Malicious prosecution

El Corton

August 29, 2006

How does the legal system deal with litigants such as SCO who use the courts to harass or punish others, perhaps at the behest of a third party? One school of thought holds that the right to due process should be abridged so that the offense never takes place. That's not the way the common law has developed. Here's something to think about:


Malicious Prosecution

An action for damages brought by one against whom a civil suit or criminal proceeding has been unsuccessfully commenced without probable cause and for a purpose other than that of bringing the alleged offender to justice.

An action for malicious prosecution is the remedy for baseless and malicious litigation. It is not limited to criminal prosecutions, but may be brought in response to any baseless and malicious litigation or prosecution, whether criminal or civil. The criminal defendant or civil respondent in a baseless and malicious case may later file this claim in civil court against the parties who took an active role in initiating or encouraging the original case. The defendant in the initial case becomes the plaintiff in the malicious prosecution suit, and the plaintiff or prosecutor in the original case becomes the defendant.


To win a suit for malicious prosecution, the plaintiff must prove four elements: (1) that the original case was terminated in favor of the plaintiff, (2) that the defendant played an active role in the original case, (3) that the defendant did not have probable cause or reasonable grounds to support the original case, and (4) that the defendant initiated or continued the initial case with an improper purpose.


An action for malicious prosecution focuses on the abuse of legal process, not on defamatory, untruthful statements. If a person helps another person launch a baseless case or takes action to direct or aid such a case, the first person may be held liable for malicious prosecution. The defendant must have been responsible in some way for the institution or continuation of the baseless case.


The plaintiff must prove that the person who began or continued the original case did not have probable cause to do so. Generally, this means proving that the person did not have a reasonable belief in the plaintiff's guilt or liability. In examining this element, a court will look at several factors, including the reliability of any sources, the availability of information, the effort required to obtain information, opportunities given to the accused to offer an explanation, the accused's reputation, and the necessity in the original case for speedy judicial action.

A failure to fully investigate the facts surrounding a case may be sufficient to prove a lack of probable cause. The termination of the original case in favor of the original defendant (now the plaintiff) may help to prove a lack of probable cause, but it may not be decisive on the issue. The plaintiff should present enough facts to allow a reasonable person to infer that the defendant acted without a reasonable belief in the plaintiff's guilt or liability in beginning or continuing the original case.


In a malicious prosecution, the plaintiff must prove with specific facts that the defendant instituted or continued the original proceeding with an improper purpose. Sheer ill will constitutes an improper purpose, and it may be proved with facts that show that the defendant resented the plaintiff or wanted somehow to harm the plaintiff. However, the plaintiff does not have to prove that the defendant felt personal malice or hostility toward the plaintiff. Rather, the plaintiff need only show that the defendant was motivated by something other than the purpose of bringing the plaintiff to justice.

Few defendants admit to improper purposes, so improper purpose usually must be inferred from facts and circumstances. If the plaintiff cannot discover any apparent purpose, improper purpose can be inferred from the lack of probable cause.


If the plaintiff suffered an economic loss directly related to the original action, the plaintiff can also recover the amount lost. This includes attorneys' fees and court costs incurred by the plaintiff in defending the original case.

Finally, the plaintiff may recover punitive damages. Punitive damages are imposed by judges and juries to punish misconduct by a party. Because an action for malicious prosecution requires proof of improper intent on the part of the defendant, punitive damages commonly are awarded to malicious prosecution plaintiffs who win damages awards.


SCO certainly won't be around long enough to be sued on these grounds, and its executives and board members probably can't be held personally liable. However, note that the defendant in an action for malicious prosecution need not be the plaintiff in the original action. A non-party -- say, one with pockets deep enough to interest even IBM -- who instigates or underwrites the malicious prosecution may be held liable. Furthermore:


In recent cases, courts have ruled that an attorney who knowingly assists a client in filing a worthless lawsuit out of malice or spite may be liable for damages along with the client.


11:29:39 PM

Re: Malicious prosecution


August 30, 2006

The trouble is that, while all very nice in theory, in the US, it does not work out in practice. For instance, look at this important decision (reported by Wikipedia):

<< Declining to expand the tort of malicious prosecution, a unanimous Supreme Court in Sheldon Appel, supra, 47 Cal.3d at page 873, observed: "While the filing of frivolous lawsuits is certainly improper and cannot in any way be condoned, in our view the better means of addressing the problem of unjustified litigation is through the adoption of measures facilitating the speedy resolution of the initial lawsuit and authorizing the imposition of sanctions for frivolous or delaying conduct within that first action itself, rather than through an expansion of the opportunities for initiating one or more additional rounds of malicious prosecution litigation after the first action has been concluded." (Accord Lossing v. Superior Court (1989) 207 Cal.App.3d 635, 638-640[255 Cal.Rptr. 18]; >>

So, in the case of SCOX versus IBM, the solution is "speedy resolution" and "sanctions for frivolous or delaying conduct". Of course, there can be disagreement about the meanings of "speedy", "frivolous" and "delaying", but I see neither "speedy resolution", nor meaningful "sanctions" in this case. That would only have been served by granting IBM's original motions for summary judgment and slapping SCOX down hard for failing to clearly detail its claims.

9:00:53 PM

Re: Malicious prosecution

El Corton

August 31, 2006

< The trouble is that, while all very nice in theory, in the US, it does not work out in practice. For instance, look at this important decision (reported by Wikipedia): >

The cases cited are from the state Supreme Court of California, not from the U.S. Supreme Court.

Malicious prosecution seems to be an unusual cause of action, but the circumstances are unusual too. I think it's a means by which IBM and/or Novell could get to the bottom of what really happened.


... BayStar spokesman Bob McGrath insists that, "For some time now, since we invested in SCO in October, we've seen things that we've been concerned about, and we've brought these concerns to SCO's board both in writing and verbally."

BayStar invested in SCO, McGrath said, because the Larkspur, Calif.-based private investment firm "believed, and still believes, that SCO's intellectual property assets are valuable and that there is great potential for these to be monetized for its shareholders."

"They have some valid claims, and with David Boies [SCO's lead outside attorney in its suit against IBM] involved in the execution of those claims, we believe that SCO can win."


McGrath went on to say, "We believe SCO must focus its resources. We're not an insider, we've been learning about SCO in the past few months and now we've reached the conclusion that SCO should focus its resources on its most valuable asset: its intellectual property claims.

"SCO should not be spending resources, its time and money, on its other businesses, such as OpenServer and UnixWare. The return there, both now or in the future, will not give enough value for return to stockholders and investors."


There's no doubt that Baystar invested in a litigation enterprise. Did it really believe the litigation had merit, and if so, did it have a reasonable basis for that belief? Or did it merely think that IBM could be harassed into a settlement? Was Baystar acting on behalf of other parties who didn't care about SCO at all?

These are questions IBM might like to see hashed out in court long after SCO is dead -- even if IBM doesn't ultimately recover any damages.

12:05:53 PM

Source: Investor Village SCO Board [ ]

Copyright 2006