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California high court greenlights suit by assault victim, despite prior settlement

The decision follows the recent passage of two California laws that prohibit nondisclosure settlements that bar victims from discussing allegations of sexual assault, harassment and workplace discrimination.

(CN) — In a ruling being hailed as a major win for victims of sexual assault and harassment, the California Supreme Court held Thursday that a contract barring two people from bad-mouthing each other doesn’t prevent a woman from suing an abuser in court.

“I think it’s a great day for California victims of harassment and abuse because the opinion appropriately recognizes that such victims are entitled to more access to the courts, greater protections and more remedies,” plaintiff’s attorney Jean-Claude Andre of Bryan Cave Leighton Paisner said in a phone interview Thursday.

Andre’s Jane Doe client sued a wealthy real estate developer, claiming he lured her to a condo unit he kept for himself at her residential building and attempted to rape her in 2015. She claims the developer, Curtis Olson, and his associates then started harassing and stalking her by “peeping, filming, videotaping and photographing” her and her guests, including through her bedroom and bathroom windows.

After Doe sought a civil harassment restraining order against Olson in court, they were referred to mediation and reached a settlement in which both parties agreed to stay away from each other and “not to disparage one another.”

Doe later filed a civil complaint against Olson, but the developer countersued, claiming her lawsuit violated the “nondisparagement” term of their prior deal. A Los Angeles County judge granted Doe’s anti-SLAPP motion to strike Olson’s breach of contract claim, but an appeals court reversed.

On Thursday, the state’s highest court unanimously overruled the appeals court, finding the nondisparagement pact did not categorically bar Doe from suing Olson on claims of sexual harassment and assault.

“We see no indication that the parties understood the nondisparagement clause to sweep so broadly,” California Supreme Court Justice Goodwin Liu wrote for the seven-judge panel. “Olson’s reliance on the bare text of the clause, devoid of context and without more, is insufficient to proceed on a breach of contract claim in the face of an anti-SLAPP motion.”

The high court concluded the pair's agreement was reached in the limited context of a dispute over a civil harassment restraining order and therefore should not affect Doe's right to litigate issues beyond that, such a demand for monetary damages.

Liu also wrote the agreement did not include any waiver of claims or release from liability, but that Olson’s interpretation of the clause “would effectively serve the purpose of those missing terms.”

Additionally, he cited a “standard mediation agreement,” which was not available at the time the parties reached their deal but was worded with similar language. Liu noted the standard version specifies that signatories should not speak ill of each other in front of “nongovernmental third parties."

“By specifically exempting ‘governmental third parties” from its ambit, the form makes clear that such agreements are intended to prevent interpersonal third party ‘gossip’ and rumor spreading, not official filings with legal authorities,” Liu wrote for the panel.

Liu also stated that “strong public policy reasons” support avoiding an overbroad interpretation of the contract, citing California’s passage of two laws in 2018 and 2021 that ban non-disclosure agreements that would otherwise muzzle victims and prevent the disclosure of sexual assault, harassment and workplace discrimination claims.

Had the state’s highest court sided with Olson’s position in the dispute, Doe’s attorney Andre said it would have “chilled victims’ access to the courts” by forcing them to face “a specter of penalty of damages, which would have a horrible deterring effect on victims seeking judicial relief.”

Two victims’ advocacy groups — the California Women’s Law Center and Family Violence Appellate Project — also filed an amicus brief in the case supporting Doe’s position.

In an emailed statement Thursday, the Family Violence Appellate Project said it was pleased with the court’s ruling and recognition that California has a “strong public policy interest” in allowing abuse survivors to access all forms of relief for harms associated with domestic and sexual violence.

“This case provides much needed clarity to the courts and litigants that California public policy is to protect survivors and statutes and agreements should be interpreted to promote that public policy,” the organization said. “We greatly appreciate the work of our co-counsel Goodwin Procter and California Women’s Law Center on this [amicus] brief.”

Olson’s attorney, Eric Kennedy of the Buchalter Law Firm, emphasized the high court’s decision did not address the merits of Doe’s claims against his client.

“Mr. Olson has long disputed Doe’s allegations and is confident he will prevail,” Kennedy said by email.

Kennedy also accused Doe of having “weaponized and abused” the legal system. Citing a lawsuit in which the same anonymous woman sued Kennedy, his firm, other lawyers, two superior court judges and other court officials, Kennedy claimed the woman has a “propensity to make unsubstantiated, publicly filed allegations under the cover of the ‘litigation privilege.’”

Second Appellate District Justice Carl Moor joined Chief Justice Tani Cantil-Sakauye and Justices Liu, Carol Corrigan, Leondra Kruger, Joshua Groban and Martin Jenkins on the high court’s panel.

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