Wednesday, June 18, 2014

No Anti-SLAPP Protection for Extortion Attempt

Stenehjem v. Sareen, No. H038342 (D6 June 13, 2014)

The underlying matter is an employment dispute concerning wrongful termination. But the employee’s attorney threatened that, unless employer settled, employee would expose the employer’s allegedly shady accounting practices to the DOJ and the DOD, which might potentially lead to a criminal false claims action. After litigation commenced, employer cross-claimed for civil extortion, and plaintiff responded by filing an anti-SLAPP motion, which the trial court granted.

On appeal, the court reviewed the evidentiary record of the parties’ correspondence, which established that the plaintiff was trying to milk a settlement out of defendant by threatening exposure to criminal prosecution for false claims activity unrelated to the merits of the employment dispute. That—demanding money to forgo exposing criminal conduct—is attempted extortion. The court, following the California Supreme Court’s decision in Flatley v. Mauro, 39 Cal. 4th 299, 305 (2006), holds that, because the cross-claim addressed extortionate conduct that was “illegal as a matter of law,” the anti-SLAPP statute categorically did not apply. It’s a more-or-less faithful application of the Flatley precedent. 

The Flatley “illegal as a matter of law” standard essentially requires the non-moving plaintiff to come forward with evidence that would entitle him to a summary judgment on the elements of the alleged illegality. See id. at 316 (“If, however, a factual dispute exists about the legitimacy of the defendant’s conduct, it cannot be resolved within the first step but must be raised by the plaintiff in connection with the plaintiff
s burden to show a probability of prevailing on the merits.”). That’s a pretty high bar, and it’s rarely met. But the court here finds it’s not an issue. The cross-defendant didn’t bother to submit evidence on the key issues, which allows the court to conclude that the facts were undisputed for purposes of the motion. See fn. 13 of the opinion.


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