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Lawyers Who Give Sound Advice Can't Be 'SLAPPed Back'
New Jersey Law Journal
May 15, 2009
In a ruling that should make lawyers breath a little easier about counseling bellicose clients, the New Jersey Supreme Court held Thursday that a litigant who makes a full and honest disclosure to an attorney and believes he is given sound legal advice can't be held liable for lodging a so-called "SLAPP suit."
Equally important, the Court restated its reluctance to allow the adversary to lodge a "SLAPP-back" suit charging the plaintiff's attorney with malicious prosecution or abuse of process.
The justices said such an expansive remedy would chill a litigant's ability to pursue a plausibly meritorious claim. They said they preferred to leave it to the attorney-disciplinary system to safeguard against such abuses.
The unanimous ruling in LoBiondo v. Schwartz, A-86-87-07, brings to a close more than two decades of litigation between the owner of the Surf Rider Beach Club in Sea Bright, N.J., and his neighbor, Grace Schwartz, who fought the expansion of his business.
In 1987, when Schwartz and her daughters complained vociferously to local and state authorities that James LoBiondo was concealing his true plans, he sued them for defamation and won $193,300 in damages. An Appellate Division panel reversed, saying the Schwartz's protests were protected.
The Schwartzes filed a counterclaim against LoBiondo and his lawyers, Michele Querques and Steven Berlin of Middletown, N.J.'s Giordano, Halleran & Ciesla, alleging abuse of process and malicious prosecution -- in essence, calling his case a strategic lawsuit against public participation (SLAPP).
The "SLAPP-back" counterclaim was dismissed on summary judgment, but the Appellate Division, while affirming as to the lawyers, said the claim could proceed against LoBiondo because his defense raised a jury question -- namely, whether he acted in good-faith reliance on his attorneys' advice after disclosing all facts.
As to the lawyers, the unanimous Court agreed with the dismissal, saying they acted properly because, after weighing everything LoBiondo disclosed to them, determined in good faith that he had legal remedies available to him.
But the Court disagreed on the second point, saying that the Schwartzes failed to prove that LoBiondo was attempting to silence them, which the Court said was a requirement for a successful "SLAPP-back" suit.
Much of Justice Helen Hoens' opinion was devoted to setting down standards for determining whether a cause of action is a SLAPP suit or "SLAPP-back" suit and what the defenses to a "SLAPP-back" suit should be.
A person making a SLAPP-back claim, such as Schwartz, must show the original plaintiff lacked probable cause and malice. For the original plaintiff's lawyer to be liable, the SLAPP-back plaintiff must show that the lawyer knew the original plaintiff's claims lacked merit and had malicious intent. And the original plaintiff may rely on an advice-of-counsel defense against a SLAPP-back suit. "Any contrary rule would be unacceptable, because it would permit the claim for malicious use of process to succeed simply because the earlier matter was unsuccessful," Hoens said.
To raise the advice-of-counsel defense, however, "the original plaintiff must prove that he or she relied on counsel's advice and that the advice was given after a full and fair presentation to counsel of all relevant facts," Hoens said. "In this context, if any of the facts so reported to counsel were known to the original plaintiff to be false, the advice-of-counsel defense will not operate as a shield against the claim."
Hoens said the Court was wary of making it easier for persons filing SLAPP-back suits to go after the attorneys for the original plaintiff, especially if they were acting in good faith that the information on which they relied was presented fairly and truthfully.
"Our reluctance to permit nonclients to initiate litigation against attorneys who are performing their duties is grounded in our concern that such a cause of action will not serve its legitimate purpose of creating a remedy for a nonclient who has been wrongfully pursued, but instead will become a weapon to chill entirely appropriate zealous advocacy on which our system depends," she said.
Better instead, said Hoens, is to rely on disciplinary rules designed to punish attorneys who engage in frivolous or meritless claims. "Few members of the bar, knowing the force of the disciplinary sanctions under the RPCs or the potential costs they face under Rule 1:4-8, engage in the sorts of baseless litigation that would also call for the creation of a remedy available through a direct cause of action," Hoens said.
Giordano Halleran's lawyer, Mark Tallmadge of Florham Park, N.J.'s Bressler, Amery & Ross, says the Court recognized that the firm's conduct "was appropriate and zealous at all times."
LoBiondo's lawyer, Ocean Township, N.J., solo Thomas Hirsch, says Lobiondo is "obviously relieved this nightmare litigation is over after all these years.
"He never believed this was a SLAPP suit," Hirsch says. "He believed he was protecting his interests, not trying to silence someone else."
One of the Schwartzes' lawyers Montclair, N.J., solo Joan Pransky, did not return a telephone call seeking comment. The family's other attorney, Montclair solo Ira Karasick, could not be reached for comment.
