IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

THE CORVUS GROUP, INC.,

 Plaintiff,

v.

NICHOLS KASTER, PLLP, and ANDREW G.

CHASE, 

 Defendants.

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MEMORANDUM OPINION AND ORDER

Plaintiff The Corvus Group, Inc. (“Corvus” or “plaintiff”)

sued defendants Nichols Kaster, PLLP and Andrew G. Chase

(“defendants”) alleging trade libel (Count I) and violations of the

Illinois Consumer Fraud and Deceptive Business Practices Act, 815

ILCS 505/2 (“ICFA”) (Count II) and the Uniform Deceptive Trade

Practices Act, 815 ILCS 510/2(a)(8) (“UDTPA”) (Count III). 

Defendants allege that “this lawsuit is a retaliation against a

wage and hour law firm, Defendant Nichols Kaster, PLLP and one of

its attorneys Andrew Chase for investigating the overtime practices

of The Corvus Group, Inc.” Mot. at 1. This lawsuit stems from

letters sent by defendants to potential clients seeking information

about Corvus. The letters at issue contained a statement that

defendants “had information” that Corvus “may have failed to

properly pay overtime to some of its employees.” Defendants have

filed a motion to dismiss, and also requested attorneys’ fees and
costs. The motion to dismiss is granted for all the reasons that

follow. However, to the extent defendants also argue that they are

entitled to dismissal (and attorney’s fees and costs) under the

Illinois Citizen Participation Act, that argument lacks merit.

With respect to the trade libel/defamation claim, the letters

at issue are absolutely privileged because they were sent as part

of a pre-suit investigation of federal wage and hour claims. In

Popp v. O’Neill, the Illinois Appellate Court, citing the

Restatement (Second) of Torts § 586 (1977), stated, “An attorney at

law is absolutely privileged to publish defamatory matter

concerning another in communications preliminary to a proposed

judicial proceeding, or in the institution of, or during the course

and as part of, a judicial proceeding in which he participates as

counsel, if it has some relation to the proceeding.” 730 N.E.2d

506, 510 (Ill. App. Ct. 2000). The court went on to explicitly

hold that attorneys enjoy an absolute privilege concerning any

defamatory statements made by an attorney to a potential client

during a preliminary legal conclusion. In light of this, I reject

plaintiff’s attempt to argue that the privilege cannot apply here

because there was no existing attorney-client relationship at the

time the letters were sent. In addition, I reject plaintiff’s

argument that the letters were not part of any “pre-trial

investigation” because they were merely solicitations seeking to

“stimulate further dialog toward a potential future relationship”

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between the law firm and the addressees. It is clear that the

letters were sent by defendants in an effort to locate additional

plaintiffs for the wage and hour case that was ultimately filed in

federal district court in Ohio. Thus, the statements made in these

letters were pertinent to a possible future legal proceeding and

are therefore absolutely privileged. See Popp, 730 N.E.2d at 511

(“[A]n attorney’s defamatory statements to a potential client

during a preliminary legal consultation [are protected] as long as

the statements are pertinent to a possible future legal

proceeding.”); Atkinson v. Affronti, 861 N.E.2d 251 (Ill. App. Ct.

2006) (“[T]he absolute privilege which applies to defamatory

statements made by an attorney during pending litigation applies to

prelitigation defamatory statements made in written communications

to a potential litigant.”).

Next, the ICFA claim is dismissed because the ICFA does not

apply to the letters sent by defendants. The Illinois Supreme

Court has held that the ICFA does not apply to attorneys acting in

their professional capacities. See Cripe v. Leiter, 184 Ill. 2d

185, 195, 198 (1998). Because attorneys are governed by state

ethics rules, the ICFA does not apply to them. Id. at 198. I am

not convinced by plaintiff’s argument that the defendants “were not

practicing law” because they were merely sending out letters to

potential clients in anticipation of the filing of the complaint in

Ohio. Certainly pre-trial investigation on the part of an attorney

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is part of the practice of law. The Rule of Professional Conduct

in Illinois (and in Minnesota) govern pre-suit investigations as

well as solicitation letters that attorneys may send in their

practice. Because the state Rules of Professional Conduct regulate

these activities, plaintiff’s ICFA claim is not viable under Cripe.

Turning to plaintiff’s third and final claim, defendants argue

that the UDTPA claim fails because the statements at issue do not

disparage the quality of the plaintiff’s goods or services. In

response, plaintiff agreed to dismiss this claim because, according

to plaintiff, defendants had ceased using the allegedly defamatory

language in their solicitation letters. Plaintiff went on to say

that so long as defendants confirmed that the language would not be

used in the future, Count III would be dismissed voluntarily. 

Because defendants, in reply, did not address this issue (and did

not confirm that the language would not used in the future) and

instead argued this claim on the merits, I too will address the

claim on the merits. 

The goal of the UDTPA is to provide a remedy for disparagement

of a product. Brown & Williamson Tobacco Corp. v. Jacobson, 713

F.2d 262, 274 (7th Cir. 1983). So long as the statements at issue

do not disparage the quality of the plaintiff’s goods or services,

no cause of action will lie under the UDTPA. Allcare, Inc. v.

Bork, 531 N.E.2d 1033, 1037-38 (Ill. App. Ct. 1988). In this case,

I cannot see how the statements at issue, that defendants “have

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information” that Corvus “may have failed to properly pay overtime

to some of its employees,” in any way disparages the quality of

Corvus’s goods or services. This claim is dismissed.

Finally, defendants argue that this case should be dismissed,

and attorney’s fees and costs awarded, as a “SLAPP” lawsuit in

violation of the Citizen Participation Act, 735 ILCS 110/1, et seq.

(“CPA”). “SLAPPS, or ‘Strategic Lawsuits Against Public

Participation,’ are lawsuits aimed at preventing citizens from

exercising their political rights or punishing those who have done

so.” Wright Development Group, LLC v. Walsh, 939 N.E.2d 389 (Ill.

2010). “SLAPPS use the threat of money damages or the prospect of

the cost of defending against the suits to silence citizen

participation.” Id. at 396. The purpose of the CPA “is to give

relief, including monetary relief, to citizens who have been

victimized by meritless, retaliatory SLAPP lawsuits because of

their ‘act or acts’ made ‘in furtherance of the constitutional

rights to petition, speech, association, and participation in

government.’” Sandholm v. Kuecker, No. 111443, 2012 WL 169708 (Ill.

Jan. 20, 2012) (quoting Wright Dev. Group, LLC v. Walsh, 238 Ill.

2d 620 (2010)). 

The CPA applies where (1) the defendants’ acts were in

furtherance of their rights to petition, speak, associate, or

otherwise participate in government to obtain favorable government

action; (2) the plaintiff’s claim is based on, related to, or in

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response to the defendant’s “acts in furtherance”; and (3) the

plaintiff fails to produce clear and convincing evidence that the

defendant’s acts were not genuinely aimed at procuring favorable

governmental action. Hammons v. Society of Permanent Cosmetic,

2012 WL 955314, at *3 (Ill. App. Ct. Mar. 20, 2012). The first

requirement is met here. Defendants’ actions in soliciting clients

in anticipation of the filing of a lawsuit are protected under the

First Amendment. Shapero v. Kentucky Bar Ass’n, 486 U.S. 466,

(1988); California Motor Transport Co. v. Trucking Unlimited, 404

U.S. 508, 510 (1972) (the right of access to the courts is an

aspect of the First Amendment right to petition the government for

redress of grievances); Hytel Group, Inc. v. Butler, 938 N.E.2d 542

(Ill. App. Ct. 2010) (filing of a lawsuit based on unpaid wages was

an exercise of right to petition for redress of grievances).1 

However, defendants have not carried their burden in showing

that this lawsuit was “based on, related to, or in response to”

defendants’ exercise of their First Amendment rights, and not

merely to recover damages for any reputational injuries. In a

recent Illinois Supreme Court case, the court construed the phrase

“based on, related to, or in response to” to mean “solely based on,

relating to, or in response to ‘any act or acts of the moving party

in furtherance of the moving party’s rights of petition, speech,

1

 I reject plaintiff’s argument that the letters were not

protected under the First Amendment because they were “libelous.” 

As explained above, plaintiff’s claims are meritless. 

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association, or to otherwise participate in government.” Sandholm,

2012 WL 169708, at *9 (quoting 735 ILCS 110/15). “Stated another

way, where a plaintiff files suit genuinely seeking relief for

damages for the alleged defamation or intentionally tortious acts

of defendants, the lawsuit is not solely based on defendants’

rights of petition, speech, association, or participation in

government. In that case, the suit would not be subject to

dismissal under the Act.” Id. 

Defendants, in support of their argument that Corvus filed

this lawsuit solely to chill their First Amendment rights, point to

a letter sent by Corvus’s counsel to defendants. In making their

arguments, defendants cherry-pick language out of the letter in

order to argue that Corvus “threatened [defendants] with meritless

retaliatory litigation.” Mot. at 14. However, when read in

context, this letter does not support defendants’ position. A

close reading of the letter does not establish that Corvus filed

this lawsuit solely to chill defendants’ constitutional rights. 

Rather, the letter shows that Corvus had requested that defendants

turn over the “information” referenced in the solicitation letters

so that it could insure that it was complying with all applicable

federal laws. Further, Corvus notified defendants that “[y]our

failure to comply with this demand will force The Corvus Group to

take such further legal action as it may deem necessary in order to

protect its business reputation and goodwill in the business

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community.” 8/22/11 Letter at 2. Thus, this letter supports the

notion that this lawsuit was, at least in part, undertaken to

protect Corvus’ reputation and good will in the community. Because

defendants have failed to put forward evidence that Corvus filed

this lawsuit solely because of defendants’ exercise of their First

Amendment rights, the suit is not subject to dismissal under the

CPA.

Finally, defendants request reimbursement for their fees and

costs incurred in defending against the ICFA claim. The ICFA

expressly allows a court, in its discretion, to award reasonable

attorney’s fees and costs to the prevailing party, which in the

case of a prevailing defendant requires that the court make a

threshold finding that the plaintiff acted in bad faith. 815 ILCS

505/10a(c). Given the clear holding of the Illinois Supreme Court

in Cripe, I conclude that the ICFA claim was frivolous, and thus

“not warranted by existing law or by a nonfrivolous argument for

extending, modifying, or reversing existing law or for establishing

new law.” Fed. R. Civ. P. 11(b)(2). As a result, I will award

defendants reasonable attorney’s fees and costs associated with the

ICFA claim. Defendants have seven (7) days from the date of this

order to file their request, with supporting documentation. 

Plaintiff, if it chooses, may file any objections within five (5)

days thereafter.

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ENTER ORDER:

 

____________________________

 Elaine E. Bucklo

 United States District Judge

Dated: May 24, 2012

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