Now this is interesting because
each time Laura Siegel cries poor and states that DC Comics have never paid
her, or her late mother, what they owe and thus have forced them to live in
abject poverty, DC then point to payments that have been made – usually six
figure annual payments. It would be hard
to live in poverty when the average person is in receipt of payments of in
excess of $125,000 per year. DC also
point the court toward money being held in trust for the Siegels, as per the
terms of the deal that they either did or didn’t strike in 2002, the amount being
an estimated $20,000,000+. It may be
chicken feed to DC Comics and Warner Brothers and it is certainly nowhere near
what should and could have been paid for the Superman character, but to the
rest of the world, it’s not an amount to be taken lightly.
I ask you this – would you
have settled? Toberoff says that DC have
shown no signs of settlement in his court filings, DC say that each time
they’ve tried to settle Toberoff and the Siegels have refused to entertain any
offers. Somehow I feel that the truth lies somewhere in the middle of this
mess. In the meantime, have a read of
what grown men of intelligence have to say before Judges of the Court of
Appeals. Despite all of the stuff about SLAPP, this does offer a great summary
of where each side see the case, as it stands and how it’s unfolded. And, as usual, there’s a lot more to come.
IN THE UNITED STATES COURT
OF APPEALS FOR THE NINTH CIRCUIT
PACIFIC PICTURES CORPORATION
ET AL., Defendants and Appellants,
v.
DC COMICS, Plaintiff and
Appellee.
ON APPEAL FROM THE UNITIED
STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA
THE HONORABLE OTIS D. WRIGHT
II, JUDGE CASE NO. CV-10 3633 ODW (RZx)
ORAL ARGUMENT
HEARD BEFORE NINTH CIRCUIT
PANEL: REINHARDT, THOMAS, SEDWICK
NOVEMBER 5, 2012
PASADENA, CALIFORNIA
NOVEMBER 5, 2012
RICHARD
B. KENDALL, ESQ.: May
it please the Court. Richard Kendall on
behalf of the Defendants and Appellees.
The first issue on this
appeal is whether the California
anti-SLAPP statute applies to DC Comics' state law claims.
They allege that Mr.
Toberoff induced and assisted the heirs of the Superman authors to breach their
agreements and instead to pursue their termination rights.
These claims of breach of
disruption and damage all flow from the heirs' very efforts to terminate DC's copyrights.
If you delete those
allegations from this complaint, there would be no claim, there would be no harm,
there would be no breach, there would be no interference because there would be
no breach.
The anti-SLAPP law therefore
covers the conduct that is alleged, and the District Court was wrong to fail to
appreciate that this is protected activity.
The policy of the anti-SLAPP
statute is to prevent defendants who have bottomless pockets from bankrupting
-- from litigating to the death a plaintiff who simply wants to pursue her
government given rights.
And what's happened here is
that two years and six months into this litigation we are still litigating a
case that has never addressed the lack of merit because of the very clear
affirmative defense of the Statute of Limitations and very clear affirmative defense
of liquidate -- litigation privilege and other defenses as well that this Court
de novo as a matter of law and the District Court should as a matter of law have
determined about this case with no merit.
The argument that is made by
the other side is, "No, no, no, this case is not about pursuing termination
rights."
But I ask the Court, if you
took out all of the places in the complaint, and there are many, where the termination
rights pursued by these heirs as referenced, what would be left? Why would we be here?
Do we think that Warner
Bros. and the subsidiary DC Comics has brought year upon year of litigation 1n
this case, in the case you're about to hear in Siegel simply because they are
fine with termination?
No. The whole issue here is whether the heirs can
terminate their rights.
And it is Mr. Toberoff's
assistance, inducement, whatever they want to allege that it is, that they're
complaining about, but only because it resulted in first the Shuster heirs and
later the Siegel heirs deciding they did not want to accept what DC was offering;
instead they wanted to pursue the rights that Congress enacted for them to
level the playing field.
The fourth claim, which is
the claim that DC alleges that Mr. Toberoff interfered with the 1992 contract,
alleges a breach of a contract that they claim means that the Shuster heirs had
given away their termination rights in 1992 and therefore were not allowed to
pursue termination when they met up with Mr. Toberoff. Mr. Toberoff provided financial assistance
and legal assistance to enable them to pursue those rights.
The pursuit of those rights,
as in the Mindys Cosmetics case, which is a trademark case, and as in all the
other cases that we cited where there is an effort by a litigant to pursue
rights either through settlement or through litigation, that's protected
activity.
Script that protected
activity out, as I've said, and there's no case left.
The only breach, the only
possible breach that was induced here, the only possible disruption that could
be claimed here of the 1992 agreement is the pursuit of termination rights.
As a matter of law, their
argument is wrong, but there's no question in addition to that that it's protected
activity.
Now move on to the fifth
claim. That's the claim as to the Siegel
heirs.
In this case the Siegels
have been arguing with DC about the termination that they had filed in 1997. From 1997 until 2002, for all that period of
time, without Mr. Toberoff being involved at all. All of those arguments, all of their dealings
with DC occurred against the backdrop of threatened litigation because when the
Siegels had in 1997 terminated, they were immediately met with a threat by DC
to go after them, to invalidate their
termination.
And there was a tolling agreement
in 1999, again showing that this was a matter that was inevitably going to go
to litigation if they didn't settle.
The complaint that is made
is that after the Siegels had rejected the long form settlement agreement that
was proposed-- and of course you'll be hearing more about this in the companion
appeal -- and after they had gone off looking for replacement counsel, as it says
in the record, they were searching for counsel even in March of 2002, they had
gone after Jerry Spence to see whether Jerry Spence would represent them, there
was very angry correspondence written by
the very elderly Mrs. Siegel, who unfortunately is not with us today because
this endless battle finally ended with her dying before she could see the end
of it, and what happens then is that they allege that Mr. Toberoff in the fall of
2002 and late summer induces the Siegels not to settle, not to take what DC is
offering but to try for something better.
That is protected activity. Solicitation of a client is protected
activity. We cited cases on that proposition. The leading one is the Taheri Group case.
Funding litigation is
protected activity. Engaging in settlement
discussions is protected activity.
And all of these challenged
activities, in addition to being protected, are barred by the Statute of
Limitations. The three-year Statute of
Limitations is the one that governs the fourth and fifth claims for interference.
Now, it is clear on the face
of the pleadings and it is certainly clear in the record that in 2006 at the
very latest DC was on inquiry notice of all of its claims in the fourth and the
fifth claims for relief.
The fourth claim, DC
received in discovery in 2006 the agreements between the Toberoff corporate entities
Pacific Pictures and the Shuster heirs that allegedly interfered with DC's
rights.
They had what they're
complaining about in 2006. They did not
bring this case until May of 2010.
They sat on that.
Why did they sit on it?
Well, we can only speculate,
but it may have had something to do with Judge Larson's summary judgment decision
in the companion case you're about to hear and their desire to keep this
litigation going as long as they could to have something else to do to make it difficult
for the Siegel heirs to…
JUDGE
REINHARDT: The Statute of
Limitations bars their case.
Have you made a motion to
dismiss on the basis of -- or summary judgment on the basis of the Statute of Limitations?
RICHARD
B. KENDALL, ESQ.: Well,
that was part of our anti-SLAPP motion, your Honor. And the anti-SLAPP statute
works like a reversal.
JUDGE
REINHARDT: Why do you need
-- even need an anti-SLAPP motion if you've got a clear basis for dismissal or
judgment on the Statute of Limitations?
RICHARD
B. KENDALL, ESQ.: Because
-- we could do that, your Honor, and in fact we had a motion to dismiss that
was pending. But the anti-SLAPP statute
is supposed to go quickly and it's supposed to go first.
And in fact, although the
State Court rule does not bind the Federal Court, you know, in State Court it's
90 days it has to be decided. We
expected that this would move much more quickly.
And then after the District
Court denied the anti-SLAPP statute, there is case law that says that all matters
on the merits should then be brought to a halt while the immunity that's
supposed to be conferred by anti-SLAPP goes up on appeal.
Again, in the State Court
the appeal is an automatic stay.
In the Federal courts, as in
the qualified immunity cases, when there's a denial of qualified immunity, that
brings to a halt the merits reviews.
And also we had a desire to
-- Since we fully recognized these issues were going to all end up going up on
appeal, because the nature of this litigation, not to have piecemeal appeals.
JUDGE
SEDWICK: Let me just see
if I understand it. If -- if you were
unsuccessful with your arguments about the anti-SLAPP statute, then this would
go back to the Court and you feel you would win on the Statute of Limitation
grounds, as least as to the fourth and fifth claims?
RICHARD
B. KENDALL, ESQ.: We
believe that that's what should happen, but we do not believe we should have to
wait for that to happen, your Honor, because the policy of the anti-SLAPP
statute is to bring the matter to an end.
And in this case, unlike the
last case where Judge Thomas was asking -- the District Court didn't decide
that issue, should we remand to the District Court, here we have a de novo
issue that should be decided by this Court in the first instance. And in fact, that is routinely what happens
in the courts, the California
courts and the Federal courts.
So even though the District
Court has not decided the matter, we cited a Fifth Circuit case to the Court,
Henry against Lake Charles American Press, in which this Court -- a Court of
Appeal, owing to the fact that it's a de novo issue, there's no need to – to to
have any more discovery. There's no need
for anything other than a resolution of the very simple question on both the
fourth claim and the fifth claim and also the sixth claim, that owing to when
it is indisputable that DC had all the information necessary to know it had a
claim, maybe not all the facts that have piled up since, but that's not the
issue because the claim accrues when you're on inquiry notice.
JUDGE
SEDWICK: So are you
saying then that we could simply rule in your favor based on the Statute of Limitations,
that this Court could do that?
RICHARD
B. KENDALL, ESQ.: Yes,
absolutely. There's no question
whatsoever about that. You could also do
it on the basis of other pure issues of law that are presented here, including
the litigation privilege, and with respect to the 1992 agreement, the
misreading as a matter of law of the copyright statute. But you needn't go to those other issues
because the Statute of Limitations disposes of all of the claims here.
JUDGE
SEDWICK: The sixth claim
as well as the fourth claim?
Now, first of all, the sixth
claim is a four-year Statute of Limitations, but under the unfair competition
law in California, that's -- there's no discovery rule whatsoever.
So with respect to the
claims in the sixth claim relating to the 2001 and 2003 agreements between the
Shusters and the Toberoff entities, those claims accrued no later than 2003,
and they had expired by 2007. They were
long gone when this case was filed.
There's also a claim
relating to the 2008 so-called consent agreement, which is the, or what the magistrate
described as the sort of Koufax/Drysdale collective negotiation agreement.
The argument that is made is
that that agreement is somehow unlawful under the copyright statute because of
the way that the termination windows work.
That is clearly wrong as a
matter of law.
There's no question that
they have misread Section 304(c)(6)(d). You
don't need to dig into the record at all to determine that that provision did
not give DC any exclusive and enforceable right that would have prohibited the
Shuster and Siegel families from banding together and decide that neither one
would settle without the other.
The statute does no such
thing. The statute doesn't compel the
terminating parties to negotiate with the terminated grantee, here DC Comics,
and it doesn't forbid those terminating parties from negotiating with anyone
else.
All it requires is that
before the Shusters and the Siegels could have actually transferred the copyright,
which there's no basis whatsoever to think occurred in these 2008 consent
agreements, they couldn't transfer the copyright, but banding together there's
-- there's absolutely nothing in the copyright statute that prevents that.
As to that, though, even if
the Court didn't want to reach that pure issue of law, it's also clearly litigation
privileged for the two families to band together for purposes of a mediation,
which is what they did, and for the ongoing purposes of these litigations, which
they've done.
Your Honor, I am seeing that
I'm just about out of time.
If I can reserve at least a minute or two for rebuttal.
JUDGE
REINHARDT: We'll give you a
minute or two.
RICHARD
B. KENDALL, ESQ.: Thank
you very much.
MATTHEW
T. KLINE, ESQ.: Good
morning, your Honors.
May it please the Court. My name is Matt Kline. I represent DC Comics.
The SLAPP statute does not
apply here for one simple reason.
The focus of California law in
analyzing a SLAPP claim is whether the claim at issue targets is based on or
arises out of protected activity.
And I'd like to walk you
through the three claims here.
The fifth claim is based on
the following allegation. Marc Toberoff
makes a false representation to the Siegel heirs in August of 2002 that he has
a $15 million hard offer in hand from a billionaire investor, and if the
Siegels take that offer, they can sell their rights to him and his company,
Marc Toberoff, Ari Emanuel, a business agent, and IPW Worldwide and this
unnamed investor.
That was not the
solicitation of a legal client. That was
not a request that litigation be initiated.
That was not done in the context of litigation. There was no litigation between the Siegels and
DC. They had an existing contractual
relationship.
And Mr. Kendall says to you,
"Please read out from the complaint all of the later conduct, all the later
litigation and all the later settlement.
Please do so."
How were we harmed when that
happened? How was DC harmed in 2002 when
that happened?
Well, for one, it had paid
$250,000 to the Siegels as a good faith advance payment in connection with that
settlement agreement. That $250,000 was gone.
And what have we learned
from the California
cases about whether that's protected activity or not?
The cases of Haneline and
Newport Builders are directly on point.
Newport Builders holds that
if two parties are in a settlement conference and there the defendant was a former
party to that litigation, the defendant shows up at their two-party settlement
conference and makes fraudulent business offers, actually to both parties, trying
to get one of them to sell him valuable rights, he later is sued for those
fraudulent business offers, and he's even injected in actual court -- court-appointed
settlement process, the California Court of Appeal holds that that intervention
in that settlement process is not protected by SLAPP or the litigation
privilege.
Why is that?
Because we don't want people
intruding on these types of processes and then using the cloak of the litigation
privilege or even their role as a lawyer, as Mr. Toberoff has done, to say that
that conduct is protected.
And to be very clear, if you
look at the offer that he's made, and it's testified to in Mr. Marks' deposition
and the Marks memo that we've asked you to review in connection with this
appeal, he's not saying to them, "Please hire me as a lawyer." He's saying, "Please sell me your rights
for $15 million."
And under the clear case
law, Haneline is another classic example, you have two part- -- a party, a
buyer and a seller. The seller is about
to sell a valuable piece of property to the buyer. A third party comes along and says,
"Hey, don't sell that property to the buyer. Let's go out and initiate some litigation. In
fact, I have a lawyer here. Please come
hire my lawyer, and we'll go out and we'll file a lawsuit and our rights will
become much more valuable and we can find another buyer." That's the Haneline case.
And they say in their
appeal, "Hold on a second. DC, you
haven't been harmed."
Again, let's look at the
fourth claim, the Shuster claims.
We have been paying the
Shusters $600,000 over the course of years.
We would have been damaged had Marc Toberoff never filed a termination
notice. We would have been damaged had
they never initiated litigation.
And to be clear, the
Shusters never did initiate litigation.
And what does the Haneline
case say?
The Haneline case says,
"You can get the" – in a tortious interference case like this where
somebody says, "Hey, don't honor your existing deal. Come with me.
Initiate litigation," what does the Haneline case say?
It says two things. Number one, you can recover the delta between
the original contract you had and this new contract you had to go out and
enforce.
There is $425,000. And it says a second very important thing. It says you can also get as consequential damages
in that case the attorneys' fees that you've spent having to pursue your
rights.
And Mr. Kendall urges you,
he says, "Read out all of the so-called protected activity," the
probate action that they filed, none of which would ever accuse Mr. Toberoff,
is the basis for our fourth, fifth and sixth claims. He says, "Read all that out."
That's fine. Under the well-established California case law, we prevail in this
case.
And they say, "Well,
hold on a second. You do seek attorneys'
fees and costs as one form of damages, and you can't do that under California law."
Well, the Cozen O'Connor
case, 192 Cal.App. 4th 1392 says, and I quote, "The remedy sought does not
affect whether the claim is based on protected activity." The Marlin case says the exact same. And the Sutter case says the exact same.
And why is that?
Because California has a special pleading doctrine
called "the primary right of action," and the remedies you seek do
not affect what the primary right
And here under the fourth
claim-- I'm sorry under the fifth claim, we are suing Mr. Toberoff for this
fraudulent business offer.
And discovery in the case
has proven this fraudulent business offer occurred.
It has proven that there is no billionaire
investor; it has proven that there was no $15 million.
And looking at the fourth
claim, for example, they say SLAPP applies because in this joint venture agreement
in which Mr. Toberoff made the choice, "I don't only want to serve as your
lawyer. I want you to give me 50 percent
of your copyrights," they say the litigation privilege should apply, they
say that SLAPP should apply because down the road he actually in fact did act
as their lawyer.
Well, that's not what the
case law holds.
The case law holds that when
you have an admittedly illegal contract -- this is their own case.
This is the Huntington Life
Sciences case.
That case holds when you
have an admittedly illegal act, when the conduct complained of was illegal,
then as a matter of law the defendant cannot make a prima facie showing that SLAPP
applies.
Now, where do we have those
admissions in this record?
You have Mark Peary, one of
the defendants in this case, one of the signatories to the PPC agreements; he
testifies under oath that Marc Toberoff told him -- this is at SER 512 -- the Pacific
Picture agreements were illegal.
In their first filings in
this case, defense counsel and defendants admitted this is at and I'm flip-flopping
these -- the Peary admission is at SER 322.
The defendant's admissions and briefing is at SER 512. They admit that those Pacific Pictures agreements
were unlawful. Again, under their own
case, Huntington Life Science, SLAPP may not apply when there's an admission
that the act complained of is illegal.
The Flatley case also says that.
And why is that?
I'd like to give you an
example.
If I came to you - if all of
my friends and I decided we wanted to go out and vote tomorrow and I came to you and we didn't have a way to get to
the polling station, if I came to you and I said, "I have this special set
of magic beans I want to sell you and it's going to make you rich, and if you
could trade me your car and I give you these magic beans, will you do
that?"
You’d do that. I then go out and I take the car and I take
all these people to go vote. And clearly
my purpose in getting the car was I wanted to get out to vote tomorrow, a very
important protected right.
That wouldn't stop any one
of you from suing me for defrauding me with your car.
And that's where the California courts focus like
a laser on "What is the protective conduct being challenged here?"
And in each one of our
causes of action, we are focused on admittedly illegal conduct.
Mr. Kendall ascribes all
sorts of negative motives to DC Comics. But
Cotati holds very clearly, as does In re Episcopal Churches, our motives are irrelevant.
Our motives were also pure.
The District Court has held
based on their own admissions that their contracts were illegal.
Mr. Toberoff told us, this
Toberoff timeline document is "a pack of lies." One evidentiary ruling after another has
confirmed that he made the $15 million bogus billionaire investor fraudulent
statements to induce the Siegels to do business with him.
Now as to the prong two
questions -- this is whether there's minimal merit to our claims, the Statute of
Limitation issues you don't need to reach
those questions because we win on prong one, and you don't get to prong --
prong two unless we do not prevail on prong one. And again it's their burden on prong one.
On prong two, the burdens
are split. To show that there's minimal
merit to our claims affirmatively, it's our burden. For them to prove the viability of their
affirmative defenses, their Peregrine case holds that it's their burden.
And here we have a very open
factual issue.
You asked, "Why didn't
they get their Statute of Limitations issue ruled on below?"
The District Court issued a
ruling saying, "I will shortly on your Rule 12 motions."
These Rule 12 motions raise
the Statute of Limitations arguments, the litigation privilege arguments.
Apparently afraid that the
ruling wasn't going to come out their way, they withdrew the motion. They have never filed a Rule 56(f) motion-- a
Rule 56 motion in the intervening years.
And most importantly, most
importantly for this Court that's going to look at the second prong in the SLAPP
test, we have a pending Rule 56(d) motion, which under this Court's Garrett
decisions, we said, "We need more discovery, including on the litigation
privilege."
And if you look at the
Edwards case, if you look at the Mindys case, if you look Bylin case, that's a
highly fact-bound inquiry.
And what they're saying is,
"Well, everything we did we did with the intent to litigate."
Not so. The documents that have come out, the Toberoff
timeline documents, the deposition admissions show that between 2002 when the
fraud occurs and 2004 Mr. Toberoff and Laura Siegel never entered into a litigation
agreement.
The record that has emerged
in discovery has shown that between 2001 when Mr. Peary and Mr. Toberoff signed
their business joint venture and 2010 no litigation was initiated.
And so we told the District
Court on each one of these defenses, on each one of these contested fact issues,
"We need further discovery."
And because the District
Court ruled in our favor on prong one, he never had the opportunity to exercise
his discretion whether to permit further discovery to -- to confront their
Statute of Limitations and litigation privilege arguments.
And to me the key case on
the Statute of Limitations issues is really two. One is Judge Thomas' opinion in the Living
Designs against Dupont case. This is a
fungicide case out of Hawaii
from the 1990s. And the issue there was
whether fraudulent concealment of evidence trumped the inquiry notice rules. And the answer there was "yes"
because Dupont had made false representations to opposing counsel to obtain a settlement
agreement.
And here we have the exact
same thing.
If you look at Mr.
Toberoff's representations in the District Court about whether the Toberoff timeline
was accurate or not, he called it "a worthless piece of garbage." He called it "an inaccurate hit piece." He called it "a pack of lies." He actually chastised counsel for relying on
that document and filing this lawsuit and pursuing discovery.
One discovery ruling in this
case after another, exactly as in your Honor's Dupont case, has proven those
representations to be absolutely false, and each one of those false
representations has tolled the running of the Statute of Limitations.
That's an intensely
fact-bound issue, as your Honor recognized in that case, that cannot be decided
on the cold record here and cannot be decided before the District Court in its
own discretion evaluates whether further discovery is warranted under Rule
56(d).
Moreover, the consent
agreement, as Mr. Kendall conceded, is well within the statutory period. But what Mr. Kendall did not tell you is if
there's a pending discovery motion to obtain a copy of the consent agreement or
that Judge Wright in his ruling last – a couple weeks ago, the summary judgment
ruling invalidated all of their consent agreements, the earlier PPC ones and
the later consent agreement.
And so it's DC Comics'
submission that this case must fail and the District Court's ruling must be affirmed
because defendants have come nowhere close to meeting their -- their burden on
prong one to prove that the SLAPP statute applies.
When you actually look at,
as the courts require, what conduct we're challenging, this is not protected
activity.
And what is the best example
of this?
The best example of this is
a long line of cases in California courts, including the Robles case, including
the -- and I apologize, your Honors -- including the Aguilar case, including
the Baharian-Mehr case where it's actually conduct in the litigation itself that's
being challenged.
In the Robles case it was an
expert witness testifying during his deposition. And the litigants, as here, said, "Well,
hold on a second. You're challenging his
classically protected speech. He's
--he's giving a deposition answer as an expert in a case. You
can't possibly sue him."
And the court dug under that
and said, "Hold on a second. They're
not suing him for giving a deposition answer.
They're suing him for negligence and a failure to disclose conflicts of
interest in connection with that testimony.
The two are separate and distinct."
A similar case is the Baharian-Mehr case.
There you had officers and
directors who chose outside counsel to initiate litigation on behalf of the
company and the shareholders who questioning that decision.
And, as here, the defendants
say, "Hold on a second. This is a
litigation choice. We're choosing our lawyers. We're choosing litigation strategists. How dare you sue us."
And the Court said,
"Hold on a second. That's not what you're being sued for. You've being sued for corporate waste, and
this is a pattern and practice consistent with those acts of corporate
waste."
And if you look at the
Episcopal Church case, there the complaint is littered with references to the very
serious ecclesiastical dispute between a local parish and the national parish
concerning gay marriage.
And the Court said,
"You know what? We understand that. We understand that that's a big political
issue. We understand that's the reason
why you're all fighting. But guess what? This is a property case, and so SLAPP doesn't
apply."
And perhaps the most
important case to take a look at is the Cotati case.
In the Cotati case a group of
mobile home owners challenge a new
city regulation governing their homes in Federal
Court. The city runs right out and files
for declaratory relief in State Court,
admittedly trying to gain a tactical advantage against the -- the other side.
The California Supreme Court
held, "We understand that the city's complaint referenced page, chapter
and verse" -- the Cotati court case -- "but what's really going on
here? The city ordinance is being
challenged. That's the issue in
controversy. That's what the complaint
is really challenging."
And it's the same thing
here, your Honors.
It's illegal rights tying
agreements that we're challenging. It's
acts of interference through fraud that cases like Haneline, Newport Builders
and a long line of cases say are not protected by SLAPP. And all of these -- I'd especially encourage
you to read Judge Fletcher's opinion ln the Mindys case. If you ever get to the second part of the
test, Mindys holds, SLAPP may apply to certain conduct, but the litigation
privilege, that's the much tougher bar. It
didn't apply to the trademark registration filings there.
Read the Edwards case. It's the seminal case in California talking about the litigation
privilege.
It has absolutely no
application to acts of fraud two years prior to litigation or illegal business
agreements ten years prior.
I see my time is over, your
Honor. I'll sit down.
Thank you.
JUDGE
REINHARDT: Thank you,
Counsel.
RICHARD
B. KENDALL, ESQ.: All
of the cases that Mr. Kline just referred you to are cases in which the essential
elements of the claim of damage were satisfied by unprotected activity. The difference between this case and all of
those cases is that there is no damage here other than the damage from
protected activity.
Protected activity is the
pursuit of termination rights.
I call the Court's attention
to the damage allegation in the complaint, which is Paragraph 186, which says,
"As a result of Toberoff's misdeeds, the Siegel heirs repudiated the DC
Comics' agreement and ended all further discussions, causing DC Comics to lose the
value of the agreement, to lose their ongoing business relation with the
Siegels, and incur subsequent legal fees in legal disputes."
All of that results from the
pursuit of termination. Similar
allegation as to what happened as a result of the alleged interference with the
Shuster agreement. It is all because of
the pursuit of the termination rights. And
that's why all of these cases are distinguishable.
One other point.
The argument that is made
that the PPC Shuster agreements were illegal and therefore not within SLAPP is
just completely wrong. The cases they
cite involve criminal conduct, and criminal conduct is not protected under the
SLAPP statute. Extortion is not
protected.
Hate speech is not
protected.
But there is nothing
actually illegal about the agreements that were made between Mr. Toberoff and
the Shusters. It's just that they are
unenforceable because of the operation of the copyright law window. They're unenforceable. They are not illegal. There is no public policy whatsoever that
would say that the anti-SLAPP statute doesn't apply on account of those agreements.
Thank you very much, your
Honor.
JUDGE
REINHARDT: Thank you,
Counsel. The case just argued will be
submitted.
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