Fights Between Business Competitors Lead To UPEPA Move In Washington State

Torchstar Corporation sells LED products through Amazon.
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Torchstar alleges that a competing seller of the same product, Hyatech, Inc., has essentially copied Torchstar’s Amazon sales page in violation of copyright and other laws. I filed a lawsuit in the district court. Hyatech, on the other hand, argued that Torchstar’s sales page did not qualify for copyright protection and that it was Torchstar who, through the litigation process, was trying to illegally destroy Hyatech as a competitor. Hyatech counterclaims against Torchstar, alleging that Torchstar made false claims of copyright infringement against Amazon, including alleging infringement resulting from product images taken by Hyatech’s own photographers. Hyatech also alleged that Torchstar did not register its copyright with the U.S. Copyright Office until the litigation began.

So, to back it up a bit, Torchstar sued Hyatech and Hyatech countersued Torchstar. Welcome to Commercial Litigation. But now it gets interesting.

Instead of opposing Hyatech’s arguments on the merits, Torchstar filed a special motion to strike under Washington’s Uniform Public Expression Protection Act (UPEPA), Washington’s Anti-SLAPP law. Torchstar argued that reporting to Amazon and initiating a lawsuit against Hyatech was a privileged litigation communication, Hyatech’s claim was barred for technical reasons (discussed below), and Hyatech ultimately substantiated its allegation of unlawful interference against Torchstar. We consider all of this in more detail as we delve into the Court’s opinion as found in Touchstar Corp., Hyatech, Inc., 2023 WL 137762 (EDWa., Jan. 9, 2023).

UPEPA’s special motion essentially provides a way for litigants to test adverse claims very early in litigation. In this case, the claims against the litigants are based on communications arising from the litigants’ exercise of their free speech and similar rights. public interest. However, excluded from the scope of UPEPA is so-called “commercial speech,” which is speech arising from the sale or lease of goods or services.

Torchstar’s special motion was based primarily on technical grounds. Noah Pennington The doctrine creates immunity for activities that petition the government for grievance relief. In other words, if a litigant petitions the government for something, Noah Pennington Plaintiffs will not be sued as a result of their petitioning activity.

That is the general rule of doctrine. However, as I frequently point out in my articles, general rules don’t generally apply. For our purposes here, with one exception: Noah Pennington It is defined as an objectively baseless attempt to abuse the litigation process to interfere with a competitor’s business relationship. A similar exception is that this principle does not apply to communications to third parties that do not threaten litigation against the third party.

The court found that Torchstar could not claim immunity based on: Noah Pennington Dogma for some reason. First, Torchstar did not threaten Amazon with a lawsuit. Second, since Amazon is a private company, Torchstar did not have a constitutional right to petition Amazon to remedy the complaint. However, the court left open the question of whether his Torchstar claim against Hyatech had the nature of a spurious lawsuit to be resolved later. The point was that Torchstar’s UPEPA special motion failed because Torchstar could not prove that Hyatech’s claims could be resolved as a matter of law.

analysis

The case ultimately, at least in the Court’s opinion, Noah Pennington Contrary to jurisprudence, it is worth noting that there was a substantive alternative basis for the court to dismiss Torchstar’s motion to dismiss. freedom of speech and the right to petition are paramount and is not intended to encompass the equivalent of a purely commercial dispute between two competing sellers. product.

Another item to consider is that UPEPA’s special motion is very similar in nature to a motion for summary judgment. Summary judgment is usually taken at the end of a case, after all discovery has been completed, to test whether a party has sufficient evidence. Evidence that a jury could reasonably reach a favorable verdict. What UPEPA and other anti-SLAPP laws have effectively done is to move summary judgment from near-end of litigation to commencement of litigation, allowing litigation that would have been dismissed anyway to be dismissed more quickly. It is to The reason for moving the fourth quarter to the first quarter in this way is to prevent litigants in areas of protected activity from being relieved of the costs and expenses of litigation in between. This prevents abusive litigants from abusing the legal system to harass parties in litigation itself and undermine protected behavior.

The point here is whether the case ultimately survives a motion for summary judgment in the same way that it survives a UPEPA special motion. However, parties to whom UPEPA’s special motions have been filed do not have the opportunity for extended action, so in effect, parties bringing a lawsuit within a protected activity can get all their ducks in line at the beginning of the lawsuit. means that you must Don’t wait for their case to slowly build up in the normal course of litigation. Thus, here the court held that Hyatech had presented sufficient evidence to bring it to trial on the issue of false action, as if it were being tested on a motion for summary judgment, and that Torchstar’s UPEPA special motion was , as if his Torchstar motion for summary judgment failed. Judgment fails.

Again, note that Torchstar’s UPEPA special motion arose in connection with Hyatech’s counterclaim. UPEPA does not limit the availability of its special motions only to those who initiate litigation, but such special motions are open to all persons, however designated and of whatever stance. Claims, counterclaims, cross-claims, third-party claims, etc. can be asserted. As long as the motion is timely, it will happen.

Finally, to completely change the course of this debate, even though Torchstar’s UPEPA special motion ultimately failed, the very submission of the motion forced Hyatech to preempt essentially all cases. In that respect, it is probably of no value to give Torchstar any legal advantage. of the discoveries that are likely to occur next between these parties. This is no small advantage and could greatly reduce the need for Torchstar discovery. The lesson here for litigants is that if a UPEPA special motion is at least colorable and not asserted for purposes of delay, it should generally be filed. Similarly, Torchstar now has the opportunity to immediately appeal the denial of UPEPA’s special motion. This is usually not available in the ordinary motion to dismiss filed at the beginning of the case. Litigators should also be aware of its potential benefits.