In Sheldon Appel, supra, 47 Cal.3d 863, 254 Cal.Rptr. 336, 765 P.2d 498, the court unanimously endorsed the proposition that "in recent years ... the large volume of litigation filed in American courts has become a matter of increasing concern...." (Id. at p. 872, 254 Cal.Rptr. 336, 765 P.2d 498.) After canvassing the arguments supporting restrictions on the use of the malicious prosecution tort as a means of controlling excessive litigation and those contra, our opinion concluded that "the most promising remedy for excessive litigation does not lie in an expansion of malicious prosecution liability." (47 Cal.3d at p. 873, 254 Cal.Rptr. 336, 765 P.2d 498.)
Instead, we said that "the better means of addressing the problem of unjustified litigation is through the adoption of measures facilitating the speedy resolution of the initial lawsuit and authorizing the imposition of sanctions for frivolous or delaying conduct within that first action itself, rather than through an expansion of the opportunities for initiating one or more additional rounds of malicious prosecution litigation after the first action has been concluded." (Sheldon Appel, supra, 47 Cal.3d at p. 873, 254 Cal.Rptr. 336, 765 P.2d 498.) Our opinion noted that the Legislature had recently taken several steps in that direction by providing enhanced sanctions for litigation misconduct by attorneys. (Ibid.)
Considered from the perspective of Sheldon Appel, supra, 47 Cal.3d 863, 254 Cal.Rptr. 336, 765 P.2d 498, and assessed in light of the cost to judicial access, we find little in the way of countervailing policies furthered by the maintenance of this derivative action. We reach that conclusion by balancing the utility of permitting a litigant in a civil action to maintain an unlawful solicitation claim against the attorneys for the opposing party against the untoward effects of such a proceeding on the administration of civil justice.
It is not difficult to imagine the consequences likely to follow in the wake of a rule permitting the defendant in a civil action to institute parallel litigation seeking to impose liability on the attorney for the adverse party based on the circumstances surrounding the formation of the attorney-client relationship that led to the filing of the original suit. Apart from provoking yet another round of litigation, all of the evils identified in our prior cases as accompanying retaliatory suits based on litigation-related communications would be promoted by such a tactic. The impairment of colorable claims by disrupting access to counsel, the intimidating effect on attorneys of facing an almost certain retaliatory proceeding, the distractions inherent in requiring counsel to deal with defending a personal countersuit as well as the predicate action and, in general, the dampening effect on the unobstructed presentation of claims which we have identified as the central value supporting limitations on other derivative tort actions, apply with equal force to this suit. (See, e.g., Silberg, supra, 50 Cal.3d at p. 214, 266 Cal.Rptr. 638, 786 P.2d 365; Sheldon Appel, supra, 47 Cal.3d at p. 873, 254 Cal.Rptr. 336, 765 P.2d 498; Bear Stearns, supra, 50 Cal.3d at p. 1131, 270 Cal.Rptr. 1, 791 P.2d 587.)
On the other hand, given the regulatory and prosecutorial sanctions available to remedy attorney solicitation, together with those available to litigants within the scope of the predicate action itself, the utility of a proceeding such as this one is marginal. As noted, attorney solicitation through the use of "runners" or "cappers" is a crime, punishable as a misdemeanor. (Bus. & Prof.Code, ss 6152-6153; [FN5] see, e.g., Hutchins v. Municipal Court (1976) 61 Cal.App.3d 77, 132 Cal.Rptr. 158.) Attorneys who engage in solicitation also are subject to discipline by the State Bar. Rule 1-400 of the Rules of Professional Conduct of the State Bar imposes substantial limitations on the content and timing of communications by or on behalf of attorneys concerning availability for professional employment and explicitly prohibits solicitation that is not constitutionally protected. (See rule 1- 400(C), Rules Prof. Conduct of State Bar.) Under its rulemaking power, the State Bar has adopted specific standards for communications that presumptively violate the proscription on attorney solicitation. (See Drafter's Note, Deering's Ann. Rules of Court (1993 pocket supp.) Rules Prof. Conduct of State Bar, foll. rule 1-400; stds. adopted May 27, 1989.) In addition, the State Bar is charged by statute with the enforcement of the anti- solicitation statute and empowered to seek injunctive relief. (Bus. & Prof.Code, s 6030.)
We are unpersuaded. Attorney solicitation may indeed be perceived as a growing problem, entwined as it is with an ongoing trend toward loosening restrictions on attorney advertising and related controls on the marketing of legal services. (See, e.g., Bates v. State Bar of Arizona (1977) 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810; Shapero v. Kentucky Bar Assn. (1988) 486 U.S. 466, 108 S.Ct. 1916, 100 L.Ed.2d 475.) Assuming, however, for the sake of plaintiff's argument, that the rise in the volume of litigation is driven significantly by solicitation, it does not follow that we should adopt a remedy that itself encourages a spiral of lawsuits.
That, in effect, is what plaintiff seeks. A continuation of this action itself would add yet another layer of litigation. And that will not be the end of it. It is argued on behalf of plaintiff that if this action should itself fail on the merits, the law firm and Green will not be without a remedy. That remedy, according to one of the amici curiae, is nothing less than another malicious prosecution action, this one against the plaintiff by defendants. In short, the remedy urged upon us is, if anything, as bad as, or worse than, the illness it is said to cure.
We are certain, in any event, that a lawsuit such as this one is inconsistent with the choice made in Sheldon Appel, supra, 47 Cal.3d 863, 254 Cal.Rptr. 336, 765 P.2d 498, where we specifically discounted another round of litigation as an antidote for the fevers of litigiousness,
preferring instead the increased use of sanctions within the underlying lawsuit and legislative measures. Consistent with that view, litigants may invoke a range of remedies, some recently made available by the Legislature, "to facilitate the early weeding out of patently meritless claims and to permit the imposition of sanctions in the initial lawsuit...." (47 Cal.3d at pp. 873-874, 254 Cal.Rptr. 336, 765 P.2d 498; see, e.g., Code Civ.Proc., ss 128.5, 437c, 1038, 409.3.) For the plaintiff in this case, potential remedies include the recovery of attorney fees and costs should he be the prevailing party in the failure-to-maintain litigation, and reasonable
expenses including attorney fees if the residents are determined to have employed frivolous or delaying tactics in their suit. (Civ.Code, s 798.85; Code Civ.Proc., s 128.5.) Ultimately, of course, plaintiff is free to prosecute a malicious prosecution action, provided the requisite
conditions are pleaded and proven. [FN6]
Despite the applicability of section 47(b), plaintiff argues that he is nevertheless entitled to pursue injunctive relief because Business and Professions Code section 17204 grants any member of the public standing to seek such relief against "unfair competition." He points out that the courts have given the phrase "unfair competition" a broad meaning, embracing "any unlawful business practice...." (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 209- 210, 197 Cal.Rptr. 783, 673 P.2d 660, italics omitted.) Because it is made unlawful by Business and Professions Code sections 6152 and 6153, plaintiff argues, attorney solicitation qualifies as a species of unfair competition. It is thus enjoinable by "any person acting for the interests of ... the general public." (Bus. & Prof.Code, s 17204.)
We recently traced the history and purpose behind the unfair competition statute in Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 10 Cal.Rptr.2d 538, 833 P.2d 545, noting its origin as one of the so-called "little FTC Acts" of the 1930's, enacted by many states in the wake of amendments to the Federal Trade Commission Act enlarging the commission's regulatory jurisdiction to include unfair business practices that harmed, not merely the interests of business competitors, but of the general public as well. We concluded that the essence of the statutory unfair competition claim lies in its restitutionary nature. (Id. at pp. 1263-1264, 10 Cal.Rptr.2d 538, 833 P.2d 545.)
Although the act's coverage is indeed sweeping, embracing "'anything that can properly be called a business practice and that at the same time is forbidden by law'" (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 113, 101 Cal.Rptr. 745, 496 P.2d 817), we observed that "the Legislature deliberately traded the attributes of tort law for speed and administrative simplicity. As a result, to state a claim under the act one need not plead and prove the elements of a tort. Instead, one need only show that 'members of the public are likely to be deceived.'" (Bank of the West v. Superior Court, supra, 2 Cal.4th at pp. 1266-1267, 10 Cal.Rptr.2d 538, 833 P.2d 545.) [FN7]
The closest precedent in point is our decision in Ribas v. Clark, supra, 38 Cal.3d 355, 212 Cal.Rptr. 143, 696 P.2d 637. As noted, ante, at p. 832 of 17 Cal.Rptr.2d, p. 1048 of 847 P.2d, there the plaintiff sought damages from a defendant who had eavesdropped on a telephone conversation between plaintiff and his former wife and subsequently testified as to the nature of their conversation; the complaint sought damages for invasion of privacy and related torts as well as damages under Penal Code section 637.2, granting persons injured by eavesdropping a right of action. Defendant contended that her testimony was privileged under section 47(b).
In upholding her claim of immunity, we expressly considered "the applicability of Civil Code section 47 to statutory causes of action." (Ribas v. Clark, supra, 38 Cal.3d at p. 364, 212 Cal.Rptr. 143, 696 P.2d 637.) We reasoned that the policy of free access to the courts underlying the privilege was "equally compelling in the context of common law and statutory claims for invasion of privacy; there is no valid basis for distinguishing between the two. Certainly, nothing indicates that in enacting Penal Code section 637.2 the Legislature intended to immunize causes of action under that statute from the traditional privileges applicable to various forms of oral evidence." (38 Cal.3d at p. 365, 212 Cal.Rptr. 143, 696 P.2d 637.)
In an analogous context, the Courts of Appeal have considered variations on plaintiff's claim that the unfair competition statute grants him unqualified standing to seek injunctive relief against defendants notwithstanding the absolute bar imposed by section 47(b). These decisions have rejected the claim that a plaintiff may, in effect, "plead around" absolute barriers to relief by relabeling the nature of the action as one brought under the unfair competition statute. Notably in the case of actions arising out of an insurer's alleged bad faith refusal to settle insurance claims, formerly brought under the Insurance Code, several decisions of the Courts of Appeal
have held that the bar on such implied private causes of action, imposed by our decision in Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 301, 250 Cal.Rptr. 116, 758 P.2d 58 (Moradi-Shalal), may not be circumvented by recasting the action as one under Business and Professions Code section 17200.
In a typical case, Safeco Ins. Co. v. Superior Court (1990) 216 Cal.App.3d 1491, 265 Cal.Rptr. 585, the plaintiff sued an insurance carrier for its conduct in settling an automobile collision claim; he sought damages under the unfair practices provision of the Insurance Code (Ins.Code, s 790.03, subd. (h)) as well as compensatory damages, injunctive relief, attorney fees and punitive damages under Business and Professions Code section 17200. (216 Cal.App.3d at p. 1493, 265 Cal.Rptr. 585.) The Court of Appeal ordered the complaint dismissed, holding that Moradi-Shalal, supra, 46 Cal.3d 287, 250 Cal.Rptr. 116, 758 P.2d 58, barred not only the Insurance Code claims, but that "[section 17200 of] the Business and Professions Code provides no toehold for scaling the barrier of Moradi-Shalal.... To permit plaintiff to maintain this action would render Moradi-Shalal meaningless." (216 Cal.App.3d at p. 1494, 265 Cal.Rptr. 585.)
The Courts of Appeal reached the same result in Maler v. Superior Court (1990) 220 Cal.App.3d 1592, 1598, 270 Cal.Rptr. 222, and Industrial Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1093, 1096, 257 Cal.Rptr. 655, both of which held that implied private rights of action alleging bad faith claims against insurers, barred by our opinion in Moradi-Shalal, were not resurrected by casting the action as one for relief under the unfair competition statute. (See also Lee v. Travelers Companies(1988) 205 Cal.App.3d 691, 694-695, 252 Cal.Rptr. 468; Doctors' Co. Ins. Services v. Superior Court (1990) 225 Cal.App.3d 1284, 1289, 275 Cal.Rptr. 674.)
The reasoning underlying these results was succinctly summarized by Justice Kaus, writing for the Court of Appeal in a case in which the applicability of section 47(b) itself was at issue. In Thornton v. Rhoden (1966) 245 Cal.App.2d 80, 53 Cal.Rptr. 706, a decision applying the litigation privilege to a claim of abuse of process, he wrote that "The salutary purpose of the privilege [of section 47(b) ] should not be frustrated by putting a new label on the complaint. If it is desirable to create an absolute privilege in defamation, not because we desire to protect
the shady practitioner, but because we do not want the honest one to have to be concerned with libel or slander actions while acting for his client, we should not remove one concern and saddle him with another for doing precisely the same thing." (Id. at p. 99, 53 Cal.Rptr. 706, emphasis
added.)
That, in effect, is the result plaintiff seeks to achieve here. As noted, the conduct of defendants alleged in the complaint is clearly communicative and otherwise within the scope of section 47(b). It is thus absolutely immune from civil tort liability, including plaintiff's interference
with contract and related claims. To permit the same communicative acts to be the subject of an injunctive relief proceeding brought by this same plaintiff under the unfair competition statute undermines that immunity. If the policies underlying section 47(b) are sufficiently strong to support an absolute privilege, the resulting immunity should not evaporate merely because the plaintiff discovers a conveniently different label for pleading what is in substance an identical grievance arising from identical conduct as that protected by section 47(b).
We emphasize that the result we reach is propelled in part by the precise circumstances before us. Plaintiff is an adversary in the collateral failure-to-maintain action brought by the Cedar Village residents; the latter are represented in that action by the same attorneys who are
defendants in this action; and defendant Green is one of the plaintiffs in that same action. Apart from spawning yet another layer of litigation, placing in the hands of a litigation adversary a weapon with the tactical potential of a statutory unfair competition claim for injunctive relief
would promote all of the evils we have described above as accompanying retaliatory suits based on litigation-related communications. (See, ante, at p. 832 of 17 Cal.Rptr.2d, p. 1048 of 847 P.2d.)
Permitting plaintiff to proceed would produce other distortions. In the typical derivative action filed in the wake of allegedly tortious litigation-related communications, the aggrieved plaintiff had been a party in the antecedent proceeding in which the challenged communications occurred, and now seeks redress for injuries alleged to have resulted from them. Unless the conditions requisite to a malicious prosecution action are pleaded and proven, section 47(b) denies relief in such circumstances, not only because that result is deemed necessary to secure the greater interest in ensuring unhindered access to the courts, but also because, as we noted in Silberg, supra, 50 Cal.3d 205, 266 Cal.Rptr. 638, 786 P.2d 365, the original litigation itself provides an efficient forum in which to "expos[e] during trial the bias of witnesses and the falsity of evidence, thereby enhancing the finality of judgments and avoiding an unending roundelay of litigation, an evil far worse than an occasional unfair result." (Id. at p. 214, 266 Cal.Rptr. 638, 786 P.2d 365.)
In short, permitting plaintiff's claim for injunctive relief here would upset the carefully constructed balance between "the freedom of an individual to seek redress in the courts and the interest of a potential defendant in being free from unjustified litigation" (Oren Royal Oaks
Venture v. Greenberg, Bernhard, Weiss & Karma, Inc., supra, 42 Cal.3d at p. 1169, 232 Cal.Rptr. 567, 728 P.2d 1202) by effectively destroying the availability of the privilege in any case in which a litigation adversary was prompted to claim that the conduct of the attorney for the opposite party constituted solicitation. Whatever the ultimate outcome of the ensuing unfair competition lawsuit, additional litigation will have been fomented and the presentation of potentially meritorious claims stifled.
Our conclusion that plaintiff's tack of pleading his claim under the unfair competition statute does not override the litigation privilege in this case is reinforced by the fact that the policy underlying the unfair competition statute can be vindicated by multiple parties other than plaintiff
under the broad standing provision of Business and Professions Code section 17204. Apart from the overreached client, these litigants include the Attorney General, district attorneys, and certain city attorneys. (Ibid.) Importantly, members of the public who, unlike plaintiff, are not
adversaries in collateral litigation involving the same attorneys also have standing to pursue unfair competition claims under the statute. (Ibid.) Finally, as noted, ante, both the State Bar and prosecutorial authorities are authorized to pursue additional sanctions against attorney solicitation of the sort alleged in the amended complaint.
Given the importance of the policy favoring judicial access, and of the role played by the litigation privilege as a means of effectuating that policy, we conclude that plaintiff may not avoid the bar of section 47(b) by casting his claim as one for injunctive relief under the unfair competition statute.
In evident conflict with the policy of permitting members of the public to police the spectrum of "unfair competition" is the policy embodied in section 47(b), discussed above, of insuring litigants open access to the courts. Confronted with an apparent conflict between these two statutes, we must harmonize them insofar as possible. (People ex rel. Deukmejian v. County of Mendocino (1984) 36 Cal.3d 476, 488, 204 Cal.Rptr. 897, 683 P.2d 1150.)
The judgment of the Court of Appeal is reversed and the cause is remanded with directions to affirm the judgment of the trial court.
LUCAS, C.J., and MOSK and KENNARD, JJ., concur.
BAXTER, Justice, concurring and dissenting.
I concur in the majority's reasoning and result as to plaintiff's claim for damages. I respectfully dissent, however, from the majority's decision to the extent that it precludes plaintiff's claim for injunctive relief. In an attempt to impose its view of good public policy, the majority judicially repeals a detailed and considered legislative remedy. The result is even more anomalous than the approach. A person who is entirely unaffected by illegal attorney solicitation can bring an action to enjoin the misconduct. A person, however, who is directly harmed by an attorney's illegal solicitation has no direct judicial recourse. The result is even more troublesome on a broader level. In an era of increased budgetary and time constraints on this state's judiciary, the majority precludes effective enforcement of the ban on unlawful attorney solicitation.
The majority acknowledges that attorney solicitation, as defined in Business and Professions Code section 6153, is unlawful. (Maj. opn., ante, at p. 836 of 17 Cal.Rptr.2d, p. 1052 of 847 P.2d.) Business and Professions Code section 17203, in turn, provides that, "Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction." (Italics added.) We have explained that, "... 'unfair competition' is not restricted to deceptive or fraudulent conduct but extends to any unlawful business practice.... The Legislature apparently intended to permit courts to enjoin ongoing wrongful business conduct in whatever context such activity might occur...." (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 209-210, 197 Cal.Rptr. 783, 673 P.2d 660, second italics added.) Furthermore, Business and Professions Code section 17204 makes clear that virtually any member of the public may seek injunctive relief from unlawful business practice.
These statutes point to one simple conclusion. Unlawful attorney solicitation may be enjoined. For the most part, the majority does not contend otherwise, acknowledging that almost any member of the public has standing to bring an action to enjoin such misconduct. The majority's only exception is the person directly harmed by the illegal conduct, that is, the person against whom the litigation was unlawfully solicited. I shall explain why I cannot concur in this strange result.
1. The majority's view of public policy
I think it important to meet the majority's fundamental premise that sound public policy supports the majority's choice to disregard the statutory provisions for injunctive relief. The majority's view appears to be that this court may disregard a statute whenever doing so facilitates our personal policy preferences. This is not tenable. No matter how strongly this court might believe that good public policy should prevent injunctive relief, the Legislature has determined for good or bad that injunctive relief is available. "Our function is not to judge the wisdom of statutes." (Wells Fargo Bank v. Superior Court (1991) 53 Cal.3d 1082, 1099, 282 Cal.Rptr. 841, 811 P.2d 1025; Delaney v. Superior Court (1990) 50 Cal.3d 785, 804-805, 268 Cal.Rptr. 753, 789 P.2d 934.) What a statute should do is beyond our authority to decide. (New York Times Co. v. Superior Court (1990) 51 Cal.3d 453, 463, 273 Cal.Rptr. 98, 796 P.2d 811.) We have no valid basis on which to usurp the Legislature's role. Indeed, by disregarding Business and Professions Code sections 17203 and 17204, the majority also necessarily disregards Code of Civil Procedure section 1858, which states: "In the construction of a statute or instrument, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted...."
Moreover, the majority contradicts its own public policy argument in favor of unfettered illegal solicitation and the resulting access to the courts. To make its result more palatable, the majority acknowledges that the "broad standing provision of Business and Professions Code section 17204" allows "multiple parties other than plaintiff" to enjoin unlawful attorney solicitation. (Maj. opn., ante, at p. 838 of 17 Cal.Rptr.2d, p. 1054 of 847 P.2d.) The potential enforcers include everyone other than the party against whom the unlawful solicitation is directed: the Attorney General, district attorneys, certain city attorneys, city prosecutors, and most importantly, any member of the public who is not the soliciting attorney's adversary in the underlying litigation. Put in plain language, the result is that every member of the public -- except for one, the victim -- can seek injunctive relief. By acknowledging a potentially unlimited class of plaintiff-enforcers, the majority seems to undercut its preferred policy of
unfettered judicial access. [FN1]