Do Not Settle. Do Not Collect a Contingency Fee. Go Straight to the State Bar.

Amjadi v. Brown, No. G059069 (D4d3 Aug. 30, 2021)

Sometimes clients won’t settle when their lawyers think they should. No matter how much you explain to them that it’s a good deal, that it’s better than anything they could expect even if they win at trial, or that they are letting emotional issues get in the way of what litigation is really about: money, they just won’t come around to your view of the situation. But if you didn’t want to deal with that, you should have told the interviewers at OCI that you want to be a capital markets lawyer. Because, as fools who decided to pursue a life in litigation, clients who don’t take our settlement advice are an occupational hazard we just need to suck up and deal with. 

Lots of strategic and tactical decisions in litigation belong to the attorney, not the client. But not settlement. Rule 1.2 of the Rules of Professional Conduct unequivocally states that a “lawyer shall abide by a client’s decision whether to settle a matter.” 

The plaintiff lawyers here (working on a contingency, no less) thought they could end around that rule by putting in their retainer agreement that the client delegated them the authority to decide if and when to settle, so long as the lawyers thought it was in the client’s interests. Bad idea.

Not only is that prohibited by the RPCs, cases have found that frustrating a client’s authority on when and under what terms to settle can constitute “moral turpitude.” So this all results in the Court of Appeal invalidating a settlement entered over the client’s objection, the Court declaring the retainer agreement void, and the lawyers being reported to the state bar, not just for the retainer agreement, but also for disclosing a bunch of client confidences in the course of the dispute over the settlement.

Reversed.

A Firm Line in the Peer Review Sand

Bonni v. St. Joseph Health Sys., No. S244148 (Cal. Jul. 29, 2021)

There has been a lot of litigation over the application of the anti-SLAPP statute employment litigation touching on hospital peer review processes. Peer review is an “official proceeding,” so questions often arise regarding whether employment decisions made in connection with a peer review process are “protected activity” under Code of Civil Procedure § 425.16(e). 

I have been droning on about the appropriate line to draw for years. If the rub of the litigation is that someone is liable for some statement made in connection with a peer review process, it is protected. But the ultimate decision or result of a peer review—generally a decision to continue or discontinue a physician’s employment or privileges—is not such a statement. So, for instance, when a doctor sues a hospital for retaliatory discharge, but the hospital claims that its peer review decision grounded in quality of care was a legitimate non-retaliatory reason for the firing, no protected activity is involved.

That’s basically what the Court of Appeal held in this case in 2017. And that’s what the Supreme Court, in a unanimous opinion by Justice Kruger, holds here. 

There is one little twist to the analysis, however. In Wilson, the Supreme Court refined the elements based “arising from” analysis from its prior decision in Park to specify that if any single element of a cause of action constitutes protected activity, it satisfies the test. So in Wilson the defendant—CNN—claimed that the very act of firing the plaintiff for plagiarism was protected because it itself was an act of journalistic ethics enforcement and thus affected its ability to speak on an issue of public concern. In reaching that result, the Court disapproved of the Court of Appeal’s decision in this case, to the extent that it somewhat categorically suggested that the act of terminating someone categorically cannot constitute protected activity. But that doesn’t really matter here, because, unlike CNN, the hospital here doesn’t claim that terminating the doctor for alleged poor care—the result of the peer review—was itself some kind of protected expressive act or otherwise an act in furtherance of its ability to speak. 

The Court also addresses a second issue, although it seems like that issue was already settled by the Court in Baral, which held that the anti-SLAPP analysis needs to parse and strike only the protected allegations within a claim. Plaintiff’s claim here was mixed—some of his allegations were addressed to protected statements made during the peer review, while others were addressed only to the unprotected outcome. 

But defendant’s motion—filed pre-Baral—was addressed only to the cause of action as a whole. So Plaintiff argues that Baral should only apply when the moving defendant specifies the sub-parts of a cause of action that should be struck. Otherwise, says the plaintiff, courts should apply the “gravamen” test that some courts used prior to Baral. The Supreme Court, however, isn’t buying it. If a moving defendant fails to show that specific portions of a cause of action arise from protected activity, it has not met its burden on those claims under Baral and the analysis of those claims needs to proceed no further.

Court of Appeal affirmed.