Several important ethical considerations converge when the attorney is preparing to file a civil lawsuit. Under California law (the Rules of Professional Conduct, and Business & Professions Code), an attorney has an ethical obligation to maintain only claims and defenses that are just, and also not to encourage actions based on passion or corruption. In addition, a lawyer cannot continue employment that would require action without probable cause, or for the purpose of harassing or maliciously injuring any person, or where the claims or defenses are not warranted by existing law, or by a good faith argument for the extension or modification of existing law.
The tort of malicious prosecution is a claim brought with “increasing frequency” by disgruntled defendants against attorneys for opposing parties. Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010). The elements of the tort are (1) the favorable termination of an underlying case; (2) the filing of an action without probable cause; and (3) malice. Significantly, not only lack of knowledge at the inception of the case can suffice to create liability, but also continuing an action after the lawyer discovers it is without merit can support a claim. Zamos v. Stroud (2004).
A recent case Franklin Mint Company v. Manatt, Phelps & Phillips, LLP (2010), illustrates the importance of conducting sound detailed factual and legal analysis regarding a claim prior to filing the claim with the court, particularly where a lawyer is inclined to advance a theory supporting the extension, modification, or reversal of existing law. Where the attorney filed claims for trademark dilution and false advertising, the court held, first, that the trademark dilution claim lacked probable cause, stating:
a lawyer is not immune from liability for malicious prosecution simply because the general area of law at issue is complex and there is no case law with the same facts that establishes that the underlying claim was untenable. Lawyers are charged with the responsibility of acquiring a reasonable understanding of the law governing the claim to be alleged. That achieving such an understanding may be more difficult in a specialized field is no defense to alleging an objectively untenable claim. Nor is it a defense to say that an attorney is arguing for an extension, modification, or reversal of existing law when that attorney is asserting legal theories that simply ignore fundamental principles or which that law is based. That is especially true here, because the fundamental principles of trademark law – that a trademark must be used to identify a product or service and its source, and that a descriptive mark (such as a personal name) must acquire a secondary meaning such that the source-identifying meaning predominates over its descriptive meaning in the minds of the public – are clear and well established. Indeed, a proper understanding of those principles, and proper application of them to the facts of the underlying case, is neither difficult nor mysterious. Application of those fundamental principles establishes that no reasonable attorney would have thought the trademark dilution claim tenable. (Emphasis added).
The trial court described the premise underlying the trademark dilution claim as “absurd,” and falling “just short of frivolous.”
In addition, the court held that the false advertising claim also lacked probable cause, and that no reasonable attorney would have thought the theory tenable. The plaintiff Franklin Mint recovered attorneys fees of over $1.6 million it incurred for defending the original claims.
A primer on malicious prosecution issued in dissent by Justice Mosk points out the potentially chilling effects of the majority’s decision on zealous advocacy, reminding us that malicious prosecution is a “disfavored” tort. Justice Mosk writes that the sort of advocacy that led to the historic decision in Brown v. Board of Education may be “endangered” if attorneys lack probable cause to assert such claims for their clients, and so that courts must take into account the “evolutionary potential of the law.” While the majority rejects the argument that survival of a motion to dismiss demonstrates probable cause for the claim, Justice Mosk would have concluded that denial of the motion to dismiss the trademark dilution claim in the underlying action established the legal tenability of the claim as a matter of law, so that what the federal court judge described as “just short of frivolous” was instead “legally tenable.” He would also have concluded that viewing everything most favorably to the attorney defendant, the malicious prosecution plaintiff failed to meet its burden of showing the false advertising claim was factually untenable.
About Carole J. Buckner
Carole J. Buckner is a Partner and General Counsel with Procopio in San Diego, California. She is an AV Peer Review Rated sole practitioner admitted to the California State Bar in 1984. She holds a BA from the University of California at Berkeley (1980) and a JD from the University of California, Hastings College of the Law in San Francisco (1984). She is available for consulting and legal advice in the field of legal ethics and issues involving professional responsibility, and the law of lawyering.