SANTA ANA – A court has upheld an order of the Superior Court of Orange County in a whistleblower case regarding alleged Medicare fraud.

Plaintiffs MMM Holdings Inc. and MSO of Puerto Rico Inc. filed a lawsuit against Marc Reich, the lawyer who represented a whistleblower and former employee of MSO. Reich had filed a motion to strike the complaint under the anti-strategic lawsuit against public participation (SLAPP) statute.

"The court granted the motion, concluding the claims asserted by plaintiffs against Reich involved Reich’s petitioning activity protected by the anti-SLAPP statute, and that plaintiffs had not shown, and could not show, a probability they would prevail on any of their claims. We conclude the court did not err and affirm the order," the March 12 opinion states.

Reich’s client, Jose “Josh” Valdez, was terminated in 2010 for his “'vocal opposition to what he perceived as plaintiffs' fraudulent practices,'” the opinion states. After he was terminated, Valdez allegedly took around 26,000 electronically stored documents, and the complaint states that Reich received, wrongfully possessed, and refused to turn over the documents from his client. Due to that, Reich was allegedly liable for conversion, receipt of stolen property and unjust enrichment, the opinion states.

The opinion states that Reich allegedly also shared some of the documents with a third party.

Reich then filed a motion to strike the complaint under the California anti-SLAPP law, Code of Civil Procedure section 425.16. The motion was granted by the court and the plaintiffs appealed, the opinion states.

In the March 12, filing, the Court of Appeal of the State of California 4th Appellate District, Division Three ruled that “we conclude that the court did not err and affirm the order.”

“Plaintiffs request, inter alia, damages of at least $100,000, punitive and exemplary damages, disgorgement of all ‘improper benefits, profits and/or gains, and restitution,’ an order enjoining Reich from continuing to violate his ethical obligations as an attorney an order enjoining Reich from using the documents and an order for immediate disclosure and return of the documents,” the opinion states. “In January 2016, Reich moved to strike the complaint on grounds the case is a SLAPP,” court documents state. “The court granted the motion and found the claims asserted by plaintiffs against Reich involve Reich’s petitioning activity protected by the anti-SLAPP statute.”

According to the opinion, the court found that, “Reich’s conduct arises from protected activity.”

“At the first step of the anti-SLAPP analysis, a court considers whether the challenged claims arises from acts in furtherance of the defendants’ right of free speech or right of petition under of the categories set forth in section 425.16," the opinion states.

For the second prong of the Anti-SLAPP, the court found the plaintiffs could not establish the probability of prevailing on their claims because the litigation privilege protected Reich from liability. The court then rejected arguments that Reich’s activities were unlawful, calling them a “nonstarter” in the opinion.

“California courts consistently hold that defendants may satisfy their burden to show that they were engaged in conduct in furtherance of their right of free speech under the anti-SLAPP statute, even when their conduct was allegedly unlawful,” court documents stated.

Since Reich’s company document usage was “’reasonably relevant’” to pending or contemplated litigation,” it was then “protected by litigation privilege,” the opinion states.

Want to get notified whenever we write about California Fourth Circuit Court of Appeals ?
Next time we write about California Fourth Circuit Court of Appeals, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

California Fourth Circuit Court of Appeals




More News