385 P.3d 1126
Or. Ct. App.2016Background
- Plaintiffs LaChapelle and Field are minority shareholders of Deep Photonics Corporation (DPC); Brill (licensed in California) was DPC’s general counsel and majority shareholder via his firm Enterprise Law Group (ELG).
- Plaintiffs allege Brill conspired with DPC directors to cover up fraud by a founder (Alekel), fire LaChapelle, transfer operations to Korea, and freeze out minority shareholders, causing $75M in damages.
- Plaintiffs filed derivative and individual claims against Brill and ELG, including a derivative legal-malpractice claim for failing to advise DPC about advancement obligations before DPC sued plaintiffs.
- Defendants moved under ORS 31.150 (anti‑SLAPP) to strike and under ORCP 21 A(8) to dismiss, arguing plaintiffs’ claims arise from protected petitioning activity and that attorney‑client privilege (California rules) prevents defendants from defending.
- Trial court denied the anti‑SLAPP motion but granted the ORCP 21 A(8) dismissal with prejudice based on McDermott (California case) and Brill’s California licensure; both sides appealed.
- The appellate court affirmed denial of the anti‑SLAPP motion, reversed the dismissal under ORCP 21 A(8), held Oregon law governs evidentiary privilege, and remanded for further proceedings (only the derivative malpractice claim potentially implicates privilege).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs’ claims arise from protected petitioning or speech under ORS 31.150(2) (anti‑SLAPP) | Claims arise from non‑petitioning misconduct (cover‑up, self‑interested acts, malpractice) not protected activity | Claims arise from litigation‑related conduct (approval/anticipation of DPC’s suit) and thus fall within ORS 31.150(2)(b)/(d) | Anti‑SLAPP denied: claims do not "arise out of" protected petitioning; garden‑variety malpractice and alleged self‑interested acts are not covered. |
| Whether attorney‑client privilege (and related California rule McDermott) mandates dismissal under ORCP 21 A(8) | Oregon evidentiary law applies; privilege does not bar defense as to many claims alleged outside attorney role; dismissal premature for malpractice claim | Brill (California lawyer) cannot defend without disclosing privileged communications; McDermott requires dismissal of derivative malpractice claims | Dismissal reversed: Oregon privilege rules apply; on the face of complaint privilege does not bar defense to most claims; only the derivative malpractice claim implicates privilege and dismissal was premature. |
| Choice of law: whether California ethics/evidence rules control privilege questions | Oregon evidentiary rules govern procedure and privilege in Oregon litigation | Brill’s California licensure and ethics risk justify applying California law | Oregon law governs attorney‑client privilege in Oregon courts; court may consider California authority as persuasive but may not supplant Oregon rules. |
Key Cases Cited
- Granewich v. Harding, 329 Or. 47 (discussing ORCP 21 A(8) pleading review standard) (accept well‑pleaded allegations as true)
- Plotkin v. SAIF, 280 Or. App. 812 (procedural rules for anti‑SLAPP review and viewing affidavits in plaintiffs’ favor)
- Young v. Davis, 259 Or. App. 497 (two‑step burden framework under ORS 31.150)
- Neumann v. Liles, 261 Or. App. 567 (review standard for anti‑SLAPP legal questions)
- Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106 (California Supreme Court: anti‑SLAPP can cover statements made in anticipation of litigation)
- Flatley v. Mauro, 39 Cal. 4th 299 (limits anti‑SLAPP protection for illegal petitioning activity)
- Kolar v. Donahue, McIntosh & Hammerton, 145 Cal. App. 4th 1532 (garden‑variety legal malpractice claims do not arise from petitioning activity)
- McDermott, Will & Emery v. Superior Court, 83 Cal. App. 4th 378 (California appellate case holding derivative malpractice may be untenable if privilege forecloses defense)
- Crimson Trace Corp. v. Davis Wright Tremaine LLP, 355 Or. 476 (Oregon applies its own evidentiary rules; privilege governed by Oregon law)
- Reynolds v. Schrock, 341 Or. 338 (discussing privilege and limits when lawyer acts outside representation)