Should You be Suing for Civil Extortion?

Extortion
A few days ago I reported on the case of Miguel Mendoza v. Reed K. Hamzeh, which found that an attorney’s demand letter amounted to extortion since it threatened criminal prosecution if money was not paid. The threatened party turned around and sued for civil extortion, and defeated the anti-SLAPP motion brought by the attorney who sent the letter.

Writing about that case got me thinking (contrary to the belief that no thinking goes into my writing). I have over the years seen a number of letters from attorneys threatening criminal prosecution. Should I have been advising the clients who received these demand letters to sue for civil extortion?

Thankfully my research was streamlined by a reader who graciously pointed me to Fuhrman v. California Satellite Systems (1986) 179 Cal.App.3d 408, 426-428. That case, and others I found, held that a civil action for extortion does in fact exist, but that like most torts requires a showing of damages. More specifically in the case of civil extortion, the extortion money must have been paid in order for there to be damages. Thus, based on my limited research, in the case of a garden-variety demand letter from an attorney that steps over the line and threatens criminal prosecution, there would not be a viable action for civil extortion.

That does not necessarily get the attorney off the hook. Continue reading

Think Before You Demand — Miguel Mendoza v. Reed K. Hamzeh

 

If the threat of getting in trouble with the State Bar is not enough, maybe the threat of both civil and criminal actions will get attorneys to toe the line.

You know that it is an ethical violation for an attorney to threaten criminal action as a means to extract a civil settlement. For example, California’s Rules of Professional Conduct state that “a member shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.” (Rule 5-100.)

Then there are the criminal extortion laws:

Extortion is the obtaining of property from another, with his consent . . . induced by a wrongful use of force or fear. . . .‟ (Pen. Code, § 518.) Fear, for purposes of extortion ‘may be induced by a threat, either: [¶] . . . [¶] 2. To accuse the individual threatened . . . of any crime; or, [¶] 3. To expose, or impute to him . . . any deformity, disgrace or crime[.]’ (Pen. Code, § 519.) ‘Every person who, with intent to extort any money or other property from another, sends or delivers to any person any letter or other writing, whether subscribed or not, expressing or implying, or adapted to imply, any threat such as is specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such threat.’ (Pen. Code, § 523.)

Despite these prohibitions, some attorneys can’t resist throwing a threat of criminal action into their demand letters. They apparently think (if they give it any thought at all) that an express or veiled threat of criminal action will be protected under the litigation privilege, but that is not the case. If you include a demand for money in a letter that threatens to pursue criminal action, you have committed extortion, and as Flatley v. Mauro held, that is not protected speech because criminal acts are not protected.

The most recent example of this was discussed in the just published decision of Miguel Mendoza v. Reed K. Hamzeh. Continue reading