After favorable treatment of the Noerr-Pennington Doctrine by the Court of Appeals for the Ninth Circuit in Sosa v. DirectTV, 437 F.3d 923, 929 (9th Cir. 2006), many saw analogy to FDCPA claims. In Sial v. Unifund CCR Partners, 2008 WL 4079281 (S.D.Cal. 2008), Judge Miller refused to apply the defense to litigation-related debt collection conduct. The Noerr-Pennington doctrine derives from the Petition Clause of the First Amendment, which protects an individual’s right to petition the government for redress of grievances. Under the Noerr-Pennington Doctrine, those who petition any department of the government for redress are generally immune from statutory liability for their petitioning conduct. In the litigation context, “petitioning conduct” includes a complaint, an answer, a counterclaim, and other assorted documents and pleadings in which their request that the court do or not do something.
This case also falls within the sham exception to the Noerr-Pennington doctrine. Plaintiff alleges that Defendants obtained a default judgment and garnished Plaintiff’s wages despite their knowledge that they had not served Plaintiff with a copy of the summons and complaint. (Compl. at 3-4 ¶¶ 18, 19). Under the third strand of the sham exception, litigation “can be deemed a sham if [Defendant’s] knowing fraud upon, or its intentional misrepresentations to, the court deprive the [collection action] of its legitimacy.”Sosa, 437 F.3d at 938. If true, the allegations in ¶¶ 18-19 of the FAC provide grounds for setting aside the default judgment. See Ellard v. Conway, 94 Cal.App.4th 540, 544, 114 Cal.Rptr.2d 399 (2001) (under Cal.Code Civ. Proc. § 473(d), “the court may set aside a default judgment which is valid on its face, but void, as a matter of law, due to improper service”) The third variant of the sham exception therefore applies to this case.
The Court also rejected the defendant’s efforts to apply the litigation privilege to the conduct alleged.
The parties also acknowledge a split in opinion among federal district courts as to whether the Rosenthal Act and the litigation privilege are irreconcilable. Compare Oei v. N. Star Capital Acquisitions, LLC, 486 F.Supp.2d 1089, 1100 (C.D.Cal.2006) (Rosenthal Act not reconcilable with litigation privilege); Butler v. Resurgence Financial, LLC, 521 F.Supp.2d 1093, 1095-97 (C.D.Cal.2007) (following Oei );Mello v. Great Seneca Financial Corp., 526 F.Supp.2d 1024, 1030-31 (C.D.Cal.2007) (same); with Taylor v. Quall, 458 F.Supp.2d 1065, 1067-69 (C.D.Cal.2006) (litigation privilege precludes Rosenthal Act claims); Nickoloff v. Wolfpoff & Abramson, L.L.P., 511 F.Supp.2d 1043, 1045-46 (C.D.Cal.2007) (distinguishing Oei, finding Rosenthal Act and litigation privilege not irreconcilable); Reyes v. Kenosian & Miele, LLP, 525 F.Supp.2d 1158, 1162-65 (N.D.Cal.2007) (same). Having considered these divergent cases, the court agrees with those courts that have found the litigation privilege and the Rosenthal Act irreconcilable.“Applying the privilege … would effectively vitiate the Rosenthal Act and render the protections it affords meaningless.”Oei, 486 F.Supp.2d at 1100. Thus, the court “applies the familiar principle of statutory construction that, in cases of irreconcilable conflict, the specific statute prevails over the general one,”id. at 1100, and finds that the Rosenthal Act prevails over the statutory litigation privilege.