PDA

View Full Version : Can threatening a lawsuit be considered extortion?


John Neiberger
01-29-2006, 09:58 AM
[Note: I posted this on misc.legal but then realized that
misc.legal.moderated might be more appropriate.]

I'm interested to find out if a particular set of actions amounts to
extortion.

Company A is a non-profit company with little in the way of assets.
Company B is a much larger for-profit company with plenty of assets, at
least when compared to Company A. The CEO of Company B feels that
Company A is acting in a way that harms his company. He's wrong and he
probably has no legal basis for a lawsuit but he threatens to sue
Company A unless they change their practices in a way that would be
directly beneficial to Company B.

Company B never actually files a suit, but over the course of a couple
of years the CEO threatens a lawsuit numerous times with the express
stated purpose of forcing Company A to go out of business by spending
all of their money defending the lawsuits.

Is that extortion? Is it extortion to continually threaten to bring
what would turn out to be an expensive lawsuit against another company?
Or is this just a danger of doing business?

If it is not extortion, what conditions would need to be present in
order for it to be extortion?

Many thanks,
John

Paul Cassel
02-01-2006, 11:09 AM
John Neiberger wrote:
[threatened lawsuits extortion in the situation of great power imbalance
between parties]
If it is not extortion, what conditions would need to be present in order for it to be extortion?
For an extortion, you'd need either the threat of violence or other
illegal action. If threats of lawsuits even in the instance of power
imbalances were illegal, it'd mean half the lawyers in the US would have
to find other means of getting their Mercedes cars paid for.

-paul
ianal

Stuart A. Bronstein
02-01-2006, 11:09 AM
"John Neiberger" <jneiberger@gmail.com> wrote:

Company A is a non-profit company with little in the way of assets. Company B is a much larger for-profit company with plenty of assets, at least when compared to Company A. The CEO of Company B feels that Company A is acting in a way that harms his company. He's wrong and he probably has no legal basis for a lawsuit but he threatens to sue Company A unless they change their practices in a way that would be directly beneficial to Company B. Is that extortion? Is it extortion to continually threaten to bring what would turn out to be an expensive lawsuit against another company? Or is this just a danger of doing business?

It depends on the laws of your specific state. But my recollection
of common law extortion is that it includes threatening to accuse
someone of a crime, but not merely threatening to sue someone for
something that doesn't amount to a crime.

Stu

Robert Bonomi
02-03-2006, 12:15 PM
In article <p7u1u15li741ahucs6skgflcjka21pqi7m@4ax.com>,
Stuart A. Bronstein <spamtrap@sbcglobal.net> wrote:
"John Neiberger" <jneiberger@gmail.com> wrote:
Company A is a non-profit company with little in the way of assets. Company B is a much larger for-profit company with plenty of assets, at least when compared to Company A. The CEO of Company B feels that Company A is acting in a way that harms his company. He's wrong and he probably has no legal basis for a lawsuit but he threatens to sue Company A unless they change their practices in a way that would be directly beneficial to Company B. Is that extortion? Is it extortion to continually threaten to bring what would turn out to be an expensive lawsuit against another company? Or is this just a danger of doing business?It depends on the laws of your specific state. But my recollectionof common law extortion is that it includes threatening to accusesomeone of a crime, but not merely threatening to sue someone forsomething that doesn't amount to a crime.

Bzzzt! demanding money 'or other thing of value' for not revealing
a criminal action by the victim is technically _blackmail_, not
extortion.

Extortion is the demand of money or other thing of value, under the
threat of 'force' -- where 'force' may be any of many things, *NOT*
limited to physical violence.

Blackmail may (and in some jurisdictions _is_) regarded as a subset
of the broader class of crime that includes extortion.

Robert Bonomi
02-03-2006, 12:15 PM
In article <n7u1u11jr5vmm5srcuo6mbb4idbf2t4fa9@4ax.com>,
Paul Cassel <pcasselplus2@comcast.net> wrote:
John Neiberger wrote:[threatened lawsuits extortion in the situation of great power imbalancebetween parties]
If it is not extortion, what conditions would need to be present in order for it to be extortion?For an extortion, you'd need either the threat of violence or otherillegal action.

not true. extortion is a taking _with_the_owner's_consent_, under
threat of 'force', where force can be many things other than physical
violence.

If threats of lawsuits even in the instance of powerimbalances were illegal, it'd mean half the lawyers in the US would haveto find other means of getting their Mercedes cars paid for.-paulianal

No, you are not. <grin>

Fact: last year, a lawyer from Illinois went down on precisely those
charges, because of the way he worded threats to file lawsuit against
a 'big name' in Hollywood. I'm drawing a blank right now on both names,
and am too lazy at this hour of the night to go dig it up -- there was
mention of the matter, in this newsgroup, within the last year.

*EVERYTHING* depends on exactly how the subject matter is discussed.

"Pay me $xxx, or I'll sue you for everything you've got."

_is_ colorably close to extortion.

"To save you the expense of litigation, we offer you the opportunity
to settle the matter for the amount of $xxxx."

is an entirely different matter.


The Illinois lawyer mentioned above used tactics that were 'too close'
to the first line of approach. And it _did_ come back to bit him, big-
time. <grin>

Fred the Red Shirt
02-03-2006, 12:15 PM
Paul Cassel wrote:
John Neiberger wrote: [threatened lawsuits extortion in the situation of great power imbalance between parties]
If it is not extortion, what conditions would need to be present in order for it to be extortion? For an extortion, you'd need either the threat of violence or other illegal action. If threats of lawsuits even in the instance of power imbalances were illegal, it'd mean half the lawyers in the US would have to find other means of getting their Mercedes cars paid for.

In the hypothetical we are given to believe that the threatened lawsuit
is meritless--implying that if filed it would be frivolous or even
fraudulent.

Does threatening a frivolous or fraudulent lawsuit expose the
plaintiff's
attorney(s) to risk of Chapter 11 sanctions, even if no suit is
actually
filed?

--

FF

Stuart Bronstein
02-04-2006, 02:23 PM
fredfighter@spamcop.net wrote:

In the hypothetical we are given to believe that the threatened lawsuit is meritless--implying that if filed it would be frivolous or even fraudulent. Does threatening a frivolous or fraudulent lawsuit expose the plaintiff's attorney(s) to risk of Chapter 11 sanctions, even if no suit is actually filed?

Do you mean Rule 11 sanctions?

Whether the action is carried out or not is irrelevant to whether or
not extortion has occurred. It's the threat that counts.

But not all threats are extortion. I don't know about the laws of
the other states, but in California it's only extortion if the threat
is:

1. To do an unlawful injury to the person or property of the
individual threatened or of a third person; or,

2. To accuse the individual threatened, or any relative of his, or
member of his family, of any crime; or,

3. To expose, or to impute to him or them any deformity, disgrace
or crime; or,

4. To expose any secret affecting him or them.

Stu

Stuart Bronstein
02-04-2006, 02:23 PM
bonomi@host122.r-bonomni.com (Robert Bonomi) wrote:

Bzzzt! demanding money 'or other thing of value' for not revealing a criminal action by the victim is technically _blackmail_, not extortion. Extortion is the demand of money or other thing of value, under the threat of 'force' -- where 'force' may be any of many things, *NOT* limited to physical violence. Blackmail may (and in some jurisdictions _is_) regarded as a subset of the broader class of crime that includes extortion.

Where I come from it's all called extortion. But my point was that I
couldn't think of another type of action that would qualify as
extortion when the issue is whether threatening to file a suit is
extortion.

Stu

Robert Bonomi
02-04-2006, 02:23 PM
In article <rqa7u1hjtb2bj263hffqbvitbh3vjcra2t@4ax.com>,
<fredfighter@spamcop.net> wrote:
Paul Cassel wrote:
John Neiberger wrote: [threatened lawsuits extortion in the situation of great power imbalance between parties]
If it is not extortion, what conditions would need to be present in order for it to be extortion? For an extortion, you'd need either the threat of violence or other illegal action. If threats of lawsuits even in the instance of power imbalances were illegal, it'd mean half the lawyers in the US would have to find other means of getting their Mercedes cars paid for.In the hypothetical we are given to believe that the threatened lawsuitis meritless--implying that if filed it would be frivolous or evenfraudulent.Does threatening a frivolous or fraudulent lawsuit expose theplaintiff'sattorney(s) to risk of Chapter 11 sanctions, even if no suit isactuallyfiled?

Such activity is 'actionable' in and of itself. See: Barratry.

Paul Cassel
02-04-2006, 02:23 PM
Robert Bonomi wrote:

Bzzzt! demanding money 'or other thing of value' for not revealing a criminal action by the victim is technically _blackmail_, not extortion.
Bzzt. I guess you're not a lawyer either. Blackmail is extortion:

http://www.lectlaw.com/def/b105.htm

-paul

Robert Bonomi
02-05-2006, 04:14 PM
In article <2n6au1lmdstc30mfd01oqgi1ts17ggut29@4ax.com>,
Paul Cassel <pcasselplus2@comcast.net> wrote:
Robert Bonomi wrote:
Bzzzt! demanding money 'or other thing of value' for not revealing a criminal action by the victim is technically _blackmail_, not extortion.Bzzt. I guess you're not a lawyer either. Blackmail is extortion:

(nice 'selective quoting' -- including omission of where I discuss
the fact that in some jurisdictions blackmail is considered as one
form of extortion.)

No, blackmail is *NOT* extortion. Blackmail is _one_form_ of extortion.
The OP used the 'defining characteristic' of _blackmail_ as the
defining characteristic of the broader class of crime that is
extortion.

Both of our language was a little sloppy, agreed. :)

http://www.lectlaw.com/def/b105.htm

Don't take what you read on the 'net as gospel. :)

I can cite statutes that treat blackmail and extortion as separate and
distinct crimes.

In some jurisdictions, blackmail is a separate crime from extortion.
In other jurisdictions, blackmail is a special-case form of extortion.

The prior poster was asserting that to be extortion (in any form) the
threat of not revealing a criminal act by the victim had to be involved.

Kevin Haddock
02-05-2006, 04:14 PM
"John Neiberger" <jneiberger@gmail.com> writes:

[Note: I posted this on misc.legal but then realized that misc.legal.moderated might be more appropriate.] I'm interested to find out if a particular set of actions amounts to extortion. Company A is a non-profit company with little in the way of assets. Company B is a much larger for-profit company with plenty of assets, at least when compared to Company A. The CEO of Company B feels that Company A is acting in a way that harms his company. He's wrong and he probably has no legal basis for a lawsuit but he threatens to sue Company A unless they change their practices in a way that would be directly beneficial to Company B. Company B never actually files a suit, but over the course of a couple of years the CEO threatens a lawsuit numerous times with the express stated purpose of forcing Company A to go out of business by spending all of their money defending the lawsuits. Is that extortion? Is it extortion to continually threaten to bring what would turn out to be an expensive lawsuit against another company? Or is this just a danger of doing business? If it is not extortion, what conditions would need to be present in order for it to be extortion?

The following is a suggested course of study, not legal advise:

Generally, extortion is a threat to do something illegal and outside
the court, except for threatening to implicate someone in a crime.
The latter can sometimes be called "compounding crimes," which is to
have knowlege of a crime but agree to accept something of value to
keep it quiet.

OTOH, the civil tort of malicious prosecution is where he brings an
unfounded legal action for abusive purposes. The civil tort of abuse
of process is a close cousin wherein one does NOT have to win the
underlying action to ultimately prevail.

Under certain narrow circumstances, the pleadings in a court could be
considered libel, which could rise to a crime, which one might
consider if the party did not have sufficient assets that a punative
damages tort judgement would not deter him.

Stuart A. Bronstein
02-09-2006, 05:04 PM
Kevin Haddock <kevin@n-CUTSPAMdex.com> wrote:

OTOH, the civil tort of malicious prosecution is where he brings an unfounded legal action for abusive purposes. The civil tort of abuse of process is a close cousin wherein one does NOT have to win the underlying action to ultimately prevail.

But I believe he has to show that the suit was brought for some
ulterior motive rather than simply to redress his grievances.

Under certain narrow circumstances, the pleadings in a court could be considered libel, which could rise to a crime, which one might consider if the party did not have sufficient assets that a punative damages tort judgement would not deter him.

In California, other than abuse of process, anything said or
published for the purpose of bringing a court action is privileged.

Stu

Deadrat
02-09-2006, 05:04 PM
"Kevin Haddock" <kevin@n-CUTSPAMdex.com> wrote in message
news:9k1du1praumsv5mhrr75n306685t1lb0tf@4ax.com...
"John Neiberger" <jneiberger@gmail.com> writes:
<snip>
Under certain narrow circumstances, the pleadings in a court could be considered libel,

Which circumstances?

which could rise to a crime,

When does libel become a crime?

which one might consider if the party did not have sufficient assets that a punative damages tort judgement would not deter him.

Antipodean Bucket Farmer
02-11-2006, 10:58 AM
In article
<00mnu1lc14hailqlb4trcu770tf9qaj6eb@4ax.com>,
ephemera1@sbcglobal.net says...
"Kevin Haddock" <kevin@n-CUTSPAMdex.com> wrote in message news:9k1du1praumsv5mhrr75n306685t1lb0tf@4ax.com...
"John Neiberger" <jneiberger@gmail.com> writes: <snip>
Under certain narrow circumstances, the pleadings in a court could be considered libel,

Which circumstances?

which could rise to a crime,

When does libel become a crime?


It becomes a crime when it said under oath in legal
proceedings, and becomes perjury.


--
Get Credit Where Credit Is Due
http://www.cardreport.com/
Credit Tools, Reference, and Forum

John F. Carr
02-12-2006, 06:27 PM
In article <00mnu1lc14hailqlb4trcu770tf9qaj6eb@4ax.com>,
Deadrat <ephemera1@sbcglobal.net> wrote:
"Kevin Haddock" <kevin@n-CUTSPAMdex.com> wrote in messagenews:9k1du1praumsv5mhrr75n306685t1lb0tf@4ax .com...
"John Neiberger" <jneiberger@gmail.com> writes:<snip>
Under certain narrow circumstances, the pleadings in a court could be considered libel,Which circumstances?
which could rise to a crime,When does libel become a crime?

Libel is a crime in a few states, but rarely prosecuted.
A web search for "criminal libel" turns up some discussion.

--
John Carr (jfc@mit.edu)

Deadrat
02-12-2006, 06:27 PM
"Antipodean Bucket Farmer" <usenet2005@THE-DOMAIN-IN.SIG> wrote in message
news:fa9su1d5dsjo03kicpm7crlv7vnv55anns@4ax.com...
In article <00mnu1lc14hailqlb4trcu770tf9qaj6eb@4ax.com>, ephemera1@sbcglobal.net says...
"Kevin Haddock" <kevin@n-CUTSPAMdex.com> wrote in message news:9k1du1praumsv5mhrr75n306685t1lb0tf@4ax.com...
"John Neiberger" <jneiberger@gmail.com> writes: <snip>
Under certain narrow circumstances, the pleadings in a court could be considered libel, Which circumstances? which could rise to a crime, When does libel become a crime? It becomes a crime when it said under oath in legal proceedings, and becomes perjury.

I'm still a little confused. If you're saying that the same
statement may get you convicted of perjury and lose a
libel suit for you, then I'd have to agree. But that doesn't
make libel a crime. Although you may libel someone by
publishing a falsehood that you believe to be true; you do
not commit perjury by uttering a falsehood that you believe
to be true. Perhaps I've missed your point. If so, sorry.

And do you have circumstances where pleadings become
libelous? Aren't they privileged, even if perjurious?



-- Get Credit Where Credit Is Due http://www.cardreport.com/ Credit Tools, Reference, and Forum

Deadrat
02-15-2006, 07:39 AM
"John F. Carr" <jfc@mit.edu> wrote in message
news:03ovu1d38a1ipsb08uukegd4aof8gjkt56@4ax.com...
In article <00mnu1lc14hailqlb4trcu770tf9qaj6eb@4ax.com>, Deadrat <ephemera1@sbcglobal.net> wrote:
"Kevin Haddock" <kevin@n-CUTSPAMdex.com> wrote in messagenews:9k1du1praumsv5mhrr75n306685t1lb0tf@4ax .com...
"John Neiberger" <jneiberger@gmail.com> writes:<snip>
Under certain narrow circumstances, the pleadings in a court could be considered libel,Which circumstances?
which could rise to a crime,When does libel become a crime? Libel is a crime in a few states, but rarely prosecuted. A web search for "criminal libel" turns up some discussion.

You're right. Some statutes are still on state books. An appeals court
struck down the PR statute; SCOTUS struck down the Utah statute.
I doubt that any such state law could withstand Constitutional scrutiny.


-- John Carr (jfc@mit.edu)

Tony
02-15-2006, 07:39 AM
Stuart A. Bronstein wrote:
But not all threats are extortion. I don't know about the laws of the other states, but in California it's only extortion if the threat is: 1. To do an unlawful injury to the person or property of the individual threatened or of a third person; or, 2. To accuse the individual threatened, or any relative of his, or member of his family, of any crime; or,

I've faced just that circumstance - where a former employer threatened
to file a criminal complaint against me if I didn't fix his website
(which had been messed up by another - current - employee). The
"something of value" in this case would have been my work product.

I couldn't get anyone to pay any attention to me - DA, police, etc. -
would I have any other recourse (This was all less than a year ago)

BTW - if any CA lawyer would be interested in talking in more detail
(and if there may be a case) tony23 at dslextreme dot com is my email -
please contact me directly :)

Deadrat
02-17-2006, 09:57 AM
"Tony" <tony23@dslextreme.com> wrote in message
news:j7f6v1hih85cud20tperp0u09ig51mlm6t@4ax.com...
Stuart A. Bronstein wrote:
But not all threats are extortion. I don't know about the laws of the other states, but in California it's only extortion if the threat is: 1. To do an unlawful injury to the person or property of the individual threatened or of a third person; or, 2. To accuse the individual threatened, or any relative of his, or member of his family, of any crime; or, I've faced just that circumstance - where a former employer threatened to file a criminal complaint against me if I didn't fix his website (which had been messed up by another - current - employee). The "something of value" in this case would have been my work product.

The website? Don't you mean your reputation and ability to find other
work?

I couldn't get anyone to pay any attention to me - DA, police, etc. -

What makes you think that threatening to file a criminal complaint is
in itself a crime?

would I have any other recourse (This was all less than a year ago)

Accusing someone of a crime he didn't commit could be defamation, but I'll
bet any CA lawyer interesting in talking to you would ask the following:

1. Did your employer accuse you of a crime or did he say he would
ask the authorities to judge whether one had been committed by you?
A good faith trip to the local DA might be privileged.

2. Did your employer publish the accusation? (I.e., did a third party
hear about it?)

3. How much damage did your reputation sustain?

BTW - if any CA lawyer would be interested in talking in more detail (and if there may be a case) tony23 at dslextreme dot com is my email - please contact me directly :)

*** I am not a lawyer, so this can't be legal advice. ***

Fred the Red Shirt
02-17-2006, 09:57 AM
Antipodean Bucket Farmer wrote:
In article <00mnu1lc14hailqlb4trcu770tf9qaj6eb@4ax.com>, ephemera1@sbcglobal.net says...
"Kevin Haddock" <kevin@n-CUTSPAMdex.com> wrote in message news:9k1du1praumsv5mhrr75n306685t1lb0tf@4ax.com...
"John Neiberger" <jneiberger@gmail.com> writes: <snip>
Under certain narrow circumstances, the pleadings in a court could be considered libel, Which circumstances? which could rise to a crime, When does libel become a crime? It becomes a crime when it said under oath in legal proceedings, and becomes perjury.

Correct me if I am wrong but if the defamation is 'said' is it
not slander rather then libel?

--

FF

Stuart Bronstein
02-18-2006, 11:53 AM
fredfighter@spamcop.net wrote:
Antipodean Bucket Farmer wrote:
ephemera1@sbcglobal.net says...
When does libel become a crime? It becomes a crime when it said under oath in legal proceedings, and becomes perjury. Correct me if I am wrong but if the defamation is 'said' is it not slander rather then libel?

Answers to written interrogatories are also under oath.

Stu

Stuart Bronstein
02-18-2006, 11:53 AM
"Deadrat" <ephemera1@sbcglobal.net> wrote:
"Tony" <tony23@dslextreme.com> wrot
I couldn't get anyone to pay any attention to me - DA, police, etc. - What makes you think that threatening to file a criminal complaint is in itself a crime?

It is a crime to threaten to file a criminal complaint if "something of
value" isn't turned over. This is true even if the crime to be
revealed actually happened.

would I have any other recourse (This was all less than a year ago) Accusing someone of a crime he didn't commit could be defamation,

Not if it wasn't communicated to a third person.

but I'll bet any CA lawyer interesting in talking to you would ask the following:
1. Did your employer accuse you of a crime or did he say he would ask the authorities to judge whether one had been committed by you? A good faith trip to the local DA might be privileged.

Of course. But threatening to go if money is not handed over is not
the same as simply going.

*** I am not a lawyer, so this can't be legal advice. ***

No comment.

Stu

Complete Labor Law Poster for $24.95
from www.LaborLawCenter.com, includes
State, Federal, & OSHA posting requirements