Parrish v. Latham & Watkins, S228277

Malicious prosecution: Tort: Interim adverse judgment rule: Bad faith: Malice: Frivolous claim: SLAPP: Ethics:

The common law tort of malicious prosecution originated as a remedy for an individual who had been subjected to a maliciously instituted criminal charge, but in California, as in most common law jurisdictions, the tort was long ago extended to afford a remedy for the malicious prosecution of a civil action. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 871 (Sheldon Appel).) The tort consists of three elements. The underlying action must have been: (i) initiated or maintained by, or at the direction of, the defendant, and pursued to a legal termination in favor of the malicious prosecution plaintiff; (ii) initiated or maintained without probable cause; and (iii) initiated or maintained with malice. (Ibid.; see Zamos v. Stroud (2004) 32 Cal.4th 958, 970 (Zamos); see also Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 297 (Soukup).)

A malicious prosecution claim will also lie if the defendant brought an action charging multiple grounds of liability when some but not all of those grounds were asserted with malice and without probable cause. (Crowley v. Katleman (1994) 8 Cal.4th 666, 671 (Crowley).) 

To establish liability for the tort of malicious prosecution, a plaintiff must demonstrate, among other things, that the defendant previously caused the commencement or continuation of an action against the plaintiff that was not supported by probable cause. We have held that if an action succeeds after a hearing on the merits, that success ordinarily establishes the existence of probable cause (and thus forecloses a later malicious prosecution suit), even if the result is overturned on appeal or by later ruling of the trial court. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 818 (Wilson).) This principle has come to be known as the interim adverse judgment rule.

The existence of probable cause is a question of law to be determined as an objective matter. (Sheldon Appel, supra, 47 Cal.3d at pp. 874, 875.). (…) A claim is unsupported by probable cause only if any reasonable attorney would agree that it is totally and completely without merit. (Wilson, supra, 28 Cal.4th at p. 817; accord, Sheldon Appel, at p. 885; In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650; see also Zamos, supra, 32 Cal.4th at p. 970.). This rather lenient standard for bringing a civil action reflects the important public policy of avoiding the chilling of novel or debatable legal claims. (Wilson, supra, at p. 817.) The standard safeguards the right of both attorneys and their clients to present issues that are arguably correct, even if it is extremely unlikely that they will win. (Ibid., quoting Flaherty, supra, at p. 650.)

In this case we are asked to decide whether the interim adverse judgment rule applies when a trial court had initially denied summary judgment, finding that a lawsuit had sufficient potential merit to proceed to trial, but concluded after trial that the suit had been brought in bad faith because the claim, even if superficially meritorious, in fact lacked evidentiary support. The Court of Appeal answered that question in the affirmative. We agree and affirm.

((…) Brought a malicious prosecution claim against FLIR‘s and Indigo‘s lawyers in the trade secrets case: defendants Latham & Watkins LLP (Latham) and Latham partner Daniel Scott Schecter. Defendants filed an anti-SLAPP motion under Code of Civil Procedure section 425.16 — that is, a special motion to strike a strategic lawsuit against public participation (SLAPP). (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.) To prevail on such a motion, a defendant must establish that the challenged claim arises from protected activity. (Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) If a defendant is able to do so, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. (Ibid.)).

((…) The Court of Appeal decided Roger Cleveland Golf Co., Inc. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660. In pertinent part, that case held that the one-year limitations period does not apply to a malicious prosecution suit filed against a former litigation adversary‘s attorney. (Id. at p. 677.) Instead, the court concluded, a two-year limitations period controls.)

((…) This court issued its decision in Lee v. Hanley (2015) 61 Cal.4th 1225, which (i) held that the one-year statute of limitations in section 340.6(a) applies to claims whose merits necessarily depend on proof that an attorney violated a professional obligation in the course of providing professional services (Lee, at pp. 1236–1237); and (ii) disapproved Roger Cleveland to the extent it was inconsistent with our opinion (Lee, at p. 1239). In particular, Lee criticized Roger Cleveland‘s premise that section 340.6(a) should be understood as a professional negligence statute (Lee, at p. 1239) without analyzing Roger Cleveland‘s ultimate conclusion that section 340.6(a) is inapplicable to claims filed against a former litigation adversary‘s attorney. The answer to the petition argued that Lee provides an alternative basis for upholding the trial court‘s grant of defendants‘ special motion to strike.

We granted the petition for review. We now conclude that the Court of Appeal was correct to hold that the interim adverse judgment rule applies. Because we conclude the malicious prosecution suit was barred on that basis, we do not reach the limitations issue.)

(…) We also recognized that the interim adverse judgment rule has its limits. The rule applies only to rulings regarding the merits of the claim, not those that rest solely on technical or procedural grounds. (Wilson, supra, 28 Cal.4th at p. 823.) And even where a ruling is based on the court‘s evaluation of the merits of the claim, the ruling does not establish the existence of probable cause if the ruling is shown to have been obtained by fraud or perjury. (Id. at p. 820.) While plaintiffs and their attorneys have the right to bring a claim they think unlikely to succeed, so long as it is arguably meritorious (id. at p. 822), they have no right to mislead a court about the merits of a claim in an attempt to procure a favorable ruling, and such a ruling can provide no reliable indication that the claim was objectively tenable.

(…) For purposes of the malicious prosecution tort, the existence of subjective bad faith is relevant to the question whether the suit was brought with malice, which, as our cases have made clear, concerns a litigant‘s subjective belief. (E.g., Sheldon Appel, supra, 47 Cal.3d at p. 874.) But it is a separate question whether, objectively speaking, defendants‘ suit was supported by probable cause. And as to that point, the trial court‘s finding of objective bad faith in the underlying action was not a finding that the action completely lacked merit.

(…) We have made clear that only those actions that any reasonable attorney would agree are totally and completely without merit may form the basis for a malicious prosecution suit. (Zamos, supra, 32 Cal.4th at p. 970.)

(…) We have made clear that a court determining whether a claim was supported by probable cause should rely on the facts known to the litigant accused of malicious prosecution. (Sheldon Appel, supra, 47 Cal.3d at p. 878.) Litigants, we have explained, need not attempt to predict how a trier of fact will weigh the competing evidence, nor to abandon their claims if they think it likely the evidence will ultimately weigh against them. (Wilson, supra, 28 Cal.4th at p. 822; see id. at p. 822, fn. 6 [litigant may have incomplete information at the outset of a case]; see also Soukup, supra, 39 Cal.4th at p. 292 [A litigant will lack probable cause for his action . . . if he relies upon facts which he has no reasonable cause to believe to be true. (quoting Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 164–165)].)

(…) As we held in Zamos, the tort of malicious prosecution . . . includes continuing to prosecute a lawsuit discovered to lack probable cause. (Zamos, supra, 32 Cal.4th at p. 966.) That means that there may be circumstances in which an interim ruling rendered at one point in the litigation will not, due to intervening circumstances, establish the existence of probable cause to continue the litigation.

The denial of summary judgment in the underlying trade secrets action established probable cause to bring that action. Because that action was supported by probable cause, Parrish and Fitzgibbons cannot establish a probability of success on their malicious prosecution claim. (Baral, supra, 1 Cal.5th at p. 384.) We thus affirm the judgment of the Court of Appeal.

(Cal. S.C., Aug. 10, 2017, Parrish v. Latham & Watkins, S228277).

Action civile dépourvue de chances de succès, poursuite pénale infondée : toutes deux peuvent faire l'objet d'une action en dommages-intérêts, en Californie comme dans la plupart des systèmes appliquant la Common law. Les quatre conditions objectives et subjective : l'action frivole doit avoir été initiée ou maintenue par le défendeur, un jugement défavorable au défendeur doit l'avoir terminée, l'action frivole n'était basée sur aucun motif raisonnable, et elle doit subjectivement avoir été initiée ou continuée avec l'intention de nuire.

Une telle action en réparation peut également être déposée si l'action qui en forme le substrat n'était dépourvue de fondement que dans certaines de ses conclusions.

La jurisprudence a précisé que si l'action "de base" conduit à un jugement favorable au demandeur à cette action, ce jugement favorable constitue la condition du motif raisonnable, même si ce jugement est renversé ultérieurement par le même Tribunal ou par une autorité supérieure. Ce principe porte le nom de "interim adverse judgment rule".

L'existence de la condition du motif raisonnable s'apprécie objectivement. Il s'agit d'une question de droit et non de fait pour le Jury. Une conclusion n'est pas supportée par un motif raisonnable si tout avocat raisonnable estime dite conclusion intégralement sans mérite. Le but est ici d'éviter de dissuader un plaideur de saisir la Justice dans des cas qui présentent des questions juridiques nouvelles ou qui présentent des arguments contestables, même si les chances de succès sont extrêmement faibles.

En l'espèce, la Cour doit déterminer si la règle de l'"interim adverse judgment rule" s'applique dans le cas où la cour de première instance refuse de prononcer un jugement sommaire, considérant que l'affaire présente des chances de succès suffisantes permettant un procès au fond, puis juge, après l'administration des preuves, que l'action a été déposée de mauvaise foi. La réponse donnée par la Cour est affirmative : la règle de l'"interim judgment rule" s'applique, barrant la route à une action subséquente en dédommagement.

(Est donné comme exemple une action en réparation dirigée contre l'avocat adverse. Celui-ci répond en déposant une motion anti-SLAPP. Dans ce cadre sont discutées deux jurisprudences récentes, l'affaire Roger Cleveland (2014) et Lee (2015), qui traitent en outre du délai pour déposer dite action en réparation (deux ans et non une année selon Roger Cleveland, peut-être une année selon Lee, la question restant ouverte car la présente espèce ne tranche pas à cet égard, se limitant à rejeter la présente action en réparation par application de l'"interim adverse judgment rule")).