No Extortion in Sending Nasty Lawyer Letters

PHOENIX (CN) - A high-profile lawyer did not extort "Big Brother" winner Mike Malin by sending him a letter threatening legal action, a California appeals court found.

Lavely & Singer lawyer Marty Singer had sent Malin the letter in 2011 on behalf of his client, "Top Chef Canada" judge Shereen Arazm aka Shereen Koules.

As a general partner in one of Singer's restaurants, Geisha House, Arazm was allegedly worried that Malin was misappropriating assets.

In his letter explaining the alleged embezzlement, Singer accused Malin of using "company resources to arrange sexual liaisons with older men such as 'Uncle Jerry,' Judge [name redacted] a/k/a 'Dad' (see enclosed photo), and many others."

While the letter included redactions and blanks where names should be, Singer warned that "there will be no blanks in the pleading" he planned to file in Los Angeles Superior Court.

Malin then sued Arazm, Singer and others on Aug. 1, 2011. In addition to alleging extortion, the "Big Brother" star claimed that Singer and Arazm hacked into his emails and tapped his phones.

Arazm sued Malin just one day later. Though laden with explosive allegations, Singer did not follow through with his promise to name names, aside from Malin's alleged given name of Michael Robert Carrie.

Singer and Arazm later moved to strike Malin's complaint under California's anti-SLAPP (strategic lawsuit against public participation) law.

A Los Angeles county judge refused, however, after finding that the statute could not procure early dismissal of allegations concerning illegal conduct, in this case wiretapping, computer hacking and extortion.

The Second Appellate District disagreed Tuesday as to the extortion claim, finding that it should have been struck since Singer's demand letter was protected speech.

"Singer's demand letter did not expressly threaten to disclose Malin's alleged wrongdoings to a prosecuting agency or the public at large," Judge Steven Suzukawa wrote for a three-judge panel.

Lavely & Singer applauded the court's defense of protected speech.

"We have maintained from day one that demand letters sent every day by California lawyers zealously representing their clients are protected by the First Amendment and the litigation privilege, and my clients' pre-litigation demand sent in this case was no exception," Lavely & Singer attorney Jeremy Rosen said in statement.

Singer called the decision complete vindication.

"This case is about embezzlement by Mike Malin and his partners," Singer said in a statement. "The defensive lawsuit that Malin filed was a desperate and futile attempt to prevent Ms. Arazm from pursuing her claims for embezzlement and using our firm to represent her."

The court's 25-page decision identified two problems with characterizing the letter as extortionate.

"First, the 'secret' that would allegedly expose him and others to disgrace was inextricably tied to Arazm's pending complaint," Suzukawa wrote. "The demand letter accused Malin of embezzling money and simply informed him that Arazm knew how he had spent those funds. There is no doubt the demand letter could have appropriately noted that the filing of the complaint would disclose Malin had spent stolen monies on a car or a villa, if that had been the case. The fact that the funds were allegedly used for a more provocative purpose does not make the threatened disclosure of that purpose during litigation extortion. We cannot conclude that the exposure of Malin's alleged activities would subject him to any more disgrace than the claim that he was an embezzler."

The second problem was that "Malin's complaint does not allege that Singer's demand letter threatened to expose a secret of a third party with whom he had a special relationship as defined by the extortion statute," the judges added. "Thus, the threatened disclosure of a secret affecting a third party, who is neither a relative nor family member, does not constitute extortion."

Singer and Arazm cannot, however, strike the wiretapping and hacking claims since the trial court correctly found that such acts do not constitute protected activity under the anti-SLAPP statute.

Rosen downplayed the preservation of the wiretapping claim as "a technicality" under the anti-SLAPP motion.

"Instead, the court suggested that disposal of the wiretapping and other allegedly related causes of action is better teed up as the subject of a summary judgment motion," Rosen added. "The court's opinion even goes as far as to suggest that my clients may have winning defenses to these specious causes of action. There is no question that Malin was overreaching by filing this lawsuit as evidenced by the fact that he named Ms. Arazm, her husband, and a Lavely & Singer associate as defendants. Ultimately, we believe the entire lawsuit - against all defendants - will be dismissed on the merits."

The lawyers apparently plan to seek fees from Malin.

Follow @jamierossCNS

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