Leegin Creative Leather Prods., Inc. v. Diaz, 131 Cal. App. 4th 1517 (2005)

Leegin Creative Leather Products, Inc. filed a civil fraud complaint against one of its employees after it learned that the employee had filed a false workers’ compensation claim against the company. Leegin alleged that it had been damaged by the filing of the false claim because its insurance premiums and reserves would be automatically increased. The employee responded by filing a special motion to strike Leegin’s complaint pursuant to the anti-SLAPP statute, alleging that Leegin’s action would have a “chilling effect” on her constitutional right to seek redress for her alleged injuries through the workers’ compensation system. The trial court granted the employee’s motion to strike and awarded her attorney’s fees and costs, and the Court of Appeal affirmed the judgment. The appellate court held that Leegin had failed to demonstrate a probability that it would prevail on the merits of its fraud claim since Leegin could not establish either that it had justifiably relied upon the employee’s allegedly fraudulent workers’ compensation claim or that it had been damaged thereby. The Court observed that there is a statutory remedy within the workers’ compensation framework (Labor Code Section 3761) of which an employer can avail itself in the event that it has actual knowledge of facts that would tend to disprove any aspect of the employee’s claim and that there are civil and criminal sanctions that can result from presenting a fraudulent workers’ compensation claim. Cf. Terry v. Davis Community Church, 131 Cal. App. 4th 1534 (2005) (defamation action filed by church youth group leaders regarding accusations of inappropriate conduct with a group member were properly stricken under anti-SLAPP statute where the accusations related to a public issue and were true, related to a protected opinion or were privileged).