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No Litigation Privilege For Post Settlement Misconduct

Travelers Casualty Insurance Co. of America v. Hirsh (Ninth Cir. 2016) 831 F.3d 1179.
Attorney Hirsh was Cumis counsel for an insured of Travelers Casualty. Hirsh was required to give all non-privileged information to Traveler’s, that did not bear on coverage issues.
The underlying suit settled and Hirsh allegedly secretly kept some of the settlement money and then tried to get more fees from Travelers though fee arbitration.
Travelers responded with a Federal court suit over Hirsh’s conduct with respect to the settlement money. Hirsh filed an anti-SLAPP motion, a California procedural vehicle, seeking dismissal based on the litigation privilege.
HELD: Hirsh’s motion was properly denied. Traveler’s suit alleged post-settlement misconduct, so the gravamen of the claims did not fall within the ambit of the litigation privilege.
Circuit Judges Kozinski and Gould lamented that the Federal courts should really stop hearing California anti-SLAPP motions in general, favoring use of the FRCP 12(b)(6) motion instead.