Cal. Supremes Duck a Tricky Litigation Privilege Question

Olson v. Doe, No. S258498 (Cal. Jan. 13, 2022)

Doe and Olson reside in the same condo building. Doe claims that Olson and his cronies in the HOA are sexually harassing and stalking her. Eventually Doe sought a civil harassment restraining order under Code of Civil Procedure § 527.6. That got resolved in a mediated settlement, where the parties agreed not to communicate with or disparage each other. Doe says the harassment continued nonetheless. She complained to HUD, which referred the matter to DFEH for investigation. 

Doe subsequently filed a civil complaint. Olson cross-claimed, alleging a breach of the non-disparage from the settlement, to which Doe responded with an anti-SLAPP motion. The trial court granted the motion. The Court of Appeal affirmed, but only in part. According to the Court of Appeal, Doe’s complaints to HUD and DFEH were protected by the litigation privilege in Civil Code § 47(b), so Defendant couldn't succeed. But, since Doe had surrendered her right to disparage in the settlement, the litigation privilege did not apply to statements made in her civil complaint. The Supreme Court granted review.

Interestingly, in a unanimous opinion by Justice Liu, the Court ducks the litigation privilege issue, which is tricky. It instead finds that the non-disparagement clause—which said simply that “[t]he parties agree not to disparage one another”—did not apply to statements made in subsequent civil litigation. Basically, according to the Court, despite the seemingly unambiguous text, the clause was meant only to prevent the parties from trash talking each other amongst their acquaintances in the building. The opinion reaches this result based on a lot of contextual information provided by the civil harassment statutes, and the mediation that resolved the restraining order claim. It effectively finds that the parties could not have intended to broadly preclude making disparaging allegations in future litigation when they agreed “not to disparage one another.”

Court of Appeal reversed.

It’s an interesting way to reach the result and avoid hard § 47(b) issues, and it is quite likely right on the merits of the contract claim. But I’m not sure what’s going on here is fully faithful to the burdens that apply in the second step of the anti-SLAPP analysis. To beat the motion, Olson needed only to come up with a prima facie case on his breach of contract claim. So long as he had evidence that, if believed by a jury, could sustain a finding in his favor, his claim had minimal merit and the motion would have been denied. (Or at least the § 47(b) issue would need to be addressed.)

On the element of breach, it seems like Olson has that in on plain text of the agreement. It does not seem too hard to say that a reasonable juror could understand “[t]he parties agree not to disparage one another” to mean that the parties will not disparage each other, including in court. Sure, given California’s extraordinarily loose parol evidence rule, could context and other extrinsic factors result in the more limited construction that the Court finds here? No doubt. As I said, as a factual matter, the Court is quite likely right. Doe deserves to prevail on the crossclaim. 

Moreover, the use of non-disparagement clauses to chill valid civil litigation—especially in factual contexts like the one presented by this case—is problematic from a policy standpoint. Indeed, the tension between the parties’ freedom to contract and the right to petition for redress is what makes the § 47(b) question avoided by the Court so difficult. So I also get, and share, the Court’s impetus to give Doe an early offramp.

But are the contextual cues here so weighty that no reasonable juror could find that the parties did not agree to what the document seems to say on its face? I.e., would Doe be entitled to summary adjudication on the interpretation of the contract? Because that’s what needs to be the case in order to establish that Olson doesn’t have a prima facie case. The Court, however, never says that Doe’s take prevails as a matter of law. Indeed, it doesn’t really address head on how the parol evidence rule affects the burden issue. Instead, the opinion feels it is engaged in fact-finding. Which is a mistake.

 

Anti-Slapp Coverage Is Close, But Not the Same, as Civil Code § 47

RGC Gaslamp v. Ehmcke Sheet Metal Co., No. D095615 (D4d1 Oct. 23, 2020)

As a step generally predicate to litigation, the recording of a mechanic’s lien constitutes “protected activity” under the anti-SLAPP statute. See Code Civ. Proc. § 425.16(e)(1), (2). As the Court of Appeal here explains, that’s the case even if the recording was somehow defective under the mechanic’s lien statutes. Nor, in meeting its initial burden, does the party seeking anti-SLAPP relief need to show that the lien, in actuality, relates to litigation that is contemplated in good faith and under serious consideration. That, no doubt, is a requirement for the protection of pre-litigiation communications under the litigation privilege in Civil Code § 47(b). But that’s an anti-SLAPP step 2 issue about the merits, not an issue over whether a claim “arises from protected activity” under step 1.

The Court of Appeal also finds that it was an abuse of discretion to strike evidence that the moving defendant submitted on reply. This wasn’t some brand new evidence that could have been included with the motion. It was, instead, supplemental to that offered in the opening papers, offered in order to rebut a specific argument raised in the opposition. Despite the common exhortations against reply evidence, that’s ok.

Affirmed.

Three Years Wait for Fait Accompli

Nelson v. Tucker Ellis, LLP, No. A153661 (D1d3 May 5, 2020)

Three years ago, the Court of Appeal determined that an attorney’s work product belongs to the firm, not the attorney. Thus when Firm received a subpoena for documents implicating the work product of a former Attorney, it didn’t need to seek his permission before producing the documents.

The prior ruling was a writ ordering reversal of a summary judgment ruling in Attorney’s favor. On remand, the trial court granted Firm’s motion for judgment on the pleadings, finding that the Court of Appeal’s ruling was inconsistent with Attorney’s theory of liability, and, in the alternative, that the claims were barred by the litigation privilege. Attorney appealed, and the Court of Appeal affirms.

Principally, the Court holds that the prior ruling appellate ruling that Firm held the work product privilege constituted law of the case. In its strong version, the law of the case doctrine holds that earlier appellate opinions in a case bind subsequent proceedings in the trial court or future appeals to an equal court. Here, attorney alleged several different causes of action—interference with contract, invasion of privacy, negligence, conversion. But each claim had at least one element that was premised on Firm’s having wrongfully disclosed Attorney’s work product. It follows that prior ruling on appeal was fatal to all the claims.

In the alternative, the claims were also barred by the litigation privilege. Civil Code § 47(b) bars any tort liability grounded on litigation-related communications. Here, Attorney’s claims were based on Firm’s having produced documents in response to a third party subpoena in a litigation. Although not every act Firm took was necessarily communicative, the non-communicative acts, like selecting what documents to produce in response, were predicate to the communicative act of producing the documents. Given the broad construction afforded to § 47(b), Firm’s acts were, on the whole, communicative enough to fall within the privilege.

Finally, the Court of Appeal affirms that Attorney didn’t need to be afforded leave to amend his complaint. Attorney did not identify any facts that would preclude the Firm’s ownership of the work product protection from cutting the legs out from under his claims. So any amendment would have been futile.

Affirmed.

No New Theories for Reversal

Cox v. Griffin, No. D074893 (D4d1 Apr. 17, 2019)

Plaintiff won a jury verdict on claims of IIED and false imprisonment, based on defendant’s having made a knowingly false police report. Problem is, Civil Code § 47(b) creates an absolute privilege for making police reports. So the trial court granted a jnov for defendant. There is an exception to § 47(b) for malicious prosecution claims. But Plaintiff neither plead, nor tried, nor instructed the jury on, a malicious prosecution claim. 

And she can’t raise the issue for the first time on appeal. Generally, you can’t do that. There’s an exception for when the new theory is a pure issue of law based on undisputed evidence. (It’s also more likely to support an affirmance instead of a reversal.) But that’s not the case here. For instance, malicious prosecution requires a favorable termination as an element. IIED and false imprisonment do not. There was no evidence in the trial record whether criminal case filed against Plaintiff terminated in her favor. So she’s not entitled to a reversal of the jnov on that theory.

Affirmed.

Privilege Claim Is Weak, Like Clock Radio Speakers!

Chen v. Berenjian, G055496 (D4d3 Mar. 28, 2019)

In an effort to avoid Creditor’s collections efforts, Judgment Debtor and his Brother engineered a collusive default judgment and then an execution that let Brother obtain possession of all of JD’s assets, including in particular a pair of stereo speakers. Creditor tries to levy on the speakers, and after learning that they were transferred to Brother based on the default, sues Brother for fraudulent transfer. 

The trial court dismissed the claim, finding it was barred by Civil Code § 47(b)’s absolute litigation privilege. But that misunderstands the nature of the claim. It was not really based on the default judgment. It was based on the wrongful transfer of the speakers to someone who didn’t have a bona fide claim to them. That isn’t communicative, so the litigation privilege does not apply. 

Reversed.

Straight-Up Park

Laker v. Bd. of Trustees of the Cal. St. Univ., No. H044836 (D6 Feb. 28, 2019)

This SLAPP case is a pretty straight-up application of the Supreme Court’s Park decision. Plaintiff—a Professor at San Jose State—complained to various university officials about the adequacy of the University’s investigation of a Title IX complaint a student had made against his Department Chair. Professor claims that in response, the Department Chair and the University ginned up some phony sexual harassment investigations against Professor. He sues for defamation in the statements that were made as part of the investigations and for retaliation under the FEHA.

As an astute reader of Park would know, the defamation claims arise from the protected activity, but the retaliation claims generally do not. 

It’s well-established that a public university’s internal investigations are “official proceedings authorized by law.” And under Park, claims whose fundamental elements rely on statements made in or in connection with them “arise from protected activity” under Code of Civil Procedure § 425.16(e)(1) or (2). 

Professor tries to throw up an argument that the proceedings were a “sham” and thus “illegal” and there for outside the purview of the anti-SLAPP statute under Flatley. But if you have learned one thing from reading this blog, you know that Flatley arguments almost always fail because the standard is almost impossible difficult to satisfy. Which is the case here too.

Moreover, for essentially the same reason the claims arise from protected activity, the statements in the investigations are privileged under the absolute “official proceedings” privilege in Civil Code § 47(b)(3).

The retaliation claims, however, are different. The gist of a retaliation claim is that the defendant made some adverse employment action to unlawfully punish the speech of the plaintiff. Most employment decisions aren’t protected, even if communications will be used as evidence to prove up the plaintiff’s claim. That said, when the adverse decision is itself a speech act (e.g., I complained so you trashed my reputation in the press)—it can be protected. 

So most of the retaliation claim stands. The University’s official decision to launch an investigation is not itself speech, even if it is sometimes carried out through it. But to the extent that Professor’s theory is that University retaliated against him by defaming him in the investigations that’s going to be protected and privileged under the Civil Code for the same reason as the defamation claim.

Reversed in part.

Defamation? In Family Court?

L.G. v. M.B., No. B284742 (D2d2 Jul. 13, 2018)

Former Nanny is suing Wife for allegedly defamatory statements Wife made about Nanny in a declaration Wife filed in support of a domestic violence restraining order her divorce case. I’m not going to get into the seamy details—there’s a reason why I try to avoid family law—but a hunch and twenty seconds of the google confirmed my suspicion that this is a b-level celebrityish thing.

Get Too Meta; Face a SLAPP

MMM Holdings v. Reich, No. G053739 (D4d3 Mar. 12, 2018)

Q: What almost always happens when you sue someone for something they did in another litigation?

A: You lose an anti-SLAPP motion. 

A Lawsuit over a Lawsuit Meets the Bar of § 47(b)

Herterich v. Peltner, No. A147554 (D1d2, as modified Mar. 28, 2018)

Plaintiff, a disinherited Son in a probate dispute, sued Executor and his Attorney for making various statements alleged to be false during the probate case. The trial court ruled against Son on the merits. He appealed. The Court of Appeal, however, noticed that there’s something more fundamentally problematic about this lawsuit—it is a lawsuit over a lawsuit. So it ordered briefing on whether the litigation privilege in Civil Code § 47(b) bars Son’s claim. It does. 

Of course, Executor and Attorney didn’t raise that defense in the trial court, so Son claims they waived it. But the Court doesn’t find that to be much of a barrier, because it presents a pure question of law applied to undisputed facts. Appellate courts have the discretion to consider purely legal questions first raised on appeal. The Court elects to do so here. 

As the Court explains, § 47(b) can and has been applied to lawsuits based on alleged fraudulent representations made in the course of prior probate proceedings. The fact that the probate code puts specific duties of candor on executors and their representatives does not vitiate the privilege in some later case. None of these statutory duties are fundamentally inconsistent with privileging statements made during the course of litigation from serving as the basis of future liability in tort. To the contrary, if a party is defrauding the court in a probate proceeding, the remedy for that fraud is in the probate case itself—including various procedures that permit for post-judgment relief—not by filing a separate lawsuit. 

Affirmed.

§ 47(b) Privilege Yields to the Insurance Fraud Prevention Act

People ex re Alzayat v. Hebb, No. E066471 (D4d2 Dec. 19, 2017)

In this case, Plaintiff has brought a qui tam case alleging that his employer and a supervisor violated the Insurance Frauds Prevention Act by making false statements in an incident report and lying in a deposition in worker’s comp proceeding. Generally, that kind of statement is protected by the litigation privilege in Civil Code 47(b). But the Court here finds that the IFPA is a specific statuary scheme that foresees assigning liability based on false statements made in connection with, among other things, workers’ comp proceedings. Under those circumstances, § 47(b) would make the IFPA inoperable in significant part. When that happens, courts have found § 47(b)’s general privilege to yield to the more specific statutory scheme where the Legislature expressed an intent that liability for the statement should, in fact, apply.

Reversed.

Our Yemen of Libel Tourism ...

Argentieri v. Zuckerberg, No. A147932 (D1d5 Feb. 15, 2017)

If you want to sue someone for defamation and you have a choice of forum between California and pretty much anywhere else, California is almost always a bad move, even taking the weather into account. Often the worst. Some of us like it that way.

Litgation Privilege Shields Doctor Who Reported Patient to DMV

McNair v. City and County of S.F., No. A138952 (D1d4 Nov. 22, 2106)

Doctor examined Patient in connection with an application for SSI. Against Patient’s wishes, Doctor sent a letter to the DMV, warning that Patient’s medical condition rendered him unable hold a commercial drives license. Patient sued for breach of contract and invasion of privacy. The trial court granted SJ on the privacy claim based on the Civil Code § 47(b) litigation privilege. It later granted a nonsuit on the breach of contract claim, on various grounds, including the litigation privilege. Plaintiff appealed.

The court holds that both claims were barred by § 47(b). The letter was close enough to the quasi-judicial DMV revocation proceedings that it should be litigation-related because it started the ball rolling on the license revocation process. Plaintiff argues that there is a specific on-point non-disclosure statute—Confidentiality of Medical Information Act, Civil Code § 56.10—that trumps the litigation privilege. But the relevant part of CIMA says that disclosure is permissible when “authorized by law,” and Health & Safety Code § 103900 says that a doctor can report a patient’s confidential medical information about a disorder causing “lapses of consciousness” to the DMV. Because the statutes don’t categorically bar disclosure—and indeed arguably allowed it—when such a disclosure, in connection with a public proceeding, is the basis of litigation, it is still coveted by § 47(b). Which is the case here.

So far as the contract claim goes, there are some cases that suggest that § 47(b) applies only to torts. But the court reads some newer cases hold that § 47(b) can, in fact, bar a disclosure in breach of a confidentiality agreement, when: (1) the obligations under the alleged agreement are not entirely clear; and (2) there is some overriding policy interest in disclosure. The court follows those later cases here. Plaintiff’s contract theory isn’t a portrait of clarity, and its uncertain even whether whatever part-oral-part-written-part-implied agreement existed wasn’t subject to the Doctor’s other disclosure obligations under the law. And there is clearly an important public protection function that is served by the laws permitting a doctor to report unfit drivers to the DMV. Given these considerations, the litigation privilege wins out.

Affirmed.

Don't Go There.

Contreras v. Dowling, No. A142646 (D1d5, as modified Nov. 18, 2016)

No matter how much your client wants to, it is a really bad idea to sue opposing counsel for litigating against your client. 

Taking Isn't, But Talking Is

Greco v. Greco, No. C078369 (D3 Aug. 23, 2016) 

In his capacity as trustee of his parents’ trust and estate, Son uses the trust’s funds to engage in a bunch of allegedly poorly conceived litigation against his Sister. Sister sues Son, alleging he’s breaching his duty of trustee by wasting the res. Son files an anti-SLAPP motion, which is denied. He appeals.

The Court of Appeal quite sensibly finds that the gist of the suit is the wrongful taking of funds from the trust and estates—as opposed to the litigation being bankrolled with that money—as thus that the case doesn’t arise from any protected activity. Because it is the taking that makes Son’s actions unlawful, that is the relevant conduct to the analysis. The sole exception was a claim for constructive fraud, which allegedly arises from Son’s misrepresentations about the lawsuit. Talking about a lawsuit is protected activity, so Son met the first part of the test on that claim.

As to the merits on the constructive fraud claim, the trial court hadn’t addressed them. It notes that the obvious bar to success—the litigation privilege in Civil Code § 47(b)—doesn’t apply because the statements at issue were not made to a court or any party to the litigation. Thus the case needed to be reversed for a determination of potential success on the merits as the the constructive fraud claim only.

Reversed and reminded, in limited part.

A Fair Report Can Include Some Self-Promotion and Puffery

J-M Mfg. Com. v. Phillips & Hohen LLP, No. B256927 (D2d7 May 2, 2016)

After they prevailed in the liability phase of a bifurcated trial, Plaintiffs’ attorneys in a qui tam case issued a press release trumpeting their victory. The losing Defendant, a pipe company, sued Attorneys for defamation and trade libel. It alleged that Attorneys mis-described the issues decided by the jury. According to PipeCo, while the jury might have found that all the pipe it sold to the government might not have met certain certified quality standards, the jury did not find any of the pipe to be actually defective, contrary to what the press release said.

Just How Interesting and to Whom?

Bikkina v. Mahadevan, No. A143031 (D1d4 Oct. 9, 2015)

Two of the four categories of activity protected under the anti-SLAPP statute require the lawsuit to arise from speech activities “in connection with an issue of public interest.” Cal. Code Civ. Proc. § 425.16(e)(3) or (4). Sussing that out can be a tough job for the judiciary, particularly when it is an invitation to weigh in on the seriousness of intra-academic disputes. Just how public or interesting does an issue have to be to meet the test? 

Here, the Court finds that one academic’s relentless and seemingly inaccurate attacks on another’s work doesn’t make the public issue grade. It then goes on to hold that it doesn’t matter anyway, because the plaintiff came forward with enough evidence to defeat the motion. Given the alternative holding, it seems—at least a little—like the court is potentially letting the merits of the dispute color the public interest inquiry. That is, the analysis intimates that the inappropriate and unmeritorious—and thus potentially defamatory—nature of accuser’s accusations precludes them from being publicly interesting in the first place. 

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.

Bad Lab Work Held Privileged Under § 47(b)

Falcon v. Long Beach Genetics, No. D062807 (Mar. 21, 2014)

The court holds that the Civil Code § 47(b) litigation privilege applies to claims against a genetic testing lab for negligently conducting a DNA test in connection with a paternity proceeding. 

Legal Misadventures in Social Media

GetFugu, Inc. v. Patton Boggs LLP, No. B231794 (D2d3, upon rehearing Oct. 3, 2013)

The court of appeal partially reverses a trial court's granting of a SLAPP motion because the plaintiff established a prima facie case that it could prevail on its claim of defamation against a lawyer and his firm.

Institutionalizing Yourself Is a Suboptimal Strategy in a Custody Fight

McClintock v. West, No. G046483 (D4d3 Sept. 9, 2013) 

During his divorce proceedings, McClintock (a lawyer) checked himself into a mental institution. Finding him incompetent, the court appointed West to act as McClintock’s guardian ad litem. West proceeded to settle the divorce case in a manner that did not meet McClintock’s approval. McClintock then sued West for breach of contract and various torts in connection with her guardian ad litem duties and a fee application West filed with the court seeking approval of her guardian fees. The trial court sustained West’s demurrer, which the court of appeal affirmed, on the grounds that (a) any causes of action arising from acts undertaken as a guardian ad litem are barred under the absolute quasi-judicial immunity; (b) liability for filing the fee petition was barred by the Civil Code § 47(b) litigation privilege; and (c) because West was acting as a guardian and not as McClintock’s attorney, she could not be held liable for professional malpractice.

Affirmed.