Friday, July 24, 2015

Jerk Plaintiffs Make Bad SLAPP Law

Finton Constr., Inc. v. Bidna & Keys, APLC, No. G050093 (Jun. 29, 2015)

This case is an offshoot of a very ugly-looking partnership litigation pending in LA Superior Court.  The gist of this matter is that a departing partner allegedly copied a bunch of files onto a hard drive, which he later turned over to his lawyers. The lawyers disclosed this fact to their opponents and the court in the LA case. Discovery issues regarding the handling and production of the files on the hard drive are being actively litigated in the LA case. The trial court appears to be making rulings to the effect that the drives don’t need to be unilaterally returned, and that that the documents on it are relevant and discoverable in the litigation. It has entered some orders attempting to work out a protocol to preserve and produce the documents, while ensuring that they aren’t misused. Seems reasonable.


Unsatisfied, the other partners sued departing partner’s lawyers in OC Superior Court for conversion and related torts for taking possession of the hard drive. They also filed state bar complaints and police reports, and did various other vexatious and inappropriate stuff. The lawyers responded by filing an anti-SLAPP motion, arguing that the claims arose entirely from their litigation tactics regarding the documents that were given to them by their client. The trial court agreed and struck the complaint.

First things first. The case settled two days before oral argument so technically it’s moot. But the panel is not very happy with the conduct of Plaintiff or its counsel. So it declined to vacate argument, and now it issues, and publishes, this opinion, “as an example to the legal community of the kind of behavior the bench and the bar together must continually strive to eradicate.”


The court of appeal then affirms, in a pretty cursory analysis. It finds that, since the claims all arise out of the lawyers’ litigation representation in the underlying case, the matter “arises from protected activity” under Code of Civil Procedure § 425.16(b)(1) and (e). It quickly moves on to address the argument plaintiff appears to have focused its fire on—that receipt of the drive was illegal as a matter of law, and thus categorically unprotected from any anti-SLAPP defense under Flatley v. Mauro, 39 Cal. 4th 299 (2006).


The Flatley analysis in the opinion is fine. Flatley sets a high bar because the illegality must be admitted or undisputed as a matter of law. There is nothing per se criminally illegal about an attorney’s receipt of documents that have been allegedly purloined for his client’s use in a future employment dispute. So the exception doesn’t apply.


But, at least as the allegations are described by the court, the “arising from” analysis is kind of thin. The court asserts that the question “is a very easy one in the instant case[.]” But it’s only easy because a bunch of hairy issues aren’t addressed. It is true § 425.16(b)(1) says that the anti-SLAPP statute protects “any act of that person in furtherance of the person's right of petition or free speech[.]” (emphasis mine). You could certainly read that as applying to any acts taken to in furtherance of the prosecution of a lawsuit. But the statue goes on to specifically define what counts as as act in furtherance in four categories enumerated in § 425.16(e)(1)–(4). And the Supreme Court has explained that the “only means specified in section 425.16 by which a moving defendant can satisfy the [act in furtherance] requirement is to demonstrate that the defendant's conduct by which plaintiff claims to have been injured falls within one of the four categories described in subdivision (e).” See Equilon Enters. v. Consumer Cause, Inc., 29 Cal. 4th 53, 66 (2002).


The first three categories in subdivision (e) all apply to “written or oral statements,” including statements made in or in connection with litigation. The court quotes an uncontroversial point that “[u]nder the plain language of section 425.16, subdivisions (e)(1) and (2), as well as the case law interpreting those provisions, all communicative acts performed by attorneys as part of their representation of a client in a judicial proceeding or other petitioning context are per se protected as petitioning activity by the anti-SLAPP statute.” (emphasis mine). But what isn’t at all clear to me is how handing your lawyer a hard drive full of allegedly purloined documents is a “written or oral statement,” or a “communicative act,” for that matter. So I don’t really understand why the court thinks this is an (e)(1) or (e)(2) issue.


The case does, however, potentially fall within (e)(4), which addresses “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.” There are certainly cases that have applied (e)(4) to protect non-expressive but litigation-supportive conduct. But there are also cases that haven’t. As I have discussed, where the (e)(4) line gets drawn is the subject of inconsistent precedent that has steadfastly evaded any coherent rule. It’s certainly not a “very easy” question. The court doesn’t address that at all.


And there’s another problem with relying on (e)(4). Unlike (e)(1) and (2), to be protected under (e)(4), the conduct has to relate to “a public issue or issue of public interest.” Not very sure how a partnership dispute over a private construction company, no matter how ugly, would meet that standard.


I get that this matter was an unnecessary multiplication of litigation that the court needed to address. It merited a quick dismissal. There is certianly a need to deter the kind of conduct plaintiff and its lawyers engaged in. But the anti-SLAPP statute isn’t the cure for all ills. While its use might feel just in this case, overbroad interpretation of the statute has led to the dismissal of some claims that don’t really have anything to do with the purpose of the statute in protecting free speech from vexatious litigation. And, in any event, the courts have lost yet another opportunity to try to create a workable framework to address conduct in furtherance of litigation under § 425.16(e)(4).


Affirmed.

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