When Does a Demand Letter Become Extortion or Defamation?

Most demand letters are meant to make someone uncomfortable.

That’s the point: you’re trying to get attention, create pressure, and resolve a dispute without filing a lawsuit. But crank the pressure too far in the wrong direction and the letter stops being “hardball advocacy” and starts looking like extortion, defamation, and an ethics problem.

This post walks through where that line actually is, with a California tilt and plenty of practical examples, so your letters stay inside the guardrails that the widget above lays out.

Why Strong Demand Letters Can Backfire

A good demand letter does three things:

• Sets out the key facts and documents
• Explains the legal theory and what you’ll seek in court
• Gives the other side a clear, reasonable path to resolve the dispute

That kind of “we will sue you if we can’t resolve this” threat is expected. Courts encourage serious pre-litigation communication because it promotes settlement and conserves judicial resources.

The trouble starts when the letter shifts from:

“We’ll file a civil complaint and pursue remedies in court”

to something closer to:

“Pay, or your life blows up in other ways.”

Once the pressure is tied to criminal reporting, regulatory trouble, immigration, or reputation damage, you’re in the zone where extortion, defamation, and Rule 3.10 all start to overlap.

When a Demand Letter Starts Looking Like Extortion

The “pay for silence” structure

California Penal Code §§ 518–519 define extortion as obtaining property or other consideration with consent, induced by wrongful use of force or fear. The statute spells out the types of “fear” that qualify, including threats to:

• accuse someone of a crime
• expose a secret or disgrace
• report immigration status
• unlawfully injure person or property

A classic extortion pattern in writing looks like this:

“Pay us $X, or we will report you to the DA / IRS / immigration / licensing board / your spouse / the media.”

The threatened harm is not “you will get sued.” It’s “we will unleash other systems against you unless you pay.”

The criminal law doesn’t care that the underlying civil claim might be perfectly legitimate or that the accusations might even be true. Extortion focuses on the structure of the threat, not the truth of the allegations.

Flatley v. Mauro: the textbook example

Flatley v. Mauro (Cal. Supreme Ct. 2006) is the case that every serious demand-letter drafter should know.

An attorney sent a demand letter on behalf of an alleged sexual-assault victim. The letter didn’t just threaten a civil lawsuit. It promised that, unless there was a seven-figure settlement, the client would sue and simultaneously launch a full-scale media campaign—press releases, interviews, the works.

The Supreme Court held that this was criminal extortion as a matter of law. Because the conduct itself was illegal, the lawyer couldn’t hide behind the anti-SLAPP statute or the litigation privilege.

The problem wasn’t “aggressive tone” or “big number.” It was the explicit bargain:

“Money in exchange for silence and suppressed publicity.”

That’s exactly the pattern Penal Code §§ 518–519 describe.

Malin v. Singer: hardball that stayed protected

Several years later, in Malin v. Singer, another very sharp letter from the same attorney was challenged as civil extortion.

This time, the letter threatened to sue and described embarrassing facts that would come out in litigation. It did not promise to run a media campaign, call the police, or contact third parties in exchange for payment. Everything was framed as “this is what will happen if we litigate.”

The Court of Appeal held that the letter was:

• tied to contemplated litigation, and
• within the scope of the litigation privilege

so it remained protected.

Read together, Flatley and Malin draw a simple line:

• Describing what you’ll allege and pursue in court → generally safe.
• Offering to keep quiet, stay away from the press, or avoid regulators if paid → very unsafe.

Personal secrets and “menace”: Tran v. Nguyen

Extortion risk isn’t limited to famous defendants or media campaigns.

In Tran v. Nguyen (Cal. Ct. App. 2023), a woman threatened to reveal a past relationship and secret child to a man’s family unless he paid her. He paid, then sued to unwind the agreement. The court treated those threats to reputation and family relationships as “menace” and allowed him to rescind and recover the money.

That logic easily translates to demand letters. Even if prosecutors never file criminal charges, a recipient who paid under that type of pressure can argue:

• “I agreed under duress / menace,” and
• seek rescission and restitution, or bring a civil extortion claim.

Where Defamation Creeps In

Extortion is the nuclear issue. Defamation is the one that shows up more often in practice.

Why most demand letters are actually safe

In California, Civil Code § 47(b) gives broad “litigation privilege” protection to communications:

• made in judicial proceedings, or
• made in serious contemplation of litigation,
• that are logically related to that litigation.

Properly directed pre-litigation demand letters—sent to the opposing party or their counsel, asserting plausible claims and discussing settlement—are usually covered. That’s why defamation claims based on a standard demand letter rarely go anywhere.

How you lose that protection

There are three ways demand-letter language can escape the shield:

1. The letter is itself criminal or extortionate.
Flatley is the example: privileges do not protect conduct the court has already labeled criminal.

2. The audience isn’t the other side.
In Rothman v. Jackson, the court made it clear that sending statements to the media—even about ongoing litigation—is usually outside the privilege. Press statements, social-media blasts, and CC’ing employers or customers are not “functionally related to the litigation” in the way letters between parties and counsel are.

3. The content is pure character attack, not factual allegations.
Calling someone “a con artist,” “a predator,” or “a criminal” without tying it to specific conduct and legal claims nudges the communication away from “privileged litigation statement” and toward “unprotected smear.”

Opinion versus factual accusation

The familiar distinction:

• “We think your pricing is unfair” → opinion, usually safe.
• “You charge for services you never provide” → factual assertion, provably true or false.

In demand-letter context, the same rule applies:

• “We believe your client’s conduct constitutes fraud under Civil Code § 1709 based on the following facts…” → legal characterization plus facts.
• “Your client is a thief who steals from customers” with no specifics → defamation bait.

The widget above already flags this, but it’s worth echoing: the more concrete and document-driven your allegations are, the safer you are on defamation.

The Ethics Overlay: Rule 3.10 and Similar Standards

Even if no prosecutor ever gets involved, state-bar rules sit quietly in the background.

California’s Rule 3.10

Rule 3.10 is short and blunt:

“A lawyer shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.”

The comment makes two key points:

• You can, in good faith, inform someone that conduct may violate criminal or regulatory law and that you may report it.
• You cannot say or imply, “we will hold off on reporting if you pay” or “we will report if you don’t pay.”

In other words:

• “This conduct appears to violate Penal Code § X; all rights are reserved to report to appropriate authorities.” → generally acceptable legal analysis.
• “We will report this to the DA, State Bar, and IRS unless you settle for $500,000.” → classic Rule 3.10 problem and also a fact pattern prosecutors recognize as extortion.

Many other states follow the same logic through their own rules or ethics opinions, even if the numbering is different.

Drafting Guardrails That Keep You in the Safe Zone

The widget above gives the quick-reference version. Here’s the narrative version to pair with it.

Keep the threat inside the civil-litigation lane

Safe threats sound like:

• “If we cannot resolve this informally, our client will file a complaint asserting claims for breach of contract and fraud, and will seek damages, fees, and all other available relief.”

What they have in common:

• They talk about civil proceedings, not regulators, prosecutors, or public shaming.
• They describe remedies the court can award, not collateral consequences in someone’s personal or professional life.

Once the threat becomes “settle or we will… report you, expose you, or embarrass you,” you’re leaving that lane.

If you must mention criminal or regulatory exposure, de-weaponize it

Sometimes the conduct really does look criminal, and ignoring that in a demand letter would be odd.

The safer pattern:

• Identify the statute accurately.
• Explain why the facts may implicate it.
• Reserve rights, without making criminal reporting part of the bargaining.

For example:

“The conduct described above may also constitute violations of [statute]. All rights to pursue civil remedies and to report to appropriate authorities are reserved.”

What you’re not saying:

“We won’t report you if you pay,”
or
“We will report you if you don’t.”

If a criminal or regulatory referral is genuinely appropriate, it should be made (or not made) on its own merits, not held out as a chip to trade.

Lead with facts, not adjectives

Good demand letters read like heavily condensed complaints.

Instead of:

“Your client is a fraud who runs a criminal operation,”

aim for:

“On March 15, your client represented in writing that [quote]. Bank records show that, on the same day, funds were diverted to [fact]. These facts support claims for fraud under Civil Code § 1709.”

The more the letter looks like something you could paste into a pleading with minimal editing, the more it looks like ordinary pre-litigation advocacy.

Control the audience

As soon as copies go to:

• employers,
• customers,
• vendors,
• family members, or
• journalists,

two things happen at once:

• Litigation privilege becomes much harder to rely on.
• Defamation and extortion arguments become easier for the other side.

If pressure on reputation is the only reason a third party is being copied, that’s a red flag. In most scenarios, there is no upside that justifies that risk.

Never trade money for secrecy about unrelated secrets

The law is particularly unforgiving about threats that sound like:

• “Pay, or your spouse finds out,”
• “Pay, or your clients hear about your personal bankruptcy,”
• “Pay, or we tell your employer about your immigration status.”

Those scenarios are very close to the fact patterns that appear in civil-extortion and menace cases. Even if the underlying civil dispute is real, using unrelated personal information as a lever is exactly what the extortion statutes are designed to address.

When the Problematic Letter Comes From the Other Side

Sometimes the widget’s “red flag” phrases don’t appear in your draft—they appear in the letter you just received.

Common warning signs:

• “Settle or we will report you to [police/IRS/immigration/licensing board].”
• “Pay, or we will contact your employer/clients/family with this information.”
• “You have ten days to pay before we launch a media campaign about your conduct.”

When that happens, it’s worth thinking in parallel tracks:

• Substance – Is there a real claim buried underneath the bad tactics? That still needs to be evaluated on its merits.
• Process – Is the letter itself potential evidence of extortion or an ethics violation?

The usual best practices:

• Preserve everything: letters, emails, texts, voicemails, screenshots.
• Separate emotional reaction from strategy; over-reacting in kind just creates another set of problematic communications.
• If the letter appears to cross clear lines, consider ethics or even law-enforcement reporting after talking through the options with counsel.

Bringing It All Together

The widget gives a quick “traffic-light” view: safe, dangerous, and red-flag phrases. The longer view is simple:

• Threatening civil litigation and clearly explaining the claims and remedies → ordinary, expected, and usually privileged.
• Threatening criminal or regulatory trouble, publicity, or exposure of secrets in exchange for money → the terrain of extortion statutes and Rule 3.10.
• Making specific false factual statements to third parties → defamation, often without the shield of litigation privilege.

Demand letters are supposed to create pressure. The art is making sure the pressure comes from the strength of your case and the credibility of your willingness to litigate—not from weapons the law itself treats as off-limits.

Frequently Asked Questions

Can a demand email or text message be treated the same as a formal letter for extortion analysis?

Yes. From a criminal and civil standpoint, the medium almost never matters; the focus is on what you said and why you said it. Penal statutes prohibiting extortion typically cover written communications broadly, and courts analyzing demand “letters” routinely look at emails, faxes, and even messages relayed through counsel under the same framework. A threatening email that conditions silence about alleged crimes on payment can present the same risk as a multi-page letter on letterhead.(CaseLaw)

Where format does matter is evidentiary and practical. Informal channels like text and messaging apps tend to invite looser, more emotional language, which is exactly where lawyers get into trouble. It is much harder to walk back a late-night text that reads like “pay or else” than a carefully edited document. For that reason, many attorneys keep substantive pre-litigation communication in structured email or PDF form, and treat everything else as scheduling only.

Does it matter if I genuinely intend to file the lawsuit I threaten in the letter?

Intent matters in two different ways. First, some courts evaluating alleged “civil extortion” or abuse of process look at whether the threatened litigation is a sham. If there is no realistic plan to file suit and the only real objective is to extract money through fear of reputational or criminal consequences, that supports an extortion narrative rather than a legitimate attempt to resolve a dispute. Flatley is a good illustration: the Supreme Court emphasized that the conduct looked like a shakedown rather than ordinary petitioning activity, which justified withholding anti-SLAPP protection.(CaseLaw)

Second, from a professional-responsibility perspective, threatening litigation you do not reasonably intend to pursue can implicate rules against frivolous claims and dishonest conduct. Ethics guidance on Rule 3.10 makes clear that lawyers are free to threaten civil actions they actually plan to file, but using an empty lawsuit threat as a scare tactic—especially combined with criminal or regulatory threats—creates a disciplinary profile that is hard to defend.(California State Bar)

Is it safer to attach a draft complaint to the demand letter, or can that backfire?

Attaching a draft complaint often helps demonstrate that you are engaged in genuine pre-litigation negotiation rather than pure intimidation. Courts analyzing demand communications frequently note that enclosing a draft pleading tends to support the idea that the sender was seriously contemplating litigation and using the letter to seek resolution of those specific claims. Malin v. Singer is a well-known example; the attached draft complaint was part of what convinced the court that the letter fit comfortably within the litigation privilege.(CaseMine)

The flip side is that a draft complaint full of gratuitous detail, salacious allegations, or speculative claims can amplify both defamation optics and extortion optics, especially if the letter hints at media use. Anything you put into that draft should be something you are truly prepared to sign, file, and defend. If the complaint looks like a vehicle to publish damaging material under the cover of litigation rather than to actually prosecute a case, the privilege analysis becomes more fragile and the Flatley problem becomes more acute.

What happens if my client posts my demand letter on social media?

Once the client publishes the letter to the world, the litigation privilege no longer operates in the same straightforward way. In California, the privilege protects communications made in or in serious anticipation of litigation when they are directed to participants in that process. Rothman v. Jackson and similar authorities make clear that “litigating in the press” sits outside that core.(Justia Law)

If a client uploads your letter to Instagram or sends it to reporters, that republication may be treated as a separate act of defamation if any of the statements are false and injurious, and it is much harder to argue that broad public dissemination was functionally necessary to the litigation. Practically, you cannot fully control what clients do, but it is reasonable to warn them in writing that the letter is intended for settlement and litigation purposes only and that public posting may expose them to defamation risk independent of the underlying dispute.

Do I need to mark the letter “confidential settlement communication” or “under Evidence Rule 408” to get protection?

Labels like “confidential settlement communication” and “FRE 408” are mostly signaling devices rather than magic words. The litigation privilege in California and analogous doctrines elsewhere do not turn on captions; they turn on the nature and purpose of the communication. If the letter is sent in serious contemplation of litigation and is genuinely aimed at resolving the dispute, it will generally be privileged regardless of whether you cite Rule 408.(BCLP)

That said, the labels still have value. They help frame the letter for later readers, including judges and arbitrators, as part of settlement dialogue rather than a public relations document. They also remind the client not to repurpose the text for social-media campaigns or press outreach. What they cannot do is cure otherwise extortionate content; a letter that conditions silence on payment or threatens collateral criminal reporting is risky no matter how many times “confidential” appears in the header.(Hinshaw & Culbertson LLP)

How does any of this change if the dispute is headed to arbitration instead of court?

From an extortion and defamation perspective, very little changes when the forum is arbitration rather than a public court. Pre-arbitration demand letters that preview claims and invite settlement fall comfortably within the same privilege logic as pre-litigation letters, because they are still communications in anticipation of a quasi-judicial proceeding. Courts applying California’s litigation privilege have treated arbitration-related communications as within the doctrine where the policy reasons—encouraging candid advocacy and settlement—are present.(BCLP)

What does change is the practical pressure profile. Threatening a public lawsuit carries an implied reputational risk that an arbitration does not, because arbitration filings are usually private. Using the “we will go to court instead of arbitration and expose this publicly” angle can quickly start to look like the kind of reputational cudgel Flatley disapproved of, especially if it is explicitly tied to payment. Keeping the focus on the merits and remedies available in the chosen forum is the cleaner path.

Can I send a copy of my demand letter to an insurer or indemnitor without extra defamation risk?

Not every third-party recipient is equal. When an insurer has a contractual duty to defend or indemnify, or when another party has a legal obligation that will be triggered by the claim, copying that entity is usually seen as part of the normal litigation ecosystem. Communications reasonably necessary to notify an insurer of a covered claim, or to tender a defense, tend to fit within the “participants in the proceeding” concept for privilege purposes, particularly where the policy itself demands notice.(BCLP)

By contrast, looping in people who are only tangentially connected—major customers, vendors, or lenders—looks very different. Rothman and its progeny draw a fairly sharp line against broadcasting litigation positions to the media and other non-participants. Insurers and contractual indemnitors are usually on the safe side of that line; business contacts who have no legal role are not. Documenting why each third party needs the letter, and limiting the distribution to those with a concrete legal interest, helps preserve both privilege and optics.(Justia Law)

Is it extortion if I demand a retraction or apology instead of money?

Extortion statutes are usually framed around obtaining property, money, or some form of “consideration,” which is why the classic cases involve payment demands. However, some jurisdictions interpret “consideration” broadly enough to include non-monetary concessions, particularly when the threatened harm is serious and the demand coerces a significant change in behavior. A threat to expose a deeply personal secret unless the other person signs away parental rights, for example, can fit the same “menace” framework the Tran court analyzed, even though cash never changes hands.(Justia Law)

Demanding a retraction or apology, standing alone, rarely looks like extortion if it is tied to a genuine concern about false statements rather than a desire to control unrelated aspects of someone’s life. The risk increases if the message is “publicly humiliate yourself in this very specific way or we will go to the police and the press.” In practice, lawyers who need corrective statements tend to frame them as part of litigation strategy—clarifying the record and mitigating damages—rather than as a personal humiliation ritual backed by collateral threats.

How do anti-SLAPP statutes interact with allegedly extortionate demand letters?

Anti-SLAPP statutes are designed to protect petitioning and free-speech activity, which includes pre-litigation settlement letters, from meritless lawsuits. Courts often treat demand letters as protected activity at the first step of the analysis because they are closely tied to contemplated litigation. Malin is a good example: the court held that the demand letter was petitioning activity and then evaluated whether the plaintiff could show a probability of prevailing.(CaseMine)

Flatley carves out an important exception. When the court concludes that the communication amounts to criminal extortion as a matter of law, it will refuse to grant anti-SLAPP protection at all. In that situation, the sender cannot use the statute as a shield, regardless of how closely the communication resembles ordinary pre-suit negotiation. Extortionary content is therefore a double problem: it creates substantive criminal and civil exposure and simultaneously removes a procedural defense that lawyers otherwise rely on in demand-letter litigation.(CaseLaw)

Does the truth of my allegations protect me from an extortion accusation?

Truth is extremely helpful in defamation law, but it does not cure extortion. An extortion statute is concerned with the method and purpose of the threat, not with the accuracy of the damaging information. A threat to reveal a true but highly embarrassing secret unless paid can fit the same statutory language as a threat based on fabricated allegations, as the menace analysis in Tran illustrates.(Justia Law)

From a practical perspective, truth helps with optics and credibility. A court or prosecutor is more likely to see a letter as legitimate pre-litigation advocacy when the factual record is strong and well documented. However, if the structure of the communication is “pay or we will expose this,” the elements of extortion may still be satisfied even if every line is factually accurate. Truth is necessary to avoid one category of risk, but it is not sufficient to avoid the other.

Can I refer to potential regulatory reporting that my client has already made or will make regardless of settlement?

Referencing existing or inevitable reporting is less problematic than using reporting as a bargaining chip, but it still needs to be handled carefully. Rule 3.10 focuses on threats “to obtain an advantage in a civil dispute,” and ethics commentary emphasizes that lawyers may file complaints with regulators or law enforcement, and may state that they will do so, so long as that step is not contingent on settlement terms.(California State Bar)

If a report has already been filed, accurately disclosing that fact can help explain the broader context in which the dispute is unfolding. If a report will be made regardless of settlement, it is safer to separate that path from the civil negotiation and avoid framing it as a threat at all. A neutral statement such as “Separate from this civil matter, our client is cooperating with regulators regarding the same conduct” conveys the reality without implying “pay us and we will slow that process.”

What if the other side sends me what looks like an extortionate letter; do I have to report it?

There is usually no blanket, across-the-board duty to report potentially extortionate conduct by opposing counsel to prosecutors or regulators, although specific jurisdictional rules can create reporting obligations in narrow contexts, particularly when a lawyer’s dishonesty raises substantial questions about fitness to practice. Many bar ethics pieces recommend a calibrated response: preserve the communication, consider raising the issue with opposing counsel, and evaluate whether the conduct materially affects your client’s interests or the integrity of the proceeding.(Orange County Bar Association)

From a strategic standpoint, immediately escalating to law enforcement can sometimes make settlement harder, especially if the other side panics and doubles down. On the other hand, sitting on plainly criminal threats may expose your client to ongoing pressure and can complicate matters if authorities later ask why nothing was said. There is no one-size-fits-all answer; the analysis is very fact-specific and often involves weighing the client’s risk tolerance, the seriousness of the threat, and the likelihood that any reporting will meaningfully change the trajectory of the dispute.

Are there special concerns when the target is a public figure or public company?

Public figures and public companies change the defamation analysis more than the extortion analysis. On the defamation side, they usually must prove “actual malice” to recover for false statements about matters of public concern, which means knowledge of falsity or reckless disregard for the truth. That higher bar can sometimes encourage more aggressive rhetoric, especially when the underlying issues are already in the news. At the same time, public entities tend to be far more sensitive to reputational risk, which can magnify the perceived coercive effect of a threat to “go public.”(Advocate Magazine)

Extortion law does not relax because the target is sophisticated or high-profile. A “pay for silence” bargain with a public company’s executive committee can still look like classic extortion if the letter threatens media or regulatory exposure as the primary cudgel. The public-company context also increases the odds that the letter will surface later in securities litigation, internal investigations, or regulatory files, where it will be read line by line by people who are not predisposed to give the drafter the benefit of the doubt.

How aggressive can I be when negotiating confidentiality and non-disparagement in the settlement that follows the demand?

There is a legitimate place for strong confidentiality and non-disparagement clauses in settlements. Parties are entitled to bargain for peace, including peace from future public commentary about the dispute. The problem arises when the drafting crosses the line into buying silence about ongoing regulatory violations, criminal conduct, or risks to third parties. Ethics authorities have repeatedly criticized agreements that purport to prevent someone from reporting misconduct to regulators or law enforcement, and some rules, including Business and Professions Code provisions and Rule 3.10 commentary, explicitly forbid such promises where lawyers are concerned.(ABTL)

From an extortion perspective, the structure of the negotiation matters. Insisting on confidentiality regarding the settlement terms and litigation allegations is very different from saying “we will keep quiet about your unlicensed medical practice to patients and regulators if you pay us.” The first is a standard civil bargain; the second looks like purchasing silence about ongoing risk to the public, which invites scrutiny from courts and agencies who do not want private contracts to undermine enforcement.

Does it help or hurt to avoid mentioning criminal statutes by name in the letter?

Avoiding statutory citations does not, by itself, reduce extortion risk. Prosecutors and judges look at substance: are you using the specter of criminal or regulatory trouble as a bargaining chip. A veiled “you know and we know this could end very badly for your license” can be just as problematic as a fully cited Penal Code reference if it is clearly intended to extract money in exchange for not triggering those consequences.(California State Bar)

What careful use of citations can do is shift the tone from menace to analysis. When a letter neutrally explains that particular conduct appears to violate a statute, and then moves back to civil remedies, it reads more like legal evaluation and less like blackmail. The key is to ensure that any mention of criminal law is not coupled with “unless you pay, we will…” and that the primary thrust of the letter is still civil enforcement of private rights.

Are there different risks when the potential wrongdoing is itself regulatory, like securities or tax violations?

When the underlying conduct already implicates regulators—unregistered securities offerings, consumer-protection violations, tax issues—the line between civil claims and regulatory exposure is naturally blurry. Private plaintiffs often have strong incentives to report misconduct, and regulators sometimes encourage whistleblowers. Ethics guidance recognizes this and allows lawyers to advise clients about reporting options and to file complaints themselves, so long as those steps are not deployed as a threat to gain leverage in a civil settlement.(ABTL)

In practice, the safest approach is to treat the regulatory dimension as parallel, not conditional. The demand letter can focus on civil remedies and note, if appropriate, that certain statutes provide private rights of action or enhanced damages. Any reporting to agencies happens on its own, with no suggestion that it will be withheld or withdrawn if the check clears. The more cleanly those tracks are separated, the harder it is for anyone to characterize the civil communication as extortionate.

How do cross-border issues affect demand letters, for example when one party is overseas?

Cross-border disputes add several layers of complexity. Different jurisdictions have very different defamation standards and criminal-threat frameworks; what is protected petitioning in California may be actionable in a foreign court, and vice versa. Some countries offer far less robust litigation privilege for pre-suit communications, and some have criminal “insult” or “blackmail” laws that cast a wider net than U.S. extortion statutes.(Illinois State Bar Association)

Choice-of-law and forum clauses in the underlying contract can mitigate some of this by anchoring the dispute in a predictable system, but they do not necessarily insulate a sender from criminal exposure in the recipient’s home country. Where the stakes justify it, counsel sometimes prepare two versions of a demand communication: one tightly tailored to the governing law and another more general notice for international recipients. Being conservative about rhetoric and scrupulous about avoiding “pay for silence” formulations is even more important when the letter is likely to cross borders.

Can I safely threaten consequences that follow automatically from litigation, like mandatory reporting obligations?

There is a difference between explaining downstream consequences of litigation and using them as a blunt instrument. For example, if a lawsuit in a particular field will trigger public docket entries or automatic notifications to regulators, it is not inherently improper to note that reality when describing why early resolution might be in everyone’s interest. Courts recognize that public exposure is a natural by-product of litigation, not something lawyers can or must ignore.(CaseLaw)

The risk arises when the letter’s message becomes “pay to avoid this collateral consequence.” If the tone suggests that the sender is prepared to file an otherwise unnecessary complaint solely to generate regulatory or reputational pressure, it looks more like the media and agency threats condemned in Flatley and related commentary. Framing the discussion in terms of shared incentives—cost, time, uncertainty—rather than “we know how to make your life miserable” keeps the communication on the acceptable side of the line.

Do I need to correct or retract a demand letter if I later learn that some allegations were overstated?

When new information reveals that an allegation in a demand letter was inaccurate or overstated, there are at least two concerns: ongoing defamation risk and professional-responsibility duties. On the defamation side, promptly clarifying the record can mitigate harm and reduce the likelihood that anyone will view the original statements as reckless or malicious. Because litigation privilege often shields the original letter, the urgency is higher where the communication reached third parties outside the litigation framework, such as the media or business contacts.(Justia Law)

From a professional-conduct perspective, lawyers have duties of candor toward tribunals and fairness toward opposing parties. Continuing to rely on a factual assertion that counsel knows is false can create serious problems if the dispute proceeds, particularly if the same allegation appears in pleadings or declarations. Sending a short follow-up letter correcting the record and explaining that the demand is now based on a refined set of facts is usually a better long-term strategy than pretending the earlier overstatement never happened.

How should I handle a client who insists on “making it personal” in the letter?

Clients under stress often want the demand letter to double as a cathartic exercise. They may push for insults, sweeping character judgments, or threats that clearly cross ethical lines. One of the core professional roles in this context is to act as a buffer between that impulse and the written record that judges, regulators, and potential jurors may one day read. Ethics commentary on Rule 3.10 and related rules expects lawyers to resist client demands for improper threats, even at the cost of upsetting the client or withdrawing if necessary.(California State Bar)

Practically, it can help to offer the client two outlets: a separate, unsent draft where they can say whatever they want for emotional processing, and a clean, professional letter that advances their legal interests. Walking the client through cases like Flatley and Tran, and explaining how an overheated letter can become the opposing side’s Exhibit A, often persuades them that restraint is not about protecting the other side but about protecting themselves.