Nguyen v. PROTON TECHNOLOGY CORP.
99 Daily Journal DAR 427, 69 Cal. App. 4th 140, 81 Cal. Rptr. 2d 392 (1999)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The absolute litigation privilege under California Civil Code section 47(b) does not protect pre-litigation communications that are substantially extraneous and bear no reasonable relevancy to the subject matter of the threatened lawsuit.
Facts:
- Vinh Phuc Nguyen was employed by Proton Technology Corporation (Proton) as part of a work furlough program while on probation.
- Nguyen's actual criminal convictions were for shooting at an unoccupied vehicle and vandalism.
- In March 1996, Nguyen left Proton to work for a competitor, Excelsior Manufacturing, Inc. (Excelsior).
- Proton's CEO, Tony Wang, became concerned that Nguyen was soliciting Proton's customers for Excelsior.
- Proton retained attorney Fenn Horton III, who sent a demand letter to Excelsior threatening a lawsuit for unfair competition.
- In the letter, Horton, based on information from Wang, falsely stated that Nguyen had been in prison for "repeatedly and violently assaulting his wife."
- At Wang's suggestion, Horton also contacted Nguyen's probation officer to report Nguyen's alleged tortious business activities and leverage the probation officer's influence.
Procedural Posture:
- Vinh Phuc Nguyen filed a complaint against Proton Technology Corporation and its law firm in Alameda County Superior Court (trial court), alleging libel, slander, and other torts.
- The defendants' demurrer was sustained as to two invasion of privacy claims but overruled as to four other causes of action.
- After discovery, the defendants moved for summary judgment, arguing the communications were protected by the absolute litigation privilege under Civil Code § 47(b).
- The trial court granted the defendants' motion for summary judgment, finding the communications were privileged.
- Nguyen, as the appellant, filed a timely appeal of the summary judgment to the California Court of Appeal.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the absolute litigation privilege under California Civil Code section 47(b) protect defamatory and false statements about an individual's criminal history made in a pre-litigation demand letter when those statements are not reasonably relevant to the civil claims being threatened?
Opinions:
Majority - Haerle, J.
No. The absolute litigation privilege does not protect defamatory statements in a pre-litigation demand letter that are not reasonably relevant to the subject matter of the dispute. For the privilege to apply, a communication must have a logical relation to the anticipated litigation and not be extraneous to the action. The court found the connection between Nguyen's alleged (and falsely reported) criminal history of wife-beating and the civil claims of unfair competition to be tenuous and specious. The court rejected the argument that the conviction was relevant for potential witness impeachment, calling that rationale a stretch of credulity. The court emphasized that using an individual's criminal record in a purely civil dispute is fraught with peril and that the privilege cannot be used as a shield for vindictive and irrelevant personal attacks.
Analysis:
This decision significantly clarifies and narrows the scope of the absolute litigation privilege for pre-litigation communications in California. It establishes that the privilege is not a license for attorneys to include any defamatory statement in a demand letter, but requires that the statement have a "reasonable relevancy" to the legal issues at hand. The ruling serves as a caution to legal practitioners against using inflammatory, personal, or extraneous accusations as a tactical tool to intimidate opponents. By enforcing a meaningful relevancy standard, the court prevents the abuse of the privilege while still protecting communications genuinely aimed at resolving a dispute before litigation.
