September 20, 2012 2:22pm PT by Eriq Gardner
Judge Set to Toss David Bergstein Suit Against Hollywood Law Firms (Exclusive)
Embattled film financier David Bergstein's plan to use a $50 million verdict against former in-house attorney Susan Tregub as a hammer in other cases isn't going well.
A Los Angeles Superior Court judge is set to dismiss one of Bergstein's bigger lawsuits — against two of Aramid Entertainment’s law firms, Stroock & Stroock & Lavan and Levene Neale Bender Yoo & Brill. In a tentative decision issued in advance of a hearing next week, Judge Michael P. Linfield wrote that he is inclined to rule in favor of the defendants' anti-SLAPP motion on the basis that Bergstein's allegations arise from protected litigation activities. The judge says that Bergstein has failed to meet his burden to demonstrate a probability of prevailing in the case, which likely means that Bergstein will have no recourse but to appeal the judgment.
The lawsuit stems from Bergstein's larger war with Aramid’s David Molner, who allegedly conspired with his former lawyers to force his film companies into bankruptcy.
It's one thing to win a $50 million verdict against Tregub, who is said to have no means of paying; It's quite another to win a case against Molner's law firms, which probably could pay up but represent a more difficult legal target.
In the lawsuit, Bergstein alleged that Stroock and Levene Neale knowingly used confidential, privileged, and proprietary information. The defendant-lawyers allegedly solicited Tregub's assistance to help out Aramid's cause despite Tregub's obligations to her client. Further, the firms were accused of using the legal proceedings to create an avalanche of negative publicity for Bergstein.
In defense, the law firms brought an anti-SLAPP motion, telling a judge that Bergstein's complaint amounted to nothing more than a meritless retaliatory strike against opposing counsel for their legitimate representation of Aramid in the bankruptcy proceedings. The anti-SLAPP motion is a special maneuver to strike claims in California that infringe on First Amendment rights. Those include the "right to petition," which encompasses protected litigation efforts.
Although Bergstein asserted that his claims didn't arise from protected activity, Judge Linfield at this moment doesn't agree with him. "Instead of merely referencing litigation, each of plaintiffs’ claims are expressly based on defendants’ conduct in representing their client(s) in various legal proceedings," the judge rules in a tentative order.
As such, the first prong of the anti-SLAPP is satisfied, meaning that Bergstein then has to establish that he has a probability of succeeding in his lawsuit.
The defendants brought up a few reasons why Bergstein would lose, including that the statute of limitations had expired. Bergstein sued Tregub for breach of fiduciary duty in March 2010. Soon after, the plaintiffs in that case expressed their belief that Stroock could be liable. But they didn't bring a lawsuit right then. Instead, the lawsuit against the two Aramid firms wasn't filed until April 20, 2012.
To get past this, Bergstein's side first tried arguing that what they knew wasn't specific enough to bring a lawsuit, and then argued, that the defendants' allegedly fraudulent concealment tolled the claims.
However, the trial against Tregub, as much as it provided a $50 million victory for Bergstein, did little to pin anything bad against Aramid that Bergstein could use in this case against Aramid's attorneys. And here, Bergstein has had trouble showing the law firms concealed anything.
"Plaintiffs’ argument is unpersuasive, as denials of wrongdoing are not the same as fraudulent concealment," writes the judge.
Plus, for pretty much the same reason why the first prong of the anti-SLAPP statute was satisfied, the judge agrees with the defendants that the so-called "litigation privilege" applies to Bergstein's claims. That includes communications based on defendants’ actions in suing Bergstein, which the judge explains "encompasses not only testimony in court and statements made in pleadings, but also statements made prior to the filing of a lawsuit."
Bergstein objected, saying that it doesn't include public mudslinging, such as comments to the press that damaged the film financier's business reputation. The judge looks at the claims about press comments and finds some hearsay and one email statement from a Stroook attorney to a reporter from Bloomberg News that wasn't privileged. But then adds, "One unprivileged statement is not enough to save this lawsuit from an anti-SLAPP motion."
For these reasons, Bergstein's lawsuit against Stroock and Levene Neale appears to be doomed. The defendants are represented by Patty Glaser. Bergstein's attorney Lucia Coyoca wasn't immediately available for comment. A hearing in the case has been scheduled for Tuesday.
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