COMMONWEALTH OF MASSACHUSETTS

MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS'
MOTION TO DISMISS/MOTION FOR SUMMARY JUDGMENT

The plaintiff, William Silverstein, hereby submits his memorandum of law in opposition to the January 11, 2001 motion to dismiss submitted by the defendants, Microsystems Sofware, Inc. ("MSI"), The Learning Company, Inc. ("TLC"), and Mattel, Inc. ("Mattel").

The plaintiff will start by responding to the arguments presented in the defendants' motion to dismiss, and will then, pursuant to Judge Zobel's statement that he would treat the motion as one for summary judgment, show that the plaintiff's case should not be dismissed for lack of evidence supporting a material fact.

I. The Defendants' Communications on September 20 and 21, 1999 (Exhibits 1 and 2) Are Evidence of Their Intent to Abuse the Legal Process by Trying to Use a Libel Claim to Coerce the Plaintiff into Silence, and Are Not Excludable as "Offers of Compromise."

The first section of the defendants' motion to dismiss makes two mistaken arguments: that the plaintiff is suing them over statements made in what they call a settlement offer and that nothing said in something presented in the form of a settlement offer can ever be admissible in court. Neither is true. The plaintiff is suing the defendants over their conduct in bringing and continuing a lawsuit that constituted an abuse of process and also retaliation under the statutes involved. The statements the plaintiff points to are not, by themselves, the sole basis of the lawsuit--the statements are evidence of the goal sought by the defendants in filing the libel counterclaim and in continuing with it even after giving the plaintiff judgment in the first lawsuit--on all of the allegations claimed to be libellous.

Exhibit 1 to the Second Amended Complaint consists of an e-mailed draft of a proposed agreement to settle the libel counterclaim, sent a week after entry of the Rule 68 judgment by Tracey Spruce, an attorney representing the defendants at the time. It would have restrained Silverstein from speaking about his case, his employment by MSI, and the employment practices of MSI, TLC or Mattel, with a penalty of $50,000 per violation. (See ¶¶ 1, 2, 3, & 10 of Exhibit 1.)

Exhibit 2, a letter faxed to Silverstein's counsel the next day by Spruce in response to the immediate rejection of that offer, contained an explicit agreement by Spruce with the characterization as "a penalty."

The law does indeed create a privilege to make offers of compromise without those offers being treated as admissions. There is no dispute between the parties on that score. However, that privilege is not applicable to the uses being made here of the communications the plaintiff is pointing to--or, in fact (as shown below), to those communications at all, as they exceeded that privilege.

First of all, the defendants' messages in Exhibits 1 and 2 to the Second Amended Complaint are not being submitted as admissions on the merits of the original libel claim but as evidence of the defendants' goal in bringing it, which is a material element of a claim for abuse of process.

As noted in Liacos, Evidence, at § 4.6 (text accompanying n.1), while both the Federal Rules of Evidence 408, and the never-adopted proposed Massachusetts Rules of Evidence 408, exclude admissions of fact in offers in compromise from being used as evidence, Massachusetts common law does not. ⁽¹⁾

The law of abuse of process differs from the law of malicious prosecution. Abuse of process focuses not on the merits of a lawsuit but on the goal sought in bringing it. A lawsuit--even if meritorious--that is brought to achieve ends that are not the legitimate ends of such causes of action gives rise to a claim of abuse of process against the party that brought it. ⁽²⁾ It is not necessary to show that the claim was groundless to find it to be an abuse of process, but such groundlessness is relevant to showing the ulterior motive, ⁽³⁾ although here that ulterior motive was communicated explicitly--which is precisely what the defendants wish to exclude!

The use of a lawsuit to attempt to obtain a form of relief that is not an available remedy under the law constitutes abuse of process. The demand for illegal relief exceeds the privilege for legitimate settlement negotiations, and is instead admissible as proof of abuse of process, in the manner described by the Supreme Judicial Court in Ladd vs. Polidoro, 424 Mass. 196 (1997):

"The ulterior motive may be shown by showing a direct demand for collateral advantage; or it may be inferred from what is said or done about the process."

[424 Mass. at 198]

A "direct demand for collateral advantage" cannot be kept out of evidence by the transparent device of calling it a proposed "Settlement Agreement."

Most profoundly, the defendants ignore Commonwealth v. Kennedy, 389 Mass. 308, (1983), which shows that one can lose the privilege for offers in compromise by attaching such improper strings to cause it not to qualify as an offer in compromise at all.

In Kennedy, a man being prosecuted for nonsupport sought to exclude from evidence his offer to his pregnant girlfriend to pay for an abortion, which was being used as an admission of paternity at trial. The Supreme Judicial Court held that his statement did not qualify to be considered an offer in compromise. It held it instead to be an effort to coerce the girlfriend in the exercise of her constitutional right to choose to carry her pregnancy to term, and as such that it was admissible in evidence:

"An offer to pay for an abortion, unaccompanied by an offer to pay the medical expenses for the delivery of the child and to pay for the support of the child, tends to influence the woman's choice as to whether to have an abortion or to carry the child to term. This court has said that, barring a compelling State interest, the law should take a neutral position on a woman's exercise of her constitutional right to decide whether to have an abortion. [citations omitted] Indeed, it has been contended that the State should do what it can, within reason and within the limits of the Federal Constitution, to advance the State's interest in the protection of potential life. [citation omitted] We see no overriding public policy justification for excluding the concededly relevant evidence of an offer to pay for an abortion."

(389 Mass. at 312-313)

The analogy to Kennedy here is strong. The "proposed settlement agreement" here was actually the defendants' demand that Silverstein give up the exercise of his constitutional right to freedom of speech. Near v. Minnesota, 283 U.S. 697 (1931) prohibits the states from going beyond awarding damages for defamation, prohibiting, as unconstitutional, "restraint upon publication." 283 U.S. at 723.

Thus the "proposed settlement agreement" was not, under Kennedy, qualified for protection as an offer in compromise, being instead part of an effort to coerce Silverstein in the exercise of his right to freedom of speech.

Just as the Commonwealth would not give aid to an effort to coerce the choice on abortion by excluding that effort from evidence, it cannot give aid to an effort to coerce Silverstein in the exercise of his freedom of speech by protecting that effort from exposure in court. If anything, this case is stronger than Kennedy:

1. In Kennedy the coercion was indirect (I'll help you if you do what I want), here it was explicit (We'll sue you until you do what we want).
2. In Kennedy the Commonwealth was, as a matter of state policy, choosing not to aid the decision to abort--here it is not allowed, under the U.S. Constitution, to aid an effort to silence the plaintiff, protecting the defendants by excluding from evidence their illegal demands.

The defendants' motion seeks to take the shield granted by the law to protect good faith efforts to compromise disputes and seeks to turn it into a sword to strike down actions for abuse of process, asking for unprecedented immunity for the communication of illegal demands.

II. The Defendants' Effort to Coerce the Plaintiff into Silence about His Opinions about the Legality of Their Treatment of Him Clearly States a Cause of Action for Intentionally Interfering with His Exercise of Rights Protected by the Statutes Involved, a Claim Commonly Known as "Retaliation."

The second section of the defendants' motion includes a large number of arguments (many of them made in single sentences, often in footnotes), which are here responded to briefly:

• They argue that intent to retaliate has not been shown because the mere time sequence of complaint and counterclaim does not prove intent, which ignores that courts do allow time sequence as proof of retaliation. ⁽⁴⁾ Nothing stopped them from suing Silverstein for libel before he sued them--and others who libeled them were not sued. (See affidavit of Silverstein.)
  
• They also ignore that they are accused of retaliating also against Silverstein's web site, which the counterclaim was expressly aimed at. The plaintiff's speaking out about his case on his web site is itself protected activity. Silverstein complained of that explicitly in each count of the Second Amended Complaint (see ¶¶ 38-39, 42-43, 45-46, 51-52, and 56-57). ⁽⁵⁾ Their reason for ignoring this aspect of the retaliation claim is clear--it was precisely this protected conduct that they were trying to coerce Silverstein into giving up.
  
• They argue that access to courts and administrative agencies is an absolute right that cannot be penalized by being made the basis for liability ⁽⁶⁾--an argument that is the height of hypocrisy coming from Mattel, which is currently suing parties in California--for libel and slander--who had sued it and publicized that suit. Mattel itself brushed off the defense of absolute privilege to sue by pointing out that sham litigation is not protected! A copy of Mattel's memorandum making that point is enclosed.

Further, as this Court is already aware, from the opposition Silverstein submitted to the defendants' motion for a more definite statement, the defendants moved before the MCAD to sanction Silverstein for (1) filing his complaint in Superior Court when his case had been pending at the MCAD for 11 months (far more than the required 90 days) and (2) for asking the MCAD to sanction the defendants for their violations of the MCAD rules.

The defendants do not appear to believe that the right to petition the government for redress of grievances is truly inviolable.

• They imply--without directly saying it--that retaliation claims can only be brought for employment actions, ignoring that the anti-retaliation provisions of the discrimination laws are considerably broader than that, and are not even limited in their scope to employers, being addressed to "any person." Since only employers can take employment actions, the prohibition against retaliation by "any person" in c.151B § 4(4) and (4A) cannot be limited to employment actions but must apply to any form of materially adverse treatment that is taken in retaliation--particularly since MSI was not Silverstein's employer when it brought the libel claim, and Mattel and TLC were never his employers. All are thus under the "any person" language. ⁽⁷⁾
  
• They argue that the plaintiff's retaliation claims are res judicata for not having been joined in the original lawsuit, even though they could not have been, under the MCAD presentment requirements of chapter 151B--the libel counterclaim was not asserted until the MCAD had lost jurisdiction over the case by its being filed in court, at which point a claim (as opposed to a defense) of retaliation could not be added.
     More importantly, Silverstein's factual basis to pierce the defense of right of petition--by showing that the lawsuit was an unprotected abuse of process--was only acquired when the defendants sent their demand for settlement (see fn. 6 supra), which was over a week after the plaintiff had already obtained judgment under Rule 68. (A) If the case was no longer pending, not even the libel counterclaim--as the plaintiff believes--he could no longer have asserted any claim in the case. (B) Conversely, if that is not the case, the libel counterclaim has not yet been dismissed with prejudice, barring the application of res judicata to it and any counter-counterclaims that could have been asserted about it, as final judgment on the libel claim would be required for the application of res judicata to that group of claims, under the defendants' own case of Bagley v. Moxley, 407 Mass. 633, 637 (1990).
• They argue that there can never be an action for abuse of process over a counterclaim since no process server is used to initiate a counterclaim. ⁽⁸⁾

And finally,

• They argue that the abuse of process claim is premature since there hasn't been a decision that the prior action was groundless--but as shown in the prior section of this memorandum, that argument is misdirected. That would be a defense against a claim of malicious prosecution, but not against a claim of abuse of process (see pages 4-5 above).

  As can be seen, the arguments presented in the second section of the defendants' motion do not hold up under scrutiny.

III. The Claims Presented in this Lawsuit Are Not Dependent upon the Outcome of the Case Currently on Appeal, as Abuse of Process--the Core of the Present Claims--Does Not Depend Upon the Lack of Merit of the Complained about Lawsuit--which Is the Basis of the Pending Appeal--but Rather Upon the Improper Motivation for its Being Brought.

The defendants' final argument is that the pendency of William Silverstein's appeal of the dismissal of the libel counterclaim without prejudice instead of ruling on his motion for summary judgment should bar this lawsuit from proceeding. ⁽⁹⁾

The defendants argue that the outcome of Silverstein's appeal could be dispositive of this case, or could lead to inconsistent results in the two cases.

The only problem with that argument is that it isn't true. Along with the other materials he is submitting in opposition to this motion, William Silverstein is submitting copies of all the briefs in the pending appeal: his principal brief, the defendants' brief, and his reply brief. Review of those briefs will show that there are no issues before either court that are before the other:

The Appeals Court is being asked to decide whether the motion for summary judgment in the previous case was improperly bypassed and a dismissal without prejudice granted instead, and asked to either decide the motion for summary judgment itself or remand it to Superior Court for decision. The argument on summary judgment is that the Rule 68 judgment was dispositive or, in the alternative, that the libel counterclaim was subject to summary judgment because the defendants could not show any actionable falsehood, malice, or harm.

The outcome of the pending appeal might be (1) affirmance, in which case there will be no ruling on the merits of the libel counterclaim, which would remain dismissed without prejudice, or (2) reversal, in which case the Appeals Court will either (a) grant summary judgment against the libel counterclaim or (b) send the motion for summary judgment back to Superior Court for decision.

Even if that case ultimately led to a ruling in favor of the libel counterclaim, it could not preclude the claims in this case:

     In the case before this Court, whether the libel counterclaim has merit is not at issue. As shown above, abuse of process does not require the challenged lawsuit to lack merit, and a showing of abuse of process defeats any constitutional privilege that might be asserted against the retaliation claims.

Thus, in no case could the outcome of the case pending in the Appeals Court be dispositive here. ⁽¹⁰⁾

The statement by Judge Zobel at the January status conference that he was treating the defendants' motion to dismiss as a motion for summary judgment has caused disagreement between the parties as to the effect of that on the scope of the issues before the court and thus what the plaintiff needs to show to avoid allowance of the motion.

The defendants' motion to dismiss does not challenge the adequacy of the plaintiff's factual showing in general, only in a few particulars that are addressed above.

However, a motion for summary judgment can be taken as calling the evidentiary support of every element of the plaintiff's case into question. Pursuant to Judge Zobel's direction at that status conference that he tell the defendants what he needs to respond to the motion (and his direction to the defendants that they provide what he needs)--and to deal with the possibility that Judge Zobel would treat the motion as calling the adequacy of the plaintiff's evidence on all elements of the case into question--the plaintiff asked the defendants to assist him in narrowing the issues by treating the Second Amended Complaint as a set of requests for admissions, and to provide documents with respect to any issue which they disputed. He asked them to respond to the outstanding discovery, and he also asked for additional documents in connection with his intended showing on punitive damages: documents showing Mattel's conduct in other lawsuits.

The defendants have declined to provide responses to any of the plaintiff's requests, beyond claiming that there is a stay on discovery, the answers or materials requested are not required to respond to their motion, and they will respond, if necessary, after the court rules on their motion to dismiss.

The defendants' position is indefensible, for numerous reasons, and William Silverstein asks this Court to treat all the facts in the case as admitted.

First of all, as pointed out on the first page of William Silverstein's opposition to the defendants motion to stay discovery last fall, defendants did not even move to stay discovery until after their time to respond to the initial requests for admissions had expired. (The initial request for admissions was served on October 23, 2000 and the motion for stay was served on November 29, 2000.)

The defendants' motion for stay asked that this Court stay all discovery until it ruled on their motion for a more definite statement. The motion for stay was accompanied by a set of "responses" to the initial request for admissions that refused to admit or deny anything--even refusing to admit or deny that:

"8. On September 13, 1999, judgment was entered in William Silverstein's favor on his claims in Silverstein v. Microsystems Software, Inc. et al., Middlesex Superior Civil Action No. 98-4820."

At the status conference on December 4, 2000, the Court took no action on the request for stay and told the defendants that they should have been able to understand the complaint, but asked William Silverstein's counsel to simplify the plaintiff's pro se amended complaint, giving him a month to do so.

On December 27, 2000, William Silverstein's counsel served the defendants' counsel in hand with the Second Amended Complaint. Even under the terms of the defendants' own request for stay, that should have started the clock running on responses to Silverstein's original discovery requests.

At the January 17, 2001 status conference, after Judge Zobel announced that the defendants' motion to dismiss would be treated as one for summary judgment instead, their counsel asked if the stay on discovery could be continued. William Silverstein's counsel objected that he needed his discovery to oppose summary judgment, and the Court told the defendants to provide the discovery that Silverstein told them he needed.

After consideration of the potential need to provide evidentiary support for every material fact in the case--particularly in the absence of the narrowing of issues that an answer to a complaint would normally provide--William Silverstein on January 29, 2001 told the defendants by a hand-delivered letter that:

"If I thought that Judge Zobel's conversion of your motion to dismiss into one for summary judgment was limited to the specific issues you explicitly addressed in your motion, I would be able to narrow our requests to the scope of the specific issues you addressed in your motion.

"Unfortunately, I do not have the luxury of making that assumption. On a motion for summary judgment, unless told otherwise by the Judge, I have to assume that I have the burden of showing either stipulated facts or else genuine issues of material fact as to all aspects of our case.

"In that posture, having to meet a summary judgment motion without the stipulations that would normally be supplied by an answer to a complaint and responses to requests for admission puts me in a difficult spot.

"1. Please now produce the documents requested by the initial document requests.

"2. I intend to treat the initial Requests for Admissions as admitted by your failure to respond within the time allowed. If you intend to challenge this, please provide formal responses to those requests, and produce all documents that reflect or evidence the facts at issue with respect to any of those requests that you do not fully admit.

"3. I am also enclosing some limited additional discovery requests. Bill won't like this, but I have not enclosed any notices to depose any of your clients."

The new discovery requests asked the defendants to treat the Second Amended Complaint as a set of requests for admissions, and to produce all documents that refer to or evidence the facts at issue with respect to any Request for Admission or paragraph of the Second Amended Complaint that they did not fully admit. They were also asked to admit the genuineness of some documents from other cases of Mattel's that the plaintiff had obtained on his own, and to provide other documents from those and other cases of Mattel's.

Once again, the defendants' response has been to assert that they are protected by a stay of discovery, although none has been granted. Once again the defendants did not provide a substantive response to any of William Silverstein's discovery requests. A copy of the defendants' responses is enclosed herewith.

William Silverstein submits that due to the defendants' repeated refusal to respond to his requests for admissions, under M.R.Civ.P. 36(a), this Court should treat as admitted all allegations in his Second Amended Complaint and in his two sets of requests for admissions, and all documents the genuineness of which they drew into issue.

In that posture, the motion for summary judgment must be denied, as the defendants must be held to have admitted to having filed and continued with their libel counterclaim, and to have encouraged or allowed their employees to defame the plaintiff in online forums and encourage others to shun him, all in retaliation for his having complained publicly and before public agencies and in court of the defendants' violations of numerous laws, and with the intent to use their libel action to coerce him into silence.

In addition, they must be held to have admitted to the applicability to them of all of the laws under which this action is brought, including not only the statutory actions but also the tort claims for abuse of process and infliction of physical and emotional distress, and that William Silverstein has sustained and continues to sustain harm including emotional stress, physical stress, lost salary, travel expenses, research expenses, and legal expenses in defending against the libel counterclaim and the defendants' other retaliatory actions.

(A compressed version of the Second Amended Complaint.)

In the alternative, if this Court is not willing to bind the defendants to such admissions by failure to respond, on the basis that the defendants reasonably thought that the only facts at issue on this motion were those they contested, then this Court should accordingly confine its consideration just to those issues, which were confined to (1) the scope of the issues in the prior action and appeal therefrom, and (2) the adequacy of Silverstein's evidence of retaliatory intent. (The defendants' challenge to the showing of adverse action was one of law, not fact, and focused on whether their libel counterclaim could be considered actionable misconduct, which is addressed above, in Part II.)

As to the first issue, the Court now has before it the complaint and notice of appeal in the former action (submitted by the defendants) and all of the briefs in the appeal from that action (submitted by the plaintiff). Part III of this memorandum, at pages 12-13, shows that the issues in that case do not interfere with this case.

As to the second issue, the question of intent is seldom appropriate for summary judgment. Here, intent to retaliate against the first lawsuit may be inferred by a jury from the time sequence of the filing of the libel claim only after the first case was filed in court, although the defendants had complained to Silverstein of the purported libel two years earlier. Intent to retaliate against Silverstein for his public speech is explicit, however, since (a) the subject of the libel action was Silverstein's protected public speech and (b) the condition demanded for dismissal of the libel action was that his protected public speech be terminated. The law showing that this conduct gives rise to an action for retaliation is set forth in Part II of this memorandum, at pages 8-9.

WHEREFORE, the defendants' motion should be DENIED.