No. S025858.
Supreme Court of California,
In Bank.
April 5, 1993.
Grebow & Barish, Arthur Grebow, Patricia A. Brown, Lincoln Stone and Susan Gruskin, Los Angeles, for plaintiff and appellant.
David Spangenberg, Palo Alto, Hart, King & Coldren, Robert S. Coldren, John H. Pentecost, Lawrence R. Bujold, Santa Ana, Rubenstein & Bohachek, Earl L. Bohachek, San Francisco, Daniel J. Popeo, New Hartford, NY, and Richard A. Samp, Washington, DC, as amici curiae on behalf of plaintiff and appellant.
Musick, Peeler & Garrett, Harry W.R. Chamberlain II, Birgit Sale, Mary Catherine M. Bohen, Matthew P. Stone and Joseph D. Rubin, Los Angeles, for defendants and respondents.
Richard N. Bates, Redding, Robert C. Fellmeth, Coronado, Crosby & Stanton, Bruce E. Stanton, San Jose, Altshuler, Berzon, Nussbaum, Berzon & Rubin and Fred H. Altshuler, San Francisco, as amici curiae on behalf of defendants and respondents.
ARABIAN, Justice.
At common law, barratry was "the offense of frequently exciting and stirring up suits and quarrels" (4 Blackstone, Commentaries 134) and was punished as a misdemeanor. A statutory version of the crime survives today, although it is seldom prosecuted, perhaps because of the requirement that the proof show the defendant "excited" at least three groundless suits "with a corrupt or malicious intent to vex and annoy." (Pen.Code, ss 158, 159.)
The modern successor of common law barratry, solicitation, is not only a misdemeanor when accomplished through the use of agents, but is also subject to discipline by the State Bar. We granted review in this case to consider whether a defendant in an impending civil action may sue the attorneys for the opposing party on the ground that they wrongfully "solicited" the litigation against him. We conclude that this proceeding not only undermines the established policy of allowing access to the courts, but that, given the availability of other remedies for the redress of attorney solicitation, this retaliatory suit is not maintainable.
The present action grows out of a "notice of intention to commence action" mailed on August 28, 1989, to Gerald Rubin by Norma Green. The notice was purportedly on behalf of all of the approximately 450 San Bernardino County residents of Cedar Village Mobilehome Park, a park co-owned by Rubin. In her notice, Green, herself a Cedar Village resident, enumerated 23 alleged defects in the operation of the park and sought a variety of remedies under California and federal law.
Rubin's attorney replied on his behalf to Green's letter, offering to meet with a park residents group to discuss the grievances and "attempt to reach a mutually satisfactory resolution." The reply went on to assert that Green had "made threatening statements to various residents" of Cedar Village "in the process of soliciting clients" as an agent for her attorneys' law firm. It concluded by warning Green that Rubin would "not tolerate such conduct and will seek appropriate compensation in the event of any loss or injury to Mr. Rubin's contractual and business relationship with his tenants and employees." Green's attorneys responded to Rubin's letter, contesting many of its assertions but indicating a desire to discuss a resolution of their clients' grievances.
Approximately a week after receiving the law firm's response, Rubin filed this action in the superior court against both Green and the law firm. Rubin's verified complaint alleged several tort claims, the gist of which was that the defendants had solicited Cedar Village residents as clients in anticipated litigation against Rubin over park conditions, thereby interfering in Rubin's contractual relations with them.
The complaint alleged that, with Green as their agent, the law firm had "embarked on a malicious effort to harm [Rubin's] economic and business standing by stirring up animosity among [Cedar Village] residents, utilizing fear, intimidation and coercion against residents, and communicating the false promise of frivolous litigation as a means to profit unjustly at [Rubin's] expense." The complaint sought damages as well as equitable relief enjoining defendants from soliciting "non-client residents at Cedar Village ... to become legal clients of [the law firm] on any matter concerning Cedar Village...." Meanwhile, on December 7, 1989, Green and over
120 other residents of Cedar Village, represented by the defendant law firm, filed the action noticed in Green's letter of August 28 to Rubin, alleging a failure to adequately maintain the park and the imposition of illegal restraints on the sale of mobilehomes by the park owners. [FN1]
According to the amended complaint, the law firm had engaged in a pattern of soliciting residents of several mobilehome parks for the purpose of commencing litigation against park owners. Allegedly, the firm's modus operandi was to arrange for an invitation to meet with park residents to help negotiate a resolution of complaints regarding park conditions with the
owner; this, in turn, would lead to a promise by the firm to obtain substantial monetary settlements for those residents who agreed to join in litigation against the owner. A lawsuit, preceded by a "form" notice of suit, followed. After filing suit, often on behalf of a hundred or more mobilehome park residents, the law firm would seek an early trial preference on the basis of the advanced age of some of the resident-plaintiffs, thereby (according to the amended complaint) truncating the defendant owner's opportunity for full discovery.
The superior court sustained a general demurrer to the first amended complaint without leave to amend on the ground that defendants' conduct was privileged under Civil Code section 47, subdivision (b) (section 47(b)), the so- called "litigation privilege." A divided Court of Appeal reversed that judgment, ruling that the privilege did not apply to the acts of the law firm and Green for alternative reasons.
First, a majority of the Court of Appeal concluded that although the acts of defendants leading to the law firm's retention by the Cedar Village residents were necessarily "communicative," that aspect of their conduct was secondary. The dominant characteristic of defendants' actions was noncommunicative, and thus was not entitled to the protection of section 47(b). Alternatively, the majority concluded that the Legislature had established an exception to the litigation privilege when it enacted a statutory prohibition on attorney solicitation. That prohibition, embodied in Business and Professions Code sections 6152 and 6153, makes it unlawful to act as an agent in the solicitation of business on behalf of attorneys, punishing violations as a misdemeanor. Finally, the Court of Appeal held that defendants' conduct in allegedly soliciting Cedar Village residents as clients constituted unfair competition, for the redress of which the Unfair Business Practices Act (Bus. & Prof.Code, s 17200 et seq.) provided
plaintiff with a private right of action for damages and injunctive relief.
One justice dissented, reasoning that the litigation privilege of section 47(b) applied to the conduct in suit, that the acts of the law firm and Green, alleged in the amended complaint, amounted to inducing the Cedar Village residents to file a lawsuit and were thus protected by a separate immunity, and that the unfair competition statute did not confer a cause of action on plaintiff against defendants for solicitation. We agree with the dissenting justice, albeit for somewhat different reasons, that plaintiff's suit cannot be maintained.
As we explain, the acts of defendants alleged in the amended complaint were communicative within the meaning of section 47(b). They were thus within the scope of the privilege and immune from tort liability. We also conclude that because plaintiff's wrongful solicitation claim lacks an essential attribute of a malicious prosecution action and is brought against attorneys
representing litigation adversaries in a related proceeding, it is not maintainable in any event. Finally, we hold that plaintiff may not avoid the bar of section 47(b) by pleading his claim as one for injunctive relief under the unfair competition statute. We will accordingly direct that
this action be dismissed.
After the superior court denied his application for interim equitable relief and refused a request that the failure-to-maintain suit be consolidated with this action, Rubin filed an amended complaint, adding a claim against defendants for "unfair business practices" and narrowing the request for injunctive relief to encompass only acts of alleged harassment against him. The amended complaint also offered a more detailed account of the solicitation allegedly practiced by the defendants on the residents of Cedar Village.
For well over a century, communications with "some relation" to judicial proceedings have been absolutely immune from tort liability by the privilege codified as section 47(b). [FN2] At least since then-Justice Traynor's opinion in Albertson v. Raboff (1956) 46 Cal.2d 375, 295 P.2d 405, California courts have given the privilege an expansive reach. [FN3] Indeed, as we recently noted, "the only exception to [the] application of section 47(2) [now s 47(b) ] to tort suits has been for malicious prosecution actions. [Citations]." (Silberg v. Anderson, supra, 50 Cal.3d at p. 216, 266 Cal.Rptr. 638, 786 P.2d 365 (Silberg ).)
[FN3] (See, e.g., Drasin v. Jacoby & Meyers (1984) 150 Cal.App.3d 481, 485, 197 Cal.Rptr. 768 [abuse of process]; Ribas v. Clark (1985) 38 Cal.3d 355, 364, 212 Cal.Rptr. 143, 696 P.2d 637 [invasion of privacy and intentional infliction of emotional distress]; Pettitt v. Levy (1972) 28 Cal.App.3d 484, 487, 104 Cal.Rptr. 650 [negligence and negligent misrepresentation]; Carden v. Getzoff (1987) 190 Cal.App.3d 907, 235 Cal.Rptr. 698 [fraud]; Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 270 Cal.Rptr. 1, 791 P.2d 587 (Bear Stearns) [interference with contract claims]; see also Silberg v. Anderson (1990) 50 Cal.3d 205, 215, 266 Cal.Rptr. 638, 786 P.2d 365.)
In light of this extensive history, it is late in the day to contend that communications with "some relation" to an anticipated lawsuit are not within the privilege. Following Albertson v. Raboff, supra, 46 Cal.2d 375, 295 P.2d 405, numerous decisions have applied the privilege to prelitigation communications, leaving no doubt as to its applicability to the facts alleged in the amended complaint. (See, e.g., Block v. Sacramento Clinical Labs, Inc. (1982) 131 Cal.App.3d 386, 393, 182 Cal.Rptr. 438 [privilege applies to communications with "some relation to a proceeding that is actually contemplated in good faith and under serious consideration by ... a possible party to the proceeding"]; Rosenthal v. Irell & Manella (1982) 135 Cal.App.3d 121, 126, 185 Cal.Rptr. 92 ["potential court actions"]; Ascherman v. Natanson (1972) 23 Cal.App.3d 861, 865, 100 Cal.Rptr. 656 [privilege extends to "preliminary conversations and interviews" related to contemplated action]; Pettitt v. Levy, supra, 28 Cal.App.3d 484, 490, 104 Cal.Rptr. 650 [meeting of parties and counsel to "marshal their evidence for presentation at the hearing"]; Lerette v. Dean Witter Organization, Inc. (1976) 60 Cal.App.3d 573, 577, 131 Cal.Rptr. 592 [privilege extends to "steps taken prior" to judicial proceedings].) In short, we can imagine few communicative acts more clearly within the scope of the privilege than those alleged in the amended complaint, that is, meeting and discussing with Cedar Village residents park conditions and the merits of the proposed failure-to- maintain lawsuit, and filing the complaint and subsequent pleadings in the litigation.
Nor does the fact that defendants' communications with the Cedar Village residents necessarily involved related acts destroy the privilege. In concluding that the gravamen of the amended complaint involved noncommunicative conduct, the Court of Appeal relied on our opinion in Kimmel v. Goland (1990) 51 Cal.3d 202, 271 Cal.Rptr. 191, 793 P.2d 524. In Kimmel, we held that the litigation privilege of section 47(b) was inapplicable to the unconsented recording by plaintiffs (and subsequent transcription by their attorney) of telephone conversations with defendants, an offense under Penal Code section 632. We noted that defendants alleged that they were injured "from the taping of confidential telephone conversations, not from any 'publication' ... of the information contained in these conversations." (Id. at p. 209, 271 Cal.Rptr. 191, 793 P.2d 524, emphasis added.)
To further emphasize the distinction between communicative acts and noncommunicative conduct -- "traditionally ... a threshold issue in determining the applicability of section 47[b]" (Kimmel v. Goland, supra, 51 Cal.3d at p. 211, 271 Cal.Rptr. 191, 793 P.2d 524) -- we relied on our decision in Ribas v. Clark, supra, 38 Cal.3d 355, 212 Cal.Rptr. 143, 696 P.2d 637, in which the plaintiff also sought damages for eavesdropping. There, we also upheld the recovery of statutory penalties for violations of Penal Code section 632, noting that the right to such penalties accrued "at the moment of the violation [and] is not barred by the judicial privilege." (38 Cal.3d at p. 365, 212 Cal.Rptr. 143, 696 P.2d 637.) However, we applied the privilege of section 47(b) to bar plaintiff's tort claims for damages resulting from the testimonial use of the contents of the overhead conversation, finding "the purpose of the ... [litigation] privilege ... no less relevant" to plaintiff's claim. (38 Cal.3d at p. 364, 212 Cal.Rptr. 143, 696 P.2d 637.)
In Kimmel v. Goland, supra, 51 Cal.3d 202, 271 Cal.Rptr. 191, 793 P.2d 524, we also said that "our holding that the litigation privilege does not apply is limited to the injury resulting from plaintiffs' and [their attorney's] conduct. To the extent the complaint rests on [the attorney's] alleged communicative acts of 'counseling' and 'advising' his clients, the privilege is clearly operative." (Id. at p. 208, fn. 6, 271 Cal.Rptr. 191, 793 P.2d 524, emphasis added.) Judging from the allegations of the amended complaint, plaintiff's claims, however styled, are founded essentially upon alleged misrepresentations made by the law firm (and Green) to Cedar Village residents in the course of discussions over park conditions and the possibility of being retained to prosecute the failure-to-maintain action, and the subsequent filing of pleadings in the lawsuit itself. Whether these acts amounted to wrongful attorney solicitation or not, they were communicative in their essential nature and therefore within the privilege of section 47(b).
Having concluded that the acts at issue here are within the scope of section 47(b), and are thus protected from tort liability, we must determine the extent of that protection. As we explain, because plaintiff's claim of attorney solicitation lacks an essential feature of other derivative tort actions, restrictions affecting the maintenance of such actions -- limitations on the timing of such claims and the elements of the alleged wrong that must be established -- are inapplicable. Instead, given the gravamen of the amended complaint, we are led to conclude that plaintiff's claim is not maintainable at all.
The core policy protecting access to the courts underlying section 47(b) has led to the requirement that a derivative tort action seeking redress for communications within the privilege be delayed until the original suit is terminated in favor of the derivative plaintiff. Its maintenance is further conditioned on a heightened showing of abuse, amounting in effect to a species of bad faith, by the plaintiff in the initial suit. The filing of retaliatory claims has thus been limited by incorporating conditions borrowed from the venerable common law tort of malicious prosecution. (See, for example, Silberg, supra, 50 Cal.3d at p. 216, 266 Cal.Rptr. 638, 786 P.2d 365; Bear Stearns, supra, 50 Cal.3d at p. 1137, 270 Cal.Rptr. 1, 791 P.2d 587.) Circumscribed retaliatory actions are thus permitted as a means of redressing a wrong -- groundless litigation -- that has, partly but not entirely, already been established by the outcome in the original proceeding.
Here, however, the gravamen of plaintiff's complaint is not that the claims of the Cedar Village litigants are themselves groundless, but that the methods employed by the law firm (through the use of Green) in being retained as counsel for the residents amounted to solicitation, conduct the Legislature has made criminal. Because the alleged wrong which plaintiff seeks to redress is not the filing of an unjustified lawsuit but of soliciting others to file what are, to all appearances, potentially meritorious claims, the question is not whether the solicitation claim should be subject to conditions analogous to those governing malicious prosecution actions, but whether such a derivative claim should be maintainable at all. [FN4] A consideration of the administrative and criminal sanctions established by the Legislature for attorney solicitation, together with the remedies available to plaintiff within the scope of the failure-to-maintain suit itself, lead us to conclude that this action should be dismissed.