united-states blackmail extortion
Why is threatening to sue not considered extortion?
<p>I'm <a href="https://criminal.findlaw.com/criminal-charges/extortion.html" rel="nofollow noreferrer">reading about extortion</a> and it says:</p>

<blockquote>
  <p>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.<br>
  It is not necessary for a threat to involve physical injury. It may be sufficient to threaten to accuse another person of a crime.</p>
</blockquote>

<p>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.</p>

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

<h2>A threat is not a threat if its lawful</h2>
<p>Let's look at a particular statute <a href="http://www6.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/consol_act/ca190082/s249k.html" rel="nofollow noreferrer">s249K</a> of the <em>Crimes Act 1900</em> [NSW]:</p>
<blockquote>
<p>(1) A person who makes any unwarranted demand with menaces:</p>
<p>(a) with the intention of obtaining a gain or of causing a loss, or</p>
<p>(b) with the intention of influencing the exercise of a public duty,</p>
<p>is guilty of an offence.</p>
</blockquote>
<p><a href="http://www6.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/consol_act/ca190082/s249l.html#unwarranted" rel="nofollow noreferrer">s249I</a> defines &quot;unwarranted&quot;:</p>
<blockquote>
<p>(1) For the purposes of this Part, a demand with menaces is
&quot;unwarranted&quot; 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.</p>
</blockquote>
<p>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.</p>

<p>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.</p>

<p>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.</p>

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

<p>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. <a href="https://www.courts.state.co.us/Courts/Court_of_Appeals/Opinion/2019/16CA0048-PD.pdf" rel="nofollow noreferrer"><em>People v. Knox</em></a>, 2019 COA 152, ¶¶ 2-4 and 48-51. The ruling says in the pertinent parts (emphasis added) that:</p>
<blockquote>
<p>¶ 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.</p>
<p>¶ 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.</p>
<p>¶ 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:</p>
<p>&quot;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[.]&quot;</p>
<p>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.”</p>
<p>. . .</p>
<p>¶ 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.</p>
<p>¶ 49 As pertinent here, a person commits criminal extortion if</p>
<p>&quot;(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</p>
<p>(b) The person threatens to cause the results described in paragraph
(a) of this subsection (1) by:</p>
<p>(I) Performing or causing an unlawful act to be performed . . . .&quot;</p>
<p>[Colorado Revised Statutes] § 18-3-207.</p>
<p>Thus, as a Colorado federal district court decision explained, proof
of extortion requires the prosecution to prove</p>
<p>&quot;(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</p>
<p>(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.&quot;</p>
<p><em>Witt v. Snider</em>, 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. <em>See Whimbush v. People</em>, 869 P.2d 1245,
1249 (Colo. 1994). The defendant must have made a threat to commit an
unlawful act. <em>Id.</em></p>
<p>¶ 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, <strong>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].</strong> After all, under our system,
parties are encouraged to resort to courts for the redress of wrongs
and the enforcement of rights.” <em>United States v. Pendergraft</em>, 297
F.3d 1198, 1206 (11th Cir. 2002); <em>see Deck v. Engineered Laminates</em>,
349 F.3d 1253, 1257–58 (10th Cir. 2003); <em>Rendelman v. State</em>, 927
A.2d 468, 481 (Md. Ct. Spec. App. 2007), <em>aff’d</em>, 947 A.2d 546 (Md.
2008); <em>see also Zueger v. Goss</em>, 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.”).</p>
<p>¶ 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. <strong>We join other
jurisdictions in concluding that the threat of litigation does not
constitute criminal extortion.</strong> Accordingly, we vacate Knox’s
conviction for criminal extortion.</p>
</blockquote>
<p>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 &quot;weed&quot; (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.</p>
