Louie’s Seafood Rest., LLC v Brown 2021 NY Slip Op 06167 Decided on November 10, 2021 Appellate Division, Second Department is a novel defense to a claim of deceit. Originally applicable to Anti-Trust litigation (where it excused certain litigation tactics), it is here applied (for the first time in state court legal malpractice claims) to a Judiciary Law § 487 claim.
“The plaintiffs commenced this action against the defendants seeking damages for aiding and abetting fraud, violation of Judiciary Law § 487, breach of contract, and fraud in the inducement. The causes of action to recover damages for aiding and abetting fraud and violation of Judiciary Law § 487 were predicated on allegations that, in the discrimination lawsuit, the plaintiff to that action had fabricated and disclosed during discovery certain diary entries, and that the defendants were aware of the fabrication and substantially assisted to advance the commission of fraud. The causes of action to recover damages for breach of contract and fraud in the inducement were predicated on allegations that, in the class action lawsuit, the defendants breached the settlement agreement by failing to hold the settlement proceeds in escrow until the court approved the settlement agreement and fraudulently induced the plaintiffs into entering the settlement [*2]agreement by misrepresenting that they were not representing any other employee or former employee of the plaintiffs in connection with an employment-related issue against them.
The defendants moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the aiding and abetting fraud causes of action and the cause of action alleging a violation of Judiciary Law § 487 on the ground, among others, that the defendants were protected by the Noerr-Pennington doctrine (see Mine Workers v Pennington, 381 US 657; Eastern Railroad Presidents Conference v Noerr Motor Freight, Inc., 365 US 127), and to dismiss the breach of contract and fraud in the inducement causes of action on the ground that the complaint failed to state those causes of action. The Supreme Court denied the motion. The defendants moved for leave to renew and reargue the motion. In an order entered September 12, 2016, the court, inter alia, upon renewal and reargument, granted the defendants’ prior motion and directed dismissal of the complaint. The plaintiffs appeal.
On a motion to dismiss a cause of action pursuant to CPLR 3211(a), the court must accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see CPLR 3026; Leon v Martinez, 84 NY2d 83, 87-88).
“The Noerr-Pennington doctrine protects the right under the First Amendment to the United States Constitution to petition the government for governmental action, including through litigation and activity incidental to litigation” (Matter of People v Northern Leasing Sys., Inc., 193 AD3d 67, 77 [citation omitted]; see Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d 101, 106-107). “There is a ‘sham’ exception to the Noerr-Pennington doctrine which applies in ‘situations in which persons use the governmental process—as opposed to the outcome of that process—as an anticompetitive weapon'” (Singh v Sukhram, 56 AD3d 187, 192 [emphasis omitted], quoting Columbia v Omni Outdoor Advertising, Inc., 499 US 365, 380; see Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d at 107). There is also a “‘corruption’ exception, which applies only where a party has stepped beyond the bounds of zealous advocacy and engages in conduct alleged to be criminal, not just deceptive or unethical” (Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d at 110).
Here, the Supreme Court properly concluded that the causes of action alleging that the defendants aided and abetted fraud and violated Judiciary Law § 487 were barred by the Noerr-Pennington doctrine. The Noerr-Pennington doctrine applied to these causes of action insofar as they were based upon litigation and activities that were incidental to litigation, and the pertinent allegations did not fit within either the “sham” or the “corruption” exceptions to the Noerr-Pennington doctrine (cf. Matter of People v Northern Leasing Sys., Inc., 193 AD3d at 77-78; see generally Singh v Sukhram, 56 AD3d at 192; Alfred Weissman Real Estate v Big V Supermarkets, 268 AD2d at 109-110).”