Thursday, January 14, 2010
Court of Appeal Revives Attorney’s Libel Action Against Former Firm
By SHERRI M. OKAMOTO, Staff Writer
The First District Court of Appeal yesterday revived a San Rafael attorney’s libel action against her former law firm based on an irate e-mail sent to the entire staff by the founding partner criticizing her performance and announcing her reassignment from a major pending case.
Division Five ruled in an unpublished decision that the complaint by Carolyn B. Burton, co-lead counsel in a large wage and hour class action against Wal‑Mart, was not a strategic lawsuit against public participation.
Burton was an attorney with the Furth Firm LLP, which represented plaintiffs in several wage and hour disputes with Wal-Mart, including a 2005 case in which the firm secured an award of $172 million for its clients and a $65 million fee award.
In the summer of 2006, Burton was co-lead counsel in two wage and hour class actions against Wal‑Mart, one pending in Massachusetts state court and the other consisting of over 20 class actions consolidated in multi-district litigation before the U.S. District Court in Nevada.
Burton alleged that firm founder Frederick P. Furth attempted to broker a global settlement that would have required Wal‑Mart to pay nearly all of the verdict and fees awarded in the California class action, while the remaining class actions would be settled for very little. Under the settlement, Furth would share in the fees from those cases.
Burton and co-counsel opposed the proposed settlement, which Burton claimed made Furth increasingly angry.
On Nov. 14, 2006 Furth sent an e-mail to all the firm’s employees announcing that the Massachusetts class action had been dismissed. He also complained that “NO ONE RUNNING THAT CASE…EVER BOTHERS TO LET ME KNOW WHAT IS GOING ON,” and reassigned all of the firm’s Wal-Mart matters to another attorney.
Burton claimed she was left without any work to perform after the Wal-Mart cases were transferred and was not given any new assignments.
Terminated After Thanksgiving
After her termination shortly after she arrived for work on the Monday after that Thanksgiving, Burton filed suit against Furth, the firm and others, asserting causes of action for libel, breach of contract, promissory estoppel, wrongful termination, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment and accounting.
A San Francisco Superior Court judge granted the defendants’ motion to strike the libel claim, finding that Furth’s e-mail contained statements made in connection with an issue under judicial review, barring Burton’s cause of action under the litigation and common interest privileges.
However, the Court of Appeal reversed in an opinion by Justice Mark B. Simons, who concluded that statements which simply mention judicial proceedings are not covered by the anti-SLAPP statute.
Simons said that in order for a statement to constitute protected activity, it must relate to substantive issues in pending or contemplated litigation and be directed to persons having some interest in that case. He also noted that the gravamen of the challenged e-mail related to matters internal to the firm, not the Massachusetts litigation.
“Reviewing the e‑mail as a whole, it is evident Furth referred to that decision to give context to his frustration and decision to reassign the cases,” Simons reasoned.
The justice explained that firms have the right to alter case assignments and terminate attorneys, but the exercise of those rights “does not necessarily amount to an act in furtherance of the right of petition” and the “assignment of attorneys who will work on a lawsuit does not necessarily implicate the public interest even though the public may have an interest in the lawsuit generally.”
Simons added that the e-mail was also not sufficiently limited to the persons who would have an interest in the controversy, since it was sent to everyone in the firm—including clerical, administrative and accounting personnel—and the defendants did not provide any justification for the scope of the distribution.
Presiding Justice Barbara J. R. Jones and Justice Terence L. Bruiniers joined Simons in his decision.
The case is Burton v. Furth, A122652.
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