SLAPP Trap for Unwary: Recent case shortens SOL for malicious prosecution against attorneys

In March of 2011, Vafi v. McCloskey (2011) 193 Cal.App.4th 874 held that the shorter one-year statute of limitations applied to malicious prosecution actions brought against attorneys instead of the two-year that applies to malicious prosecution actions generally against non-lawyers.

SLAPP MALPRACTICE. IT'S HERE TO STAY!! ANGRY SLAPP PLAINTIFF SUES ATTORNEY

With the ever increasing number of anti-SLAPP motions that are being filed, granted, and won by defendants throughout California in state, federal, trial, and appellate courts every month, the number of angry SLAPP plaintiffs that get hit with high fee awards is rising exponentially. [CCP 425.16(c)] Every civil litigation attorney who files an action on behalf of a plaintiff or cross-complainant is now at an ever increasing risk of being hit with a malpractice suit filed by an irate client who lost an anti-SLAPP motion and got hit hard with a hefty SLAPP fee award. To make the point eminently clear, every time an attorney represents a losing plaintiff in a SLAPP case, SLAPP fees are mandatory and often exceed $100K. If this state of affairs is not enough to make an angry client sue for malpractice, the losing SLAPP plaintiff and the attorney are also simultaneously exposed to a SLAPPback malicious prosecution suit from the prevailing SLAPP defendant in the underlying action under CCP 425.18. Soukup v. Hafif (2006) 39 Cal.4th 260. So the former client's potential damages against his attorney for malpractice have now escalated dramatically. And even if the attorney is able to successfully defend the malpractice action, it can irreparabley ruin the attorney's reputation even if the attorney successfully defends the action years later. Moreover, defending a malpractice action is a a major expense, time waster, and source of stress for attorneys facing such an action. What follows is a case in point.

In January of 2011, I testified as a defense expert in a case that resulted in what is believed to be the first anti-SLAPP malpractice verdict in California. In a case called Lefkowitz v. Gruenberg (Case No. 37-2009-00101969-CU-PN-CTL) San Diego Superior Court, I was retained by Lewis Brisbois, San Diego to testify as a standard of care and attorney fee/ethics expert for the defense in a legal malpractice/breach of fiduciary duty action against an attorney where the key allegation was that the attorney allegedly mishandled the underlying defamation action by failing oppose the motion SLAPP motion properly and failing to spot the SLAPP issue and properly advise the client/plaintiff that he would be liable for substantial attorney's fees and costs if he lost the SLAPP motion and appeal. In the underlying defamation action, the court awarded the prevailing SLAPP defendant $86,000.00 in SLAPP fees against plaintiff after losing SLAPP motion on appeal. Even though the attorney obtained a net positive settlement of $35, 000.00 in a related whistleblower cause of action, the former client/defamation plaintiff sued his attorney claiming he would have obtained a better settlement had he not been saddled with the $86K SLAPP fee award against him.

We believe that Lefkowitz is the first SLAPP malpractice verdict in the State of California as the LA Daily Journal and other verdict commentators are unaware of any other legal malpractice verdicts arising from the attorney's representation of a client in an underlying SLAPP case.

DEFENSE VERDICT - 1/6/11 - HON. JOHN S. MEYER SAN DIEGO SUPERIOR COURT

The jury found "no negligence" as to whether the attorney failed to timely and properly advise his former client of the risk of paying the defendant's attorney's fees if the employer's SLAPP appeal was successful. The jury did not reach the issues of causation and damage. Mr. Moneer testified that two attorneys and one trial judge misapplied the anti-SLAPP law to the defamation claim in the prior action. Simply because the Court of Appeal reversed and remanded for mandatory SLAPP fees does not mean that the attorney fell below the standard of care in handling the defamation/SLAPP action for the ordinary employment litigation practitioner.

ATTORNEYS: Peter Garchie, Esq. , Lewis Brisbois, San Diego - Defense
Shauna Hagan, Esq., Lewis Brisbois, San Diego - Defense

Alicia I . Dearn, San Diego - Plaintiff

EXPERTS: James J. Moneer, Esq. San Diego - Defense

Peter R. Thompson, Esq. - Plaintiff


For more facts and details about the case see www.slapplaw.com and click on attorney profile and scroll down to Lefkowitz v. Gruenberg.

WHAT CAN PLAINTIFF'S CIVIL LITIGATION ATTORNEYS DO?

1. SCREEN, SCREEN, SCREEN FOR SLAPP ISSUES BEFORE THE PLEADING IS FILED.

2. ADVISE YOUR CLIENTS IN WRITING REGARDING SLAPP FEES

3. CONSULT AN EXPERT TO SCREEN THE COMPLAINT, ASSIST WITH OPPOSITION, AND/OR GIVE EXPERT TESTIMONY TO CUT THE FEE AWARD DOWN SUBSTANTIALLY

CALIFORNIA SHOULD ADOPT D.C. ANTI-SLAPP LAW'S PROTECTION FOR ANONYMOUS ONLINE POSTERS

The District of Columbia anti-SLAPP legislation just went into effect on 3/31/11. The new law was modeled after California's anti-SLAPP legislation with one added feature - a special motion to quash a subpoena seeking to discover the identity of online posters. California's anti-SLAPP laws are the strongest in the nation with this one loophole. Unlike the California law, the D.C. law makes attorney's fees to a prevailing SLAPP defendant merely discretionary instead of mandatory as it is in California. But the big strength of the D.C. statute is its provision for a special motion to quash subpoenas and other discovery in suits filed against "Doe" defendants who are alleged to have published defamatory material on the internet. California's anti-SLAPP laws (CCP 425.16, 425.17, 425.18) do not have any such special motion to quash provision and recent California case law has held that an anti-SLAPP motion cannot be used to challenge a motion or a subpoena that arises from the exercise of First Amendment speech or petition rights - SLAPP motions challenge only "causes of action" in a complaint, cross-complaint, or petition (CCP 425.16, subd. (h)). Moreover, because the anonymous online poster is named only as Doe and not as a named defendant, the anonymous poster served with a subpoena demanding production of their computer hard drive is defenseless for the poster cannot file an anti-SLAPP motion and stay the discovery until they are sued as a named defendant. So the discovery stay provision that benefits traditional SLAPP defendants who are named in the action provide no protection for the Doe defendant who happens to get served with a subpoena to produce such private and highly sensitive information. Subpoenas designed to disclose the identity of online posters can be highly intimidating to anonymous online posters because of the excessive scope, cost, and intrusiveness of such demands.

Th D.C. statute counters this problem by providing online posters with an additional weapon to combat SLAPPs - they special motion to quash a subpoena or discovery aimed at disclosing an anonymous poster's real identity. It is a burden shifting motion to quash that works similarly to the two step process of the anti-SLAPP motion. The plaintiff/propounding party must show a probability of prevailing on the claim and that such probability outweighs the intrusiveness of the discovery sought and the method used. If the plaintiff/propounding party is unsuccessful in meeting this burden, the anonymous poster can recover attorney's fees and costs.

Many public interest commentators have observed that the rise in web-based commentary and the ever increasing number of lawsuits that ensue are a motivating force behind many other states enacting their own anti-SLAPP legislation. Texas became the 30th state to adopt their own anti-SLAPP laws in June 2011. Another commentator found that with the explosion of the internet, there are many more of these sorts of suits. Moreover, anonymous posters now feel empowered to say things they wouldn't otherwise say. They don't often realize that their identities can be uncovered.

AGREE OR DISAGREE?? YOUR COMMENTS APPRECIATED. I THINK THIS IS SOMETHING OUR CALIFORNIA LEGISLATURE SHOULD SERIOUSLY CONSIDER.

Pincus comphrensive anti-SLAPP seminar 10/6 at LA Athletic Club in downtown LA.

Please join me and my colleagues for a 4-hour comprehensive anti-SLAPP workshop sponsored by Pincus Professional education on Wed. 10/6/10 from 1:00pm to 5:30pm. The Panelists will by myself and my distinguished colleagues, Judge Amy Hogue, Phil Goar, Senior Judicial Attorney for the Court of Appeal 2nd Dist., Div. One, and Ben Shatz, Esq. of Manatt Phelps LA. The seminar materials contain a variety of key SLAPP cases and legislative history as well as an actual SLAPP complaint, SLAPP motion, SLAPP discovery motion and other SLAPP pleadings. There have been a lot of new developments in anti-SLAPP law over the past year, including a very recent amendment that became effective this year which precludes a prevailing SLAPP defendant from recovering SLAPP fees in cases where the liability is based on alleged violations of the Ralph M. Brown Act.

I look forward to seeing you there. Go to my website www.slapplaw.com for more details.

Jim

4/13/10 - Pincus SLAPPinar on the elusive "gravamen" concept

Go to PincusProfessionalEducation.com for details on the SLAPP webinar (SLAPPinar) on 4/13/10 from 1:00pm to 2:30pm. Please join me for an intermediate SLAPPinar on the elusive "gravamen" concept. Actual complaints will be analyzed to illustrate the application of the gravamen concept in plain and mixed SLAPP cases. Disagreements among various Appellate Districts will be highlighted.

SLAPP fees Nondischargeable in Bankruptcy Under New Federal Bill

A Bill introduced in the House of Representatives on 12/16/09 would provide that litigants with procedures to combat SLAPP suits. These protections are needed to protect citizen participation in government and freedom of speech, according to the text. The Citizen Participation Act of 2009 (H.R. 4364) was introduced 12/16/09 by Rep. Steve Cohen (D-Tenn.) and is pending in the judiciary committee.

For an action brought in state court in a state court, the defendant would be permitted to remove the suit to federal court for the purpose of filing a special motion to dismiss. It is modeled after California's anti-SLAPP legislation and has similar exceptions for public interest and commercial speech set for in CCP 425.17. A prevailing defendant on a special motion to dismiss would be entitled to attorney's fees and the fee award would not be dischargeable in bankrupcty.

This new bill, when passed, will have profound malpractice and SLAPPBack malicious prosecution implications for SLAPP suit filers (plaintiffs) and the attorneys who represent them.
In other words, once the fees are awarded, they are nondischargeable even if there is no finding of fraud, or willfull or malicious conduct on the part of the SLAPP filer. So some innocent plaintiffs and their attorneys will be unfairly harmed by this law. So now there is much more at stake for plaintiffs opposing SLAPP motions and SLAPP fee motions than ever before. All the more reason to have a competent SLAPP attorney screen your complaints and cross-complaints before they get filed and to use expert declarations to testify for the lowest fee award possible. See prior 2/26/10 blog on SLAPP damage control$

Overall, however, I think it is great from the defense perspective that SLAPP fees may soon be nondischargeable in bankruptcy. Now collection is less of an issue in SLAPP fee cases.
This new bill will give anti-SLAPP laws throughout the nation the most powerful jaws and sharpest teeth of any pre-trial dismissal motion on the books.

SLAPP Damage control$: Use of expert declarations in SLAPP fee motions

SLAPP is all about fees. The threat of a sizeable mandatory fee award to the prevailing SLAPP defendant is what generates the enormous leverage and bargaining power for the prevailing party. Plaintiffs want to avoid this fate and defendants want to get their SLAPP motion granted and obtain the highest award of fees possible. An expert declaration is like adding a turbo charger to a defense fee motion and is absolutely indispensable for a losing SLAPP plaintiff seeking to minimize the fee award.

The use of expert declarations in making and opposing SLAPP fee motions provides maximum persuasive power in convincing the judge to move as close as possible to the number ultimately sought. Obviously, in the case of an unsuccessful SLAPP plaintiff, zero is ideal but unrealistic in most cases. In cases where the amount of fees sought by the prevailing SLAPP defendant approaches or exceeds $50,000.00, expert declarations almost invariably result in a significant reduction in the fee award - often a 50% to 75% reduction in the fees awarded from the amount the defendant initially sought. In most cases, the amount of the reduction in the fee award pays for the cost of the expert declaration anywhere from two to ten times over. I call this damage control after the SLAPP filer (usually the plaintiff) has lost the motion and appeal.

The fee opposition in the trial court is the SLAPP plaintiffs last chance to mitigate the enormous damage that can easily befall him or her (and the plaintff's attorney) if a large amount of fees is awarded. The same can be said of expert declarations in cases where defendants seek to boost the amount of fees awarded. Aside from assembling a detailed record of billing tasks and hours, an expert declaration supported by a solid foundation is like adding a turbo charger to SLAPP fee motion or opposition.

The use of expert declarations by a prevailing SLAPP defendant in support of a request for mandatory attorney's fees can be extremely helpful in boosting the defendant's bottom line - particularly in contingent fee cases where a discretionary multiplier is sought or where the number of hours billed is substantial. But where an unsuccessful SLAPP plaintiff seeks to decimate a massive SLAPP fee request, an expert declaration is essential. Because the unsuccessful SLAPP filer after appeal often becomes the target of a SLAPP fee request that is well in excess of $100,000.00, the use of an expert declaration from an attorney who has demonstrable experience and expertise in anti-SLAPP jurisprudence is indispensable. In light of the newly enacted SLAPPback provisions of CCP section 425.18, the SLAPP plaintiff's attorney becomes exposed not only to a legal malpractice action byt the former client for loss of the prior lawsuit and for the fee award, but the attorney also become subject to a SLAPPback malicious prosecution suit without a meaningful SLAPP defense. (More on SLAPPBacks in future blogs) Hence, a prudent SLAPP filer or defendant who wishes to recover a high fee award or a plaintiff who desires to reduce the fee award as much as possible would be wise to make the strongest record possible for the desired amount of fees to be awarded.

James J. Moneer, Esq.
www.slapplaw.com