Today the Tenth Circuit Court of Appeals issued an extremely interesting civil RICO case. Bixler v. Mineral Energy and Technology Corporation (METCO)
). While the entire case is worth reading, one point of intellectual dishonesty needs highlighted:
Plaintiffs assert that defendants’ litigation tactics wereextortionate, with the purpose of coercing them to accept defendants’ allegedlyfraudulent acts. We have refused to “recogniz[e] abusive litigation as a form ofextortion [because doing so] would subject almost any unsuccessful lawsuit to a colorable extortion (and often a RICO) claim.”
Slip op. at 11-12. The panel cited Deck v. Engineered Laminates, 349 F.3d 1253,1257 (10th Cir. 2003) (here), which contained this discussion:
Although the alleged conduct is certainly reprehensible, it does not in itself constitute extortion under § 1951. Section 1951(b)(2) defines "extortion" as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right."
Extortion is the antithesis of litigation as a means of resolving disputes. To promote social stability, we encourage resort to the courts rather than resort to force and violence.
The Deck opinion is intellectually bankrupt, because extortion does not require force or violence. Let's pull out the handy United States Attorney Manual for an explanation of the federal extortion statute: "Did the defendant use or attempt to use the victim's reasonable fear of physical injury or economic harm in order to induce the victim's consent to give up property?"
These days, there aren't many classic Hobbs Act extortion cases. Gone are the days when the mob breaks your legs as punishment for failing to pay for protection. Today, a classic extortion case involves the David Letterman scenario: Give me money or I'll tell the world about your affair. Revealing David Letterman's secrets would cause him economic harm, and thus courts are willing to say that Mr. Letterman has been extorted.
A frivolous lawsuit is an economic harm. It will require you to spend time and money defending it. It is philosophically indistinguishable from the David Letterman scenario. Yet rather than addressing the tough issue of whether a frivolous lawsuit should not be extortionate for some other reason, the court instead seemed to imply that the extortion statute only covers violence.
Then again, a more charitable reading of Deck would be thus: Inciting fear in someone by threatening to file a frivolous lawsuit does meet the "force, violence, or fear" element of the extortion statute. However, filing a frivolous lawsuit against someone is not "wrongful."
Whoa. Perhaps that is what the Deck panel was actually saying:
We recognize that litigation can induce fear in a defendant; and it would be fair, at least in other contexts, to characterize as "wrongful" the filing of a groundless lawsuit, particularly when the plaintiff resorts to fraudulent evidence.
[W]e join a multitude of other courts in holding that meritless litigation is not extortion under § 1951. See, e.g., United States v. Pendergraft, 297 F.3d 1198, 1208 (11th Cir.2002) ("threat to file litigation against Marion County, even if made in bad faith and supported by false affidavits, was not `wrongful'" within the meaning of term in § 1951).
How does that make you feel, knowing that the Tenth Circuit Court of Appeals (along with nearly ever other Federal Circuit Court of Appeals) believes that filing a frivolous lawsuit is not "wrongful"?
The Decker panels addresses one policy concern of a contrary holding:
Whenever an adverse verdict results from failure of the factfinder to believe some evidence presented by the plaintiff, the adverse party could contend that the plaintiff engaged in extortionate litigation. Comfortable that the adjective "wrongful" in the extortion statute was not intended to apply to litigation, we hold that Plaintiff's allegations of bad-faith litigation do not state the predicate act of extortion.
Id. at 1258. Yet couldn't that be said of malicious prosecution, as well? After all, a prevailing party in any lawsuit could file a lawsuit for malicious prosecution. The prevailing party would almost always lose. Thus, lawyers rarely file malicious prosecution lawsuits.
The floodgates of litigation would not swell open if lawyers who filed frivolous lawsuits were held accountable under the Hobbs Act. Those would be loser cases that would almost never be worth filing - much like malicious prosecution and abuse of process lawsuits.
That the panel is more concerned with protecting lawyer who file frivolous lawsuits than they are with the victims of lawsuits is yet another testament to the lawlessness that our legal system has created. If I show up - sans lawyer - and demand payment for the photographs I have of you cheating on your wife, then I'm a federal felon. If I file a frivolous lawsuit against you, most judge won't even care.