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I'm reading about extortion and it says:

Most states define extortion as the gaining of property or money by almost any kind of force or threat of [...], harm to reputation, or unfavorable government action.
It is not necessary for a threat to involve physical injury. It may be sufficient to threaten to accuse another person of a crime.

However, I understand lawyers (and I guess non-lawyers) routinely send mail that amounts to a threat to involve government action (e.g. file a lawsuit) unless some settlement is reached.

How does that itself not constitute extortion? Are there exceptions to the threats that can be made? What are they generally?

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A published decision of the Colorado Court Of Appeals issued today is on point and holds that threatening to sue does not constitute extortion, reversing a trial court conviction entered on that theory. People v. Knox, 2019 COA 152, ¶¶ 2-4 and 48-51. The ruling says in the pertinent parts (emphasis added) that:

¶ 2 On November 26, 2014, Amber Diedrichs-Giffin was turning left in her car when she heard a “bang” as Knox forcefully placed her hands on the hood of the car. When Diedrichs-Giffin asked if Knox was okay, Knox responded that her “leg kind of hurts.” . . . Diedrichs-Giffin provided her insurance and contact information; however, Knox declined to contact law enforcement officials and asked for “weed” or money, stating, “We could settle this now.” Knox walked away — seemingly uninjured — after Diedrichs-Giffin directed Knox to contact Diedrichs-Giffin’s insurance company.

¶ 3 Shortly afterward, Diedrichs-Giffin called 911 to report the accident, expressing her uncertainty about who was at fault. The dispatcher told her that, without an injury, she did not need to file a report; but if Knox contacted law enforcement officials later, they could refer to the recording of Diedrichs-Giffin’s call.

¶ 4 Later the same day, Knox sent Diedrichs-Giffin a series of text messages asking to settle matters outside of court. The particular text message underlying the eventual criminal extortion charge and conviction stated:

"Hey amber, this is Ashley the young lady, u hit..i have a little amount of time if i want to pursue, court action…im already on pain management and am going through hard times like everyone..im sure..id rather u help me out we agree to a one time feesable amount. We can even sign something if u want..to keep out of a long court proceeding going back to court over several months, insurance goin up, and my medical bills, since im in and out of hospital already[.] Let me know, if that works for you, or u would rather draw it out in court. Thanks[.]"

Diedrichs-Giffin did not respond to the message and testified that she perceived it as an attempt to “make a one-time deal with me so that way we didn’t have to pursue it in court.”

. . .

¶ 48 Knox contends, the People concede, and we agree that Knox’s threats of litigation to cause “economic hardship” were insufficient to prove her guilty of criminal extortion.

¶ 49 As pertinent here, a person commits criminal extortion if

"(a) The person, without legal authority and with the intent to induce another person against that other person’s will to perform an act or to refrain from performing a lawful act, makes a substantial threat to . . . cause economic hardship . . . to . . . the threatened person or another person; and

(b) The person threatens to cause the results described in paragraph (a) of this subsection (1) by:

(I) Performing or causing an unlawful act to be performed . . . ."

[Colorado Revised Statutes] § 18-3-207.

Thus, as a Colorado federal district court decision explained, proof of extortion requires the prosecution to prove

"(i) a person, lacking legal authority to do so, ma[de] a threat to . . . cause economic . . . harm to the victim, with the intent of coercing the victim to perform an act or refrain from performing an act, and

(ii) the person propose[d] to do so by resorting to an unlawful act or by threatening to invoke action by a third party, such as law enforcement."

Witt v. Snider, Civ. A. No. 16-cv-01303-MSK-CBS, 2017 WL 2215252, at *5 (D. Colo. May 19, 2017). However, making a threat to do something while lacking express legal authority is not tantamount to committing an unlawful act. See Whimbush v. People, 869 P.2d 1245, 1249 (Colo. 1994). The defendant must have made a threat to commit an unlawful act. Id.

¶ 50 Because no Colorado court has addressed this issue, we look to the decisions of other jurisdictions that reached this conclusion. As both parties mention, the overwhelming majority of jurisdictions addressing the unlawful act requirement in the federal analogue conclude that “[a] threat to litigate, by itself, is not necessarily ‘wrongful’ within [this context]. After all, under our system, parties are encouraged to resort to courts for the redress of wrongs and the enforcement of rights.” United States v. Pendergraft, 297 F.3d 1198, 1206 (11th Cir. 2002); see Deck v. Engineered Laminates, 349 F.3d 1253, 1257–58 (10th Cir. 2003); Rendelman v. State, 927 A.2d 468, 481 (Md. Ct. Spec. App. 2007), aff’d, 947 A.2d 546 (Md. 2008); see also Zueger v. Goss, 2014 COA 61, ¶ 42, 343 P.3d 1028, 1038 (Colo. App. 2014) (“Settlement implies a compromise; it does not establish conduct against one’s will.”).

¶ 51 Accordingly, Knox’s threat to sue Diedrichs-Giffin did not suggest that she intended to act unlawfully; instead, she gave Diedrichs-Giffin the option to settle her alleged claim to avoid litigation. We join other jurisdictions in concluding that the threat of litigation does not constitute criminal extortion. Accordingly, we vacate Knox’s conviction for criminal extortion.

It is also interesting to note that neither the prosecution nor the defendant nor the Court were concerned for purposes of the criminal extortion statute that one of the proposed settlements options suggested was a payment in "weed" (i.e. marijuana), in lieu of cash, which arguably would be an unlawful transaction under both federal law and Colorado law, since that still did not amount to a threat.

  • This is great. Thank you! – Mehrdad Oct 10 at 22:46
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A threat is not a threat if its lawful

Let's look at a particular statute s249K of the Crimes Act 1900 [NSW]:

(1) A person who makes any unwarranted demand with menaces:

(a) with the intention of obtaining a gain or of causing a loss, or

(b) with the intention of influencing the exercise of a public duty,

is guilty of an offence.

s249I defines "unwarranted":

(1) For the purposes of this Part, a demand with menaces is "unwarranted" unless the person believes that he or she has reasonable grounds for making the demand and reasonably believes that the use of the menaces is a proper means of reinforcing the demand.

If you genuinely believe that you have reasonable grounds for your demand and that a lawsuit is a proper means of enforcing that demand, then threatening to initiate one is not blackmail.

  • Thanks for the answer! Turns out I forgot to tag as USA, sorry (just did), but note that FindLaw was a US site... I don't expect the laws around this are necessarily the same everywhere. – Mehrdad Mar 25 at 23:28
  • @Mehrdad I think you will find that they will all be pretty similar - a lawful threat is not extortion – Dale M Mar 25 at 23:53
  • Okay in that case would you mind clarifying what exactly "lawful threat" means? Does it mean the act that I'm threatening to commit is lawful in itself? Or does it mean my threat to do something lawful is itself lawful (which seems a bit of a tautology)? – Mehrdad Mar 25 at 23:57
  • @Mehrdad: If they would outlaw legal threats, than a lot more trivial cases would end up in court (because it would be more difficult to settle cases early). Lawsuits are so grossly expensive, for everyone including the court system, that no reasonable jurisdiction will outlaw legal threats. – Kevin Mar 26 at 0:18
  • @Kevin : So if you're using the threat as a rhetorical technique (i.e. you do not genuinely believe you have reasonable grounds, or you think there might be but you're uncertain and you treat and act on the "possibility" part of that uncertainty as actual belief), is it then illegal even if it is not threatening an actually illegal action (just one that would not end up working)? – The_Sympathizer Mar 27 at 5:51
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Since it is lawful to sue for a legitimate debt (or one sincerely believed to be legitimate) or for legitimate damages for a tort, a threat to sue unless the debt is paid or the damages are conceded or settled is lawful, and is not extortion.

However, when the demand is far out of proportion to the issue legally at stake in the suit, it can be a form of extortion. For example, if a minor lawsuit would result in a possible judgement of a few thousand dollars, but also in publicizing some fact that the defendant would wish to keep secret, a demand for a million dollars or else the suit would be filed is essentially a form of blackmail, under cover of the suit. Such actions could be extortion, if a demand is made that the victim "settle" for an otherwise highly excessive sum to avoid such publicity. This is a very unusual situation.

A similar unreasonable demand to settle a suit already field can also be extortion, as a comment points out. This is also unusual.

  • Extortion can also attach if a lawsuit has been filed (see for example Prenda Law). – Kevin Mar 26 at 0:25
  • "However, when the demand is far out of proportion to the issue legally at stake in the suit, it can be a form of extortion." I've never seen or heard of an extortion prosecution in that fact pattern. Maybe the basis for court sanctions or a malicious prosecution lawsuit, but not criminal extortion. Also to be clear "publicizing some fact that the defendant would wish to keep secret" will generally only be extortion if a demand is made or was made for something in exchange for not doing it. This would only rarely even be actionable as a civil action or as a criminal privacy violation. – ohwilleke Mar 26 at 0:42
  • @Kevin In the Prenda Law case "One of the attorneys behind the Prenda Law "copyright trolling" scheme has pleaded guilty to federal charges of fraud and money laundering.", but there wasn't an extortion count. – ohwilleke Mar 26 at 0:45
  • @ohwilleke In the link in lkevin's comments above, it mentions a scam in which people who downloaded pornography were sued or threatened with suit that would if brought to trial, reveal that the person had downloaded porn, embarrassing them far more than the actual IP value of the download. People were brought to settle these contrived suits for fear of this exposure. – David Siegel Mar 26 at 0:47
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    @ohwilleke: You may find this exchange before the Ninth Circuit rather interesting in terms of whether it was technically "extortion" or not (it also begins with a quite lengthy explanation of the whole scheme, so skip to 29:03 if you just want to hear the word "extortion"). – Kevin Mar 26 at 2:13

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