Metropolitan News-Enterprise


Monday, November 20, 2017


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Anti-SLAPP Statute Barred Extortion Claim Against Attorneys, C.A. Declares

Justice Segal Says Bare Allegation of Criminal Threats Do Not Preclude Striking Complaint; Finds Litigation Privilege Applies


By a MetNews Staff Writer


The Court of Appeal for this district has held that a complaint alleging that attorneys tried to extort money from the plaintiff was properly stricken under the anti-SLAPP statute because any threats that were made came in protected prelitigation communications, the litigation privilege applied, and no unlawful conduct was established.

The opinion, by Justice John Segal of Division Seven, was filed Thursday and not certified for publication. It affirms an order by Los Angeles Superior Court Judge Michael Johnson.

The case stems from indictments by the Orange County Grand Jury on June 18, 2014, in two related cases on multiple counts of insurance fraud. The indictments alleged a network of healthcare providers paid kickbacks to doctors in exchange for writing prescriptions for workers’ compensation patients, then submitted fraudulent bills and liens to workers’ compensation insurance carriers.

Four of the carriers brought a qui tam action in Los Angeles Superior Court seeking disgorgement of profits and penalties. They were represented by the Los Angeles/Walnut Creek law firm of Knox Ricksen LLP.

Thomas E. Fraysse and Eric J. Danowitz, partners in that firm, discovered that of the some clinics that were involved were owned or operated by Larson, and suspected he shared in the kickbacks.

Plaintiff’s Allegation

Larson alleged that at various meetings, Fraysse and Danowitz, along with Newport Beach sole practitioner Stephen Lawrence Philipson, attempted to extort funds from him by threatening to accuse him of a crime unless he paid up.

In addition to seeking money from him, Larson alleged, Philipson demanded he persuade his medical providers to withdraw all liens and receivables flowing from certain workers compensation claims denied by insurance companies represented by Knox Ricksen.

Larson sued the firm and the three attorneys. The defendants responded by filing special motions to strike based on the anti-SLAPP statute, which Johnson granted.

Protected Activity Found

In the opinion affirming Johnson’s order, Segal found the conduct in issue satisfies the first prong of the anti-SLAPP statute, Code of Civil Procedure §425.16, in that it is protected activity.

“All of Larson’s causes of action arise from communicative acts taken by lawyers acting within the scope of their representation of clients in anticipation of litigation,” he said.

Responding to Larson’s contention that the anti-SLAPP statute does not apply because extortion is not protected activity, Segal pointed to the California Supreme Court’s 2006 decision in Flatley v. Mauro. There, it was held that prelitigation communications are removed from the protection of §425.16 only where “either the defendant concedes, or the evidence conclusively establishes, that the assertedly protected speech or petition activity was illegal as a matter of law.”

Allegations Denied

“Far from conceding Larson’s allegations of extortion,” Segal said, “the defendants categorically denied them.”

Not only did they dispute the contention that Philipson was an agent of Knox Ricksen, but asserted that he had been on the other side in past litigation and at the first meeting with Larson, was representing interests.

The test in Flatley was also not met, Segal said, because Larson presented no conclusive evidence the defendants ever threatened him.

With respect to the second prong of the statute—an inquiry as to whether the plaintiff can show a probability of success on the merit—Segal Larson can’t because the litigation privilege bars the action.

Larson failed to make a showing in connection with his allegation of an extortion attempt of such strength as to surmount the privilege, he declared, noting Johnson’s description of “wildly inconsistent and conflicting” statements on the plaintiff’s part.

Segal found no merit in Larson’s argument that the litigation privilege cannot pertain because there is no allegation and no showing of any “threat of civil litigation.”

The jurist wrote:

“In deciding whether Larson’s causes of action arise from protected activity, however, we focus not on Larson’s characterization of the defendants’ conduct, but on the defendants’ actual activities….Here, the defendants allegedly made certain statements in the context of settlement discussions with a potential defendant in a qui tam action filed shortly after or before the communications occurred. Such statements are protected by the litigation privilege.”

The case is Larson v. Fraysse, B270061.

Attorneys on appeal were Michael K. Blue and Neil M. Sholander of The Blue Law Group, for Larson; Harry W.R. Chamberlain II, Robert M. Dato and Efrat M. Cogan of Buchalter, for Thomas E. Fraysse, Eric J. Danowitz and Knox Ricksen LLP; and Peter Scalisi, Stephen Lawrence Philipson.


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