Anthony G. Graham
Graham & Martin LLP
3 Park Plaza, Suite 2030
Irvine, CA 92614
Phone: (949) 474-1022
Fax: (949) 474-1217
November 14, 2010
VIA EMAIL AND FEDERAL EXPRESS
Lana Burkett, Editor
Prop 65 News
Dear Ms. Burkett,
This letter is intended to respond to the article entitled “Property Owners
Counter-Attack Consumer Defense Group,” printed in the August 15, 2002 edition of
Prop 65 News, which references, and quotes liberally from, a complaint filed by attorney
Scott Ferrell (who apparently provided the complaint to your magazine), of the law firm
of Call & Jensen, on behalf of three property management companies. The complaint
asserted claims for malicious prosecution and abuse of process against my client,
Consumer Defense Group (“CDG”), a public interest association, the law firm of Graham
& Martin LLP, and myself. For his own reasons Mr. Ferrell chose not to inform your
readers that, contrary to the allegations in his complaint, (1) the underlying Proposition 65
lawsuit has not been dismissed, and is in fact still ongoing, and that, (2), as of the date
the article was published, the malicious prosecution complaint had already been
dismissed as a SLAPP suit.
As many of your readers know, my client, Consumer Defense Group, has entered
into “global” settlement agreements with the California Apartment Association (“CAA”)
and the California Hotel & Lodging Association (“CH&LA”) relating, respectively, to the
California apartment and hotel industries. Pursuant to the terms of the CAA settlement,
CDG agreed to dismiss without prejudice all current defendants to allow them a sixty-day
period in which to evaluate the settlement proposal in good faith. If, at the end of that
period, the defendant decided not to enter into the settlement CDG would re-file the
Mr. Ferrell, with full knowledge of the reasons for the dismissal, and having
chosen to avail his clients of the opportunity, chose to immediately attempt to use the
request for dismissal filed pursuant to the CAA settlement to form the basis for a
malicious prosecution/abuse of process action by asserting that the dismissal was
somehow a “victory” for him and his clients. That attempt failed. In fact, as of the date
your article was published, the malicious prosecution complaint had already been
dismissed as a SLAPP suit, in response to a Special Motion to Strike pursuant to
C.C.P. § 425.16 filed by me on behalf of my client, my law firm and myself. The
Honorable Judge Gallivan of Orange County Superior Court recently held, in ruling on
our Motion for Attorneys’ Fees and Costs that, as a matter of law, the lawsuit filed by Mr.
Ferrell was a meritless, tactical lawsuit filed primarily to chill the exercise of the First
Amendment rights of free speech and petition.
A timeline, drawn directly from the relevant court filings (which have been made
available to you and your readers), of what has to date occurred in this matter may assist
On March 21, 2002, a complaint was filed by Consumer Defense Group against
Beacon Property Management, Sunrise Management Company and the Braddock &
Logan entities (“the Defendants”), alleging violations of Proposition 65 and Business &
Professions Code § 17200.
In early May, 2002, prior to any answer or any other responsive pleading being
filed by the Defendants, I was approached by counsel representing the CAA, on behalf of
their membership, comprising the majority of the California apartment industry. After
three weeks of negotiations a “global” settlement proposal was agreed between the
parties. Pursuant to that agreement, CDG agreed to dismiss without prejudice all current
defendants involved in Proposition 65 cases relating to the apartment industry in order to
give all such parties (including the Defendants) a reasonable opportunity in which to
evaluate the proposed settlement.
On May 24, 2002, I informed Mr. Ferrell in writing of the proposed settlement,
and specifically informed Mr. Ferrell that CDG would be dismissing his clients solely in
order to allow them a period of time in which to review and evaluate the terms of the
proposed global settlement. I also informed Mr. Ferrell that, should his clients choose not
to enter into the settlement the underlying lawsuit would be re-filed, and that a full and
appropriate investigation of their facilities had been accomplished both prior to the
service of the sixty day notice.
At the same time, I provided this information to all other defendants in the six
remaining actions. A number of these defendants, having reviewed the CAA proposed
settlement, requested that CDG not dismiss them from the pending actions but rather
enter into individual settlements with those defendants. CDG agreed to do so since its
proposed settlement with CAA did not preclude such settlements.
On June 6, 2002, Mr. Ferrell wrote to me requesting a copy of the Request for
Dismissal. That same day I contacted counsel for Defendants to inform him of the
responses received from other defendants and to offer them the opportunity to consider an
individual settlement. The individual offer was to remain open until June 10, 2002, at
which time, if his clients had not accepted the individual settlement offer, CDG would
proceed with the dismissal pursuant to the CAA agreement.
On June 10, 2002, having received no response of any kind from Mr. Ferrell I
filed requests for dismissal relating to the underlying lawsuit. On June 12, 2002, I
confirmed that the requests for dismissal had been filed, attached copies of the requests
and noted that I would serve Mr. Ferrell with a Notice of Dismissal once I received an
executed copy of the dismissal from the clerk.
On June 18, 2002, prior to entry of dismissal, Mr. Ferrell chose to attempt to
misuse the requirement under the terms of the proposed settlement that CDG dismiss all
pending lawsuits. On that day, Mr. Ferrell sent me a letter, attaching a copy of the
SLAPP complaint filed that day. The letter goes on to state the following:
By now you know that my clients have both the means and the inclination to
pursue this case to trial, and that we intend to obtain a substantial judgment
against the Consumer Defense Group, Graham & Martin, and you personally.
Nevertheless, if you would like to resolve this dispute without further litigation,
my clients would be willing to settle their claims against you and the other
defendants for: (1) complete reimbursement of their legal fees in this action and
the underlying lawsuit; (2) payment of $100,000 from each defendant; and (3) an
appropriate covenant not to institute any future proceedings against any of my
clients. If you or the other defendants are interested in this scenario, please feel
free to contact me.
I did not respond to this letter for obvious reasons. Unfortunately for Mr. Ferrell he had
“jumped the gun” by making the demand and filing the frivolous and malicious lawsuit
before the dismissal had been entered in the underlying action. Further, on June 25,
2002, I received notice from the Court that the request for dismissal as to the Defendants
had not been entered due to an administrative error.
On July 5, 2002, I filed, on behalf of my client, my law firm and myself a Special
Motion to Strike pursuant to C.C.P. § 425.16. Mr. Ferrell then immediately moved ex
parte in the underlying lawsuit to demand that the dismissal be entered by Judge Jameson
pursuant to the terms of the CAA settlement, while at the very same time moved ex parte
before Judge Gallivan (without referencing the CAA settlement) for additional time to
prepare an opposition to the Special Motion because he needed time to, in his words,
gather “substantive evidence” to support his complaint. Not surprisingly, Judge Jameson
denied the ex parte application.
On August 12, 2002, prior to the hearing on the Special Motion, Mr. Ferrell
dismissed his SLAPP suit, having not only never filed an opposition, but never made any
attempt to present any evidence to support the allegations made in the complaint. I then
filed a motion for attorneys’ fees and costs for just over $17, 000.00, to which CDG, my
law firm and myself were entitled under § 425.16.
Mr. Ferrell then filed a demurrer to the underlying complaint, asserting that the
form of 60-Day Notice used was insufficient. Mr. Ferrell chose to file the demurrer
despite the fact that he knew Judge Ann Kough, at the time the coordinating judge in the
Coordinated Secondhand Tobacco Smoke Cases pending in Los Angeles Superior Court,
had already found the form of Notice used by CDG to be sufficient as a matter of law.
On September 18, 2002, Judge Jameson denied the demurrer.
On the same day, Judge Gallivan, in ruling on our motion for attorneys fees and
costs, expressly found that the malicious prosecution action filed by Mr. Ferrell was a
SLAPP suit, that is, a meritless, tactical lawsuit, made without evidentiary or legal
support, and filed primarily to chill the exercise of the First Amendment rights of free
speech and petition.
On September 24, 2002, Mr. Ferrell answered the complaint on behalf of his
The Consumer Defense Group has at all times tried to litigate its actions in a fair
and reasonable manner. CDG has never been accused of unnecessarily litigating a matter
solely to drive up defense costs and fees. CDG has also never been accused of seeking
extortionate settlement amounts – in fact, the contrary is the case, since it attempts to
resolve these matters in a manner conducive to everyone’s best interests. The terms of
the CAA and CH&LA settlements, which are public knowledge, make that plain.
As I noted in a previous edition of your magazine, Proposition 65 places a great
deal of power in the hands of a plaintiff, and it is incumbent upon such a plaintiff and his
counsel to recall that he is representing the interests of all Californians when such an
action is brought. However, defense counsel in such cases also need to be aware that
litigation tactics which appear solely designed to harass and annoy a plaintiff are not
merely costly in terms of the financial expense to defendants, but also in the litigation and
settlement posture likely to be taken by a plaintiff when faced by such tactics.
For your readers convenience we have provided to you a copy of the Motion to
Strike and all supporting documents thereto. If you or your readers have any questions, I
would be happy to speak with you or them.
Anthony G. Graham, Esq.