The Letter of the Law

Levy Wins Intimidation Lawsuit

by Nick Welsh

Embattled developer Bill Levy (pictured) won a high-stakes showdown before the California Supreme Court with longtime foe and onetime friend Richard Berti, who charged Levy had grossly abused the judicial process by using it as a cudgel to silence critics. The critic in question was Berti himself, who waged a nine-year legal campaign to find out how Levy spent his investors’ money on what’s since become the Ritz-Carlton time-share condo proposal slated for lower State Street. The high court did not rule on whether Levy had used the court system as charged — which would violate the state’s anti-SLAPP (strategic lawsuit against public participation) laws — only that Berti was not entitled to attorney’s fees and costs as claimed.

In January 2003, Levy sued Berti for $50 million, alleging he sought to torpedo Levy’s time-share condo investment deal by leading disgruntled investors in an insurrection against Levy. Specifically, Berti — then a minor partner in Levy’s waterfront plan — had hounded Levy through the court system, demanding a full accounting of how Levy spent the partnership’s money over the years. In response, Berti contended that Levy sought to intimidate him for demanding information to which he, as an investor, was legally entitled. He also grumbled about “the law being a rich man’s game,” and wondered caustically why Levy was going to such great lengths to keep him and other investors in the dark.

One day before Berti notified Levy’s attorneys that he intended to countersue on the grounds that Levy had violated California’s anti-SLAPP laws, Levy voluntarily withdrew his lawsuit against Berti. Berti countersued anyway. His attorney, Pete Bezek, argued the intimidation Levy inflicted could not be undone by dropping his lawsuit any more than a bullet could be unfired from a gun after it was shot. Berti, he argued, had been forced to spend considerable time and money in preparing his defense; Levy should pay. Levy’s attorneys cautioned that if plaintiffs were not allowed to withdraw lawsuits without fear of economic reprisals, no cases would ever settle and the courts would be more clogged than they already are.

At the trial court level, Levy prevailed. But at the Court of Appeal, Berti triumphed. And once the case got to the California Supreme Court, what had been an especially bitter feud between two former friends attracted significant interest. Filing friend-of-the-court briefs on behalf of Berti were the Sierra Club, the California Newspaper Publishers Association, the Los Angeles Times, the Copley Press, McClatchy Newspapers, the New York Times, the California First Amendment Coalition, and the First Amendment Project. These organizations and businesses worried that others might seek to dodge the consequences of the state’s anti-SLAPP laws by following Levy’s lead. Meanwhile, Levy attracted a friend-of-the-court brief filed by former Colorado governor Richard Lamm, who’d been on the receiving end of anti-SLAPP litigation himself.

However intriguing such concerns might have been, the high court confined its logic to a strict reading of the letter of the law: For the anti-SLAPP protections to be applicable, the person invoking them must be the subject of a lawsuit at the time. Because no such suit existed, the justices unanimously ruled in Levy’s favor.

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