Los Angeles and San Francisco have lost an appeal in their attempt to sue a law firm notorious for filing voluminous lawsuits, effectively portrayed as disability access cases against small businesses. As per the ruling by a state appeals court last Friday, these cities will not be able to proceed with their lawsuits against the firm.
The central issue in this controversy is the principle of litigation privilege. According to this principle, the communication between a lawyer and their client is seen as privileged, guarded and immune from legal action, even in instances of perceived unfair competition. Thus, the litigation privilege provided the law firm with a shield against the accusations brought by the cities.
The law firm, Potter Handy, has reportedly filed thousands of such lawsuits citing denial of access. The cities’ legal teams had hoped to challenge these filings upon the consequences they have had on numerous small businesses. However, these hopes have now been quelled by the recent ruling from the California Court of Appeal, First District.
Interestingly, the court ruled that the litigation privilege not only protects from civil enforcement action under the Unfair Competition Law (UCL) but also conduct that may be subject to criminal action or state bar disciplinary proceedings under the California Business & Professions Code. Consequently, the court disagreed with the cities’ interpretations and applications of these laws.
Further details about the court’s rationale and reasoning can be found in the official court document, available here. The impact and repercussions of this ruling might be far-reaching and are yet to be fully realized. Both law firms and corporations will need to pay close attention to the evolution of this case law and its implications for their litigation strategies and practices.