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Philadelphia-based Greitzer & Locks has won a significant battle in its war with DaimlerChrysler Corp. now that a federal judge has ruled that the law firm can proceed with its defamation counterclaims against the auto giant over statements that accused the firm of engaging in “legalized blackmail” and trying to transform the legal system into a “rigged lottery.” The statements were made by DaimlerChrsyler’s general counsel at the time that the auto maker was filing a Dragonetti Act suit against the law firm for filing an allegedly frivolous class action suit in which the lead plaintiff was later found not even to own the car at issue. DaimlerChrysler sued three parties — Greitzer & Locks; the lead plaintiff in the suit, Brian Lipscomb; and Maryland attorney William Askinazi. Askinazi and Lipscomb moved to have the suit dismissed. But Greitzer & Locks’s lawyers, John D. Lewis and David D. Langfitt of Montgomery McCracken Walker & Rhoads, took a different approach by filing an answer with counterclaims that accused DaimlerChrysler of defamation and tortious interference with prospective contractual relations. In recent weeks, U.S. District Judge William H. Yohn Jr. has issued three opinions in the case, DaimlerChrysler v. Askinazi. The first held that DaimlerChrysler’s general counsel, Lewis Goldfarb, must answer to the defamation counterclaims. The second rejected the motions to dismiss filed by Askinazi and Lipscomb. ( The Legal Intelligencer incorrectly reported in a story on the second opinion that Greitzer & Locks had lost its motion to dismiss. In fact, only the other two defendants had filed such motions.) Now Yohn has issued a third opinion in which he ruled that the defamation and tortious interference counterclaims survive DaimlerChrysler’s motion to dismiss. DaimlerChrysler filed its wrongful use of civil proceedings complaint on Nov. 10, 1999. On the same day, it issued a press release titled “DaimlerChrysler Corporation Turns the Tables on Class Action Lawyers.” The press release quoted numerous statements made by Goldfarb, and several newspapers republished the contents of the press release or used it as a source for articles. Goldfarb also made statements that were reported in a Nov. 11, 1999, article in the Wall Street Journal and an article in the January 2000 issue of the American Lawyer. The press release stated that the wrongful use suit “was needed to recover the costs of defending this frivolous class action and to deter abuses by law firms that file unwarranted and baseless cases.” Goldfarb was quoted in the press release as saying “for too long, trial lawyers have been exploiting class actions, turning these lawsuits into a form of legalized blackmail. … they launch frivolous cases because they believe that just the threat of massive class actions filed in many states can coerce a company into settlement.” He was also quoted as saying “class action lawsuits should be used to resolve legitimate claims and not serve as a rigged lottery for trial lawyers” and that “the irony of frivolous class actions is that they dupe the very people they are supposed to serve — consumers. Not only do consumers rarely see a benefit, but in the end they also pay higher product costs from the millions companies spend in defense or settlement.” Greitzer & Locks alleged in its counterclaims that the purpose of the statements, the press release, and the publicity was to prevent a class representative with standing from agreeing to participate with Greitzer & Locks in a future suit against DaimlerChrysler. The defamation claim focused on four statements, saying DaimlerChrysler described the firm’s lawyers as lawyers who abuse the legal system by filing “unwarranted and baseless cases”; “who engage in ‘legalized blackmail’ by launching frivolous suits to ‘coerce’ Chrysler and others into settling claims”; who “seek to transform the legal system into a ‘rigged lottery”‘; and who “dupe their clients for their own financial benefit.” DaimlerChrysler’s lawyers argued that because all of the statements at issue involve matters of public concern and debate, the statements are privileged. Judge Yohn found that two of the four statements are actionable but that two others are “opinion” statements for which the factual basis was also included. Yohn found that the statement accusing the plaintiffs’ lawyers of abusing the legal system by filing frivolous cases was a legally protected opinion. “From the press release, it is clear that DaimlerChrysler believed Lipscomb to be frivolous because it was filed ‘even though the [allegedly defective] seats had the stamp of approval of the National Highway Traffic Safety Administration, and the plaintiff had never owned a DaimlerChrysler vehicle.’ Because the factual bases for DaimlerChrysler’s opinion are clear, a reader is able to evaluate them and accept or reject the opinion based on that evaluation. Thus, the opinion is not actionable despite its defamatory nature,” Yohn wrote. Likewise, Yohn found that DaimlerChrysler was expressing a protected opinion in stating that the Greitzer & Locks lawyers were lawyers “who dupe their clients for their own financial benefit.” “A reasonable person would understand this statement to express the opinion that the filing of Lipscomb was not beneficial to consumers. … From this statement, it is clear that the opinion is based on the perception that any benefit consumers received from Lipscomb, or any similar class action, is outweighed by the increase in product costs that results from the class defendants passing along to consumers the costs of defending Lipscomb. Because the basis for this opinion is clear, a reader is able to evaluate that basis and accept or reject the opinion based on that evaluation. Thus, the opinion is not actionable despite its assumed defamatory nature,” Yohn wrote. But Yohn found that Greitzer & Locks had a solid defamation claim over the statement that called its firm “lawyers who engage in ‘legalized blackmail’ by launching frivolous suits to ‘coerce’ Chrysler and others into settling claims.” A reasonable person, Yohn said, “would interpret this statement as an assertion that Greitzer & Locks filed Lipscomb not because it was attempting to adjudicate a legitimate claim but because it believed that, regardless of the merits of Lipscomb, it could frighten DaimlerChrysler into settling the case. Understood in this manner, the statement accuses Greitzer & Locks, and other unnamed others, of improper professional conduct.” Yohn rejected the argument that DaimlerChrysler was again expressing an opinion. “A reasonable person reading this statement would not understand the counterclaim defendants to be expressing an opinion. A reasonable person would understand the counterclaim defendants to be stating an objective fact about Greitzer & Locks’s motivation for filing Lipscomb. Moreover, even if this statement were an opinion, the basis for the opinion is not disclosed,” he wrote. In the same vein, Yohn found that Greitzer & Locks has the right to sue over the statement that its lawyers “seek to transform the legal system into a ‘rigged lottery.” A reasonable person, he said, “would understand this statement to imply that Greitzer & Locks expected to force DaimlerChrysler into a settlement in Lipscomb that would be unrelated to the merits of the case. … Because this statement tends to damage the reputation of Greitzer & Locks in the eyes of the community, it is defamatory.”

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