejected them in bad faith. Accordingly, the court finds Plaintiffs fail to make a prima facie showing of the element of reasonable reliance. Based on the foregoing, the court finds Plaintiffs do not demonstrate by competent and admissible evidence that they have a probability of prevailing on the merits of their claim. Plaintiffs must, at the very least, make a prima facie showing as to each element of their claim. Since Plaintiffs fail to meet their burden of proof on multiple elements of their claim, the court finds Plaintiffs cannot prevail on the second prong of this motion. : ‘The court therefore GRANTS Defendant's special motion to strike under CCP § 425.16 as to the first and only cause of action of the Complaint. III. Request for Attorney’s Fees and Costs Defendant did not request for attorney's fees or costs in this motion. Demurrer Plaintiffs’ Complaint consists of only one cause of action for false promise under Civ. Code § 1711. The court has granted Defendant's anti-SLAPP motion. The court therefore finds Defendant's demurrer to the Complaint is MOOT. Itis so ordered. Dated: February 2, 2024 Judg€ of the Superior Court 21