Gordon & Rees San Diego partner Michelle R. Bernard and senior counsel Allison L. Jones recently prevailed on an anti-SLAPP motion in San Diego County Superior Court. The win resulted in dismissal of malicious prosecution and abuse of process claims against a corporate defendant client in a contentious business litigation dispute. In light of the ruling, under California’s anti-SLAPP statute, Gordon & Rees’s client will be entitled to recover its attorneys’ fees and costs in bringing the motion.
The client provides educational training courses in the fields of electrical energy and telecommunications. In response to the departure of several former employees who formed a competing business, the client’s former counsel initiated a lawsuit in federal court seeking damages and injunctive relief arising out of the alleged theft of confidential proprietary business information by the former employees. Although the former employees were ordered to return proprietary materials to the client, the jury found against the client on other related business tort claims. However, the federal court declined to award attorneys’ fees sought in excess of $700,000 under the California Uniform Trade Secrets Act given the absence of any evidence that the client brought its claims against the former employees in bad faith or for an improper purpose.
After the federal court judgment was entered, the former employees and their competing company sued the client and its former counsel in state court seeking more than $2 million in alleged damages for malicious prosecution, abuse of process, defamation, trade libel and other related business torts.
In response to the complaint, Gordon & Rees filed an anti-SLAPP motion arguing that the business competitor’s malicious prosecution and abuse of process claims should be dismissed as an improper infringement of the constitutional right of petition. Gordon & Rees further argued that the companion state court claims were barred by principles of collateral estoppel and res judicata given that the federal court previously had ruled in response to the former employees’ attorneys’ fee motion that the client acted in good faith and with reasonable cause in pursuing claims against them.
Based on the federal court’s prior ruling, the competing company was barred from re-litigating the same issues in the state court action, resulting in dismissal of the malicious prosecution and abuse of process claims against the client and its former counsel.