Anti-SLAPP

How I Defeated an anti-SLAPP Motion by Doing Almost Nothing

Win anti-SLAPP doing nothing

Sometimes delay can be a good thing. Here is the tale of an anti-SLAPP motion defeated by time.

Because of certain changed circumstances, a massive company, we’ll call it Optimus, found itself in a bad situation. The facts are very complicated, but here is a simplified, made-up analogy that will set the scene.

Picture that Optimus is in the cold-remedy business, and a number of its formulations contain acetaminophen. But one day it is discovered that when acetaminophen is aerosolized, it cures baldness, and can be sold at a much higher price for that purpose. All of the suppliers want to bail on providing acetaminophen to Optimus, so Optimus comes up with a complaint it intends to use across the country against its suppliers, to force them to honor their agreements. Optimus knows that the suppliers will claim that the new use is a better use for the acetaminophen, because curing baldness is obviously the best conceivable use of any drug, especially as compared to a little pain and fever relief during a cold. The complaint by Optimus will challenge that legal theory and, if successful, will get all its other providers back into line.

But before Optimus can file its first test case, one of its suppliers, Megatron, files a declaratory relief action under the aforesaid theory. In response, Optimus tweaks its test action and files it as a cross-complaint.

From an anti-SLAPP standpoint, Optimus steered very close to SLAPP territory, because its cross-complaint included allegations that Megatron’s lawsuit was causing it harm. As I have written here before, suing someone for suing (in anything other than the malicious prosecution context) is almost always a SLAPP due to the litigation privilege. But the attorneys for Optimus had done a great job of making clear that the complaint was not based on the litigation, but rather the litigation was just another example of Megatron’s intentional interference with Optimus and its business.

But the attorneys at Megatron failed to read the cross-complaint in detail. They saw that there were allegations relating to the litigation, and immediately thought SLAPP. (It’s certainly OK to think SLAPP, but having done so, you need to do a little analysis.) They dutifully filed an anti-SLAPP motion, and I was brought in to assist with opposing the motion.

I researched and drafted the opposition to the anti-SLAPP motion, with the assistance of the fine attorneys at Optimus. Soon after we filed the opposition, and the Megatron attorneys realized that the Sultan of SLAPP was opposing the motion, they withdrew it and curled into a fetal position. At least that’s how I choose to picture what happened. But in reality, it probably went more like this.

We had the bad luck of being in a court that takes forever to hear motions, and is unwilling to give anti-SLAPP motions any priority. Making matters worse, as the date drew near, the judge apparently had no time to work it up, and set a new date, again off in the distant future.

boxer downA few days before the new hearing date, Megatron’s attorneys filed a notice that they were withdrawing the anti-SLAPP motion. Of course, I immediately took full credit, but the more likely scenario is that the withdrawal was a result of another of Optimus’s cases. Another court on another matter had ruled against a supplier, finding that the “higher and better use” argument was not a basis to breach their supply contract with Optimus. Although not actual precedent to our case, Megatron was forced to see that the argument probably wasn’t going to fly in our case as well. They would be in the position of having to argue on the second prong that Optimus was not likely to succeed on its claim to force them to continue providing acetaminophen, when a court had just done exactly that.

As much as I would have loved to see the motion play out, this was a best result for the client. Indeed, the result was amazing because by Megatron filing the anti-SLAPP motion, the matter was on hold from discovery all the many months the court kept kicking it down the street. Effectively, Optimus was able to spend almost nothing defending this case, while testing its theory as the plaintiff in another jurisdiction.

 

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Understanding Anti-SLAPP Evidence

police defamation

Another great victory by Morris & Stone, and an important lesson on anti-SLAPP evidence.

Our tale begins with a father who loved his daughter. We’ll call him Dad, and his daughter will be Rose.

Dad thought married life was good, and he and his wife begat their wonderful daughter Rose. But his wife (we’ll call her Mom) apparently saw greener grass, and divorced Dad to marry New Guy, meaning that Rose would now be spending time with New Guy.

Reports from Rose about her time with New Guy were disturbing. She claimed that New Guy had spanked her, and one time she returned home with a badly bruised arm she blamed on New Guy. During the ongoing custody battle, Dad reported his concerns about New Guy to the court in various court documents, stating that based on what Rose was reporting, he was being too forceful with Rose. Dad freely admitted he had no personal knowledge of any of this; he was only reporting what Rose was telling him. What else was he supposed to do?

Read the rest of this entry »

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Morris & Stone Victory – Reducing Attorney Fees

Inflated Fee ApplicationsI am often brought in as an expert to oppose inflated attorney fee applications following an anti-SLAPP motion. Of course every case is different, but thus far I have never failed to get the requested fees reduced. Lest you be overly impressed, I will immediately note that I only handle a case if I agree that the attorney fees should be reduced. Sadly, there are far too many unethical attorneys who, after prevailing on an anti-SLAPP motion, view fee application as a winning lottery ticket, and greatly inflate the fees. In most instance my services are sorely needed to challenge the application, but there have been a few occasions where the fees being requested are reasonable in my opinion, and I inform the plaintiff and/or his attorney that I cannot opine that a reduction would be appropriate.

In today’s case, the fee application was of the all too common variety, where defense counsel grossly overstated the fees to which he felt entitled. In this case, the plaintiff had negligently filed a SLAPP, making the common mistake of seeking damages that flowed from fighting a legal action, claiming that the action was an “abuse of process”. When the defendant filed the anti-SLAPP motion, the plaintiff was educated as to the litigation privilege, and dismissed the challenged causes of action (others still remained). Rather than just bringing me in as an expert, the client decided to retain me to oppose the motion and prosecute the remaining causes. Read the rest of this entry »

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Morris & Stone Anti-SLAPP Victory – Witness at EEOC Hearing Protected

EEOC Shield

Every week I get callers complaining about the anti-SLAPP statutes and/or the litigation privilege. The scenario is almost always the same. The caller sued someone for defamation for something they said in conjunction with litigation or an investigation by some government agency, and the caller was hit with an anti-SLAPP motion. The caller is outraged that the anti-SLAPP motion is keeping him from getting damages for the allegedly false statements made in court or court documents.

The outrage is misplaced, because the law is working properly by preventing the callers from doing what they are trying to do. The legal system cannot function without a litigation privilege. That privilege provides that anything said in conjunction with litigation is privileged, and cannot form the basis for a defamation action. And since the speech is privileged, a plaintiff can’t make an end run around the statute by just asserting different causes of action. I have written on this topic before, and the prior article shows what the justice system would be like without the litigation privilege.

Today I argued an anti-SLAPP motion in Los Angeles Superior Court, and the facts of the case provide a real life example of why the litigation privilege is so essential.

Let’s call the plaintiff in this case John. John decided one day that his employer was discriminating against him, and filed a complaint with the EEOC on that basis. There was then a dispute with his employer, with the employer saying John had violated a company policy and John denying that claim. The employer fired John for the alleged violation. John argued to the EEOC that the termination for the alleged violation was just more evidence of discrimination.

The EEOC investigated John’s claims of discrimination, and during that investigation interviewed our client, who also worked for the company. We’ll call him Dave. Read the rest of this entry »

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SLAPP001 – Why Every Litigator Must Know California SLAPP Law


California SLAPP Law Podcast

California’s SLAPP Law provides for the use of special motions to strike, called “anti-SLAPP motions“, to quickly dispose of lawsuits that were filed only to improperly silence free speech or to prevent the defendant from pursuing a lawful legal remedy.

But as one person put it, the 15 Legislators who passed the law failed to consider the 4,000 attorneys who would interpret it. There is a dark side to California’s SLAPP Law. It trades one form of abuse for another. It was designed to protect free speech and the right of redress, but now it keeps some legitimate cases out of court because the risks are just too high. And with its automatic right of appeal, it is used to greatly delay trials. Any anti-SLAPP motion, no matter how ill-conceived, gives the defendant an automatic right of appeal. A defendant can therefore delay a trial for a year or more just by filing an anti-SLAPP motion.

Finally, with the right to attorney fees it provides, it provides unscrupulous attorneys with a mechanism that allows them to recover windfall fees.

With Episode 1 of the California SLAPP Law Podcast, I take you through the history of the anti-SLAPP statutes, and explain why every California litigator must be familiar with this law.

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Anti-SLAPP Motions are Used For Just About Everything

Paris Hilton Greeting Card

This case is a few years old, but it illustrates how anti-SLAPP issues can come up in just about any context. In this entertaining case, Hallmark Cards published a card using Paris Hilton’s likeness, and her ridiculous tag-line, “that’s hot”.

Hilton sued for the unauthorized commercial use of her image and, incredibly, Hallmark brought an anti-SLAPP motion, claiming the card was a matter of public interest. The trial court denied the anti-SLAPP motion, finding the card and its speech was not a matter of public interest, and the Court of Appeals for the Ninth Circuit agreed.

“First, ‘public interest’ does not equate with mere curiosity. Second, a matter of public interest should be something of concern to a substantial number of people. Thus, a matter of concern to the speaker and a relatively small, specific audience is not a matter of public interest. Third, there should be some degree of closeness between the challenged statements and the asserted public interest; the assertion of a broad and amorphous public interest is not sufficient. Fourth, the focus of the speaker’s conduct should be the public interest rather than a mere effort to gather ammunition for another round of private controversy. Finally, … [a] person cannot turn otherwise private information into a matter of public interest simply by communicating it to a large number of people.”

Here is the complete opinion.

 

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Why It Is a Really Bad Idea to Use Litigation as a Means to Discover Defamation

Defamation - Shot in Foot

I get this type of call perhaps twice a week, so I decided to post this article, in order to provide detailed information to prospective clients who bring up these issues.

Here is the scenario. The caller is convinced that he is being slandered, but does not know exactly what is being said. He may know who is making the statements, but has heard only rumors about what is being said, or has witnessed only the consequences of the statements. Often the issue will arise in the workplace, where because of the statements of a co-worker, the caller is being passed over for promotions, or perhaps was terminated because of those statements. Other times it might be a neighborhood situation, where the caller feels he is being shunned by neighbors and has reason to believe it is because of something said at an HOA meeting.

The problem with this sort of case is that you can’t determine if you are being defamed until you know what is being said. The consequence of a false statement can be severe, but that does not mean the statement is defamatory. For example, you might be entirely correct that you are being passed over for promotions because of something being said by a co-worker, but that co-worker might simply be saying that you are lazy and should not be promoted. That statement is not defamatory, because it is an opinion. Defamation can be very nuanced, and whether a statement is defamatory can come down to a single word or even the voice inflection used.

Before I can take a case, I have to know what was said. In cases where the prospective client does not have direct evidence of what is being said, I have a simple screening process. Read the rest of this entry »

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Anti-SLAPP Motion Does Not Dispose of Action as to Unprotected Claims

Anti-SLAPP Court of AppealIn a ruling that makes perfect sense, the Fourth District Court of Appeal held that an anti-SLAPP motion can be used to excise some allegations in a cause of action that involve protected activities, while leaving intact those allegations that do not fall under the statute.

In Cho v. Chang (LASC case number B239719), Jessica Chang sued a former co-worker, Howard Cho, for sexual assault and harassment. Chang filed a cross-complaint that was a clear SLAPP, because the two causes of action alleged defamation and infliction of emotional distress based on the things Chang had said about Cho to her employer, EEOC and DFEH. As I have said here many time, statements to government entities are protected, and the statements to the employer are a natural part of the redress process, and therefore are also protected.

But wait a second. The cross-complaint also alleged that the statements by Chang to her co-workers were defamatory. In some circumstances statements to co-workers can be protected, and indeed that was the argument made by Chang, but here the connection was too attenuated. As the court stated,

“Chang argues that her comments to co-workers related to matters of ‘public interest,’ but that is without merit. A public interest involves more than mere curiosity or private information communicated to a small number of people; it concerns communications to a substantial number of people and some connection with the public interest rather than a private controversy.”

So, if the allegations about the statements to co-workers state a valid action for defamation and infliction of emotional distress, must that baby be thrown out with the bath water just because it is contained in the same cause of action that include protected speech? Los Angeles Superior Court Judge Michael Johnson, and the Court of Appeal, answered “no” to that question. They both determined that an anti-SLAPP motion could be used surgically to remove just the allegations of protected activities and speech, while leaving any cognizable claims.

Nonetheless, the anti-SLAPP motion was successful, at least in part, so did Chang recover her attorney fees? In that regard, Judge Johnson was not very charitable. The judge noted that a party prevailing on an anti-SLAPP motion is normally entitled to an award of attorney fees, but said:

“While Chang’s motion has been granted in part, the ruling has produced nothing of consequence. Cho is still entitled to pursue his causes of action for defamation and [intentional infliction of emotional distress], and the evidence to be presented at trial is largely the same. Chang should have been aware that Cho’s allegations about private comments were viable, and she should have addressed the other allegations in a more focused and less burdensome manner (such as a traditional motion to strike or a motion in limine). Chang’s request for an award of fees and costs is denied.”

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Anti-SLAPP Victory — Shaheen Sadeghi v. Delilah Snell

Defamation Road Less TraveledI just wish counsel would run these cases past me before filing a defamation action. Here is a tale of a SLAPP that should have been spotted a mile away.

The tale starts with an article in OC Weekly. The article was about a guy named Shaheen Sadeghi. The article was extremely favorable to Sadeghi, referring to him as the “Curator of Cool” and discussing his amazing success in Orange County. OC Weekly even put his visage on the cover of the paper. Truly, it was a positive article that most would kill for.

But everyone has their detractors, and Sadeghi’s was a woman named Delilah Snell. After disclosing that Snell happens to be the girlfriend of a OC Weekly editor, the article reports on a dustup between Snell and Sadeghi, as told by Snell. Here is what the article said:

Still, some say Sadeghi will do whatever it takes to succeed. Delilah Snell, owner of Road Less Traveled, a shop in Santa Ana that sells environmentally friendly gifts and home goods, met with him in 2008 to discuss an opportunity to move to the Camp. (Full disclosure: Snell is the girlfriend of OC Weekly editor Gustavo Arellano.) She says the rent rate he gave was way too high, at least triple what she was paying, and she declined the offer. Then, she claims, he made a threat. “He basically said to me, ‘If you don’t move into my center, I will copy your business,'” she says.

Snell, co-founder of the Patchwork Indie Arts & Crafts Festival and a pioneer in Orange County’s eco-movement, believes her store is the model for the Camp’s SEED People’s Market, an airy, 12,000-square-foot gallery-type outlet that sells sustainable products and handmade crafts. Sadeghi owns the store with his wife, Linda. Snell claims that SEED has approached many of the vendors featured at Road Less Traveled and even used a photo of her shop in a promotional email sent out to customers. (The Weekly has a copy of the email.)

The article then goes on to tell Sadeghi’s side of the story:

Of Snell’s accusations, Sadeghi responds, “I think she’s full of it.” He says his business plan for SEED was dated “five years before she developed a business plan.”

“It’s a whole different store, whole different vibe,” he says, “and it has nothing to do with Road Less Traveled.”

The article then returns to singing the praises of Sadeghi, providing examples of how he is beloved by his tenants at his business centers like The Lab in Costa Mesa.

Sadeghi sued Snell in Orange County Superior Court, alleging in his complaint that Snell “orally accused Mr. Sadeghi of threatening to copy Ms. Snell’s business idea and plan if Ms. Snell did not move into Plaintiff’s retail center.” Sadeghi then alleged causes of action for slander, slander per se, libel, libel per se, invasion of privacy/false light, intentional interference with economic prospective advantage (sic), negligent interference with economic prospective advantage (sic), unfair competition, and injunctive relief. Whew! All arising from the statements Snell allegedly made to the OC Weekly, claiming that Sadeghi had said “If you don’t move into my center, I will copy your business.” Snell responded with an anti-SLAPP motion.

A quick aside to discuss the “Wall of Wrong”.

A potential client will call me, and during the call will tell me about 20 evil deeds committed by the defendant. In their mind, they have been horribly wronged, and they want to sue. Fair enough, but for a legal action each wrongful deed must be viewed independently to determine if it is actionable. I call the wrongful acts the “Wall of Wrong”, and each wrongful act is an item on that wall. (I considered calling it the Shelves of Wrong, but that didn’t seem as catchy.) I explain to the client that to determine if there is a case, we must walk up to the wall, take down each item and examine it independently to see if it will support an action. If not, it is tossed away never to be discussed again.

The reason this exercise is so important is because the client groups all the perceived wrongdoing together, and views it as a single act that certainly must support an action. But when all the conduct that does not support the action is stripped away, the client will often see that there is no action or that what is left remaining is pretty petty.

One more point to keep in mind in the defamation context is that just because something is false does not mean it is defamatory.

So let’s take Mr. Sadeghi to the Wall of Wrong to see if he has a case. Here, there are only two items to examine: (1) the claim that he was going to copy Snell’s business, and (2) that he pressured Snell to lease space in his center with the aforesaid threat. Let’s take those items off the shelf one at a time and decide if they will support a suit.

“I will copy your business.”

Sadeghi alleged that he never said he was going to copy Snell’s business. So, is it defamatory to falsely claim that someone said he was going to copy your business? Of course not. That statement, whether true or false, does not accuse Sadeghi of any wrongdoing. Imitation is the sincerest form of flattery. As the court put it in granting the anti-SLAPP motion, “Pepsi copies Coke. Gimbel’s Copies Macy’s. This is the nature of business.” Mr. Sadeghi, take that statement from the Wall of Wrong and never speak of it again.

Pressuring Snell to lease space.

Is it wrong to pressure someone to lease space in a mall? Of course not. But let’s refine that a little. Is it wrong to say you will copy someone’s business if they don’t lease space from you? Sometimes creating an analogous fact pattern makes it easier to analyze. Let’s say you have a chain of pizza restaurants, and a landlord comes to you and says, “we really want a pizza place like yours in our center, so we just want you to know that if you don’t lease the space, we’re going to create a pizza place just like yours for our center.”

Anything wrong with that? Sure, he’s pressuring you to rent the space with the threat of opening a competitor if you don’t, but that’s fair. When a landlord is looking for an anchor store in their mall, don’t you think they play Macy’s and Neiman Marcus off one another? Mr. Sadeghi, take that statement from the Wall of Wrong and never speak of it again.

So we are left with nothing on the Wall of Wrong, meaning that there is no case to pursue. This case should never have been filed, and the court properly granted the anti-SLAPP motion.

A SLAPP is not saved by numerous legal theories.

The other essential takeaway from this case is that nine causes of action do not a case make if the basis for the action is defective. In other words, if it was not defamatory for Snell to claim that Sadeghi said “If you don’t move into my center, I will copy your business,” then those words will not support any other legal theories like intentional infliction of emotional distress or unfair competition.

Further information about the case and the Court’s minute order can be found here, and the original article in question can be found here.

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Anti-SLAPP Does Not Protect Illegal Speech — Miguel Mendoza v. Reed K. Hamzeh

If the threat of getting in trouble with the State Bar is not enough, maybe the threat of both civil and criminals actions will get attorneys to toe the line.

It is an ethical violation for an attorney to threaten criminal action as a means to extract a civil settlement. For example, California’s Rules of Professional Conduct state that “a member shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.” (Rule 5-100.)

Then there are the criminal extortion laws:

“Extortion is the obtaining of property from another, with his consent . . . induced by a wrongful use of force or fear. . . .‟ (Pen. Code, § 518.) Fear, for purposes of extortion ‘may be induced by a threat, either: [¶] . . . [¶] 2. To accuse the individual threatened . . . of any crime; or, [¶] 3. To expose, or impute to him . . . any deformity, disgrace or crime[.]’ (Pen. Code, § 519.) ‘Every person who, with intent to extort any money or other property from another, sends or delivers to any person any letter or other writing, whether subscribed or not, expressing or implying, or adapted to imply, any threat such as is specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such threat.’” (Pen. Code, § 523.)

Despite these prohibitions, some attorneys can’t resist throwing a threat of criminal action into their demand letters. They apparently think (if they give it any thought at all) that an express or veiled threat of criminal action will be protected under the litigation privilege, but that is not the case. If you include a demand for money in a letter that threatens to pursue criminal action, you have committed extortion, and as Flatley v. Mauro held, that is not protected speech because criminal acts are not protected.

The most recent example of this was discussed in the just published decision of Miguel Mendoza v. Reed K. Hamzeh. According to the opinion, an attorney named Reed K. Hamzeh was representing a client named Guy Chow, seeking to recover money allegedly owed to Chow by Miguel Mendoza. The dispute concerned Mendoza’s employment as the manager of Chow’s print and copy business. Hamzeh sent a letter to Mendoza’s attorney, which according to the opinion stated:

As you are aware, I have been retained to represent Media Print & Copy (“Media”). We are in the process of uncovering the substantial fraud, conversion and breaches of contract that your client has committed on my client. . . . To date we have uncovered damages exceeding $75,000, not including interest applied thereto, punitive damages and attorneys‟ fees. If your client does not agree to cooperate with our investigation and provide us with a repayment of such damages caused, we will be forced to proceed with filing a legal action against him, as well as reporting him to the California Attorney General, the Los Angeles District Attorney, the Internal Revenue Service regarding tax fraud, the Better Business Bureau, as well as to customers and vendors with whom he may be perpetrating the same fraud upon [sic].”

The letter goes on to list Mendoza‟s alleged transgressions, including failure to pay Media‟s employees, sales taxes and bills.

What followed next was Flatley all over again, with some additional twists. In May 2011, Mendoza responded to the demand letter by filing an action against attorney Hamzeh, asserting causes of action for civil extortion, intentional infliction of emotional distress and unfair business practices. Just as in Flatley, Hamzeh thought his letter was protected under the litigation privilege, and brought an anti-SLAPP motion to strike Mendoza’s complaint. But here, the plaintiffs counsel had the benefit of the already decided Flatley, and wrote to Hamzeh to say that the anti-SLAPP motion would be frivolous since the facts fell squarely under that decision. Hamzeh decided to go ahead regardless, and after the court denied the motion it awarded attorney fees on the grounds that the motion had, indeed, been frivolous. Hamzeh then appealed from the denial of the anti-SLAPP motion, and lost. The action against Hamzeh for civil extortion and the other causes of action will now proceed.

The takeaway from Hamzeh’s experience is that the standard for civil extortion is very low. On appeal, Hamzeh argued that his demand letter was not nearly as egregious as the one utilized in Flatley, which was true, but as the court found, the issue is not how far the letter goes, it is whether it amounts to civil extortion as a matter of law. As you can see from the Penal Codes above, that requires only a demand for money in conjunction with a threat to “expose, or impute to him . . . any deformity, disgrace or crime . . . .” That standard is incredibly broad! It doesn’t even matter whether or not a crime occurred that can be properly reported. Further, as I just realized in preparing this article, the threat doesn’t even need to concern criminal conduct; it is enough to threaten “disgrace”. If an attorney wrote a letter suggesting that the defendant should settle to avoid having his family realize what he had done, it appears that would constitute civil extortion.

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Aaron Morris, Attorney
Aaron Morris
Morris & Stone, LLP

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NOTICE PURSUANT TO BUSINESS & PROFESSIONS CODE SECTION 6158.3: The outcome of any case will depend on the facts specific to that case. Nothing contained in any portion of this web site should be taken as a representation of how your particular case would be concluded, or even that a case with similar facts will have a similar result. The result of any case discussed herein was dependent on the facts of that case, and the results will differ if based on different facts.

This site seeks to present legal issues in a hopefully entertaining manner. Hyperbolic language should not be taken literally. For example, if I refer to myself as the “Sultan of SLAPP” or the “Pharaoh of Free Speech,” it should not be assumed that I am actually a Sultan or a Pharaoh.

Factual summaries are entirely accurate in the sense of establishing the legal scenario, but are changed as necessary to protect the privacy of the clients.