by James M. Fischer

Fischer is a Professor of Law at Southwestern Law School and member Los Angeles County Professional Responsibility & Ethics Committee. This article is a condensed version of James Fischer, When Can Lawyers Lawfully Use Threats When Negotiating, 15 St. Mary’s Journal on Legal Malpractice & Ethics 109 (2025). The views and opinions expressed in this article are those solely of the author and should not be attributed to anyone else. Ethics articles are provided regularly by LACBA’s longstanding Professional Responsibility and Ethics Committee.

The use of threats by lawyers is a common negotiation technique, but a threat that amounts to extortion (or blackmail)[1] is a crime. It is, thus, important for lawyers to be aware of the distinction between lawful and unlawful threats so that their negotiating tactics do not cause them to engage in conduct that subjects them to criminal or civil liability. Lawyers should also be aware of the possibility of professional discipline for making threats. Rule 3.10 of the California Rules of Professional Conduct provides: “A lawyer shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.” That provision is not, however, the focus here: rather the focus is on the possibility that the use of threats by a lawyer may subject the lawyer to civil or criminal liability for extortion. It is unlikely that a threat that did not warrant civil or criminal sanction would serve as the basis for professional discipline under Rule 3.10.[2]

It is common in negotiations to send a “demand letter” threatening consequences if the recipient does not agree to the demand. It is recognized that a demand letter does not per se constitute extortion; yet, in some instances the demand letter may cross the line and be seen as involving the wrongful use of fear to achieve advantage in civil disputes. Flatley v. Mauro[3] is the leading California decision on the use of negotiation threats as amounting to extortion. Its status reflects its promulgation by the California Supreme Court, the celebrity status of the plaintiff, and the over-the-top nature of the threat made in the matter. That said, on inspection, the decision actually says very little in distinguishing a wrongful threat from a permissible threat. Michael Flatley, a celebrity, had a sexual encounter with a woman one night in Las Vegas, Nevada. The woman subsequently claimed the encounter had not been consensual but was a sexual assault. She retained a lawyer (Mauro) to represent her in the matter. Mauro sent a demand letter to Flatley. The letter, containing relentless use of capitalization and grammatical errors, started as a normal demand letter, but it soon morphed into hyperbole and exaggeration that bordered on clownishness[4] regarding what would happen if Flatley did not acquiesce to Mauro’s demands. Flatley sued Mauro for civil extortion.[5] The California Supreme Court held that Mauro’s threats to shame and humiliate Flatley if Flatley did not acquiesce to Mauro’s demands constituted extortion as a matter of law. Unfortunately, the decision provided little guidance as to what constituted extortion as a matter of law. The court stressed that (1) Mauro had supplied no evidence supporting the demand, (2) that Mauro implied that Flatley had committed other crimes, and (3) that Mauro had refused to negotiate his demands.[6] Yet, it is difficult to see how these factors made the demand not just an impermissible threat but extortion as a matter of law. The court itself was indecisive for it noted at the end of its opinion:

Our opinion should not be read to imply that rude, aggressive, or even belligerent prelitigation negotiations, whether verbal or written, that may include threats to file a lawsuit, report criminal behavior to authorities or publicize allegations of wrongdoing, necessarily constitute extortion. Nor is extortion committed by an employee who threatens to report the illegal conduct of his or her employer unless the employer desists from that conduct. In short, our discussion of what extortion is as a matter of law is limited to the specific facts of the case.[7]

Flatley created a cottage industry of civil extortion claims. There are over 20 reported appellate opinions on this issue. Although a number of the opinions are non-precedental, many are and there lies the rub: there is little consistency in approach as to when a negotiating threat becomes an extortionary threat. The amount of threatened publicity regarding the threat does seem to be a significant factor,[8] which is in line with the facts of Flatley v. Mauro, but courts have found extortion as a matter of law in the absence of threat of widespread publicity[9] and have found the threat to be not extortionary in the face of threatened widespread publicity.[10]The threat to disclose the embarrassing or shameful conduct to Public Agencies has been found to support a claim of extortion as a matter of law,[11] as well as to be unnecessary.[12] The nexus between the threatened disclosures and the claim has been a significant factor in many, but not all, cases.[13] In some cases the language of the demand is the court’s focus;[14] in other cases courts use a contextual approach to assessing whether the threat is extortionary.[15] There does not appear to be a consensus on the part of California courts as to when a threat becomes extortionary, much less extortionary as a matter of law.

Threats and demands are speech and, as such, are generally protected by the First Amendment.[16] However, courts have also recognized that “true threats” are not protected by the First Amendment. Somewhat surprisingly, the attentiveness to First Amendment concerns with respect to criminal prosecution for threats is largely absent in civil prosecutions for extortion. It is true that criminal threats often involve threatened physical injury, whereas civil extortion typically does not; however, there is no First Amendment line of demarcation between physical injury threats and mental injury or economic loss threats. The First Amendment protects speech, and courts do not layer First Amendment protection based on whether the speech (here a threat) focuses on physical injury versus mental injury or economic loss. Modern extortion law does not either. Most civil cases simply address whether the threat amounts to extortion as a matter of law under the Penal Code. This seems to imply that even if speech is an aspect of a crime, it does not necessarily bring the crime under First Amendment protection. The problem here is that the speech is the crime—a point that appears to escape courts considering extortion in the civil liability context.

            Recently, in Counterman v. Colorado,[17] the United States Supreme Court addressed the issue of the requisite understanding a defendant must possess to be convicted of extortion, consistent with the First Amendment. The Court held that a “true threat,” i.e., a threat that is outside First Amendment protection, requires that the person making the threat have a subjective appreciation the threat would be perceived as a threat by the victim.[18] Counterman holds that it is not enough that the statement is objectively perceived and understood to be a threat. The Court implicitly treated statements that did nothing more than satisfy an objective, reasonable person standard to be protected by the First Amendment.[19] Rather, to take the threat outside the First Amendment as a “true threat” the statement must objectively be understood as a threat and the defendant must subjectively appreciate the statement to be so understood.[20]

Whether a lawyer subjectively appreciates that the victim understand the demand as a threat or a warning will often be difficult to determine. Litigation has consequences, and apprising a potential defendant of those consequences and the benefits of consequence avoidance can easily be characterized as a warning by the lawyer rather than a threat. Of course, the line between threat and warning is more opaque than clear. But when the consequences are closely tied to the specific claims being made, the more intuitive is the treatment of the consequences as a warning. The defendant is simply being apprised of the likely evolution of the litigation and its attendant consequences. Counterman will require claims that a negotiation threat amounts to extortion to establish that the person making the threat subjectively understands that the threat would be so understood by the victim. This may be difficult to establish in many instances involving civil litigation negotiations, particularly if lawyers craft their “or else” demands to make it appear that the consequences of the non-acquiesce is more a result of the natural evolution of litigation than a direct consequence of demand rejection.

The safest course of action for a lawyer is to eschew threats, other than “we will see you in court, if you do not agree with our position.” Courts consistently treat “see you in court” threats as not extortionary,[21] but, as noted in this article, once the threat goes beyond that, the risk that the threat will be treated as extortion increases.

If the lawyer wants to impress upon his or her adversary other consequences than going to court, such as injury to reputation, privacy, etc., the lawyer should be careful to not suggest that he or she will have a direct role in disseminating the disclosures to social, print, and mass media. When the lawyer assumes the direct role, courts have been more prone to find extortion (Flatley, Falcon Brands, Mendoza) than when the lawyer simply cautions that litigation is public and information the opponent may prefer to remain private may lose that status because of public attention given to court proceedings.[22] Consistent with this approach, the lawyer should not threaten to be the one who will notify the media, or cause the media to be made aware, as this may simply cause the court to see the threat as veiled rather than direct.

Lawyers should avoid threatening to notify law enforcement of the harmful facts if the settlement demand is not accepted. Flatley and professional commentary have stated that a limited statement informing the opponent that the misconduct the party wishes redressed will be reported to law enforcement if the demand is not accepted may be acceptable in certain circumstances.[23] However, as noted in this Article, some courts have found such a demand to be a significant factor for treating the threat as extortionary or not extortionary.[24] May the employer’s lawyer threaten to report the employee to law enforcement if the employee does not restore the embezzled funds? Here the misconduct is criminal and directly tied to the employer’s loss. Moreover, disclosure is limited, unlike Flatley and other cases where broad public dissemination was threatened. This would seem to be exactly the type of case that would fall under Flatley’s permissible threat, but as noted in this article some courts (and disciplinary authorities) would treat this threat of limited disclosure as extortionary,[25] so a lawyer who makes such a threat is on proverbial thin ice to land in hot water.

Finally, lawyers should not threaten to make a media extravaganza of the victim’s peccadillos if the demand is not met. Flatley clearly tells us that, but subsequent decisions also counsel against disclosure to any person or entity directly connected to the dispute.[26] A lawyer should always be ready to justify why disclosure was necessary, and as Falcon Brands evidences, the justification should be objectively strong as the court may be skeptical that disclosure was warranted. Rather the perception may be that the purpose of the threat was to improperly coerce the opponent rather than provide relevant information to an involved and interested party.