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Litigation: California Civil Litigation
No Anti-SLAPP When Court Filings Were Not the Gravamen of the Complaint
The plaintiffs appealed from a judgment entered after the defendant's successful anti-SLAPP motion (Code of Civil Procedure section 425.16). The plaintiffs had sued the defendant, an attorney, for breach of contract, professional negligence and breach of fiduciary duty. The motion was granted on the grounds that the actions that the plaintiffs complained of were court filings that the defendant had made on behalf of another client.
The plaintiffs, who were represented by attorney David Barry, had brought an antitrust action against a real estate sales multiple listing service. They sought to have the antitrust action certified as a class action with themselves as class representatives. Defendant Schack volunteered to help Barry with the case. Schack signed an Attorney Association and Fee Agreement in which he agreed that he had all the responsibilities toward the plaintiffs that exist in an attorney-client relationship. Barry had detailed discussions with Schack in which he disclosed confidential information, litigation strategy and work product.
Schack then filed a motion in the action on behalf of a "proposed plaintiff in-intervention", Hemphill, who he argued satisfied class representative requirements. He argued that the plaintiffs were inadequate representatives. At a settlement conference where Barry represented the plaintiffs, Schack represented Hemphill. Schack had worked out an agreement in principle with the defendants which would provide non-monetary damages for class members and $1 million in attorney's fees for Schack and his new co-counsel. Barry tried unsuccessfully to have Schack disqualified. Schack filed an new action on behalf of Hemphill and obtained preliminary approval of a settlement class that did not include the plaintiffs.
The plaintiffs settled their antitrust action. They then filed this action against Schack. Schack's anti-SLAPP motion was based upon his argument that the plaintiffs' causes of action in this case were based upon his statements and writings in the antitrust case, which was a judicial proceeding.
The Court of Appeal rejected Schack's argument. Anti-SLAPP protection is available only when the cause of action is based on acts in furtherance of the defendant's right of petition. The gravamen of the plaintiffs' complaint against Schack was based on his abandonment of them as clients and his representation of a party with interests adverse to the plaintiffs'. The allegations of Schack's court filings and oral arguments were merely incidental to their causes of action. The essence of the plaintiffs' claim was that Schack had breached his duty of loyalty to them.
Justice O'Rourke wrote the opinion. Presiding Justice Nares and Justice Aaron concurred.
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