Yes, Virginia, Petitioning Activity Can Be Frivolous
The Appeals Court issued today issued The Gillette Company v. Provost, another anti-SLAPP decision. The case does not tread new anti-SLAPP ground, but it is remarkable for its clarity on a few issues, and is one of a small number of cases that address the second prong of the anti-SLAPP analysis (whether petitioning activity is devoid of reasonable basis in fact or law and caused actual injury) and find that it warrants dismissal. In a two-for-one, the decision, with far less clarity, also addressed the contours of the litigation privilege, drawing a somewhat dubious distinction between speech and conduct.
Gillette filed a lawsuit against former employees who it claimed gained access during their employment to Gillette's confidential information and trade secrets, and one of Gillette's competitors, ShaveLogic, which hired the former employees. Gillette alleged that the former employees misappropriate trade secrets and other confidential information to develop a wet-shaving razor for the benefit of their new employer, ShaveLogic.
ShaveLogic counterclaimed, alleging that Gillette filed its lawsuit in bad faith.
Gillette moved to dismiss, arguing that its filing of the lawsuit was petitioning activity protected by the anti-SLAPP statute, G.L. c. 231, section 59H, and was protected by the litigation privilege. The trial court (Sanders, J.) denied the motion. Gillette filed an immediate, interlocutory appeal.
The Appeals Court affirmed the trial court's denial of the anti-SLAPP motion. It confirmed, as the parties agreed, that the conduct at issue on the abuse of process claim was Gillette's petitioning activity and moved on to the second phase of the anti-SLAPP analysis, namely whether ShaveLogic proved by a preponderance of the evidence that the petitioning activity was without reasonable basis in fact or arguable basis in law and caused actual injury. The Court concluded that the trial court could have condluced" that ShaveLogic had met this burden and affirmed denial of the anti-SLAPP motion.
First, the Court confirmed that appellate review "is limited to determining whether the judge committed an abuse of discretion or other error of law" and also actually applied that standard. While this has been the standard of review since at least 2001 when the SJC established it in Baker v. Parsons, Courts often seem to give lip service to the standard: they recite it, cite Baker, but then engage in what looks an awful lot like de novo review.
The Gillette Court, however, not only cited, but stuck to the abuse of discretion standard and asked itself whether on the record before it, the trial court "could have" reached the conclusion it reached, namely that ShaveLogic, as the non-moving party met its burden to show the petitioning activity lacked reasonable basis in fact and caused actual injury.
The Court explained that ShaveLogic had put in affidavits of the former employees who all denied working on projects at Gillette involving the wet razor's elements and denied using any confidential information they obtained while working there. ShaveLogic also provided an affidavit from another individual who asserted he had invented the design for the wet razor a year before the former GIllette employees joined ShaveLogic and backed up the assertion with design drawings.
Gillette offered only an affidavit from its lawyer that stated Gillette had sent pre-litigation letters threatening a lawsuit and filed the lawsuit in good faith to protect its intellectual property and investment in confidential product development. But Gillette admitted at oral argument that various elements of the razor were in the public domain since 1919 and others were publicly known before the individual defendants joined Gillette. The Court agreed with the trial judge that the complaint was "bare bones" and contained "only conclusory allegations" about the individual defendants' misappropriated confidential information.
The Court found that on this record the trial "judge was within her discretion to find by a preponderance of the evidence that Gillette's complaint lacked a reasonable basis in fact."
Second, the case is noteworthy because it joins only a few other cases that not only deal with the second part of the anti-SLAPP analysis, but find the petitioning activity to be without reasonable basis. Ever since the SJC issued Fabre v. Walton in 2004 and even more so since it decided Benoit v. Frederickson in 2009, and reinforced the notion that competing affidavits will end with anti-SLAPP dismissal, it has been even more difficult for a party to overcome an anti-SLAPP challenge if the claims challenged were based on petitioning activity. The finding of petitioning activity was often the death knell for a case.
The SJC in Van Liew recently made it seem at least possible that non-moving party might meet the burden of showing petitioning activity was devoid of reasonable basis in fact or law, but dealt with political speech used as a basis for an anti-harassment order. Gillette deals with the issue in the context of a business dispute.
Finally, any anti-SLAPP decision that involves an abuse of process claim is worth reading particularly given concerns over the years that the statute had obliterated the claims.
Speaking of concerns of not obliterating an abuse of process claim, not quite as clear as its anti-SLAPP discussion is the Court's litigation privilege discussion. Alongside its anti-SLAPP motion, Gillette filed a Rule 12(b)(6) motion to dismiss, predicated in part on the litigation privilege. The Court confirmed that denial of a motion to dismiss based on the litigation privilege is immediately appealable as anti-SLAPP decisions are, but that review is de novo. The Court, however, accepted as "sound" the trial court's distinction between "speech" and "conduct" in the litigation privilege context and concluded that the privilege did not apply because it was not the statements themselves, but the conduct of sending letter and filing a lawsuit making the statements.
Applying the speech/conduct distinction, the Court affirmed denial of the counterclaim based on the litigation privilege. The Court explained that ShaveLogic did not contend that statements in a pre-litigation letter or in Gillette's complaint were defamatory or actionable themselves, but rather those "statements are evidence that might support ShaveLogic's claims of other misconduct", namely Gillette's conduct of sending pre-litigation letters threatening a baseless lawsuit and filing the baseless lawsuit.
The distinction between speech and conduct, while an understandable effort not to broaden the privilege and to keep alive the possibility of asserting claims based on litigation conduct, the distinction seems artificial: Of course sending letters and filing lawsuits is conduct, but liability for abuse of process attaches due to the content of the letters and the lawsuit. Under the speech/conduct distinction, the litigation privilege would bar a defamation claim based on the content of the letters and lawsuit, but would not bar other claims based on the exact same letters and lawsuit.
Another avenue the Court could have, but did not take, to reject the litigation privilege was within its acknowledgement that the privilege only attaches to statements preliminary to litigation "if they relate to a proceeding that is contemplated in good faith and that is under serious consideration" or are made in a good faith proceeding. The Court could have, given its other rulings, applied this exception here, but declined to "explore [the] precise contours" of these principles.