Boyer v. Health Grades, Inc.

• Citation: 2015 CO 40,359 P.3d 25
• Decision Date: 01 June 2015
• Docket Number: Supreme Court Case No. 13SC131
• Parties: Christopher BOYER and Patrick Singson, Petitioners v. HEALTH GRADES, INC., a Colorado corporation, Respondent
• Court: Colorado Supreme Court

359 P.3d 25

2015 CO 40

Christopher BOYER and Patrick Singson, Petitioners

v.HEALTH GRADES, INC., a Colorado corporation, Respondent

Supreme Court Case No. 13SC131

Supreme Court of Colorado.

June 1, 2015

Attorneys for Petitioners: The Law Office of Paul Maxon, P.C., Paul Maxon, Boulder, Colorado

Attorneys for Respondent: Lewis Roca Rothgerber LLP, Kris J. Kostolansky, Susan S. Sperber, Denver, Colorado

En Banc

Opinion

JUSTICE COATS delivered the Opinion of the Court.

¶ 1 Boyer and Singson, defendants in a suit brought by Health Grades, petitioned for review of the court of appeals' judgment declining to affirm a favorable jury verdict on their counterclaim for abuse of process. The court of appeals remanded to the district court and ordered reversal of the verdict unless that court were to find that the claims initially brought by the plaintiff, Health Grades, were devoid of reasonable factual support or had no cognizable basis in law, in accordance with the appellate court's understanding of the mandate of Protect Our Mountain Environment v. District Court (POME ), 677 P.2d 1361 (Colo.1984). On rehearing, the appellate court modified its opinion, expressly evaluating the recent judgment of this court in General Steel Domestic Sales, LLC v. Bacheller, 2012 CO 68, 291 P.3d 1, which had found the heightened abuse of process standards of POME inapplicable to the filing of an arbitration complaint implicating a purely private dispute. Based on its own exegesis of POME and its progeny, as well as POME's roots in federal jurisprudence, the court of appeals concluded that nothing in General Steel required the modification of its remand order.

¶ 2 Because we now hold that the underlying rationale for our judgment in General Steel concerning arbitration proceedings is equally applicable to actions filed in courts of law, and because it is uncontested by the parties that the action filed by Health Grades involved a purely private dispute, the judgment of the court of appeals is reversed, and the matter is remanded with directions to affirm the jury's verdict.

I.

¶ 3 Health Grades, Inc., which operates a website providing information to healthcare consumers about hospitals and physicians around the country, filed suit against two of its former employees, Christopher Boyer and Patrick Singson. Its complaint alleged that Boyer and Singson created competing websites during their employment at Health Grades and solicited Health Grades' clients to advertise on their competing websites, which utilized proprietary methodologies created by Health Grades to increase the probability that consumers would discover their websites. The complaint included claims of breach of the fiduciary duty of loyalty, misappropriation of trade secrets, tortious interference with prospective business advantage, and ultimately, breach of contract and conversion.

¶ 4 The defendants, Boyer and Singson, denied Health Grades' material allegations and asserted a counterclaim for abuse of process. In support of their counterclaim, they alleged that Health Grades' claims lacked a reasonable factual basis or cognizable basis in law and were based on allegations Health Grades largely knew to be false. They further alleged that Health Grades filed suit with the motive to harass and intimidate them and the purpose of limiting their ability to earn a living in their respective professional fields; and ultimately, they alleged that Health Grades' claims were a “sham.”

¶ 5 The district court denied cross-motions for summary judgment and for directed verdicts and submitted the case to the jury. With regard to Health Grades' motion for directed verdict on the defendants' abuse of process counterclaim, the court simply indicated that there was sufficient evidence for the jury to find for the defendants, and it instructed the jury concerning the requirements for a finding of an abuse of process under the heightened standard announced in Protect Our Mountain Environment v. District Court (POME ), 677 P.2d 1361 (Colo.1984). The jury rejected all of Health Grades' claims and returned a verdict for the defendants on their counterclaim. The court subsequently denied Health Grades' motion for judgment notwithstanding the verdict as well.

¶ 6 On appeal, the intermediate appellate court found that the district court erred by allowing the jury to decide the question, under POME, whether Health Grades' claims were devoid of reasonable factual support or lacked any cognizable basis in law such that they were not immune from liability under the Petition Clause of the First Amendment; and it remanded with instructions for the district court to make an independent judicial determination of that question. Shortly after the opinion was released, this court issued its opinion in General Steel Domestic Sales, LLC v. Bacheller, 2012 CO 68, 291 P.3d 1, holding that the heightened standard set forth in POME did not apply where the underlying alleged petitioning activity was the filing of an arbitration complaint concerning a purely private dispute. On rehearing, the court of appeals modified its initial opinion by including its own exegesis of POME and its progeny, as well as POME's roots in federal jurisprudence, concluding that nothing in General Steel required the modification of its remand order.

¶ 7 Boyer and Singson petitioned for a writ of certiorari.

II.

¶ 8 Less than three years ago, in General Steel, we were called upon to revisit in detail our jurisprudence concerning the immunization from legal liability of various forms of administrative and judicial activity, treated as the exercise of the First Amendment right to petition the government for redress of grievances. Id. In reviewing the heightened standard for plaintiffs suing for the “alleged misuse or abuse of the administrative or judicial processes of government,” id. at ¶ 26, 291 P.3d at 8, which we promulgated in POME and applied in subsequent cases, we focused on two questions: first, whether the filing of an arbitration complaint constitutes “petitioning the government” within the contemplation of POME and the federal case law forming the basis for that decision; and second, whether the constitutional protection for petitioning the government “for a redress of grievances” applies where the underlying alleged petitioning activity involves a purely private dispute. Id. at ¶ 31, 291 P.3d at 8–9. While we found it unnecessary to go beyond the arbitration context to resolve the case before us, our analysis of the second question clearly foreshadowed our holding today.

¶ 9 In General Steel, which involved an employment dispute strikingly similar to the one in this case, we explained that in POME we relied on the so-called “Noerr –Pennington doctrine” both for the proposition that the right to petition the government has been applied to immunize from legal liability in subsequent litigation various forms of administrative and judicial petitioning activity, and for the proposition that this right to petition is not without limits. Id. at ¶¶ 21–25, 291 P.3d at 7 (citing E.R.R. Presidents Conference v. Noerr Motor Freight, Inc. , 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) ; United Mine Workers of Am. v. Pennington , 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965) ). With regard to the abuse of process claim at issue in POME , we therefore held that a plaintiff, when faced with a motion to dismiss based on the constitutional right to petition, must meet a heightened standard to demonstrate that a defendant's petitioning activities were not immunized from liability, by showing that his administrative or judicial claims were devoid of reasonable factual support or lacked any cognizable basis in law; that the primary purpose of his petitioning activity was to harass the plaintiff or effectuate some other improper objective; and that his petitioning activity had the capacity to affect adversely a legal interest of the plaintiff. Id . at ¶ 26, 291 P.3d at 8 (citing POME , 677 P.2d at 1369 ). As we noted in General Steel , however, in POME we did not address the question what type of activity constitutes “petitioning the government” such that the activity is entitled to protection under the First Amendment right to petition in the first instance. Id. at ¶ 30, 291 P.3d at 8.

¶ 10 As an historical matter, we have applied the added protections of POME almost exclusively to claims based on bona fide petitioning activity regarding matters of public concern. See POME, 677 P.2d at 1363–64, 1368–69 ; Concerned Members of Intermountain Rural Elec. Ass'n v. Dist. Court, 713 P.2d 923, 924 (Colo.1986) ; Krystkowiak v. W.O. Brisben Cos., Inc., 90 P.3d 859, 863, 866 (Colo.2004). POME, itself, involved a developer's abuse of process claim against an environmental group based on the latter's prosecution of a C.R.C.P. 106 action challenging a zoning board's decision to reclassify 500 acres of agricultural land, in order to accommodate the developer's plan for a large residential and commercial development project. 677 P.2d at 1363–64. Since then, we have held POME's protections applicable to claims for abuse of process or tortious interference only twice, both times involving matters of public concern. Concerned Members, 713 P.2d at 924 (concerning C.R.C.P. 106 action seeking an order compelling a recall election of a rural electric cooperative's board members); Krystkowiak, 90 P.3d at 863, 866 (concerning individual's participation in city council hearings in opposition to a developer's application to build a large residential apartment complex near the individual's home). In neither case did we suggest that POME's heightened standard would apply to a claim for abuse of process premised on the filing of a lawsuit involving a purely private dispute.

¶ 11 In General Steel, we expressly distinguished In re Foster, 253 P.3d 1244 (Colo.2011), the sole example of a case in which we arguably applied the POME heightened standard to a purely private dispute,...