Calif. SC rules against attorney who opposed former client

John O'Brien May 17, 2011, 11:14am


SAN FRANCISCO (Legal Newsline) - The California Supreme Court says a free speech law doesn't apply to an attorney who campaigned against his former employer.

In an opinion issued Monday, the justices ruled for Oasis West Realty in its case against attorney Kenneth Goldman, who had been soliciting signatures on a referendum petition to overturn the Beverly Hills City Council's approval of the company's redevelopment project.

Goldman said his actions were protected by the anti-SLAPP (Strategic Lawsuit Against Public Participation) statute. That law was passed in 1992 in response to an increased number of suits brought over free speech issues.

"Oasis has presented a prima facie case that Goldman did use confidential information, to the detriment of his former client, with respect to the precise subject of the prior representation," Justice Marvin Baxter wrote. "Defendants have cited no authority to suggest the First Amendment would protect such duplicity."

Oasis hired Goldman in 2004 to help obtain approval for its plan to build a five-star hotel and luxury condominiums on a 9-acre parcel it owned in Beverly Hills, on which a Hilton hotel already stood.

The company says Goldman became "intimately" involved with the details of the plan before he resigned in April 2006. Two years later, the Beverly Hills City Council approved specific parts of the plan.

Some Beverly Hills residents created the Citizens Right to Decide Committee, which sought a referendum on the ballot that would allow residents to overturn the council's decision. Goldman became involved with the committee, soliciting approximately 20 signatures for a petition circulated by it.

Goldman said he never disclosed confidential information and did not believe he needed to tell any potential signees that he had represented the company. Oasis sued Goldman over breach of fiduciary duty, professional negligence and breach of contract, seeking more than $4 million in damages.

The trial court said the anti-SLAPP statute did not apply to the case, but an appellate court reversed that decision. The appellate court found that Goldman had not undertaken a 'second attorney-client relationship or second employment of any kind' with an adverse interest, was no longer representing Oasis and had not disclosed confidential information.

One case cited by the appellate court was 1988's Johnston v. Koppes, but Baxter wrote the case was not helpful to Goldman. In that case, an attorney employed by the state Department of Health Services was demoted after attending a legislative committee hearing on the use of state funds for abortions.

The attorney did not speak at the hearing, but the DHS demoted her because it knew her views on the subject differed from its.

The decision said "Loyalty to a client requires subordination of a lawyer's personal interests when acting in a professional capacity. But loyalty to a client does not require extinguishment of a lawyer's deepest convictions; and there are occasions where exercise of these convictions - even an exercise debatable in professional terms - is protected by the Constitution."

Baxter wrote about the decision, "Inasmuch as there was no allegation that the attorney acted in any way against the department as to a specific and ongoing matter on which she was then representing or had previously represented the department, nor was there any allegation that she had used or disclosed confidential information acquired by virtue of her employment, Johnston does not suggest that the conduct alleged by Oasis would be protected by the Constitution."

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