Drafting a Demand Letter That Stays On The Right Side Of Flatley v. Mauro

What Flatley v. Mauro actually held

In Flatley v. Mauro (2006) 39 Cal.4th 299, the California Supreme Court considered a pre-litigation demand letter sent by an attorney to a public figure. The letter threatened to publicize allegations of rape and to report alleged violations of immigration, tax, and Social Security law unless the recipient paid a multimillion-dollar settlement. The recipient sued the lawyer for civil extortion and related torts. The lawyer moved to strike under the anti-SLAPP statute and invoked the litigation privilege.

The Supreme Court held that when a defendant's communication constitutes criminal extortion as a matter of law, neither the litigation privilege under Civil Code section 47(b) nor the anti-SLAPP statute under Code of Civil Procedure section 425.16 shields the conduct. The court tied the analysis to Penal Code section 519, which defines extortion to include obtaining property under threat to accuse the victim of a crime, expose any secret affecting the victim, or expose the victim to disgrace.

Two features of the holding matter for every California demand letter:

• Truth is not a defense. Penal Code section 519 reaches threats to accuse the victim of a crime "whether such accusation be true or false." The court applied that text without flinching. A letter is not safe simply because the underlying allegations are real.
• The analysis is performed early. When the trial court can determine extortion as a matter of law from the letter itself plus undisputed facts, anti-SLAPP protection drops out at the threshold. The defendant does not get to litigate intent, business purpose, or good faith to a jury.

What specifically triggers the rule

Flatley does not turn every aggressive demand letter into extortion. Lower courts have been careful with the holding. Malin v. Singer (2013) 217 Cal.App.4th 1283 and Mendoza v. Hamzeh (2013) 215 Cal.App.4th 799 read Flatley as narrow, applied to specific fact patterns. The pattern that actually triggers it has two elements working together:

1. A threat to expose the recipient to a forum other than the civil claim itself. Criminal authorities. Regulators. The state Attorney General. Immigration enforcement. A taxing authority. A professional licensing board. The press. The public. The board of a parent organization. The trustees of a grantor. The recipient's customers.
2. A demand for money that does not tightly track the legally cognizable claim that would justify the exposure. If the letter says, in substance, "pay me on Claim A or I will report you to authorities on unrelated Issue B," the letter is in the danger zone. If the letter says, "pay the wages you owe under Labor Code section 218 or I will file a Labor Commissioner claim that becomes public record on those same wages," the second clause is the natural civil consequence of the first claim, not a separate lever for sale.

Three sub-patterns I see repeatedly in client-drafted letters:

• Regulatory grafting. The cognizable claim is contract or wage. The letter then mentions, often as background, that the recipient has compliance problems with a state grant, a license condition, or a public-benefits program. The grafted regulatory exposure is what the recipient feels, and that is what creates Flatley risk.
• Reputational exposure as a separate ask. Public-disclosure framing presented as the consequence of the recipient's refusal to pay rather than as the consequence of the lawsuit the sender is preparing to file.
• Criminal hint. Suggesting tax fraud, mail fraud, wire fraud, or theft, where the underlying civil claim does not require a finding of criminal conduct, and the criminal framing is not necessary to the civil case.

The truth-is-not-a-defense problem

This is the part that surprises clients. Sophisticated clients in particular tend to assume that if the regulatory violations they are alleging are real, and if the supporting documents are in their hands, the letter is safe. Flatley says otherwise, and Penal Code section 519 says so explicitly.

The wrong is not in alleging the underlying conduct. The wrong is in leveraging the threat of exposing that conduct to a forum that does not adjudicate the cognizable civil claim. A factually accurate threat to report a recipient to the Attorney General for grant misuse is still a Flatley-triggering threat if the lawsuit being prepared is, say, an unpaid wage claim. The grant issue is real, but it is not the consideration for the money demanded.

The pre-suit discovery framing that some sophisticated drafters try

I have seen clients describe regulatory or public-disclosure issues as "matters of public judicial discovery" or "matters that will become part of the public record once filed" on the theory that recasting the exposure as a consequence of the civil action solves the Flatley problem.

Sometimes that works. Often it does not. The framing only does work if every piece of the regulatory exposure is genuinely something the civil complaint will plead, prove, or attach. If the complaint as drafted does not actually require the regulatory issue, then describing the regulatory issue as a downstream consequence of filing is a fiction, and Flatley sees through it.

The functional test I apply when reviewing a draft:

• Read the proposed letter, then read the proposed complaint. Strike from the letter any reference to a forum, agency, or public exposure that does not appear in the operative facts and the prayer of the complaint.
• If the letter loses force after the strike, the original framing was probably doing extortionate work, not litigation-preview work.
• If the letter holds up after the strike, the regulatory references were doing legitimate notice-of-claim work and are likely protected.

How to draft a demand letter that stays inside the privilege

The lawful side of the line is not narrow. California demand letters can be firm, specific, and aggressive. The list below is the working checklist I run before any letter goes out on my letterhead:

1. Tie every demand to a legally cognizable claim. Identify the statute or doctrine. If the claim is unpaid wages, cite Labor Code section 218 or the applicable wage-claim provision. If the claim is alter ego, cite the controlling test, the elements, and the factual basis you have for each prong. Refuse to demand anything you cannot anchor in a cause of action.
2. State the consequences as litigation, not as exposure-for-sale. The next step in a properly framed letter is filing in court or in an authorized forum. Not reporting the recipient to a third party as a punishment. The difference is whether the consequence is a procedure or a leverage point.
3. Avoid criminal language unless the cause of action requires it. Fraud, embezzlement, theft, and similar labels often add nothing to the civil case and add a great deal of Flatley risk. If the claim is breach of contract, plead breach. If the claim is wage theft under Penal Code section 484 or Labor Code section 1199, plead it directly and accept that the criminal framing is now part of the operative theory and must be supportable.
4. Be careful with cc lines and copies. A demand letter copied to a regulator, a board, a licensing body, or the press, especially when the recipient is represented by counsel, looks much more like leverage than like notice. The default for me is opposing counsel only.
5. Anchor the dollar amount in the cause of action. The demand should add up. Wages owed plus statutory penalties plus authorized attorney fees plus interest, with the math shown, looks like a claim. A round number bigger than the claim, with no math, looks like a settlement of exposure.
6. Set a reasonable response window. Short windows that exist only to apply pressure read as extortion. A response window calibrated to the statute of limitations, the harm continuing, or a court deadline reads as litigation discipline.

Two short examples, same facts, different sides of the line

The factual record can be identical. The drafter can have the same evidence in both versions. The first version is protected. The second version is not. The difference is whether the consequences described are the natural sequel of the civil action or a separate lever the recipient can buy off.

If you have already sent a letter and you are now worried

Two practical points. First, the Flatley analysis is performed on the four corners of the letter plus undisputed surrounding facts. Strong contemporaneous documentation that the letter was a litigation preview, not a private leverage demand, is helpful but does not rewrite the text. The text is what the court reads.

Second, an immediate follow-up letter that withdraws the problematic language, narrows the demand to the cognizable claim, and clarifies that no third-party disclosure is being held over the recipient can be useful. It cannot undo what was sent, but it can mitigate the optics and, in some matters, the damages exposure. Anything beyond that is matter-specific, and I will not pretend a generic guide can answer it.