Rivalry between business rivals leads to UPEPA motion in Washington state

Torchstar Corporation sells LED products through Amazon
amazon
. Torchstar filed a lawsuit in the US District Court for the Eastern District of Washington alleging that Hyatech, Inc., a competing seller of the same product, essentially copied Torchstar’s Amazon sales page, in violation of copyright and other laws. Hyatech claims that Torchstar’s sales page does not qualify for copyright protection, and that Torchstar is trying to unlawfully destroy Hyatech as a competitor through litigation. Hyatech countersued Torchstar, alleging that Torchstar made false claims of copyright infringement against Amazon, including claims that the infringement was caused by product images taken by Hyatech’s own photographers. Hyatech also claims that Torchstar did not register its copyright with the U.S. Copyright Office until after the lawsuit began.

So, in support of a second, Torchstar sued Hyatech, and Hyatech countersued Torchstar. Nothing out of the ordinary here, welcome to commercial litigation. But now it gets interesting.

Rather than fighting Hyatech’s claims on the merits, Torchstar filed a special motion under Washington’s Uniform Public Expression Protection Act (UPEPA), Washington’s anti-SLAPP law. Torchstar argued that its reports to Amazon and its lawsuit against Hyatech were privileged litigation communications, that Hyatech’s claims were barred for technical reasons (discussed below), and that Hyatech ultimately failed to prove its tortious interference claims against Torchstar. All of this will come under closer scrutiny as we delve into the court’s opinion, as seen in Touchstar Corp., Hyatech, Inc., 2023 WL 137762 (EDWa., Jan. 9, 2023), which you can find here Read it yourself.

UPEPA special motions essentially provide litigants with a means to test adverse claims at an early stage of the proceedings in certain circumstances where claims against litigants are based on communications arising from the litigants’ exercise of freedom of speech and similar rights of public concern. question. However, what is not subject to UPEPA is so-called “commercial speech,” ie speech resulting from the sale or lease of goods or services.

Torchstar’s special motion is mainly based on technical foundations, the so-called Noel Pennington Doctrine creates immunity for campaigns to petition the government for redress of grievances.In other words, if a litigant petitions the government about something or other, then under Noel Pennington Doctrine cannot sue litigants for the petition.

This is a general rule of doctrine. However, as I often point out in my articles, the thing about general rules is that they often don’t apply.For our purposes here, one of the exceptions Noel Pennington The doctrine is that it does not apply to so-called “false petitions,” which are defined as being objectively baseless and attempting to abuse the proceedings to interfere with a competitor’s business relationship. A similar exception is that the principle does not apply to communications with a third party that do not threaten prosecution of that third party.

Court rules that Torchstar cannot rely on Noel Pennington doctrine for a number of reasons. First, Torchstar has not threatened Amazon with any lawsuits. Second, because Amazon is a private party, Torchstar does not have any constitutional right to seek any remedy from Amazon. However, the court’s question of whether Torchstar’s claim against Hyatech is sham litigation is left for later. At the end of the day, Torchstar couldn’t show that Hyatech’s claim could be settled legally, so Torchstar’s UPEPA special motion failed.

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Although the case ultimately — at least in the eyes of the court — hinges on the vagaries of Noel Pennington In principle, it’s worth noting that the court denied Torchstar’s motion to dismiss on a plethora of other grounds, not the least of which is UPEPA’s business speech exception. That said, UPEPA is intended to protect a wider range of constitutional rights, primarily freedom of speech and the right to petition, but is not meant to encompass purely commercial disputes between two competing sellers of goods.

Another item to consider is that UPEPA special motions are largely in the nature of summary judgment motions, which typically occur at the end of a case, after all discovery has been made, and test whether a party has sufficient capacity to show that the jury could reasonably evidence to render a ruling in its favour. What UPEPA and other anti-SLAPP laws do effectively is move summary judgment from near the end of litigation to at the beginning of litigation so that cases that should have been dismissed are more quickly dismissed. The reason for moving the fourth quarter to the first quarter is to prevent litigants in protected areas of activity from being simultaneously exonerated from litigation costs and fees. This prevents abusive litigants from abusing the legal system to harass clients through the litigation itself to the detriment of their protected conduct.

The bottom line here is that if a case ultimately will or will not survive a summary judgment motion, it will equally or will not survive a UPEPA special motion. But since the party targeted by the UPEPA special motion will not have the opportunity to prolong litigation, this effectively means that parties litigating in the area of ​​protected activities must get what they want at the outset of the case, rather than waiting for their case to be filed Slowly assembled during normal proceedings. So here the court finds that Hayatech has presented enough evidence to bring it to trial on the bogus lawsuit issue as if it were accepting a motion for summary judgment, and thus Torchstar’s UPEPA special motion fails, as Torch Star’s motion for summary judgment will fail.

Also note here that Torchstar’s UPEPA special motion is related to Hyatech’s counterclaim. UPEPA does not limit the availability of its special motions to only those bringing suit, but such special motions may be filed against every claim, counterclaim, cross-claim, third-party claim, etc., regardless of designation or status in which they arise, As long as the motion is timely.

Finally, just to drastically change the direction of this discussion, it’s worthless that while Torchstar’s UPEPA special motion ultimately failed, the filing of the motion itself may have given Torchstar a litigation advantage because it allowed Hyatech to basically show it early A whole case of discovery between these parties that might ensue. This is no small advantage and will likely significantly reduce Torchstar’s discovery needs. The lesson here for litigants is that a UPEPA special motion should generally be filed if it is at least colorable and not brought for delay purposes. Likewise, Torchstar now has the opportunity to immediately appeal the denial of its UPEPA special motion, which would not normally apply to an ordinary motion to deny filed at the outset of the case. Litigants should also be aware of this potential advantage.