Legal Ethics

Appeals court OKs fine for lawyer who asserted SLAPP shield against tort case over demand letter

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A California law that offers lawyers a shield against tort claims concerning their litigation activities has been limited by a California appeals court and might even be eliminated entirely by a federal appeals court.

The state’s so-called anti-SLAPP statute is intended to offer an early exit for small parties targeted for abusive litigation by well-funded companies and other litigants with big war chests, often in cases that raise public policy or political concerns. SLAPP stands for Strategic Lawsuit Against Public Participation, and similar laws have been enacted in other states.

However, a state appeals court ruled Monday that the California statute was not only unsuccessfully but frivolously invoked by a Los Angeles lawyer sued over the demand letter he sent to a client’s former employee, the Recorder (sub. req.) reports.

Writing on behalf of a client to a former manager of the client’s business, attorney Reed Hamzeh had threatened to report the manager to the district attorney and the Internal Revenue Service, among others, if he didn’t pay a proposed $75,000 settlement. Hamzeh, who is a former associate of Quinn Emanuel Urquhart & Sullivan, was working at his own law firm when he wrote the letter at issue in the anti-SLAPP case.

Hamzeh’s claim in the demand letter that he would go to law enforcement agencies if the settlement wasn’t paid violated a legal ethics rule against threatening criminal or administrative licensing sanctions against an opposing party to gain an advantage in civil litigation. And it also amounted to civil extortion, the Second District Court of Appeal said in its opinion (PDF).

The opinion upheld both a lower court’s dismissal of Hamzeh’s attempt to assert an anti-SLAPP shield against the manager’s tort claim and a $3,150 fine that was assessed against the attorney for frivolously asserting the anti-SLAPP shield.

Meanwhile, in an unrelated case last week, Chief Judge Alex Kozinski of the San Francisco-based 9th U.S. Circuit Court of Appeals urged his colleagues to reconsider, en banc, a 14-year-old decision to recognize the state’s anti-SLAPP shield in federal court. He called the anti-SLAPP statute a dubious procedure that requires interlocutory appeals. Ordinarily, state substantive law applies in federal court, but federal law applies to questions of procedure.

If Kozinski’s view should prevail in the federal appeals court, “I think there would be a lot of interesting forum-shopping situations,” partner Jeremy Rosen of Horvitz & Levy told the legal publication. Rosen, an anti-SLAPP expert, serves as director of a federal appellate advocacy legal clinic at Pepperdine University’s law school.

“You’d have a lot more state torts getting into federal court,” Rosen continued, speculating about the situation that would result from potential elimination of the anti-SLAPP shield. “I think that would be troubling and certainly defeat California’s strong public policy behind the anti-SLAPP law.”

See also: (May 2010): “Appeals Court OKs Cyberbullying Suit, Says Threats Nixed SLAPP Law” (May 2010): “Sued By Chevron for $4M, Lawyer Scores Interim SLAPP Suit Victory in Malicious Prosecution Case” (July 2010): “Lewis Brisbois Can’t Use SLAPP Law as Shield Against Ex-Client’s Malpractice Suit” (June 2011): “Winning Law Firm Loses $33K SLAPP Motion Legal Fee Bid; Using Associate Was Self-Representation”

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