Narrative Opinion Summary
This case involves allegations against Potter Handy, LLP and its attorneys by the district attorneys of Los Angeles and San Francisco, claiming that the firm engaged in unlawful business practices under California's Unfair Competition Law (UCL) by filing numerous Americans with Disabilities Act (ADA) lawsuits with false standing allegations to coerce settlements from small businesses. The primary legal issue revolves around whether the litigation privilege, which protects communications made during judicial proceedings, applies to shield Potter's conduct. The trial court sustained Potter's demurrer, ruling that the litigation privilege barred the UCL claim and provided no exceptions, such as those permitted under Business and Professions Code section 6128(a) for deceitful attorney conduct. The appellate court affirmed this decision, finding no legislative intent to create an exception to the privilege for UCL claims, even when filed by government entities. The court emphasized that while criminal sanctions under section 6128 remain enforceable, the litigation privilege effectively prevents civil actions under the UCL based on similar allegations. Consequently, the court ruled in favor of Potter, maintaining the protection offered by the litigation privilege and rejecting the plaintiffs' attempts to circumvent it via the UCL.
Legal Issues Addressed
Application of the Unfair Competition Law (UCL)subscribe to see similar legal issues
Application: The UCL claim filed by the People is barred by the litigation privilege, as the court found no legislative intent to override the privilege in UCL enforcement actions.
Reasoning: The UCL does not allow actions that are explicitly barred by other statutes, as established in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co.
Criminal Sanctions for Attorney Misconductsubscribe to see similar legal issues
Application: The court emphasizes that section 6128 permits criminal prosecution for attorney deceit, but this does not impact the privilege's applicability to civil claims like those under the UCL.
Reasoning: Section 6128 clarifies that the litigation privilege does not prevent criminal prosecution of attorneys for deceit or collusion intended to mislead the court or other parties.
Exceptions to Litigation Privilegesubscribe to see similar legal issues
Application: The court concludes that exceptions to the litigation privilege do not apply to the UCL claim, as the privilege does not extend to criminal prosecution under section 6128 but does bar civil actions like the UCL claim.
Reasoning: The litigation privilege does not apply to crimes like perjury or attorney deceit, and exceptions to this privilege are recognized only when they conflict with more specific state laws.
Litigation Privilege under California Civil Code Section 47(b)subscribe to see similar legal issues
Application: The litigation privilege applies to the People's UCL action against Potter, barring the claim despite allegations of filing lawsuits based on false claims to coerce settlements.
Reasoning: The litigation privilege, established in section 47(b), protects communications made in judicial proceedings, making them absolutely privileged regardless of malicious intent.