Professional Liability Client Alert: Anti-SLAPP Does Not Prevent a Claim for Civil Extortion Against a Lawyer Who Submits a Threatening Demand

In Mendoza v. Hamzeh (California Courts of Appeal – 2nd District, B239245), plaintiff filed an action against attorney Hamzeh, asserting causes of action for civil extortion, intentional infliction of emotional distress and unfair business practices. The claims were based upon a “demand letter” from attorney Hamzeh (on behalf of his client). The demand letter from Mr. Hamzeh sought payment of “damages” and cooperation in further investigation or face suit “as well as reporting him to the California Attorney General, the Los Angeles District Attorney, the Internal Revenue Services regarding tax fraud, the Better Business Bureau, as well as customers and vendors with whom he may be perpetrating the same fraud….”

Attorney Hamzeh filed an anti-SLAPP Motion claiming that the demand letter was a protected litigation communication. Upon receipt of the anti-SLAPP Motion, Mendoza’s counsel contacted defendant Hamzeh asserting the motion was frivolous and solely intended to cause unnecessary delay as the motion failed to even reference the significant California Supreme Court case of Flatley v. Mauro (2006) 39 Cal.4th 229, 305, holding that communications which constitute civil extortion are not covered by the anti-SLAPP statute as a matter of law. Defendant Hamzeh did not withdraw the anti-SLAPP Motion. The trial judge denied the anti-SLAPP Motion and awarded attorneys’ fees to plaintiff Mendoza.

The Court of Appeal, Second Appellate District, cites the clarity of the California Supreme Court’s opinion in Flatley finding the law does not contemplate the use of criminal process as a means of collecting a debt. Further, attorneys are not exempt from these principles in their professional conduct. The Rules of Professional Conduct specifically prohibit attorneys from threatening to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.

The anti-SLAPP Statute does not apply to the threats identified in attorney Hamzeh’s demand letter. Regardless of whether Mr. Mendoza committed any crime or wrongdoing, attorney Hamzeh’s threat to report criminal conduct to enforcement agencies and to Mr. Mendoza’s customers and vendors, coupled with the demand for money, constituted criminal extortion as a matter of law. The Appellate Court concludes that Flatley should be seen as a bright line rule. The anti-SLAPP statute does not apply to litigation communications which constitute criminal extortion as a matter of law.

As defendant Hamzeh did not meet the threshold obligation of an anti-SLAPP Motion, the court concluded it need not address the second prong of the two step analysis, whether the plaintiff (Mr. Mendoza) demonstrated a probability of prevailing on his claim.

In addition to attorney fees awarded by the Trial Court, the Court of Appeal ordered that plaintiff Mendoza was also entitled to attorney fees and costs on appeal in amounts to be determined by the Trial Court.

The lesson for practitioners is to avoid any threatened criminal, administrative, or disciplinary charges in any demand letters. When opposing an anti-SLAPP motion, consider raising the “frivolous or solely intended to cause unnecessary delay” standard of C.C.P. § 425.16(c), if applicable, in a pre-opposition request that such motion be withdrawn.

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April 25, 2013