In Fremont Reorganizing Corporation v. Faigin, (2011) 198 Cal. App. 4th 1153, the Third Division of the Second Appellate District held in a published decision that the litigation privilege may not be used to protect an attorney from liability to a former client for the breach of professional duties. The plaintiff, a former in-house counsel, filed suit against his company for wrongful termination. His former client and employer filed a cross-complaint alleging breach of confidence, fiduciary duty and ethical obligations. The former client alleged that after the attorney was discharged, he informed the California Insurance Commissioner that his former client was improperly selling artwork belonging to a subsidiary, which was in liquidation.
The attorney moved to strike the cross-complaint under the anti-SLAPP statute which the trial court granted. On appeal, the court reversed (in part) the holding and found that the attorney’s statements to the Commissioner in connection with the liquidation proceeding were not protected by the litigation privilege. The court reasoned that if the litigation privilege were to apply, it “would preclude essentially any action by a former client against an attorney” and “would undermine the attorney-client relationship.”
The court relied on Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, regarding injuries to a former client from the use of confidential information obtained during the attorney-client relationship.