No Close Shave On Litigation Privilege
The Gillette Company’s claim of litigation privilege was rejected by the Massachusetts Supreme Judicial Court
The Gillette Company sued four of its former employees (the individual defendants), claiming that they misappropriated Gillette’s trade secrets and other confidential information to develop a wet-shaving razor for the benefit of their new employer, the defendant ShaveLogic, Inc. After ShaveLogic counterclaimed, alleging that Gillette brought its lawsuit in bad faith, Gillette moved to dismiss the counterclaims on grounds that the filing of the lawsuit was petitioning activity protected by G. L. c. 231, § 59H (commonly known as the anti-SLAPP statute), and was protected by the litigation privilege. A judge of the Superior Court denied the motion, and Gillette filed this interlocutory appeal.
We conclude that, based on the record before her, the judge could have found that ShaveLogic met its burden of showing that Gillette’s petitioning activity was “devoid of any reasonable factual support” and caused ShaveLogic “actual injury.” Under the anti-SLAPP statute, that showing was sufficient to allow the counterclaims to go forward. We further conclude that the litigation privilege does not bar the counterclaims because they seek to hold Gillette liable not for speech, but for conduct (its act of filing an allegedly groundless lawsuit), to which the privilege does not apply. We therefore affirm that part of the judge’s order resolving these two issues in ShaveLogic’s favor.
ShaveLogic’s contentions
ShaveLogic is a start-up company, which is trying to compete in the wet-shaving market dominated by Gillette. Although Gillette currently holds “over [four] times the market share held by the nearest competitor,” its market dominance is being threatened by “new competition from dynamic start-up companies” such as ShaveLogic. In response Gillette has “tak[en] steps to attempt to thwart newer companies” from entering the market.
As to the purported litigation privilege
In this case ShaveLogic is not claiming that the statements in Gillette’s complaint or prelitigation letters are defamatory or otherwise actionable in and of themselves. Rather, the statements are evidence that might support ShaveLogic’s claims of other misconduct, i.e., Gillette’s purported acts of sending letters threatening a baseless lawsuit with the knowledge that ShaveLogic would have to disclose them to potential partners and investors, and then actually filing a baseless lawsuit, all as a means to prevent ShaveLogic from competing in the wet-shaving market. It is this conduct, and not any particular statements in Gillette’s letters and complaint, that is alleged to have interfered with ShaveLogic’s business relationships and to constitute unfair and deceptive acts and practices…
We conclude that the privilege does not attach in these circumstances, where it is not the statements themselves that are said to be actionable. See 58 Swansea Mall Drive, LLC vs. Gator Swansea Property, LLC, U.S. Dist. Ct. No. 15-13538, slip op. at 3 (D. Mass. Oct. 12, 2016) (interpreting Massachusetts litigation privilege to apply to claims seeking to “hold[] a speaker liable for the content of her speech” but not to claims “using that speech as evidence of her misconduct”). Indeed, without this distinction, it is hard to see how any claim for abuse of process or malicious prosecution would survive an assertion of the privilege. Gillette’s overly expansive view of the privilege would eviscerate these longstanding causes of action.
(Mike Frisch)