Thursday, September 11, 2014

Another Court Weighs in on the Lawyer Statute of Limitations

Parish v. Latham & Watkins, B244841 (D2d3 on rhearing,** June 26, 2015)

Prevailing defendants in a trade secrets case sued the plaintiff’s law firm for malicious prosecution. As one would expect, the firm responded by filing an anti-SLAPP motion. There’s no dispute that the mal-pros case arises from petitioning activity, since the gist of the complaint attacks the filing of the trade secrets suit. So the motion turns on the probability of prevailing, which in this case depends on which is the applicable statute of limitations: The one-year period in Code of Civil Procedure § 340.6 or the two-year period in § 335.1.


Section 340.6 provides a one-year limitations period for “[a]n action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services . . .” As we have discussed several times over the past few months, there is an ongoing debate about how broadly to read this language. One camp reads it literally to apply to garden variety torts so long as they are committed by attorneys while providing professional services. The other reads it more narrowly, limiting its application to malpractice actions. 


Unfortunately for the law firm, while this appeal was pending, two of the judges on this panel joined an opinion that took the narrow path in holding that § 340.6 does not apply to malicious prosecution claims against lawyers, which essentially forecloses the issue. The court goes on to find that the plaintiff came forward with sufficient evidence that the trade secrets case lacked probable cause, and thus that it had established a sufficient likelihood of success to avoid dismissal as a SLAPP.


Reversed. 


**On rehearing, the court revised the opinion, reducing the statute of limitations discussion to a single paragraph without change in the result.

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