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SAN JOSE — The Sixth District Court of Appeal on Thursday reinstated a malicious prosecution suit by former Siebel Systems Inc. CEO Thomas Siebel against a San Mateo County judge and a Bay Area lawyer. In 1996, Siebel sued Carol Mittlesteadt and E. Rick Buell II for allegedly pursuing a case they knew had no merit. The pair represented a female employee of San Mateo’s Siebel Systems, who claimed she was unfairly terminated and faced sexual discrimination at work. Siebel’s attorney, Maxwell Blecher of Blecher & Collins in Los Angeles, said Siebel should never have been sued because employment statutes specify that only companies, not individuals, can be charged in such cases. “This was a form of legalized extortion.� Sue the guy even though he can’t be held legally accountable,” Blecher said. “Tom [Siebel] has always thought that this isn’t legal conduct and they shouldn’t be able to get away with it.” The trial court initially threw out the case on the grounds that “Siebel had failed to achieve a favorable termination of the employee’s action against him, the parties having settled their dispute while the case was in the appellate court,” according to Thursday’s ruling. In reversing the decision, Justice Franklin Elia wrote that “Siebel obtained a favorable termination of the underlying action” — Siebel Systems settled for about $300,000 — and that there was no probable cause for Mittlesteadt and Buell to pursue wrongful termination claims. He was joined by Presiding Justice Conrad Rushing and Justice Eugene Premo. Blecher said he expects no problems in pursuing a case against Mittlesteadt, who was appointed to the bench by Gov. Pete Wilson in 1998. “At the time she was a lawyer, and that’s the conduct we’re looking at,” he said. Blecher will soon ask to set a new trial date. Defense attorney Tony Tanke said he will appeal Siebel v. Mittlesteadt , 04 C.D.O.S. 3906, to the California Supreme Court on the grounds that the case ended when Siebel settled out of court with his former employee. “A settlement ends the case, so you cannot and come back and sue for malicious prosecution,” Tanke said. “[Siebel] hates these lawyers, and he’s one of the richest men in the country and has unlimited funds to settle his vendetta. He ought to be sued by his shareholders for wasting their money on this case.” Siebel claims that Buell told lawyers for Siebel Systems that the case was “bogus” and that Mittlesteadt said she wanted Siebel named as a defendant in order to extract a quick settlement, given the company’s pending IPO. Siebel resigned as chief executive officer of the company on Monday but will retain the chairman title. Former IBM executive Michael Lawrie has since been named CEO. Siebel founded the company in 1993.

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