LOS ANGELES (Legal Newsline) - A clothing manufacturer’s strategy of suing labor lawyers for malicious prosecution failed badly, as a California appeals court ordered the company to pay them additional legal fees on top of the tens of thousands of dollars they obtained after settling the underlying wage-and-hour lawsuit.
Attorneys Kevin Mahoney and Oscar Ramirez represented Ana Jimenez in a lawsuit against Citizens of Humanity, a Los Angeles jeans manufacturer they accused of shortchanging workers out of overtime pay and meal and rest breaks. Citizens of Humanity denied the claims but after lengthy negotiations in December 2017 agreed to pay Jimenez $50,000 to drop her suit, with Jimenez’s lawyers getting $35,000 of that amount as fees. Shortly thereafter, her lawyers also agreed to dismiss class claims on behalf of the other workers.
A court approved the dismissal in March 2018. Seven months later, Citizens of Humanity sued Jimenez and her lawyers for malicious prosecution, saying there was no basis for her claims and the lawyers dropped the class action because they couldn’t find evidence to support a lawsuit on behalf of other workers.
Jimenez and her attorneys fired back with anti-SLAPP motions, a procedure to dismiss lawsuits intended to silence speech about matters of public importance. The trial court denied the anti-SLAPP motions, finding that Citizens of Humanity was likely to win its malicious prosecution claims.
Jimenez and her lawyers appealed to the Second Appellate District. In an April 19 decision, the appeals court overturned the trial court’s ruling, finding that by settling with Jimenez, Citizens of Humanity had doomed its malicious prosecution case.
To prove malicious prosecution, the plaintiff must show the defendant pursued a lawsuit without probable cause and ultimately lost the case. While Citizens for Humanity’s lawyer appeared to acknowledge the company hadn’t won against Jimenez, because it paid her to drop her case, the company said it did win on the class claims because the lawyers dropped them unilaterally.
The appeals court disagreed, saying Jimenez’s case couldn’t be separated from the class action and the settlement represented a favorable conclusion on both. Having essentially won their case, the appeals court said, Jimenez and the lawyers couldn’t be accused of malicious prosecution.
“The case was resolved by settlement, by which Oheck paid her (and her counsel) $50,000,” the court ruled. “A class action is merely a procedure by which a plaintiff can pursue her claim, not a separate claim that can be resolved on the merits independent of the plaintiff’s own claim.”
In yet another victory for the plaintiff lawyers, the court ordered Citizens of Humanity to pay their fees.