Destined to End Poorly

Optional Capital v. Akin Gump Strauss Hauer & Feld LLP, No. B275274 (D2d1 Dec. 7, 2017)

In connection with an appeal in a related case just about four years ago, we discussed how judgment collection avoidance activities like fraudulent transfers in connection with phony settlements aren’t “protected activity” under the anti-SLAPP state, even though they might be tangentially related to a litigation. 

But after remand, Plaintiff in that case went off and sued the debtor’s litigators for assisting in those activities, on various theories. The attorneys filed an anti-SLAPP motion of their own. And this time it was granted, and the Court of Appeal affirmed. 

The case against the primary defendants is that they were hiding assets by manipulating the legal process. The asset hiding was the key to the claim. In contrast, the new case against the litigators is entirely based on what they did in the litigation. A client’s nefarious purpose does not render an attorney’s litigation activities unprotected. There’s a difference between using the legal process as cover for your asset hiding—which isn’t protected—and conducting that process itself—which is. 

Which isn’t to say there can never be some liability if litigators are in cahoots with their clients in manufacturing a bogus litigation. But that’s a question for the “success” prong of the anti-SLAPP analysis. To show that, Plaintiff would need to provide evidence of acts or statements that are not privileged under Civil Code § 47(b)’s absolute privilege for statements made in connection with a litigation. Plaintiffs didn’t do that here.

Affirmed.