5.01.2008

Why DA's Palco suit was ill-advised

”All good things must come to an end” is an old saying we all know. With any luck, the same could be said of all bad things, and so it is with the People v. Pacific Lumber Company lawsuit filed by the Humboldt County district attorney.

After being dismissed by the trial court and then having been unanimously rejected by the appeals court, the California Supreme Court has driven a stake through the heart of this ill-advised lawsuit. On April 24, the Supreme Court denied District Attorney Gallegos' petition for review. It also denied his request to have the appellate court decision depublished.

The public deserves an explanation of what all this means.

Before that, I would like to make it clear that I in no way approve of Palco's behavior. I personally prosecuted them twice criminally (obtaining literally every last penny available as penalties under the 15 counts I charged collectively) and once civilly (against Scopac, actually), receiving $80,000 in a settlement, $35,000 of which I sent to schools in the Van Duzen watershed.

And I found Palco's behavior in the recall election astounding and shameful, an incredibly bad set of decisions to fund petition signers and more in an effort to drive out an elected official.

That said, Gallegos' decision to prosecute Palco was a political one, make no mistake. Political prosecutions are never a good idea.

Within days of taking office, Gallegos directed his chief investigator to conduct an investigation. When his investigators reported they could not find evidence of a crime, the suit was filed civilly instead. The day before it was filed, a member of a local watchdog organization sat in the DA's library and read the complaint.

The civil complaint was poorly charged, forcing Gallegos' office to twice amend it during trial. Even so, the trial court ultimately dismissed it on a “demurrer,” which is a motion asserting the case lacks the basic essentials to get to trial. The dismissal was “without leave to amend,” meaning the trial court found the allegations incapable of proceeding. The appellate court was even less kind.
Stating the rule that it must “give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded,” the appellate court examined the only two arguments Gallegos made: (1) the “litigation privilege” in Civil Code section 47(b), which is “absolute,” and (2) the Gallegos-named “right-to-lie” argument (the Noerr-Pennington doctrine, actually). Both went down in flames.

The idea in the “litigation privilege” is that those honestly in court should be allowed to make whatever claims they may without fear of then being sued simply for having made those claims. The principles are (1) protecting access to the courts, and (2) the “chilling effect” that such a fear would have on those with legitimate claims.

The appellate court looked at many cases, as well as the facts of the Palco case, and found that “the same chilling effect would occur here, we fear, were this (Palco) lawsuit to proceed.”

The “Noerr-Pennington doctrine” gives those who attempt to influence the government immunity from liability under federal antitrust law. There is a “sham exception” to this immunity, which Gallegos argued applied to Palco.

The appellate court “decline(d) to hold that the state's fraud-based allegations meet the requirements of the sham exception,” and held that Palco was “undoubtedly immune from liability under Noerr-Pennington.”

The appellate court closed its opinion noting that the court “must determine whether plaintiffs [the state] have demonstrated evidence which, if credited, would justify their prevailing at trial.” It then held that “for the reasons discussed above, we conclude the state's evidence, even if credited, would not justify its prevailing at trial. Further, we conclude the state has failed to prove, on its third try, a reasonable possibility that the (complaint)'s defect can be cured by amendment.”

In short, all arguments advanced by District Attorney Gallegos, both at trial and on appeal, were shot down in their entirety.
It is said that “bad facts make bad law.” And so Gallegos asked to have the appellate court's decision “depublished,” meaning that it would no longer be law. The Supreme Court declined, and we are left with “The People ex rel Paul V. Gallegos, as District Attorney v. the Pacific Lumber Company.”

Some may celebrate the end of this case, finding it bad, while others may lament, seeing the case as good. We are all still left deciding if we approve of further political prosecutions That, I submit, is bad.

Paul Hagen is an attorney in Eureka. He previously served as a deputy district attorney in four northern California counties, including Humboldt county. He resides in Eureka.

Paul Hagen
Article Launched: 05/01/2008 01:27:25 AM PDT