“Reasonable” is the New “Justice”

Judges and attorneys say the most absurd things these days. They treat falsehoods as truth by hiding behind ambiguous words like reasonable.

A San Diego attorney, Corinne C. Bertsche of Lewis Brisbois Bisgaard & Smith LLP, is arguing that I should pay tens of thousands of dollars in attorney fees that she says her clients incurred defending my appeal. That appeal challenged an earlier attorney-fee award entered after Ms. Bertsche filed an anti-SLAPP motion on behalf of her clients, Ellis Stern and Alan Goldberg of Stern & Goldberg.

I had sued Stern and Goldberg for derivative legal malpractice and conversion. When I learned that I could not pursue a derivative action on behalf of an LLC without an attorney, and the court denied my request to retain counsel on a limited-scope basis, I voluntarily dismissed the case.

Judge Janis L. Sammartino nevertheless concluded that because I dismissed the lawsuit, Stern and Goldberg were the prevailing parties on the anti-SLAPP motion. In the years that followed, Judge Todd Robinson and Judge Linda Lopez agreed. The anti-SLAPP motion was treated as a success, even though legal malpractice and conversion claims are rarely the kind of speech-related claims anti-SLAPP statutes are intended to protect.

But there is a more fundamental problem.

The anti-SLAPP motion should never have been necessary.

A derivative action filed on behalf of an LLC by someone who is not licensed to practice law is a nullity. It is void. The defendants did not need to file a motion running hundreds of pages. A short filing pointing out that the complaint was a legal nullity would have sufficed.

There was another threshold issue as well.

The federal court lacked subject matter jurisdiction. That is not an obscure legal doctrine. It is a basic principle taught in the first year of law school. An LLC is a citizen of every state in which any of its members is a citizen. When an LLC member names the LLC as a defendant in a state-law case filed in federal court, complete diversity is destroyed. Without complete diversity, there is no diversity jurisdiction.

Instead of litigating an anti-SLAPP motion, any of the attorneys—or any of the district or appellate judges who reviewed the case—could have disposed of it in a paragraph explaining that the federal court lacked subject matter jurisdiction.

Instead, the attorneys generated substantial fees they now seek to recover from me, while the courts devoted years of judicial resources to a case that could have been resolved at the outset.

In her latest reply, Ms. Bertsche uses the word reasonable six times. She repeatedly insists that these fees are reasonable.

Really?

Ms. Bertsche reportedly charges $450 per hour. If an attorney billing at that rate did not recognize two well-settled, first-year legal principles—that a non-attorney cannot maintain a derivative action on behalf of an LLC and that complete diversity is destroyed when an LLC member sues the LLC in federal court—then it is difficult to understand how charging $450 per hour is reasonable.

If, on the other hand, she did recognize those principles but chose to pursue a lengthy anti-SLAPP motion anyway, it is equally difficult to understand why the resulting fees should be considered reasonable.

Either way, the repeated invocation of the word reasonable does not make the fees reasonable.

Perhaps American courts should retire words like reasonable and justice. They have become so elastic that they can be stretched to justify almost anything. That should concern everyone who depends on the courts to apply the law as it is, not as convenient labels make it appear.