More of the same, but with sanctions
This morning something — call it intuition; call it server logs — made me go back and look at what was going in with a case I blogged about in December of 2014, Philippe Charriol Ltd. v. A’lor Int’l Ltd. At the time, I wrote, “According to PACER, this litigation is still going strong. There have been, as far as I can tell, no substantive rulings.”
This was only half right, as should have been obvious from the rest of the post, the topic of which was the preliminary injunction application. That is about as substantive as you can get. But I was right in saying that the litigation was still percolating along, complete with what appears to have been an abortive interlocutory appeal to the Ninth Circuit. Indeed, the most recent docket entry on PACER is a telegraphic order administratively imposing costs in connection with those proceedings.
But the case does remain active and the court is doing the right thing by pushing the parties towards settlement. Still, really, to look at this PACER docket is to love civil litigation, especially of the fashion / IP kind, as LIKELIHOOD OF CONFUSION® surely does. And, as I will explain, it serves to reinforce a point I made years ago about why anti-SLAPP legislation seems like a good idea, but, when you see how it plays out, is probably worse than the problem it was meant to solve.
Now when I say this case is percolating along, I mean percolating along. What in the hopper? There have evidently been a host of actions which have all been consolidated into the same PACER docket at this point. But to refresh your recollection, as discussed in the December post, you’ve got, on the one hand, an April 2014 preliminary injunction granted to a plaintiff which, the court found, could not meet the likelihood of success prong with respect to any of the claims sounding in infringement of intellectual property. Instead, the injunction was granted on breach of contract grounds.
In November, the defendant moved to dismiss or, in the alternative, to strike certain sections of the complaint — quite logical, considering that the court signaled that it didn’t think much of them. Then last month, February 2015, the court granted a very odd application indeed: Plaintiff made an ex parte motion, in a case already growing long in the tooth, for, of all things, leave to file an overlong brief in connection with an intended “Omnibus Motion for relief arising out of Defendant A’lor International Limited’s serious and serial violation of the Court’s April 10, 2014 Preliminary Injunction.” Here’s the Order Granting in Part Plaintiff’s Ex Parte Motion to Exceed Page Limitation:
You can just imagine where this goes, of course, both sides being more than ably represented. But … ex parte? On a page limitation?
NB: We’ve never really had the discussion here on the blog about the special charms of representing fashion clients or even representing people being sued by them (as opposed to the free-floating concept of “being a fashion lawyer“). It’s for another time.
But, quick and dirty: They’re very passionate about their creative work, as you’d guess. That tends to result in things like, well, requests over-long briefs claiming serial violations of a preliminary injunction.
Now that I think about it… it’s kind of funny how these “they violated the injunction” motions seem to arise in cases where the grounds for that injunction were itself razor-thin. Perhaps that’s a kind of litigation tactic in and of itself meant to shore up an otherwise shaky affirmative claim by showing what bad guys the other side is and, presumably, getting a little bit further up the hill, leverage-wise.
It’s an odd approach, though, because if it fails, as it’s likely to do, the party that tries it will be reminded that it’s really pushing its luck with a judge who has already expressed skepticism about its case. And that just might blow up in its face, you know?
Anyway, besides all this, and besides the feint to the Ninth Circuit, there’s something I skipped in the chronology — that SLAPP bit I mentioned, which is the real point here. Besides seeking dismissal of what was clearly a flawed complaint, the defendants also made what is called, under California law, a special motion to strike the plaintiff’s October 2014 pleading under that state’s Anti-SLAPP law. The argument is as follows:
On October 24, 2014, PCI filed a Consolidated Complaint in which it alleges, among other claims, a California state law claim against A’lor for breach of the parties’October 1, 2010 Exclusive Jewelry License Agreement . . . . However, PCI premises this claim in substantial part on A’lor’s protected activity during litigation, namely resort to the American judicial system, which renders this particular claim subject to an anti-SLAPP motion. Specifically, PCI alleges A’lor “participat[ed]in a lawsuit implicating PCI’s intellectual property without providing any notice to PCI.” For that reason, under California’s anti-SLAPP statute, the claim must be dismissed unless PCI meets its burden to prove through admissible evidence a probability of prevailing on this claim.
I’m not going beyond this, i.e., discussing the merits. All I’m saying is, of course defendants filed this motion when one of the claims in the complaint enunciated — for whatever reason — the filing of a lawsuit as an element of a claim for relief. That ipso facto triggers California’s anti-SLAPP statute; it implicates a motion to strike; and it implicates the Holy Grail itself: attorneys’ fees.
Fees! These are the trophies, the ribbons, the very severed enemy heads of litigation. Who can resist their lure?
Every California practitioner who does not recognize this is not doing his or her job. The problem with that is, as I wrote in this 2010 post, that it’s just nuts, and it often achieves the exact opposite of the policy goal it’s supposedly promoting.
Remember, as every motion seeking relief under the law recites, “California’s anti-SLAPP statute summarily disposes of meritless causes of action intended ‘to chill or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances.'”
But, yes, there are times when a party has a legitimate legal claim based on the wrongful filing of a lawsuit. And, again, there are ample tools at the judiciary’s disposal with which to dispose of what should be disposable litigation. Yet while the case reporters demonstrate that judges have no problem imposing Anti-SLAPP sanctions without any regard for the big picture, the judiciary, with precious few exceptions, manifestly refuses to act against obviously improper litigation tactics, frivolous filings and demonstrable misrepresentations in court filings by counsel and lay persons alike.
Now Philippe Charriol Ltd. v. A’lor Int’l Ltd. is not an example of abuse at all. What it does demonstrate, however, is that in bet-the-company (or similar) litigation involving sophisticated counsel and well-funded litigants, SLAPP statutes are just another weapon to be deployed tactically in the litigation arsenal. Can it really be suggested that any constitutional rights were threatened by the filing of Philippe Charriol’s October 2014 claims, however meritless, in the midst of a turgid consolidated commercial dispute? Is anyone, in any way, seriously at risk of being deprived of the ability to petition the government for redress of grievances?
The remedial purposes of Anti-SLAPP don’t seem to have anything to do with IP and commercial litigation. And yet, based on the precedent, A’lor’s motion should win if the case is not settled, or if the motion is not otherwise disposed of informally. That’s why A’lor brought it; that’s good California lawyering.
The judiciary is not an exception to the general rule that the remedy for bad government is rarely more government; it is better government. Of course, judges demonstrate their deep understanding of this when they urge parties to settle cases, as the docket in Charriol v. A’lor suggests is happening there. Because when it comes to trying any of these things, whether by a judge, jury or arbitrator, there’s no slap in the face like the reality that hits when that’s over.