In the news last week was the ruling by a California appeals court that a high-profile Hollywood lawyer’s settlement demand letter was not extortion. The Courthouse News Service Reported:
Lavely & Singer lawyer Marty Singer had sent Malin the letter in 2011 on behalf of his client, “Top Chef Canada” judge Shereen Arazm aka Shereen Koules.
As a general partner in one of Singer’s restaurants, Geisha House, Arazm was allegedly worried that Malin was misappropriating assets.
In his letter explaining the alleged embezzlement, Singer accused Malin of using “company resources to arrange sexual liaisons with older men such as ‘Uncle Jerry,’ Judge [name redacted] a/k/a ‘Dad’ (see enclosed photo), and many others.”
While the letter included redactions and blanks where names should be, Singer warned that “there will be no blanks in the pleading” he planned to file in Los Angeles Superior Court.
Malin then sued Arazm, Singer and others on Aug. 1, 2011. In addition to alleging extortion, the “Big Brother” star claimed that Singer and Arazm hacked into his emails and tapped his phones.
Philadelphia lawyer Maxwell Kennerly wrote about the case last week on his blog and agreed that Singer’s letter was not extortion. Kennerly also examined the Model Rules of Professional Responsibility (Rule 4.4) and concluded that the letter did not violate the rules of professional responsibility:
Was there a “substantial purpose” to Singer’s letter and the letter sent to Flatley? I believe so: the purpose was to fully inform the defendant as to what information the plaintiff believed would become public if the was filed.
I find Stingley’s tactics to be both unseemly and unprofessional. In my opinion, demands should be based on the facts of the case. If the defendant has other reasons to settle the case that are not directly related to the facts, then it is for the defendant to identify and weigh those reasons.
Even if ok, I don’t believe that threatening demand letters that have the taint of extortion will promote settlement. My guess is that more times than not, these types of letters turn a legitimate dispute into a no-holds-barred street fight.
Opinions can differ on this issue, but one could persuasively argue that it’s harder to settle cases when the defendant personally dislikes the plaintiff and his attorney. Letters like Stingley’s guarantee that this type of personal animosity comes into play.
What might be surprising to some defense lawyers is that many times the impetus for threatening demand letters is the plaintiff and not the plaintiff’s lawyer. I can’t count the number of times that I’ve had to explain to clients why I’m not going the take it personal route.
In general, plaintiffs greatly over-estimate the weight that the threat of litigation imposes on potential defendants. As a general rule, no one is ever going to settle your case just to keep it from the public domain.
I know we’ve all heard about the big alienation of affection case that settled pre-suit to keep it out of the public record. But cases like that are the exception, not the rule.
Also, how do threatening demand letters like Stingley’s make the profession look? Like a real profession? Or a bunch of mob goons? Some would say this doesn’t matter–a lawyer should push every limit to maximize his client’s prospects. I disagree. Lawyers taking this approach is a big reason that the public views attorneys unfavorably.
Making every case personal also is a sure path to a miserable life for a lawyer. You will never convince me that lawyers who make every case personal lead happy lives. Lawyers who do this are reviled within the profession and look miserable. To me, that’s no way to go through life.