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Jan. 28 --Washington's anti-SLAPP law does not protect a law firm and its attorneys, who transcribed telephone calls with an opponent's former employee without his knowledge, from possible liability for invasion of privacy, the Washington Court of Appeals, Division One, held Jan. 21 (Dillon v. Seattle Deposition Reporters, LLC, 2014 BL 15875, Wash. Ct. App. Div. 1, No. 69300-0-I, 1/21/14).
The court ruled that when lawyers surreptitiously record conversations to gather evidence in a litigation matter, that activity does not involve “public participation and petition” so as to be protected by the state statute that forbids “strategic lawsuits against public participation,” or SLAPPs. “The anti-SLAPP statute does not operate to transform unprotected activity into protected activity simply because it is undertaken during the course of a lawsuit,” Judge Stephen J. Dwyer declared.
At least 30 states have enacted anti-SLAPP acts, which provide an expedited procedure for escaping from lawsuits filed to inhibit the valid exercise of speech or petition rights. In states with anti-SLAPP laws, these statutes are usually the first line of defense for law firms when they are sued by third parties for alleged misconduct in judicial proceedings. (See boxes.)
Cases in which lawyers have successfully used anti-SLAPP laws to get claims against them dismissed:
▸Aiding breach of fiduciary duty and conversion in probate case--Graham-Sult v. Clainos, 2013 BL 356884, No. 11-16779, (9th Cir. Dec. 27, 2013) (applying California anti-SLAPP law).
▸Civil extortion--Malin v. Singer, 2013 BL 188529, 159 Cal. Rptr.3d 292 (Cal. Ct. App. 2013) (demand letter that did not constitute criminal extortion)
▸False advertising--Davis v. Avvo, Inc., No. C11-1571RSM, 2012 BL 90336, (W.D. Wash. March 28, 2012) (statements on lawyer-rating website; applying Washington's anti-SLAPP law)
▸Intentional infliction of emotional distress, negligence, malicious prosecution and abuse of process--Gerbosi v. Gaims, Weil, West & Epstein, LLP, 2011 BL 62743, 122 Cal. Rptr.3d 73 (Cal. Ct. App. 2011) (claims against firm by litigation opponent)
▸Invasion of privacy--Mallard v. Progressive Choice Ins. Co., 2010 BL 215811, 115 Cal. Rptr.3d 487 (Cal. Ct. App. 2010) (subpoena for mental health records while preparing for arbitration)
▸Defamation--Simpson Strong-Tie Co. v. Gore, 2010 BL 11030, 230 P.3d 1117 (Cal. 2010) (statements in ads that sought product liability plaintiffs)
▸Fraud, prima facie tort--Kearney v. Foley & Lardner, LLP, 2009 BL 198914, 582 F.3d 896 (9th Cir. 2009) (alleged discovery abuse; applying California's anti-SLAPP law)
▸Interference with contractual relations--Genethera, Inc. v. Troy & Gould PC, 2009 BL 40444, 90 Cal. Rptr.3d 218 (Cal. Ct. App. 2009) (settlement offer letter during trial)
▸Malicious prosecution--Wenger v. Aceto, 2008 BL 63398, 883 N.E.2d 262 (Mass. 2008) (criminal prosecution of ex-client for writing bad check to cover fees)
▸Interference with business relations--Taheri Law Grp. v. Evans, 2008 BL 38606, 72 Cal. Rptr.3d 847 (Cal. Ct. App. 2008) (luring away another firm's client)
▸Aiding fraud--Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP, 35 Cal. Rptr.3d 31 (Cal. Ct. App. 2005) (litigation tactics in SEC inquiry)
Cases in which lawyers' alleged conduct wasn't covered by anti-SLAPP statute:
▸Extortion--Flatley v. Mauro, 139 P.3d 2 (Cal. 2006) (threat to ruin plaintiff unless client received payment to keep quiet about alleged rape); Mendoza v. Hamzeh, 2013 BL 108324, 155 Cal. Rptr.3d 832 (Cal. Ct. App. 2013) (threat to report criminal activity unless client received payment)
▸Intentional infliction of emotional distress, invasion of privacy--Malin v. Singer, 2013 BL 188529, 159 Cal. Rptr.3d 292 (Cal. Ct. App. 2013)
▸Indemnity against other lawyers--Chodos v. Cole, 2012 BL 281822, 148 Cal. Rptr.3d 451 (Cal. Ct. App. 2012)
▸Defamation--August v. Hanlon, 975 N.E.2d 1234 (Ill. App. Ct. 2012) (comments to news reporter)
▸Injunctive relief--La. Crisis Assistance Ctr. v. Marzano-Lesnevich, 2012 BL 343453, 878 F. Supp.2d 662 (E.D. La. 2012) (applying Louisiana's anti-SLAPP law)
▸Breach of contract--Personal Court Reporters Inc. v. Rand, 2012 BL 99593, 140 Cal. Rptr.3d 301 (Cal. Ct. App. 2012) (nonpayment of court reporting fees)
▸Wiretapping--Gerbosi v. Gaims, Weil, West & Epstein, LLP, 2011 BL 62743, 122 Cal. Rptr.3d 73 (Cal. Ct. App. 2011)
▸Conflict of interest and equitable indemnity--Fremont Reorg. Corp. v. Faigin, 2011 BL 225924, 131 Cal. Rptr.3d 478 (Cal. Ct. App. 2011)
▸Subpar performance in handling client's claim--PrediWave Corp. v. Simpson Thacher & Bartlett LLP, 2009 BL 260642, 102 Cal. Rptr.3d 245 (Cal. Ct. App. 2009)
▸Breach of fiduciary duty to client--Hylton v. Frank E. Rogozienski, Inc., 2009 BL 205143, 99 Cal. Rptr.3d 805 (Cal. Ct. App. 2009)
▸Breach of contract to split fee with co-counsel--Cohen v. Brown, 2009 BL 88469, 93 Cal. Rptr.3d 24 (Cal. Ct. App. 2009)
▸Defamation--Cadle Co. v. Schlichtmann, 859 N.E.2d 858 (Mass. 2007) (alleged slurs on website meant to boost lawyer's practice)
▸Violation of civil rights and RICO statutes--Plante v. Wylie, 824 N.E.2d 461 (Mass. Ct. App. 2005) (statements made in settlement talks)
Cases in which court found protected activity but allowed at least one claim to proceed:
▸Fremont Reorg. Corp. v. Faigin, 2011 BL 225924, 131 Cal. Rptr.3d 478 (Cal. Ct. App. 2011) (client likely to prevail on claims for breach of confidence and breach of fiduciary duty)
▸Oasis W. Realty, LLC v. Goldman, 2011 BL 130748, 124 Cal. Rptr.3d 256 (Cal. 2011) (ex-client likely to prevail on claim that lawyer breached fiduciary duty by rallying opposition to developer's project after representing developer in regard to that project)
▸Mindys Cosmetics, Inc. v. Dakar, 2010 BL 152540, 611 F.3d 590 (9th Cir. 2010) (claims for malpractice and breach of fiduciary duty arising from lawyer's registration of trademarks were sufficiently grounded to avoid being struck)
Attorneys James Grant and a colleague at Davis Wright Tremaine LLP arranged for a court reporter to transcribe two telephone conversations they had on a speakerphone with Jason Dillon. Grant told Dillon that his “assistant” was taking notes but did not reveal that the assistant was actually a court reporter who was using stenographic equipment to transcribe the conversations.
Dillon was the former vice-president of NetLogix, which was suing T-Mobile in federal district court in Washington. The lawyers represented T-Mobile.
Davis Wright Tremaine filed portions of the transcribed conversations in that lawsuit to support a motion to dismiss NetLogix's claims. The trial court granted the motion, concluding that the transcripts proved spoliation of evidence by NetLogix.
Dillon then sued Grant and Davis Wright Tremaine, along with the court reporting company, in Washington state court. He accused them of violating Washington's privacy act, which makes it unlawful and tortious for private conversations to be recorded without the consent of all participants.
The trial court granted summary judgment for the defendants, concluding that Dillon had no expectation of privacy in the telephone conversations. The court also ruled that Washington's anti-SLAPP statute barred Dillon's suit, and it awarded the defendants statutory damages of $10,000 each along with $40,000 in attorneys' fees.
Washington's anti-SLAPP law, Wash. Rev. Code §4.24.525, allows defendants to file a special motion to strike a claim that is based on “an action involving public participation and petition” as defined in the statute.
The trial court found that Dillon's lawsuit implicated the SLAPP act because the underlying activity was connected with a judicial proceeding. Accordingly, it granted the defendants' motion to strike Dillon's claims.
The court of appeals reversed, concluding that the recording of telephone conversations is not an action involving public participation and petition. That activity does not fit any of the statutorily defined categories of statements or conduct that qualify as “public participation and petition,” it said.
In particular, the court said that the firm's acts at the heart of Dillon's claims could not be categorized as protected “statements” submitted in a judicial proceeding. Although the transcripts of the conversations contained statements, the thrust of Dillon's claims was the act of transcribing the conversations without his knowledge, not the firm's subsequent submission of the transcripts to the federal court, the court said.
The act of transcription simply does not convey any message and cannot be viewed as protected statements, Dwyer said.
Even if the recording was lawful--a question the court did not decide--the firm's acts could not be categorized as conduct “in furtherance of the exercise of the constitutional right of petition,” Dwyer said.
That statutory language, the court said, refers to the state constitutional right of petition, which has been construed as a political right that does not encompass the right of access to courts.
Moreover, the court said, the firm's acts in transcribing the conversations did not involve “the constitutional right of petition” even if the statutory language also refers to the federal constitutional right to petition, which does cover conduct relating to litigation.
To be protected as petitioning activity, the court said, the acts must actually give rise to and be the basis for the asserted liability. Here, it said, Dillon did not sue the firm because it gathered evidence for a lawsuit, but rather because of its method of gathering evidence.
“The act of recording is not itself protected speech or petitioning activity,” even if the anti-SLAPP law extends to First Amendment petitioning activity, the court declared.
As support, the court relied on Gerbosi v. Gaims, Weil, West & Epstein, LLP, 2011 BL 62743, 122 Cal. Rptr.3d 73 (Cal. Ct. App. 2011), which held that wiretapping in the course of representing a client is not protected activity under California's anti-SLAPP statute.
The court also cited Malin v. Singer, 2013 BL 188529, 159 Cal. Rptr.3d 292, (Cal. Ct. App. 2013), which relied on Gerbosi in ruling that California's anti-SLAPP statute did not protect a lawyer from an invasion of privacy claim based on allegations that his law firm wiretapped the plaintiffs and hacked their computers.
In addition, the court said, policy considerations support the conclusion that Washington's anti-SLAPP law does not protect the defendants from Dillon's claims. A holding that the statute covers all means of gathering evidence would elevate a lawyer's ability to marshal evidence above the right to file lawsuits and might raise questions about the statute's constitutionality, it explained.
“The anti-SLAPP statute does not operate to negate the privacy act, or any other statutory protection, merely because the disputed conduct occurred during a separate lawsuit,” it said.
Although the court ruled that the anti-SLAPP statute did not shield the lawyers from Dillon's claims, it went ahead and explained how trial courts should evaluate the merits of a claim in those cases where a plaintiff's claims do involve protected activity. The trial court should apply a “summary judgment-like analysis to determine whether the plaintiff has shown, by clear and convincing evidence, a probability of prevailing on the merits,” the court said.
The court reversed summary judgment in favor of the lawyers and their firm on Dillon's privacy claims. It found that triable questions of fact exist as to whether Dillon subjectively and reasonably believed that his conversations with the lawyers were private, even though he was aware of the ongoing litigation and knew the lawyers were representing his former employer's opponent.
“Simply because Dillon was divulging information pertinent to a civil suit does not mean that his expectation of privacy was unreasonable as a matter of law,” the court declared.
The court pointed out that lawyers have other ways of obtaining relevant evidence in a civil suit, such as taking a potential witness's deposition and asking a witness to sign a declaration. Given these alternate, legitimate methods, it is not unreasonable as a matter of law for a potential witness to expect that his initial conversation with a party's attorneys would be private, the court held.
Dennis M. Moran and William A. Keller of Moran & Keller PLLC, Seattle, represented Dillon. Ralph E. Cromwell Jr. and Jofrey M. McWilliam of Byrnes Keller Cromwell LLP, Seattle, represented Davis Wright Tremaine and the other defendants.
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