PARRISH v. LATHAM & WATKINS (To be called and continued to the June 2017 calendar.)Amicus Curiae Brief of Attorney’s Liability Assurance Society, Inc., Baker & McKenzie, Bryan Cave LLP, et al.Cal.May 27, 2016SUPREME COURT COPY SUPREME COURT Case No. S228277 FILE Supreme Court MAY 2.7] 2018 of the State of California — Franka. McGuire Clerk Deputy WILLIAM PARRISHand E. TIMOTHY FITZGIBBONS, Plaintiffs and Appellants VS. LATHAM & WATKINS, LLP and DANIEL SCHECTER, Defendants and Respondents. AFTER A DECISION BY THE COURT OF APPEAL SECOND APPELLATEDISTRICT, DIVISION 3, CASE NO. B244841 HON. JAMESR. DUNN, JUDGE, SUP. CT. NO. BC 482394 APPLICATION OF ATTORNEY’S LIABILITY ASSURANCE SOCIETY,INC.; BAKER & MCKENZIE; BRYAN CAVE LLP; DLA PIPER LLP (US); FISH & RICHARDSONP.C.; GIBSON, DUNN & CRUTCHER LLP; GREENBERG TRAURIG, LLP; IRELL & MANELLA LLP; MCGUIREWOODSLLP; MORRISON & FOERSTER LLP; O>MELVENY & MYERS LLP; PAUL HASTINGS LLP; REED SMITH LLP; AND SQUIRE PATTON BOGGS(US) LLP; FOR LEAVE TO FILE AMICICURIAEBRIEF AND AMICICURIAE BRIEF SUPPORTING RESPONDENTS MUNGER, TOLLES & OLSON LLP Mark B. Helm (SBN 115711) Mark.Helm@mto.com John F, Muller (SBN 300839) 355 South Grand Avenue, 35th Floor Los Angeles, CA 90071 Tel: (213) 683-9100 Fax: (213) 687-3702 . Attorneysfor Attorney's Liability Assurance Society, Inc. ht s A N B e s t e s S a t ue Case No. 8228277 Supreme Court of the State of California WILLIAM PARRISHand E. TIMOTHY FITZGIBBONS, Plaintiffs andAppellants VS. LATHAM & WATKINS, LLP and DANIEL SCHECTER, Defendants and Respondents. AFTER A DECISION BY THE COURT OF APPEAL SECOND APPELLATEDISTRICT, DIVISION 3, CASE NO. B244841 HON. JAMESR. DUNN, JUDGE, SUP. CT. NO. BC 482394 APPLICATION OF ATTORNEY’S LIABILITY ASSURANCESOCIETY,INC.; BAKER & MCKENZIE; BRYAN CAVE LLP; DLA PIPER LLP (US); FISH & RICHARDSONP.C.; GIBSON, DUNN & CRUTCHER LLP; GREENBERG TRAURIG, LLP; IRELL & MANELLA LLP; MCGUIREWOODSLLP; MORRISON & FOERSTER LLP; O’MELVENY & MYERS LLP; PAUL HASTINGS LLP; REED SMITH LLP;. AND SQUIRE PATTON BOGGS(US) LLP; FOR LEAVETO FILE AMICI CURIAEBRIEF AND AMICICURIAE BRIEF SUPPORTING RESPONDENTS MUNGER, TOLLES & OLSON LLP Mark B. Helm (SBN 115711) Mark.Helm@mto.com John F. Muller (SBN 300839) 355 South Grand Avenue, 35th Floor Los Angeles, CA 90071 Tel: (213) 683-9100 Fax: (213) 687-3702 . Attorneysfor Attorney’s Liability Assurance Society, Inc. BAKER & MCKENZIE Peter D. Engstrom (SBN 121529) peter.engstrom@bakermckenzie.com Two Embarcadero Center, 11th Floor San Francisco, California 94111-3802 - Tel: (415) 576-3025 Fax: (415) 576-3099 Attorneyfor Baker & McKenzie DLA PIPER LLP (US) Charles L. Deem (SBN 110557) charlie.deem@dlapiper.com 401 B Street, Suite 1700 San Diego, CA 92101-4297 Tel: (619) 699-2978 Fax: (619) 764-6678 Attorneyfor DLA Piper LLP (US) GIBSON, DUNN & CRUTCHER LLP Kevin S. Rosen (SBN 133304) krosen@gibsondunn.com 333 South Grand Avenue Los Angeles, CA 90071-3197 Tel: (213) 229-7635 Fax: (213) 229-6635 Attorneyfor Gibson, Dunn & Crutcher LLP IRELL & MANELLA LLP Harry Mittleman (SBN 172343) hmittleman@irell.com 1800 Avenueofthe Stars, Suite 900 Los Angeles, CA 90067 Tel: (310) 277-1010 Fax: (310) 203-7199 Attorneyfor Irell & Manella LLP BRYAN CAVE LLP John W. Amberg (SBN 108166) jwamberg@bryancave.com 120 Broadway #300 Santa Monica, CA 90401-230 Tel: (310) 576-2280 Fax: (310) 576-2200 Attorneyfor Bryan Cave LLP FISH & RICHARDSONP.C. John W. Thornburgh (SBN 154627) thornburgh@fr.com 12390 El Camino Real San Diego, CA 92130 Tel: (858) 678-5070 Fax: (858) 678-5099 Attorneyfor Fish & Richardson P.C. GREENBERG TRAURIG, LLP Jeff E. Scott (SBN 126308) scottj@gtlaw.com 1840 Century Park East, Suite 1900 Los Angeles, CA 90067 Tel: (310) 586-7700 Fax: (310) 586-7800 Attorneyfor Greenberg Traurig, LLP MCGUIREWOODSLLP Leslie M. Werlin (SBN 67994) Iwerlin@mcguirewoods.com 1800 Century Park East, 8th Floor Los Angeles, CA 90067 — Tel: (310) 315-8222 Fax: (310) 315-8210 Attorneyfor McGuireWoods LLP MORRISON & FOERSTER LLP Douglas L. Hendricks (SBN 83611) dhendricks@mofo.com Philip T. Besirof (SBN 185053) pbesirof@mofo.com Morrison & Foerster LLP 425 Market Street, Suite 3200 San Francisco, CA 94105 ~ Tel: (415) 268-7000 Fax: (415) 268-7522 © Attorneysfor Morrison & Foerster LLP PAUL HASTINGS LLP Eve M. Coddon (SBN 125389) evecoddon@paulhastings.com 515 South FlowerStreet, 25" Floor Los Angeles, CA 90071 Tel: (213) 683-6150 Fax: (213) 996-3150 Attorneyfor Paul Hastings LLP SQUIRE PATTON BOGGS(US) LLP Adam R. Fox (SBN 220584) adam.fox@squirepb.com 555 South Flower Street, 31st Floor Los Angeles, CA 90071 Tel: (213) 624-2500 Fax: (213) 623-4581 Attorneyfor Squire Patton Boggs (US) LLP O’MELVENY & MYERS LLP Martin S. Checov (SBN 96901) mchecov@om.com 400 South HopeStreet Los Angeles, CA 90071 Tel: (213) 430-6000 Fax: (213) 430-6407 Attorneyfor O’Melveny & Myers LLP REED SMITH LLP Kurt C. Peterson (SBN 83941) kpeterson@reedsmith.com 1901 Avenue ofthe Stars, Suite 700 Los Angeles, CA 90067-6078 Tel: (310) 734-5201 Fax: (310) 734-5299 Attorneyfor Reed Smith LLP APPLICATION OF ATTORNEY’S LIABILITY ASSURANCE SOCIETY, INC. AND THIRTEEN INDIVIDUAL NON-ALAS LAW FIRMS FOR LEAVETO FILE AMICICURAIEBRIEF IN SUPPORT OF RESPONDENTS To the Honorable Tani Cantil-Sakauye, Chief Justice: Attorney’s Liability Assurance Society, Inc. (“ALAS”), and thirteen individual non-ALASlawfirms with practices in California—Baker & McKenzie; Bryan Cave LLP; DLA Piper LLP (US); Fish & Richardson P.C.; Gibson, Dunn & Crutcher LLP; Greenberg Traurig, LLP; Irell & Manella LLP; McGuireWoods LLP; Morrison & Foerster LLP; O’Melveny & Myers LLP; Paul Hastings LLP; Reed Smith LLP; and Squire Patton Boggs (US) LLP—tespectfully moveforleaveto file a brief as amici curiae in support of Respondents. ALASinsures 216 law firms and approximately 58,800 lawyers and offers insurance against claims for malicious prosecution. Collectively, the thirteen non-ALASamici law firms have extensive experience defending actions against attorneys for malicious prosecution. Both ALASand the non-ALASamicilaw firms have beenactivein various policy issuesrelating to the legal profession, whether through public commentary, participation in amicusbriefs, educational efforts, or otherwise. | Further, ALAS’s California attorney insureds and the California attorneys belonging to the non-ALASamici law firms haveaninterest in vigorously representing their clients without being subjectedto the kind of “No party or counsel for a party authored the proposed amici curiae brief in whole or in part or made a monetary contribution intended to fund the preparation or submission ofthe brief. No person orentity, other than amici curiae and their members, made a monetary contribution intended to fund the preparation or submissionofthis brief. . hindsight-driven second-guessing that this Court has held is inappropriate in a later malicious prosecution action. Finally, they have aninterest in availing themselvesofthe repose from malicious prosecution actionsthat the California Legislature found appropriate to afford attorneys when it enacted Code of Civil Procedure section 340.6—andin avoiding the higher malpractice insurance premiums that would result from application of a longerlimitations period. ALASandthe non-ALAS amici law firms believe they have important perspectives to offer on each of the two issues before the Court, either of which is independently dispositive and both of which are important to the profession. First, as the proposed amicusbrief explains, Petitioners’ arguments, | if accepted, would underminethe principles set out by this Court regarding probable cause andthe interim adverse judgmentrule. Byjettisoning the fraud or perjury requirements for the exception to the interim adverse | judgmentrule, Petitioners would transform malicious prosecution from an intentional tort into one governedbystrict liability or negligence principles. Undertheir formulation, probable cause would be judged not bythe facts the attorney defendant knewatthe time but by then-unknownfacts that later cameto light. Petitioners would also have courts assess whether an action was justified based on the final result rather than the circumstances under whichthe attorney acted. The consequence would be to discourage lawsuitsthat litigants have a lawful right to bring, and to encourage baseless suits for malicious prosecution. Second, Petitioners also advance an interpretation of Code of Civil Procedure section 340.6 contrary to this Court’s express instructions in Lee v. Hanley (2015) 61 Cal.4th 1225, and the intentions of the legislature. Properly interpreted, the one-year limitations period in section 340.6 applies to malicious prosecution actions against attorneys, andthis limitations period begins when judgmentis entered in the underlying action. Forthe reasonsstated above, the Court should grant this application and permit ALASand the non-ALASamici law firmsto file the attached proposed amicicuriae brief. _ DATED:May13, 2016 /s/ Mark B. Helm Respectfully submitted, /s/ Peter D. Engstrom MUNGER, TOLLES & OLSON LLP Mark B. Helm (SBN 115711) John F. Muller (SBN 300839) Attorneysfor Attorney’s Liability Assurance Society, Inc. /s/ John W. Amberg BRYAN CAVE LLP John W. Amberg (SBN108166) Attorneyfor Bryan Cave LLP /s/ John W. Thornburgh FISH & RICHARDSONP.C. John W. Thornburgh (SBN 154627) Attorneyfor Fish & Richardson P.C. BAKER & MCKENZIE Peter D. Engstrom (SBN 121529) Attorneyfor Baker & McKenzie /s/ Charles L. Deem DLA PIPER LLP (US) Charles L. Deem (SBN 110557) Attorneyfor DLA Piper LLP (US) /s/ Kevin S. Rosen GIBSON, DUNN & CRUTCHER LLP Kevin S. Rosen (SBN 133304) Attorneyfor Gibson, Dunn & Crutcher LLP. /s/JeffE. Scott GREENBERG TRAURIG, LLP Jeff E. Scott (SBN 126308) Attorneyfor Greenberg Traurig, LLP /s/ Leslie M. Werlin MCGUIREWOODSLLP Leslie M. Werlin (SBN 67994) Attorneyfor McGuireWoods LLP /s/ Martin S. Checov O’MELVENY & MYERS LLP Martin S. Checov (SBN 96901) Attorneyfor O’Melveny & Myers LLP /s/ Kurt C. Peterson REED SMITH LLP Kurt C. Peterson (SBN 83941) . Attorneyfor Reed Smith LLP /s/ Harry Mittleman IRELL & MANELLA LLP Harry Mittleman (SBN 172343) Attorneyfor Irell & Manella LLP /s/ Douglas L. Hendricks MORRISON & FOERSTER LLP Douglas L. Hendricks (SBN 83611) Philip T. Besirof (SBN 185053) Attorneysfor Morrison & Foerster LLP /s/ Eve M. Coddon PAUL HASTINGS LLP Eve M. Coddon (SBN 125389) Attorneyfor Paul Hastings LLP /s/Adam R. Fox SQUIRE PATTON BOGGS(US) LLP Adam R. Fox (SBN 220584) Attorneyfor Squire Patton Boggs (US) LLP TABLE OF CONTENTS Page INTEREST OF AMICI CURIAE u.ececssssesscssssssssesesscsesesssescesscssssssvscsessacscvececeatstacacans 1 INTRODUCTION AND SUMMARYOF ARGUMENT........c.ccssessssestesseessees 1 ARGUMENT1...cc ceccsssscseesssstssssscsessesesesasssacsessseseesescsescssscsssesesessssesssseaesevseatacasans 5 I. STANDARD OF REVIEW .....ccccccsssssesssscsescsssescssscsesessseusssesssssaceceesasasseaeas 5 II. PETITIONERS FAIL TO SHOW RESPONDENTS LACKED PROBABLE CAUSE TO PROSECUTE THE PRIOR ACTION............0..6 A. Malicious Prosecution is a Disfavored Cause of Action .................6 B. Probable Cause Is Assessed From the View of a Reasonable Attorney Aware of the Facts Known to the Defendant0...eececsesssesessessesescsescsessescsesesescssessscsssssssceceveseesasesees7 C, An Interim Judgment Establishes Probable Cause Because it Reflects an Application of the Probable Cause Standard.............9 D. Petitioners’ Effort to Broaden the Exceptionto the Interim Adverse Judgment Rule Ignores the Policy Underlying the Rule and Is Foreclosed by this Court’s Precedents............:ccesssees 11 E. Petitioners’ Position Finds No Support In Case Law ........cccsesess. 13 F, Petitioners Do Not Make a Prima Facie Case that An Exception to the Interim Adverse Judgment Rule Applies............ 16 G. The Finding of Bad Faith Under the UTSAin the Underlying Action Does Not Alter This Analysis...21 H. Petitioners Offer No Evidence Supporting Their Claim That Respondents Continued the Suit Without Probable CaUse...ccccccccscssesecessesessssessssessseseeesessscssscsvsssssesssssssssetecescececsess24 II. PETITIONERS’ CLAIMS ARE BARRED BYSECTION 340.6’S ONE-YEAR STATUTEOF LIMITATIONS.....ccccccseccscsessesceecessseseses25 A. Under Lee v. Hanley, Section 340.6 Applies to Actions that Depend on Proofof Certain Attorney-Specific Misconduct..........26 B. Because This Suit Depends on Proof Respondents Violated an Obligation Unique to Attorneys and Judged According to an Attorney-Specific Standard, Section 340.6 Applies.............28 Cc. Prospective Application of Section 340.6 to Malicious Prosecution Suits Against Attorneys Would be Improper............. 30 D, This Suit is Barred Under Section 340.6 .......ccccccccscssseseesseesesees31 CONCLUSION...cccceecsecsseseessoescssssessecseesscseesesseresscsuscsssecsecsssessaravaeeaeateasas32 TABLE OF AUTHORITIES Page(s) FEDERAL CASES Director General v. Kastenbaum (1923) 263 U.S 25 oeecsssssssssseseseseesesscssssesscsecsecssssessessesecsevastarsesareaass 9 STATE CASES Antounian v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438 woo.cccscsccsssssscsssscsscssessessaesesecsssacsscees 1] Babb v. Superior Court (1971) 3 Cal.3d 841 occeccccsecsecssccsssssssessesesseesnenracecenseseisesossanceess 32 Bertero v. Nat. Gen. Corp. (1974) 13 Cal.3d 43 occeccsssssessccssesscessscssssssssssssscsssssenssceseaeesceres 29, 31 Black v. Knight . (1919) 44 Cal.App. 756 ......cccccsccssscesesscesseeees aseeeseeeeessecteecesseeesseessuees 15 Bullock v. Morrison (1931) 118 Cal-App. 112........... scseeceseeessseesseesneceeenesenecsseeeeeatersesssaseneees 16 Carpenter v. Sibley (1908) 153 Cal. 215 occcsecssccssscsseesscssssecsssssscsssaceeeseceeeses 14, 15, 16 Cheong Yu Yee v. Cheung | (2013) 220 CalApp.4th 184 oo.cccsccssceescssseeesseseeees 13, 14, 28, 32 Cowles v. Carter (1981) 115 Cal.App.3d 350 weeccccsccsssssssssssscsssssesersssseceesssececsssaseees 16 Eustace v. Dechter (1942) 53 Cal.App.2d 726 .....cccccccscscsscsscscssssessssescscsecssesscesssscsessesesees 16 Flatley v. Mauro (2006) 39 Cal.4th 299ociccscccssscsscsscsscssssssscssssscscssscsssaseessessasscusaesans 5 FLIR Sys., Inc. v. Parrish (June 13, 2008, No. 1220581) 2008 WL 2472248ceeceeeeseeeeees 20, 24 FLIR Sys., Inc. v. Parrish (2009) 174 CalApp.4th 1270 occccccccsccscsssscssssscsssssssscssscsscsssecsstscsenes 17 li TABLE OF AUTHORITIES (continued) Page(s) Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 CalApp.4th 1249 oo. ccccccccsscsssesessescsssscssssssscsssscsessrscesseseees 24 Holliday v. Holliday _ (1898) 123 Cal. 26oeccesscssesscssesscesesesssecsesessesssessessssssesevsssseecasenes 15 Kachig v. Boothe . (1971) 22 CalApp.3d 626 oo... ccccccessssesssssssscerestsesscssssessescscsssscsseeeeass 16 Laird v. Blacker (1992) 2 Cal.4th 606 oo.cccccessecsessssssssssssesessesesssessecsesscsssssssvstecenevace 30 Lee v. Hanley (2015) 61 Cal4th 1225occccecccssesscssssccecssscsctsscteesseesseseees 1, passim Manco Contracting Co. (W.W.L.) v. Bezdikian (2008) 45 Cal.4th 192, 204 & fin. 9ce ccccecsescsesssscssssesssesssscevsveseesenes 25 In re Marriage ofFlaherty (1982) 31 Cal.3d 637 oo. eccccsccsscssesscsscsscsssssesessesesssscsesssssscsesevarseeereaseanas 6 Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179 ceccccsccesesessssessssssssscscsscsscsssesaseesereesens 22 Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973 oo ccccssessssseessessssessesscssescsecsessccsssssssssserscseeeeesars 30 Norton v. John M.C. Marble Co. (1939) 30 Cal.App.2d 451 oeccccssecsscsssssssssessesssesecsessesssssssssssscaseeaees 16 Pacific Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal. 3d L118ceccsccsssseesescssssessssesesssessessesrcousssscscseees 7, 13 Parrish v. Latham & Watkins (2015) 238 Cal.App.4th 81 oo.ccscsesesseeeseeseessetesseeseeeeneeeceteeeeaeeses 22 Planning & Conservation League v. Dept. of Water Resources (1998) 17 Cal.4th 264occccsscsscessessesessescscessssusssssssssssscssescesarennes 30 Plumley v. Mockett (2008) 164 Cal.App.4th 1031 ...cecccsssccsccssssssssssssessessesssssssseesssssssssssseeesee 16 ili TABLEOF AUTHORITIES (continued) Page(s) Quintillianiv. Mannerino (1998) 62 CalApp.4th 54 oo.cecesssesessestesessessssesesssnescssensseaesseaens 26, 29 Rare Coin Galleries, Inc. v. A-Mark Coin Co., Inc. (1988) 202 Cal.App.3d 330 0... .ccccecsssssssesssscescseescsssscssssscssssvscscveceeesnes 32 Roberts v. Sentry Life Ins. (1999) 76 Cal.App.4th 375 oo... ccescccssssssescsecsssecsssssessscsessneeees 10, 13, 14 Roger Cleveland GolfCo. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660..........sevsaeeeaseseseveaeeeaeesaeeeeeesseesaseesseaeeass 28, 32 SASCO v. Rosendin Electric, Inc. (2012) 207 Cal.App.4th 837 oc.ccccsccsesssessssssesssssssssssscssvsassvsevecseeseseeaes 24 Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863 oo. cescscessscsseessesssssesesessesecsesscsecsecsssscasees 2, passim Slaney v. Ranger Ins. Co. (2004), 115 CalApp.4th 306.0... cccsscsescsesscsssssssecsssseessscssserersees 22, 23: Sosinsky v. Grant — . (1992) 6 Cal.App.4th 1548.00...vaseusensecsesscersceseoonsnesesaesseesenessevsens 29, 31 Tool Research & Engineering Corp. v. Henigson (1975) 46 Cal.App.3d 675 ......cccecssscsssssssesesscssessessssssscsscssesscsstereesacees 8,9 Vafi v. McCloskey . (2011) 193 Cal.App.4th 874......... beseeessecsssecscecsaceaeesaeeseeeseaeesesesesetesesenes 28 Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811ccccsssscsssssssssscssssesscssssesssssssceeseses 1, passim Zamosv. Stroud (2004) 32 Cal.4th 958occcescsssssscescsssesessssssessssscsessssessessssessvsceeraceaes 14 STATE STATUTES Civ. Proc. Code, § 335.1 cccccicccsccscccscescesssssssssssssecesssecsacesesecsssesssvacerseeeoss 30 Civ. Proc. Code, § 340.6 ....ccccccccsccsscssccccesscsssssessesecensceeceeessreceareess 1, passim iv TABLE OF AUTHORITIES (continued) Page(s) Civ. Proc. Code, § 340.6(8)..... cs cecccsccsssssessesssesecssscsscsscssessccsacscavecesesarenees 25 Evid. Code, § 80] oo... cscsssesscesessessssessesesessssssecsescssssssssessscssscscecauessseeaas 19 Uniform Trade Secrets Act § 3426.4 secesestssesstesssesssresssessseeseesees beens 3, passim STATE RULES Cal. Rules of Court, rule 8.500(b)........ccccccccscsssscsssscessseessseseecsesesseseesaeons 25 Cal. Rules of Prof. Conduct, rule 3-200...eseseceaeeseeeesenstsseonseees 5, 28 Cal. Rules of Prof. Conduct, rule 3-200(A) ou... seceeeeessecessesesaeseeees 29 TREATISES . 1 Harperet al., The Lawof Torts § 4.2, P. 407...cecccescccsssscssecsecesssecenees 12 | INTEREST OF AMICI CURIAE Amici are Attorney’s Liability Assurance Society, Inc. (“ALAS”), which insures 216 law firms and approximately 58,800 lawyers, as well as thirteen non-ALASamicilaw firmsthat practice in California. ALAS offers insurance against claims for malicious prosecution, and the individual non-ALASfirms have extensive experience defending actions for malicious prosecution. It is in the interest of amici that this Court _ define and apply the elements of malicious prosecution consistently and correctly, and that the properstatute of limitations be applied to such actions when they are brought against attorneys. By virtue oftheir extensive experience with legal malpracticelitigation, and particularly actions against attorneys for malicious prosecution, amici are uniquely situated to offer a broader perspective on the issues raised bythis appeal. INTRODUCTION AND SUMMARYOF ARGUMENT The Court of Appeal properly granted Respondents’ anti-SLAPP motion on the ground that Respondents had probable causeto bring the underlying action. This ruling should be affirmed. Alternatively, the Court may affirm the judgment below on an independent ground without reaching the probable cause issue. Specifically, the Court may rule, under Lee vy. Hanley (2015) 61 Cal.4th 1225, that this action is barred by the one-year limitations period in Code of Civil Procedure section 340.6. | As this Court held in Wilson v. Parker, Covert & Chidester (2002) . 28 Cal.4th 811, an interim adverse judgment on the merits establishes probablecauseto bring an action unless the judgment wasobtained by fraud or perjury. This rule rests on a straightforward and important principle: subject to the exceptions Wilson identifies, an interim adverse judgment on the merits necessarily proves the existence ofprobable cause. A lawyerhas probable cause to prosecute an action when a reasonable lawyer, based on the facts actually knownat the time, would believe that the action wasnot “totally and completely without merit.” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 885.) Critically, this standard depends on the facts knownbythe actual lawyer: it asks how a reasonable | lawyer would haveacted if aware of the same primafacie evidence. (Wilson, supra, 28 Cal.4th at pp. 821-22 and fn.6.) In the usual case, an interim judgment on the merits for a lawyer’s client necessarily will rest on a determination that there was probable cause to bring the action: in reaching the judgment, a reasonable (as wellas disinterested and experienced) lawyer—the court—will have found, based on the facts knownto the lawyer defendant, that the actionwas nottotally and completely without merit. The one instance in whichthis will not be the case is when the court was misled aboutthe facts actually knownto the lawyer defendant—thatis, when the lawyer knowingly misstated those facts to the court through fraud or subornation ofperjury. In that instance, the lawyer cannotbe said necessarily to have acted with probable cause, because the interim judgment wasnot based upon the samefacts the lawyer knew atthe time. Petitioners Seek to expand the exceptionsto the interim adverse judgmentrule in violation of this fundamentalprinciple. They argue for an exception to the rule when a judgment was obtained notby fraud or perjury but by “materially false facts”—whetherornot the falsity of those facts was knownby the lawyerat the time. This rule would impose sort ofstrict liability or negligence standard for probable cause, faulting lawyers for facts they did not knowatthe time they acted. Such an approach is fundamentally inconsistent with how the probable causetest has been understood and applied by this Court. Malicious prosecution is and always has been an intentional tort—and indeed one with ahigh threshold for establishing the requisite intentionality. The tort should not be transformed into one making lawyers guarantors that facts they relied upon to support probable cause will never provelater to be erroneous. Such a rule would discourage lawyers from bringing lawsuits their clients have a right to bring. It would also create a conflict of interest between lawyersandtheir clients, encouraging lawyers to conduct excessive inquiries that are not for the benefit oftheir clients. Petitioners’ argumentthat a later finding of “bad faith” under section 3426.4 of the Uniform Trade Secrets Act showsa lack ofprobable cause has the issue exactly backwards. Petitioners ignore this Court’s statement that unjustified litigation is best deterred by measures, like sanctions, applicable in the initial suit, rather than by a successive action for malicious prosecution. Giventhis directive, the award of sanctions undersection 3426.4 based on finding of bad faith is a reason why later malicious prosecution action is unnecessary, not a reason whyit should be maintained. In any event, a finding of bad faith under section 3426.4 does not require a finding of fraud or perjury, and thus offers no reason to disturb an interim adverse judgment. And even in the absenceofan interim adverse judgment, a finding of bad faith under section 3426.4 does not | correspondto a finding of no probable cause. In this suit, Petitioners do not advance any evidenceof fraud or perjury in the underlying action—or,for that matter, even any evidence of materially false facts. Their argument boils down to the assertion, wholly unsupported bythe evidence,that two experts falsely claimedthat they had applied a “scientific methodology”to assess the likelihood of trade secret misuse. Even the most cursory look at the expert declarations conclusively refutes this claim: they made no such representation.! Petitioners really ' Portionsofthetrial court record are contained in sealed volumesofthe record on appeal, which were not available to amici. In thetrial court, ask this Court to find that Respondents lacked probable cause to bring the _ underlying action merely because,aftertrial, the court weighed the evidencein favor of Petitioners. Such a holding would create a back door to this Court’s carefully circumscribed standard for probable cause, discouraging lawsuits that litigants and their attorneys havea rightto bring, creating a conflict of interest between attorneys andtheir clients, and encouraging a flood of suits for malicious prosecution. In any event, this Court need not decide how the interim adverse judgmentrule properly should havebeen applied here. Rather, the Court mayaffirm on the independentand fully sufficient basis that this action is barred by the one-yearlimitations period set by Code of Civil Procedure section 340.6. Under Lee v. Hanley, supra, section 340.6 applies to claims against attorneys that depend on a showingthat the attorney, in the course of performing services judged against an attorney-specific standard, violated an obligation that the attorney had by virtue of the attorney’s identity as an attorney. This rule does not extend to claims—like sexual battery or garden-variety theft—that would showthat the attorney violated an obligation of general application rather than an obligation unique to attorneys. Lee defined the scope of section 340.6 with attention to the Legislature’s goal of controlling the rising costs of malpractice insurance. UnderLee, claimsthat allege maliciousprosecution by attorneys are subject to section 340.6. Attorneys are obligated, by virtue of being however, some ofthese portions of the record were not sealed in their entirety, but rather were redacted. Instead of bringing a motion to unseal the appellate record, amici have simply consulted the redactedtrial court record available to the public. Although these redactedtrial court records are not part of the appellate record, they give amici insight into whatis available to the Court but not to amici. attorneys, to not represent clients where the purpose of the representation is to prosecute. an action without probable cause and with malice. (Cal. Rules of Prof. Conduct, rule 3-200.) An attorney whoviolates this obligation necessarily does so while engaged in the performanceofservices judged by an attorney-specific standard: the reasonable-attorney standard for probable cause. The fact that non-attorneys are also subject to suits for malicious prosecution does not change the fact that an attorney’s obligations are unique. Non-attorneys may notbe held liable for malicious prosecutionif they relied in good faith on the advice oftheir attorneys. But attorneys have no comparable defense: their obligations arise from their particular role as attorneys acting on behalf of clients. In addition, the application of section 340.6 here advances the Legislature’s purpose in enactingit: attorney malpractice insurance, including the insurance offered by ALAS,coverssuits against lawyers for malicious prosecution. ARGUMENT I. STANDARD OF REVIEW The grant of an anti-SLAPP motion is reviewed de novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325.) In order to survive such a motion, a plaintiff “must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing offacts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” (Wilson, supra, 28 Cal.4th at p. 821.) Accordingly, courtsask if, “as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff's attempt to establish evidentiary support for the claim.” (/bid.) Petitioners must meetthis standard with respect to each of the two grounds on which Respondents’ anti-SLAPP motion sought dismissalofthis suit: (1) ae s al ea gi ag te rt Respondents had probable cause to bring the underlying action, and (2) the presentactionis barred by section 340.6’s one-yearlimitationsperiod. Il. PETITIONERS FAIL TO SHOW RESPONDENTS LACKED PROBABLE CAUSETO PROSECUTE THE PRIOR ACTION A. Malicious Prosecution is a Disfavored Cause ofAction Asthis Court explained in Wilson, malicious prosecution is a “disfavored”tort for two primary policy reasons. (Wilson, supra, 28 Cal.4th at p. 817.) First, it has the “‘potential to impose an undue‘chilling effect’ on the ordinary citizen’s willingness to report criminal conduct or to bring a civil dispute to court.’” (/d., quoting Sheldon Appel, supra, 47 Cal.3d at p. 872.) Second, “as a meansof deterring excessive and frivolous lawsuits,”malicious prosecution actions have “the disadvantage of constituting a new roundoflitigation itself.” ([bid.) In light of these policy concerns,the elements ofthe tort “have historically been carefully circumscribed so thatlitigants with potentially valid claims will not be deterred from bringing their claims to court by the prospect of a subsequent malicious prosecution claim.” (Sheldon Appel, supra, 47 Cal.3d at p. 872.) To state a claim for malicious prosecution, a plaintiff must show that the underlying claim was(1) “brought without probable cause”and (2) “initiated with malice.” (Id. at p. 874.) Whether a claim was brought without probable cause depends on a purely “objective determination of the ‘reasonableness’ of the defendant’s conduct.” (Id. at p. 878.) Whether a claim wasinitiated with malice, by contrast, is concerned with the “subjective mental state of the defendantin instituting — the prior action.” (Jbid.) | This Court has defined probable causeso that “[o]nly those actions that ‘any reasonable attorney would agree [are] totally and completely without merit” mayform the basis for a malicious prosecution suit.” (Wilson, supra, 28 Cal.4th at p. 817, quoting Jn re Marriage ofFlaherty (1982) 31 Cal.3d 637, 650.) In other words,“probable cause exists if ‘any reasonable attorney would have thought the claim tenable.’” (/d., quoting Sheldon Appel, supra, 47 Cal.3d at p. 886.) In civil suits like this one, this “rather lenient” standard for probable cause is “equivalent to that for determining the frivolousness of anappeal.” (Jbid.) Litigants and their attorneys havea “right[] . . . to bring nonfrivolouscivil actions, ‘even ifit is extremely unlikely that they will win.’” (/d. at p. 820, quoting Sheldon Appel, supra, 47 Cal.3d at p. 885.) Indeed, this Court has warnedthat “(t]he probable cause requirementis essential to assure free access to the courts.” (Pacific Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1131.) “[I]f the bringing of a colorable claim were actionable, tort law wouldinhibit free access to the courts and impair our society’s commitment to the peaceful, judicial resolution of differences.” (Ibid.) The existence of “probable causeis a legal question to be resolved by the court,” which ensures that defendants in a malicious prosecution action are “protected against the danger that a lay jury would mistake a merely unsuccessful claim for a legally untenable one.” (/d. at p. 817.) In addressing this legal question,this Court has advised that unjustified litigation is best addressed through “the adoption of measuresfacilitating the speedy resolutionoftheinitial lawsuit and authorizing the imposition of sanctions for frivolous or delaying conduct within that first actionitself.” (/d., quoting Sheldon Appel, supra, 47 Cal.3d at p. 873.) B. Probable Cause Is Assessed From the View ofa Reasonable Attorney Awareofthe Facts Knownto the Defendant The probable cause inquiry requires application of an objective standard “to the facts on which the defendant acted”in prosecuting the underlying action. (Sheldon Appel, supra, 47 Cal.3d at p. 878.) Courts ask whethera reasonable lawyer, “on the basis of the facts known to the defendant,” would have believed that the action wasnotfrivolous. (Jbid.) Because“probable cause to bring an action dependsonthefacts known to the litigant or attorney at the time the action is brought,” the probable cause inquiry is properly limited to an assessment ofthe plaintiff’ s “prima facie case alone”in the underlying action. (Wilson, supra, 28 Cal.4th at p. 822 fn. 6.) | . For purposesofprobable cause, therefore, it is irrelevant if a plaintiff or his or her attorney was unawareof other evidence that weighed against their claim when heor she decided to bring suit. ([bid.) Likewise, attorneysare “not required, on penalty oftort liability, to attempt to predict howa trier of fact will weigh the competing evidence,or to abandon their claim if they think it likely the evidence will ultimately weigh against them.” (/d. at p. 822.) The probable cause inquiry is confined to an assessmentof the facts upon which the malicious prosecution defendant acted. | This Court has accordingly madeclear that whether an attorney performed a “reasonable investigation” of facts or an “industrious search of legal authority” has no bearing on the probable cause inquiry. (Sheldon Appel, supra, 47 Cal.3d at pp. 882-83, rejecting dictum to the contrary in ' Tool Research & Engineering Corp. v. Henigson (1975) 46 Cal.App.3d 675, 683.) Malicious prosecution is an intentional tort. Consideration of the reasonablenessof an attorney’s research or investigation would _ improperly “shift[] the focus of the probable cause inquiry from the objective tenability of the prior claim to the adequacyoftheparticular defendant’s performance as an attorney.” (/bid.) This view ofthe probable cause inquiry would run also afoul of “a consistent line of California decisions”that have precluded actions for negligence against an opponent’s attorney. (/bid.) In addition, it would “tend to create a conflict of interest betweentheattorney andclient, tempting a cautious attorney to create a record ofdiligence” by performing research and factual investigation “not for the benefit ofhis client, but simply to protect himself from his client’s adversaries in the eventthe initial suit fails.” (/bid.) Alongsimilarlines, an attorney’s subjective belief in the legal tenability of a claim is also irrelevant to probable cause. As Sheldon Appel explained, “the distinction between the [malicious prosecution] defendant’s knowledge of facts and his subjective assessment of tenability”is critical to the distinction between probable cause and malice. (/d. at p. 881.) “The wantofprobable cause ... is measured by thestate ofthe defendant’s knowledge, notby his intent.” (Id. at p. 881, quoting Director Generalv. Kastenbaum, (1923) 263 U.S. 25, 27-28.) This rule looks to “the absence of probable cause knownto the defendant whenheinstituted the suit. But thestandard applied to defendant’s consciousness is external to it. The question is not whether he thoughtthe facts to constitute probable cause, but whether the court thinks they did.” (Ibid.) In short, in assessing probable cause, courts must place themselves in the shoes ofthe attorney who brought the underlying action and ask whether, on the facts knownto the attorney whenthe attorney broughtthe action, that action was wholly and completely without merit. C. An Interim Judgment Establishes Probable Cause Because it Reflects an Application ofthe Probable Cause Standard ' The rule that certain non-final judgmentson the merits conclusively establish probable cause flows from a straightforward and important principle. These judgments, whenproperly credited, necessarily found that a reasonable lawyer, on the facts knownto the malicious prosecution defendant whenheor she brought the underlying action, would have concludedthat the underlying action was notfrivolous. In other words, the judgmentsreflect a determination that the probable cause standard has been met. This Court recognizedthis principle in Wilson whenit held that such judgments establish probable cause except whenthen theyare “obtained by meansof fraud or perjury.” (Wilson, supra, 28 Cal.4th at p. 817.) Typically, “(c]laims that have succeededat a hearing on the merits, even if that result is subsequently reversed bythetrial or appellate court, are not so lacking in potential merit that a reasonable attorneyorlitigant would necessarily have recognizedtheir frivolousness.” (Jd. at p. 818.) For instance,if a court denies an anti-SLAPP motion on the groundthat the plaintiff has made a prima facie case, it must have concluded that the claim was“legally sufficient and can be substantiated by competent evidence.” (/d. at p. 821.) This conclusion presumptively “establishes probable cause to bring the claim, for such an action clearly is not one that ‘any reasonable attorney would agree . . is totally and completely without merit.’” (Ibid. quoting Sheldon Appel, supra, at p. 885.) Likewise, on a motion for summary judgment,a “trial court’s conclusion that issues of material fact remain for trial ‘necessarily impl[ies] that the judge”—a reasonable(as well as disinterested and experienced) lawyer—“finds at least some merit in the claim.’” (/d. at p. 819, quoting Roberts v. Sentry Life Ins., (1999) 76 Cal.App.4th 375, 383.) Thus, the trial court’s conclusion, unless disregarded, “compels [the] conclusionthat there is probable cause, because probable causeis lacking onlyin the total absence of merit.” (Ibid) These interim judgments, however, will necessarily reflect that the probable cause standard was satisfied only if they were reached based on the prima facie evidence knownby the malicious prosecution defendantat the time the defendant brought the underlying action. In the normal course, an interim judgmentwill be made on those facts: the lawyer in the underlying action will marshal the evidence supporting his or herclient’s primafacie case. However, as Wilson recognized,there is a circumstance wherethis will not be the case: whenthe ruling “is shown to have been obtained by fraud orperjury.” (Jd. at p. 820.) 10 Adoption ofthis standard for an exceptionto the interim adverse judgmentrule makes perfect sense in light of the rule’s purpose. Fraud and perjury connote knowledgeof false evidence. (E.g. Antounian v. Louis . Vuitton Malletier (2010) 189 Cal.App.4th 438, 452 [stating that “the fraud exception requires ‘knowinguseoffalse and perjured testimony’”]; see also POBat p. 24 [defining fraud and perjury as “knowing submission of false evidence”].) If an attorney knowingly misleads the court and thereby obtains an interim judgment, the court’s ruling will not be based on the evidence knownto the attorney—it will be based on a view ofthe evidence as misrepresented by the fraud or perjury. In that circumstance, the judgmentwill not reflect a determination of whether, on thefacts known to the defendant, a reasonable lawyer would have believed the claim legally tenable. D. Petitioners’ Effort to Broaden the Exception to the Interim Adverse Judgment Rule Ignores the Policy Underlying the Rule and Is Foreclosed by this Court’s Precedents Petitioners seek to expand the exceptions to the interim adverse judgmentrule to circumstances where a judgmentis procured notby fraud or perjury but by “materially false facts.” This proposal does not merely . run afoul of this Court’s formulation in Wilson that fraud andperjury are the only exceptionsto the interim adverse judgmentrule, it contravenes the important principle beneath that rule: probable cause must be determined based on the facts known by the malicious prosecution defendantin bringing the underlying suit, not based on facts the defendant did not know. Under Wilson and Sheldon Appel, if a lawyer in an underlying action relies unknowingly on false fact, the falsity of that fact is irrelevant in assessing whether the lawyer had probable cause to bring the action. This is because thefalsity of the fact has no bearing on the question ofwhether, on the facts known to the lawyer, a reasonable lawyer would have believed 11 the claim legally tenable. For the same reason, whether a lawyerrelied unknowingly on a materially false fact is also irrelevant in assessing whether an interim adverse judgment in the lawyer’s favor establishes that the lawyer broughtthe action with probable cause. If the lawyerdid not know ofthe material falsity of the fact, then the court that issued the judgmentstoodin the lawyer’s shoes in finding that the claim waslegally tenable: it reached this conclusion on the same facts that were knownto the lawyer, likewise unawareoftheir falsity. By contrast, a court will not stand in the lawyer’s shoesif the lawyer knowingly misled the court by misrepresenting or concealing evidence. Contrary to this Court’s precedents, Petitioners’ proposal would transform malicious prosecution from an intentionaltort into one governed by strict liability or negligence principles. Malicious prosecution serves“to protect an individual’s interest ‘in freedom from unjustifiable and unreasonablelitigation,’”and, in turn, to dissuade attorneys andlitigants from intentionally bringing such litigation. (Sheldon Appel, supra, 47 Cal.3dat p. 878, quoting 1 Harperet al., The Law ofTorts § 4.2, p. 407.) This interest is not served by faulting lawyers, onstrict liability, for facts they did not know. As Sheldon Appel explained, this interest also would not be servedif an attorney’s failure to conduct a “reasonable investigation” of facts could giverise to a finding that the attorney brought an action without probable cause. (/d. at p. 883.) Such a requirement would be “fundamentally incompatible with the objective nature of the probable cause determination,”as it would shift the focus of that inquiry “from the objective tenability of the prior claim to the adequacyofthe particular defendant’s performanceasan attorney,” as judged by a negligence standard. ([bid.) It would also “create a conflict of interest between the attorney and client, tempting a cautious attorney to create a record of diligence . . . not for the benefit of his client.” (Jbid.) Moreover, by 12 encouraging judicial second-guessing ofinterim judgments,Petitioners’ rule would endangerthe public’s constitutional interest in “free access to the courts.” (Pacific Gas & Elec. Co., supra, 50 Cal.3d. at p. 1131.) Theinterests that underliethe tort are instead served by looking to the facts knownbylitigants and their lawyers and asking if they reasonably could have believedthatlitigation was justifiable on those facts. E. Petitioners’ Position Finds No Support In Case Law Faced with this conceptual and precedential hurdle, Petitioners give no explanation for how their exception comports with this Court’s definition ofprobable cause. Instead, they rely almost entirely on loose language from a single Court of Appeal decision, Roberts v. Sentry Life Insurance, (1999) 76 Cal.App.4th 375, decided five years before Wilson. Roberts, of course, is not binding on this Court. The decisionstated, in language endorsed by Wilson, that “denial of defendant’s summary judgment[motion] in an earlier case normally establishes there was probable causeto sue, thus barring a later malicious prosecutionsuit.” (Roberts, supra, 76 Cal.App.4th at p. 384; see also Wilson, supra, 28 Cal.4th at pp. 814-15.) Roberts then stated, in a discussion not endorsed in Wilson,that if a denial of summary judgment was “induced by materially false facts,” then finding probable cause based on this denial “might” be wrong. (Roberts, supra, 76 Cal.App.4th at p. 384.) Roberts did not address whether a judgment “induced by materially false facts” is necessarily different from a judgment obtained by meansof fraud or perjury. Nor did Roberts give any reason an exception broaderthan the one adoptedin Wilson would be appropriate given the purposes of the probable cause standard.” Plaintiffs also point to one other Court of Appeal decision, Cheong Yu Yee v. Cheung (2013) 220 Cal.App.4th 184, which cited the “materially false 13 Petitioners also suggest, erroneously, that this Court “expressly endorsed”that“falsity is sufficient to avoid the presumption ofprobable cause” in Zamos v. Stroud (2004) 32 Cal.4th 958. (POBat p. 20.) In fact, it did no such thing. Zamos noted that the defendant in that case had invoked Roberts before the Court ofAppeal, arguing that the denial ofa summary judgment motion in the underlying action established probable cause. (Zamos, supra,at p. 973, fn. 10.) Zamos also noted that Wilson had cited Roberts “with approval”(ibid.), which,as described above, Wilson did only in finding that the denial of a defense motion for summary judgmentin a prior case normally establishes probable cause. But Zamos, like Wilson, did not address the merits of the language in Roberts regarding “materially false facts.” The arguments under Roberts were not part of the _ petition for review in Zamos and, accordingly, this Court stated it would not decide them. (bid. [“As defendantsdid notpetition for review on this issue, we need not decide whetherthe Court ofAppealcorrectly decided . it.”].) . In anothertack, Petitioners claim that the “materially false facts” language from Roberts is consistent with language from a 1908 decision by this Court, Carpenter v. Sibley (1908) 153 Cal. 215, that Petitioners claim states a more comprehensive principle than Wilson. Carpenterstated that a criminal conviction establishes probable cause for the prosecution of the person convicted unless “the conviction was procured by fraud, perjury, or subornation ofperjury, or other unfair conduct” by the prosecutor. (/d. at p. 218.) Petitioners contend that Carpenter found that unfair conduct“may be enoughto rebut the presumption ofprobable cause”arising from an interim adverse judgment. (POB at p. 20.) facts” language in Roberts. (ld at p. 201. Yee did not, however, apply this language or addressits viability under Wilson. 14 This expansive reading of Carpenter cannot survive this Court’s decisions in Wilson and Sheldon Appelnearly a century later. The only “unfair conduct” that may rebut the presumption ofprobable cause that arises from an-interim adverse judgment is conduct that would have prevented the ruling court from assessing the legal tenability of the underlying claim on the basis of the facts knownto the defendantin the: malicious prosecution action. In other words, this Court’s precedents make clear that only fraud and perjury amount to “unfair conduct” cognizable under Carpenter as an exception to the interim adverse judgmentrule. Indeed, California courts have construed Carpenter in this manner since it was issued. Carpenter recognized “the established rule”that a guilty verdict is conclusive evidence of probable cause to bring a charge unless the judgmentwas“procured by fraud at the instance or instigation of the defendants.” (Carpenter, supra, 153 Cal. at p. 217, citing Holliday v. Holliday (1898) 123 Cal. 26.) There was no argumentin Carpenter that the guilty verdict at issue was procured by “unfair conduct” other than fraud or perjury. Instead, the Court addressed the argumentthat, even though evidence had been introduced that the judgment had been obtained by subornation of perjury, only a showing of “extrinsic fraud which would justify an action to set aside the judgment” could rebut the presumption of probable causearising from that judgment. (Jbid.) Carpenterheldthat, even though “the fraud alleged in this complaint is not such a fraud as would support an action for the setting aside of a judgment,it is still a fraud which will support an action” for malicious prosecution. (/d. at p. 218.) Carpenter’s language regarding “unfair conduct,” therefore, was not applied beyond fraud and perjury. After Carpenter, California courts continued to state the exception to the interim adverse judgmentrule as applying only to knowingfraud, and have cited Carpenter on that basis. (E.g., Black v. Knight (1919) 44 1S Cal.App. 756, 770; Bullock v. Morrison (1931) 118 Cal.App. 112, 114; Eustace v. Dechter (1942) 53 Cal.App.2d 726, 732; Kachig v. Boothe (1971) 22 Cal.App.3d 626,639; Plumley v. Mockett (2008) 164 Cal.App.4th 1031, 1053.) Indeed, as a 1939 decision stated, “it is apparent that the ‘other unfair conduct on the part of the defendant” referenced in Carpenter “must amountto fraud”in orderto vitiate probable cause. (Norton v. John M.C. Marble Co. (1939) 30 Cal.App.2d 451, 455, quoting Carpenter, supra, 153 Cal. at p: 217.) Petitioners do not identify a single decision that has applied the “unfair conduct” language in Carpenterto find acts other than fraud or perjurysufficient to overcome the presumption of probable cause arising from an interim adverse judgment. Petitioners also invoke a statement, quoted in Wilson, from Cowles v. Carter (1981) 115 Cal.App.3d 350: “it would be hard law which would render a plaintiff liable in damagesfor instituting an action, wherein he _ madea truthful and honest statementofthefacts, in the eventthat, notwithstanding a judge of the superior court wassatisfied that upon those facts the plaintiff had a meritoriouscase, a ruling to that effect should afterwardsbeset aside.” (Cowles, supra, 115 Cal.App.at p. 357 (italics added); see also Wilson, supra, 28 Cal.4th at p. 822.) Petitioners suggest that this passage somehowstatesthat, if an interim adverse judgmentrelies on fact later shownto be false, then the judgment does notestablish probable cause. (POBat p. 23.) But this Court of Appeal decision refers to an “honest” statementofthe facts, i.e., one that was not knowingly false. Cowles doesnot speakto situations where the facts were false for reasons unknownto the underlyingplaintiff. | F, Petitioners Do Not Make a Prima Facie Case that An Exception to the Interim Adverse Judgment Rule Applies Petitioners argue that this Court should notcredit, as establishing probable cause, the trial court’s conclusion that FLIR had “produced 16 sufficient evidence, for example with [two declarations], to raise a triable issue as to misappropriation oftrade secrets.”* Petitionersassert, primarily, thatthe trial court’s judgment on this ground was procured by “materially false facts.” But Petitioners also assert, without any elaboration, that they have “directly andextensively argue[d]”that the trial court’s ruling was obtained through “the submission of evidence that was the product of fraud or perjury.” (POBat p. 2 fn. 1; see also id. at p. 10, 19-20.) At no pointin their briefing to this Court have Petitioners even attempted to explain what evidence was fraudulent or perjured. The closest Petitioners get to such an explanationis to cite four pages from their briefing before the Court of Appeal. (/d. at p: 14.) These pagesreveal that Petitioners’ argumentthatthe plaintiffs in the underlying action, FLIR and Indigo (collectively “FLIR”), submitted fraudulent or perjured evidenceis identical to their argument that FLIR submitted evidence that was “materially false.” This argument, in turn, relies almost entirely on a passage of the Court of Appeal decision in the underlying action, as opposed to any specific record evidenceortrial court findings. Petitioners quotea portion of the decision that claims FLIR “opposed the summary judgment motion with expert declarations suggesting that there was a scientific methodology to predict the likelihood oftrade secret misuse.” (AOBat p. 37, quoting F'LIR Sys., Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1282; see also ARB at pp. 11-12.) Inpurported contrast, once again as stated by the Court of Appeal decision,at trial thesame experts “admitted there was novalid scientific methodologyto predict trade secret misuse.” (AOBat p. 37.) Petitioners imply, therefore, albeit without any citation to actual evidencein the record before this Court, that FLIR 3 AA 0087. 17 submitted expert declarations that were fraudulent—and materially false: specifically because the declarations allegedly claimed that there was a “scientific methodology”to predict the likelihood oftrade secret misuse, even though the declarants later stated they believed no such “scientific methodology”existed. EvenifPetitioners were correct on the facts—and they are not—this argument would notdisturb the conclusion that the trial court necessarily found that Respondents had probable causeto present this theory oftrade secret misappropriation. Petitioners have not made any argumentthat Respondents had knowledge that the expert declarations were false and nevertheless submitted them to the trial court. Yet Respondents’ knowledgeis critical: if the declarations were false but their falsity was unknownto the Respondents,thenthe trial court’s decision was based on the facts known by the Respondents. Accordingly, Petitioners have made no showingthat the interim adverse judgment does notestablish probable cause, andit plainly does. The judgmentreflects a determination, based on the facts known by the Respondents, that a reasonable lawyer would have | foundthe action legally tenable. In any event, even the most cursory look at the expert declarations themselves wholly refutes Petitioners’ characterization of the facts.’ The expert declarations, which together span total of five pages, do not purport to rely on any “scientific methodology” that would predict trade * Asdiscussed supra, amici have consulted the redactedtrial court record, whenpossible, for public information contained in the sealed appellate record. In thetrial court record, one of the two declarations contained no redactions. In the second, three of the eight paragraphs wereredacted. (See FLIR Sys., Inc. v. Parrish, Case No. 1220581, Compendium of Declarations in Support of Plaintiffs’ Combined Opposition to Defendants Motions for Summary Judgmentorin the Alternative, Summary Adjudication, at pp. 14-15 and 18-20 (Mar. 7, 2007).) 18 secret misuse. Instead, both experts stated that they were unaware of any entity, other than FLIR,that could produce microbolometers at the cost, volume, yield, and speed necessary to implementPetitioners’ business plan. The experts offered this “opinion” based on their “experience and background” andtheir “review of materials in the action,” including materials in the public domain regarding the design of microbolometers. Thetrial court, moreover, did not find thatthe declarations claimed any “scientific methodology” could predict trade secret misappropriation. Indeed, in a motion to strike the declarations, Petitioners argued that the declarations employed “a complete lack of scientific methodology.” In the Court of Appeal, Petitioners later reversed course by arguingthatthe declarations necessarily represented that they were based on scientific methodology that would predict trade secret misuse; they reasonedthat the declarations should have been admitted as expert testimonyonly if they made sucha representation.° But Petitioners do not renew that claim before this Court, as it is plainly incorrect: under California law, expert testimony is admissible wheneverthe expert has knowledge and experience “sufficiently beyond commonexperiencethat the opinion of an expert would assist the trier of fact.” (Evid. Code, § 801.) Thereis no requirementthat they be based on somekindof “scientific methodology.” In short, nothing in the declarations themselvesnorin the trial court’s ruling show that the declarations falsely claimedthat a “scientific methodology”couldpredict trade secret misuse.’ 5 FLIR Sys., Inc. v. Parrish, Case No. 1220581, Defendants’ Motion to Strike Expert Declarations of Murphy and Neikirk, at p. 4 (Mar.14, 2007). © AOBat pp. 37-39. "In their reply brief, Petitioners assert that one of the experts “assume[d] awayhis actual knowledgeofcritical non-public evidence that Raytheon had the very technology Plaintiffs intended to license.” (RB at p. 19.) On 19 The Petitioners’ actual complaint with the declarations has been clear throughoutthis litigation. They do not contendthat the declarations were “false,” but that the facts they stated did not warrant finding trade secret misappropriation as a matter of law. In their motion tostrike the declarations, Petitioners made this argument by claiming that the declarations could support only an inevitable disclosure theory ofliability.® Petitioners renewed the same argumentin their motion for summary judgment.’ FLIR has repeatedly responded that it was not pursuing an inevitable disclosure theory, but instead had presented specific evidence sufficient to give rise to the inference of misappropriation. At the summary judgment stage, faced with these arguments, the trial court agreed with FLIRthat the declarations presented a triable issue of fact. After trial, the trial court weighed the evidence differently, emphasizing that FLIR had notsufficiently addressed the possibilities that Petitioners would be able to meet their business plans through innovation or by licensing non-public technology—topics that neither of the expert declarations in question purports to address. (FLIR Sys., Inc. v. Parrish, (June 13, 2008, No. 1220581) 2008 WL 2472248,at § 43.) this basis, Petitioners conclude that the expert’s testimony was a “proffer of knowingly false evidence.” (/bid.) But Petitioners cite to no evidencethat the expert in fact had any “actual knowledge”about this non-public evidence. In any event, the expert testified only about public evidence, so his testimony could not have been false on the groundPetitioners asserts. 8 FLIR Sys., Inc. v. Parrish, Case No. 1220581, Defendants’ Motion to Strike Expert Declarations of Murphy and Neikirk, at p. 4 (Mar. 14, 2007). ” FLIR Sys., Inc. v. Parrish, Case No. 1220581, Defendant Parrish’s Reply Brief in Support of Motion for Summary Judgment,or, in the Alternative, Summary Adjudication, at pp. 5-9 (Mar. 14, 2007); FLIR Sys. Inc. v. Parrish, Case No. 1220581, Defendant Fitzgibbons’s Reply Brief in Support of Motion for Summary Judgment, or, in the Alternative, Summary Adjudication, at pp. 6-9 (Mar. 14, 2007). 20 The result after trial does not show that the summary judgment ruling was procured through fraud or perjury—orfor that matter even through “false” facts. The court’s function at summary judgmentis to . determine whetherthere are issuesfortrial. Attrial, the factfinder plays a muchdifferent role: it assesses the believability of the evidence, weighs different pieces of evidence against one another, andapplies the law to the facts. Thatan expert opinionis ultimately foundattrial to have limited persuasive value doesnot negate the fact that it was evidence upon which an attorney could have relied in making a claim. Any other conclusion would violate this Court’s directive that attorneys andtheir clients “‘have a right to presentissues that are arguably correct, evenifit is extremely | unlikely that they will win.’” (Wilson, supra, 28 Cal.4th at p. 817, quoting Sheldon Appel, supra, 47 Cal.3d at p. 885.) G. The Finding ofBad Faith Under the UTSA in the Underlying Action Does Not Alter This Analysis Petitioners contendthat, notwithstanding the foregoing, the imposition of sanctions under Civil Codesection 3426.4 in the prior action shows Respondentsinitiated the action without probable cause. The Court of Appealproperly rejected this argument, whichis exactly backwards. This Court has made clearthat the problem of unjustified litigation is best addressed through measures that facilitate resolution ofthe initial lawsuit and apply sanctions within thatinitial lawsuit. (Wilson, supra, 28 Cal.4th at p. 817.) Section 3426.4 is just such a measure. By availing themselvesof this procedure, Petitioners obtained an awardofnearly $1.7 million to cover their attorneys’ fees and costsin litigating the underlying action. Asa result, the need to compensate these Petitioners through a later malicious prosecution action is far less than in cases where sanctions were not already awarded. Forthis reason,it would be perverse and paradoxical to have the award ofsanctions undersection 3426.4 form the basis for 21 establishing a subsequent malicious prosecution action, rather than for showing it was unnecessary. In any event, a finding of bad faith under section 3426.4 does not compela finding that probable cause was lacking. As explained above, an interim adverse judgment on the merits conclusively establishes probable cause unless that ruling was obtained by fraudor perjury. A finding of bad faith under section 3426.4 doesnot require a finding offraud or perjury, | muchless a finding that the relevant interim judgment was obtained by fraud or perjury. In the absence of such finding, there is no reason to disregard an interim judgment, as the judgmentwill still reflect a determination, basedonthe facts knownbythe malicious prosecution defendant, that the action waslegally tenable. In this case, moreover, the trial court’s order imposing sanctions under section 3426.4 did not find fraud or subornation ofperjury. Petitioners attempt to evadethis conclusion by invoking Slaney v. RangerIns. Co. (2004), 115 Cal.App.4th 306. In Slaney, the Second District held that the denial of a summary judgment motion does not establish probable cause whenit is followed by the grant of a renewed motion as well as certain findings that “support inferences of lack of probable cause and malice,” including a finding of bad faith. (Slaney, supra, 115 Cal.App.4th at p. 321.) But as the Court of Appeal held below, Slaney cannot be reconciled with “the interim adverse judgmentrule’s core principles as articulated in Wilson.” (Parrish v. Latham & Watkins (2015) 238 Cal.App.4th 81, 100.) Indeed, Slaney did not cite Wilson, and instead relied primarily on a pre-Wilson Court of Appeal decision that did not apply or recognize the interim adverse judgmentrule. (Slaney, supra, 115 Cal.App.4th at p. 321, citing Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179.) 22 Slaney represents precisely the sort of reasoning Wilson has instructed courts to avoid. The Second District did not ask whether probable cause existed based on the prima facie evidence knownto the malicious prosecution defendant in the underlying action. Instead, Slaney looked to how the court and the jury in the underlying action weighed the evidence presented overthe course ofthe litigation. This approachis contrary to Wilson’s holdings thatplaintiffs and their attorneys “have the right to bring a claim they think unlikely to succeed, so longasit is arguably meritorious,”and that plaintiffs and their attorneys “are not required, on penalty oftort liability, to attempt to predict how trier of fact will weigh the competing evidence, or to abandon their claim if they think it likely the evidence will ultimately weigh against them.” (Wilson, supra, 28 Cal.4th at p. 822.) Perhaps because it used this improperly retrospective approach, S/aney failed to recognize that the denial of a summary judgment motion, in the absenceoffraud or perjury, necessarily reflects a determination that a reasonable lawyer confronted with the prima facie evidence would havebelieved that the action wasnotfrivolous. In addition, Slaney confused the probable causestandardby failing to recognize that malice, a measure of subjective intent, is wholly irrelevant to the probable cause inquiry. To the extent that Petitioners argue that a finding ofbad faith vitiates probable cause as evidence of malice, that argumentis foreclosed by Sheldon Appel. Evenin instances where a malicious prosecution defendant cannot point to an interim judgmentin its favor, a findingof bad faith under section 3426.4 will not necessarily showthat the action was brought without probable cause. The probable cause inquiry asks whether, at the time a suit is brought, a reasonable lawyer would believethat it was not _ frivolous. By contrast, the “objective speciousness”inquiry under section 3246.4 asks whether, at the close ofthelitigation, the claim was 23 “superficially fair, just, or correct” but “without substancein reality.” (Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1261-62.) There are two important differences between these standards. First, a claim need not befrivolous in order to be completely without merit for purposes of section 3426.4. (/d.; see also SASCOv. Rosendin Electric, Inc. (2012) 207 Cal.App.4th 837, 846.) Second, there maybe probable causeto bring a claim based on the prima facie evidence, evenifthe evidenceis ultimately so one-sided as to render the action specious undersection 3426.4. (Gemini, supra, 95 Cal.App.4th at pp. 1261-62.) A finding of bad faith undersection 3426.4 is not a proxy for a finding ofno probable cause. H. Petitioners Offer No Evidence Supporting Their Claim That Respondents Continued the Suit Without Probable Cause Petitioners also suggest, without explanation, that Respondents “continued [their] prosecution” of this suit without probable cause andthat, on this basis, Petitioners’ malicious prosecution action should be allowed to proceed. As elsewhere, Petitioners are short on details, both as a matter of fact and as a matter of law. Theystate only that the evidence supporting this assertion “include[s] the same facts” underlying the badfaith determination undersection 3426.4 in thetrial court. (POBat p. 12.) This argumentfalls far short ofPetitioners’ burden. Thetrial court’s opinion speaksto continuation only in finding that FLIR continued its lawsuit after letters from Petitioners notified them “ofproblems in [FLIR’s] case.” (FLIR Sys, Inc. v. Parrish, supra, 2008 WL 2472248,at | 79.) The trial court did not state that these letters revealed that FLIR had no prima facie case or that its claims were frivolous; it simply noted the communications, which are “a factor in the section 3426.4 analysis.” (Jbid.) Petitioners, moreover, do not explain how or when the letters established a lack ofprobable cause. Instead, Petitioners imply theletters 24 undermined Respondents’ argumentthat Petitioners’ business plan was developed while they were employees at FLIR. (POBat pp. 29-30.) But Petitioners then claim that Respondents “abandoned”that argument. (POB at p. 30.) If that is correct, then Respondents could not have continued to prosecute this argument without probable cause. Petitioners’ continuation ~ argument, therefore,fails on its own terms. New facts invariably arise after a denial of summary judgment. If litigants could evade an interim adverse judgment merely by invoking such facts, the interim adverse judgment rule would have no consequence. The threshold for showingthat new facts warrant ignoring such a judgment, therefore, must be high. The new facts would need to show that, even though a reasonable lawyer believed the action wasnotfrivolousat the time of the interim adverse judgment, no reasonable lawyer could continueto hold such a view given the new facts. This high bar would be met, for instance, if a plaintiffs prima facie evidence consisted only of testimony by a single witness and, following an interim judgmentin theplaintiff's favor, the plaintiff's lawyer was informed by the witness that the testimony was false. Petitioners do not comeclose to making such a showing. Ill. PETITIONERS’ CLAIMSARE BARRED BY SECTION 340.6°S ONE-YEAR STATUTE OF LIMITATIONS Analternative and fully sufficient basis to affirm the judgment belowis that the claim is barred by the statute oflimitations.'° Code of 10 Although the Court need notdecide the probable causeissueifit affirms on the basis ofthe statute of limitations defense, it has the option to decide that issue as well in order to “secure uniformity of decision”and “settle an important question of law.” (Cal. Rules of Court, rule 8.500(b); see also Manco Contracting Co. (W.W.L.) v. Bezdikian (2008) 45 Cal.4th 192, 204 & fn. 9 [“Ourresolution ofthe statute of limitations question is an independent, alternative groundforaffirming the decision of the Court of Appeal.”’].) 25 Civil Procedure section 340.6(a) provides: “An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performanceofprofessional services shall be commenced within one year after the plaintiffs discovers, or through the use of reasonable diligence should have discovered,the facts constituting the wrongfulact or omission.” Asset forth below, this statute bars Petitioner’s claims. A. Under Lee v. Hanley, Section 340.6 Applies to Actions that Depend on ProofofCertain Attorney-Specific Misconduct In Lee v. Hanley, supra, 61 Cal.4th 1225, this Court carefully defined the scope of section 340.6 after closely examiningthestatute’s languageand legislative history. Lee identified two guiding policy considerations from section 340.6’s legislative history. First, Lee found the legislature had sought to ensure that the applicable limitations period would “turn on the conduct alleged andultimately proven, not on the way the complaint wasstyled.” (/d. at D. 1236.) Second, Lee found that the legislature “ma[de]clear that its primary purpose wasto address the growing cost of malpractice lawsuits,” particularly in light of “rising legal malpractice insurance premiums.” (Jbid.) Based on these two considerations, Lee concluded that section 340.6 applies only to claimsthat “depend on proofthat the attorney violated a professional obligation.” (Ibid.) Lee elucidated this standard in somedetail. It held that section 340.6 “applies to a claim whenthe merits of the claim will necessarily depend on proofthat an attorney violated a professional obligation—thatis, an obligation the attorney has by virtue of being an attorney—inthe course of professional services.” (/d. at p. 1229.) Lee defined “professional services” as “services performed by an attorney which can be Judged against the skill, prudence anddiligence commonly possessed by other attorneys.” (Id. at p. 1237, quoting Quintilliani v. Mannerino(1998) 62 Cal.App.4th 54, 64.) 26 UnderLee, therefore, section 340.6 applies when proving a claim depends on showing that an attorney, in the course of performingservices judged against an attorney-specific standard, violated an obligation the attorney had by virtue of the attorney’s identity as an attorney. Lee enumerated several circumstances where section 340.6 would not apply underthis standard. First, a claim against an attorney for “sarden-variety theft” does not trigger section 340.6 “even if the theft occurs while the attorney and the victim are discussing the victim’s legal affairs.” ([bid.) The obligation not to engage in garden-variety theft is not an obligation that attorneys havebyvirtue of being an attorney,anditis not judged against an attorney-specific standard basedon the skill, prudence, and diligence commonly possessed by attorneys. Likewise, a claim that an attorney “sexually batteredhis client while the attorney was providing legal advice” also doesnottrigger section 340.6. (/d. at 1238.) Even though attorneys have a “professional obligation notto [sexually batter others] in the particular context ofthe attorney-client relationship,”this obligation is . not one that attorneys have by virtue of being an attorney, andit is not an obligation judged against an attorney-specific standard: “everyone has an obligation not to sexually batter others,” not just attorneys. (bid) Onsimilar reasoning, Lee held that the claim before it did not necessarily trigger section 340.6. The Court explainedthat the claim, which alleged wrongdoing in an attorney’s failure to return client funds, could be styled as a simple claim for conversion. (Jd. at p. 1240.) The claim did not “necessarily depend on proof”that the lawyer hadviolated a professionalobligation, even thoughtheallegations,if true, might have established that he had violated such an obligation. (/bid.) Lee emphasized that future factual development might show that section 340.6 applied, depending on the theory ofliability pursued. (Jbid.) If, for instance, the claim turnedonproofthat the lawyer kept the money “pursuantto an 27 unconscionable fee agreement”or that the lawyer “did not properly preserve client funds,” then 340.6 might apply. (/bid.) In those circumstances,the claim would necessarily require a showingthat the lawyer violated an attorney-specific obligation judged according to a professional standard. | B. Because This Suit Depends on ProofRespondents Violated an Obligation Unique to Attorneys and JudgedAccording to an Attorney-Specific Standard, Section 340.6 Applies The Court of Appealheld that section 340.6 did not apply under Roger Cleveland GolfCo. v. Krane & Smith, APC (2014) 225 Cal.App.4th 660, a decision expressly disapproved in Lee. (Lee, supra, 61 Cal.4th atp. 1239.) Roger Clevelandread section 340.6 “as a professional negligence statute,” parting ways with two other Court of Appeal decisions that had found section 340.6 applied to malicious prosecution claims against attorneys: Cheong Yu Yee v. Cheung (2013), 220 Cal.App.4th 184, and Vafi v. McCloskey (2011) 193 Cal.App.4th 874. (Roger Cleveland, supra, 225 Cal.App.4th at pp. 676-77.) Lee rejected the basis for the holding in Roger Cleveland, and sided with the very cases that decision deviated from. Lee concludedthat section 340.6 “applies not only to actions for professional negligence but to any action alleging wrongful conduct, other than actual fraud, arising in the performance ofprofessionalservices.” (Lee, supra, 61 Cal.4th at p. 1236.) In reaching this conclusion, Lee invoked Yee and Vafi as examples ofactions where section 340.6 applied based on “the conduct alleged and ultimately proven.” (Ibid.) The allegations in this action—that Respondents prosecuted the underlying action on behalf ofFLIR withoutprobable cause and with malice—necessarily depend on proofthat, in the course ofperforming services judged against an attorney-specific standard, Respondentsviolated an obligation they had by virtue of being attorneys. Asreflected in Rule of 28 Professional Conduct 3-200, attorneys are obligated not to represent clients under circumstances wherethe attorney knows, or should know,that the purpose of the representation is to prosecute an action “without probable cause and for the purposeofharassing or maliciously injuring any person.” (Cal. Rules of Prof. Conduct, rule 3-200(A).) An attorney whoviolates this obligation, moreover, necessarily does so while engaged in the performance of services judged against an attorney-specific standard: whether an attorney has probable causeto prosecute an action on behalf ofa client depends on howa reasonable attorney would haveacted. Thefact that non-attorneys may besubjectto liability for malicious prosecution does not changethis analysis. It is true that everyone has an obligation, as a potential litigant, not to bring lawsuits that lack probable cause motivated by malice. This obligation, however, is substantially narrowerthan the obligation attorneys have, by virtue ofbeing attorneys, not to bring such actions on behalfoftheir clients. Mosttellingly,a litigant is not subject to suit for malicious prosecution if the litigant proves that he or she relied on “advice of counsel”in good faith after full disclosure of the facts. (Bertero v. Nat. Gen. Corp. (1974) 13 Cal.3d 43, 53-54; Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1556.) Attorneys have no comparable defense: they cannot rely on the fact that the client thought the action had merit. Rather,it is the attorney’s responsibility, by virtue of being an attorney acting on behalfof a client, not to bring actions that no reasonable attorney would have brought underthe circumstances. For this reason, the standard governing attorneys whobringbaseless lawsuits is fundamentally different from the one governing non-attorneys. Whether an attorney has probable cause to bring a lawsuit is judged “againstthe skill, prudence anddiligence commonly possessed by other attorneys.” (Lee, supra, at p. 1237, quoting Quintilliani, supra, 62 Cal.App.4th at p. 64.) In contrast, non-attorneys are not required to have 29 the skill, prudence, or diligence of an attorney but may rely on an attorney instead. The obligation of an attorney notto bring baseless lawsuits is | therefore notthe generalized obligation applicable to everyone—analogous to the obligation everyonehas notto steal or commit sexual battery—but thevery specialized obligation applicable only to attorneysthattriggers the limitations periodof section 340.6 under Lee. The conclusion that malicious prosecution claims are subject to the one-year limitation period is further underscoredbythe fact that malicious prosecution claims are covered by the samekind of insurance covering attorney malpractice—including the malpractice insurance offered by amici ALAS. Subjecting such claims to section 340.6, therefore, is consistent with the Legislature’s aim ofcontrolling “rising legal malpractice insurance premiums.” (Lee, supra, at p. 1236.) C. Prospective Application ofSection 340.6 to Malicious Prosecution Suits Against Attorneys Would be Improper 99 665Asa “general rule,” “judicial decisionsare given retroactive effect.” (Laird v. Blacker (1992) 2 Cal.4th 606, 620.) Petitioners contend that this general rule should not apply, if the Court rules that section 340.6 governs, becausePetitioners “relied” on the view that a two-yearlimitations period governed under Code of Civil Procedure 335.1. (POBatp. 38.) But a party’s reliance on a rejected view of the law is relevantonly if the party was “reasonable”in so relying. (Laird, supra, 2 Cal.4th at p. 620; Newmanv. Emerson Radio Corp. (1989) 48 Cal.3d 973, 982-87.) In the usualcase, if a plaintiff “cannot claim reliance ona prior decision ofthis [C]ourt or. . . a consistent line of decisions from the Courts ofAppeal making [this Court’s] contrary holding ‘unforeseeable,’” then the general rule favoring retroactivity will apply. (Planning & Conservation League v. Dept. of Water Resources (1998) 17 Cal4th 264, 274.) 30 As Respondents makeclearin their brief, Petitioners could not have reasonably relied on the viewthat a two-yearlimitations period applied to this suit. Petitioners cannot identify a single precedent applying a two-year statute of limitations to malicious prosecution actions against lawyers. D. This Suit is Barred Under Section 340.6 Finally, Petitioners argue that, even if section 340.6 applies, they satisfied the statute’s one-yearperiod.'! In particular, Petitioners arguethat the limitations period did not begin to run until they learned FLIR might assert an advice-of-counsel defensein the prior malicious prosecution action brought againstit. Petitioners claim that, before learning ofthis potential defense, they were unawarethat the filing of the underlying action “was prompted by advice from [Respondent].” (POBat p. 41.) Petitioners misapprehend the import of the advice-of-counsel defense. As discussed above, this defense protects past plaintiffs from potential liability for malicious prosecution if they show that they relied on the advice of their counsel in good faith and after fully informing counsel of the facts. (Bertero, supra, 13 Cal.3d at pp. 53-54; Sosinsky v. Grant, supra, 6 Cal.App.4th at p. 1556.) But whetherthe client relied on the advice of counsel has no effect on whether the attorney is liable for bringing an objectively untenable claim. An attorney is required to satisfy the probable cause standard whetherornotthe client relied upon the attorney’s advice. WhetherPetitioners had a claim against Respondents therefore did not depend in any way upon whether Respondents’client relied upon their advice. 'T Undersection 340.6, the limitations period commences when“the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission.” 31 California courts have consistently held, including undersection 340.6, that a cause of action for malicious prosecution accrues “at the conclusionofthelitigation in favorofthe party allegedly prosecuted maliciously.” Yee, supra, 220 Cal.App.4th at p. 193 (quoting Babbv. Superior Court (1971) 3 Cal.3d 841, 846); see also Roger Cleveland, supra, 225 Cal.App.4th at p. 668 (citing Rare Coin Galleries, Inc. v. A-Mark Coin Co., Inc. (1988) 202 Cal.App.3d 330, 334-35.) Petitioners offer no reason not to apply this rule here. CONCLUSION The Court of Appeal’s ruling that Respondents’ anti-SLAPP motion should have been granted should be affirmed. In the alternative, the Court should hold that Respondents’ anti-SLAPP motion should have been granted on the groundthat this action is barred by section 340.6. DATED: May13, 2016 Respectfully submitted, /s/ Mark B. Helm /s/ Peter D. Engstrom MUNGER, TOLLES & OLSONLLP BAKER & MCKENZIE Mark B. Helm (SBN 115711) Peter D. Engstrom (SBN 121529) John F. Muller (SBN 300839) . Attorneyfor Baker &McKenzie Attorneysfor Attorney's Liability Assurance Society, Inc. /s/ John W_Amberg /s/ Charles L. Deem BRYAN CAVE LLP DLA PIPER LLP (US) John W. Amberg (SBN 108166) Charles L. Deem (SBN 110557) Attorneyfor Bryan Cave LLP Attorneyfor DLA Piper LLP (US) 32 Ls/John W. Thornburgh FISH &RICHARDSONP.C. John W. Thornburgh (SBN 154627) Attorneyfor Fish & Richardson P.C. /s/ JeffE. Scott GREENBERG TRAURIG, LLP Jeff E. Scott (SBN 126308) Attorneyfor Greenberg Traurig, LLP /s/ Leslie M. Werlin MCGUIREWOODSLLP Leslie M. Werlin (SBN 67994) Attorneyfor McGuireWoods LLP /s/ Martin S. Checov O’MELVENY & MYERS LLP Martin S. Checov (SBN 96901) Attorneyfor O’Melveny & Myers LLP 33 /s/ Kevin S. Rosen GIBSON, DUNN & CRUTCHER LLP Kevin S. Rosen (SBN 133304) Attorneyfor Gibson, Dunn & Crutcher LLP /s/ Harry Mittleman IRELL & MANELLA LLP Harry Mittleman (SBN 172343) Attorneyfor Irell & Manella LLP /s/ Douglas L. Hendricks MORRISON & FOERSTER LLP Douglas L. Hendricks (SBN 83611) Philip T. Besirof (SBN185053) Attorneysfor Morrison & Foerster LLP /s/ Eve M. Coddon PAUL HASTINGS LLP Eve M. Coddon (SBN 125389) Attorneyfor Paul Hastings LLP /s/ Kurt C. Peterson REED SMITH LLP Kurt C. Peterson (SBN 83941) Attorneyfor Reed Smith LLP 34 /s/Adam R. Fox SQUIRE PATTON BOGGS(US) LLP Adam R. Fox (SBN 220584) Attorneyfor Squire Patton Boggs (US) LIP CERTIFICATE OF WORD COUNT According to the word count function in Microsoft Office Word 2010,this brief, including footnotes but excluding portions excludable under Rule 8.520(c)(3), contains 9,933 words. DATED: May13, 2016 John F. Muller Ja. thy /- 35 PROOF OF SERVICE I, Michelle Godfrey, declare as follows: J am overthe age of 18 and am nota party to this action. I am employed in the County of Los Angeles. My business address is 355 South Grand Avenue, 35th Floor, Los Angeles, CA 90071. On May13, 2016, I served true copies of the attached document described as . APPLICATION OF ATTORNEY’S LIABILITY ASSURANCE SOCIETY, INC. AND THIRTEEN INDIVIDUAL NON-ALAS LAW FIRMS FOR LEAVE TO FILE AMICICURAIEBRIEF IN SUPPORT OF RESPONDENTS on the interested parties in this action as follows: SEE ATTACHED SERVICE LIST I enclosed the documents in sealed envelopes addressedto the personsat the addresseslisted in the Service List and placed the envelopes for collectionand mailing, following ourordinary businesspractices. I am readily familiar with the firm’s practice for collecting and processing correspondence for mailing. On the same daythat the correspondenceis placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. | I declare under penalty of perjury under the laws of the State of California that the foregoingis true and correct. Wiredf Michelle Godfrey 36 SERVICE LIST Clerk, Court of Appeal Second Appellate District, Division 3 300 S. Spring Street Second Floor, North Tower Los Angeles, CA 90013 Court of Appeal ‘Case No. B244841 Michael J. Avenatti, Esq. EAGEN AVENATTI, LLP | 5200 Newport Center Drive, Suite 1400 Newport Beach, CA 92660 Attorneysfor Plaintiffs and Appellants William Parrish and E. Timothy Fitzgibbons Stuart B. Esner, Esq. -ESNER, CHANG & BOYER 234 E. Colorado Blvd., Suite 750 Pasadena, CA 91101 Attorneys for Plaintiffs and Appellants William Parrish and E. Timothy Fitzgibbons J. Michael Hennigan, Esq. | Michael H. Swartz, Esq. McKOOL SMITH HENNIGAN,P.C. 865 S. Figueroa Street, Suite 2900 Los Angeles, CA 90017 Attorneys for Defendants and Respondents Latham & Watkins, LLP and Daniel Schechter Brian J. Panish, Esq. Adam K.Shea, Esq. Kevin R. Boyle, Esq. PANISH, SHEA & BOYLE LLP 11111 Santa Monica Blvd., Suite 700 Los Angeles, CA 90025 Attorneys for Plaintiffs and Appellants William Parrish and E. Timothy Fitzgibbons Hon. James R.Dunn Los Angeles County Superior Court 111 N. Hill Street, Dept. 26 Los Angeles, CA 90012 Trial Judge — Superior Court Case No. BC482394 Frederick R. Bennett IILos Angeles County Superior Court{ 111 N. Hill Street, Rm. 546Los Angeles, CA 90012 Court CounselLos Angeles Superior Court 37
