Articles Posted in Privileges

Clever defamation lawyers seem to have developed a new technique for bringing lawsuits against the rich and powerful. Step One: Announce to the world that a public figure has mistreated you in some way. Step Two: Wait for the public figure to issue a statement disputing your story and proclaiming innocence. Step Three: Sue the public figure for defamation on the theory that the public figure falsely communicated to the public that you are a liar. Sound familiar?

In 2005, California lawyer Tamara Green told the Today Show that Bill Cosby drugged and groped her. Years later, speaking to Newsweek, Cosby’s publicist responded to Green’s accusation as follows: “This is a 10-year-old, discredited accusation that proved to be nothing at the time, and is still nothing.” Ms. Green then sued Cosby for defamation, complaining that “in an effort to continue the public branding of [Green] as a liar, Defendant Cosby…stated explicitly, stated in effect, stated by innuendo, implied, and/or insinuated, that Defendant Cosby’s drugging and sexual assault against Plaintiff Green never occurred, and therefore that Plaintiff Green lied and was a liar.”

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Redouane Goulmamine, M.D., is physician based in Petersburg, Virginia, who conducts business under the name “The Petersburg Spine Center.” According to a complaint he filed in the Richmond Division of the Eastern District of Virginia federal court, he became aware that several employees of CVS Pharmacy were providing false information about him to patients and refusing to fill prescriptions he had written. CVS eventually made it official, sending him a letter notifying him that the pharmacy would no longer fill his prescriptions and implying its decision was based on its belief that Dr. Goulmamine had been writing pain-pill prescriptions for drug addicts.

Dr. Goulmamine sued CVS for defamation, insulting words, and tortious interference with contract/business expectancy. The complaint recites nearly two-dozen conversations with CVS employees alleged to be defamatory. Some of the statements were clearly statements of opinion (e.g., “he is filling too many prescriptions”), but the court noted that several alleged statements amounted to statements of fact that were claimed to be false. These statements primarily fell into two camps: (1) false factual statements about Dr. Goulmamine himself (e.g., that he was in jail; that he had overprescribed to a pregnant patient; that one of his patients had died from a Xanax overdose; and that someone in his office was producing fraudulent prescriptions); and (2) false or misleading factual statements about Dr. Goulmamine’s standing in relationship to regulatory bodies (e.g., that the DEA, FBI, or Board of Medicine was investigating him or had revoked his license, or that he was being “audited.”)
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As a general rule, both the United States and the Commonwealth of Virginia enjoy sovereign immunity, which shields the government entities and their agencies from defamation lawsuits as well as most other types of litigation. The law becomes trickier when applied to the employees of those governments. Federal employees are immune from defamation claims based on things they said while acting within the scope of their employment. Those who work for the Commonwealth of Virginia, on the other hand, or one of its counties, cities, or towns, don’t have it so easy. Virginia employees do enjoy some degree of sovereign immunity for their actions, but–with limited exceptions–the protection they are afforded is less than the absolute protection federal employees receive. Like federal employees, state and local employees must be acting within the scope of their employment to be potentially entitled to claim immunity, but state employees need to meet additional criteria before they will be granted immunity.

The Virginia Supreme Court has described sovereign immunity as “a rule of social policy, which protects the state from burdensome interference with the performance of its governmental functions and preserves its control over state funds, property, and instrumentalities.” This rule of social policy is essentially based on the following goals: (1) to protect the “public purse” (i.e., to preserve tax dollars), (2) to address the concern that officials might be unwilling to carry out their public duties if they lived in constant fear of being sued, (3) to encourage citizens to take public jobs, and (4) to permit the orderly administration of government by discouraging improper influence through vexatious litigation. (See Messina v. Burden, 228 Va. 301, 308 (1984)). Consideration of these policies is what guided the Virginia courts to develop a rule affording immunity to some state and local employees but not others.
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The First Amendment guarantees, among other freedoms, “the right of the people…to petition the Government for a redress of grievances.” This right to petition is part of the First Amendment‘s free-speech protection, as it pertains to a particular form of freedom of expression. A lawsuit aimed at deterring or punishing citizens from exercising this First Amendment right, or from otherwise exercising their right to freely express their political views or engage in discourse on a matter of public concern, is known as a “SLAPP” suit. (SLAPP stands for “Strategic Lawsuit Against Public Participation”). SLAPP suits usually don’t advertise the fact that they seek to chill the expression of ideas; they are often disguised as legitimate lawsuits for defamation or some other tort.

A majority of states have passed anti-SLAPP laws designed to facilitate the identification and early dismissal of frivolous SLAPP suits. The laws differ from state to state, but generally allow a defendant to make a “special” motion to dismiss if he can show the claim arises from a statement made in connection with a public issue in furtherance of the right to free speech. Significantly, if the court grants one of these special motions to strike, the anti-SLAPP statutes generally allow the defendant to recover his attorneys’ fees. Attorneys’ fees are normally not recoverable in defamation actions, so this can be a powerful deterrent against meritless lawsuits.
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Workplace defamation actions face a number of obstacles. The one that probably comes up the most is the issue of qualified privilege. Employees often claim that a manager or supervisor defamed them in the course of a termination or negative performance evaluation. These statements are usually protected from defamation claims, as a limited privilege applies to communications made on any subject matter in which the person communicating has an interest, or with reference to which he has a duty, if made to another person having a corresponding interest or duty. In other words, in situations where it is necessary or expected that one employee will make statements concerning the performance of another (such as a performance evaluation), a qualified privilege will apply.

Another defense that is sometimes raised in the employment context is that of “intra-corporate immunity.” This is a defense borrowed from the law of conspiracy. Because a conspiracy, by definition, requires at least two legally distinct persons, and because two employees acting within the scope of their employment duties are both acting as agents of their employer, a conspiracy cannot be formed between those two employees due to the unity of interest and absence of a second entity. “A corporation cannot conspire with itself,” is the oft-used way of describing the reasoning behind the doctrine.
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As a business owner, you can’t control everything your employees will do or say. What if one of them defames the character of another employee while on the job? Can the business be held responsible? If the employee uttered the defamatory words while performing the employer’s business and acting within the scope of his or her employment, then yes, the employer can be held liable for defamation. How does one determine whether an employee’s statements were made with the “scope of employment”? In Virginia, an act will be considered within the scope of employment if it was (1) expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) performed with the intent to further the employer’s interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer’s business, and did not arise wholly from some external, independent, and personal motive on the part of the employee to do the act upon his own account. (See Kensington Assocs. v. West, 234 Va. 430, 432 (1987)). If a plaintiff alleges the existence of an employment relationship, it becomes the employer’s burden to prove that the statement was not made within the scope of employment. Absent such proof, the employer is on the hook.

Last week, a defamation case against Bio-Medical Applications of Virginia, Inc. (doing business as Fresenius Medical Care Dominion) was allowed to go forward. The Amended Complaint filed in the case alleges that a Fresenius employee emailed to coworkers various false statements suggesting that the plaintiff (a registered nurse) had a complete disregard for patient welfare. For example, the alleged emails attributed to the plaintiff statements such as “[the patient] just needs a little bleach in his lines” and, in reference to another patient, “all she needs is a good shot of air. That’ll take care of her.” Another email accused the plaintiff of saying, “Well isn’t it about time?” after another patient had died. Fresenius Medical Care filed a motion to dismiss the case, arguing that the complaint failed to plead sufficient facts to hold the employer liable for the statements of its employees, and that the elements of defamation had not been satisfied. The court disagreed on both counts and denied the motion.
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According to The Virginian-Pilot, Portsmouth attorney Sterling H. Weaver was “convicted in Portsmouth General District Court of assault” in June 2006. A new lawsuit filed by that attorney alleges that a WAVY-TV report, broadcast in February 2014, reported similarly that “in 2006, a Chesapeake judge sentenced [Mr. Weaver] to 30 days in jail for grabbing a prosecutor by the throat after she asked to postpone a case.” (The quote is from the complaint, not the WAVY-TV report). Mr. Weaver says that he heard the report while in jail, where he was staying after being “indicted for assault on a law enforcement officer and sexual battery of that officer.” The report was defamatory, the lawsuit claims, because “the 2006 charge of assault was dismissed.”

Those of you who share with me an unnatural interest in Virginia defamation law are naturally curious as to what the issues in this case are going to be. There are several in my mind, but here are the first few that jump out:
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Defamation claims arise frequently in employment settings. Employees often disagree with their performance reviews and, if they feel particularly aggrieved, resort to the courts to extract a modicum of revenge. Unfortunately for them, statements relating to employee discipline and termination made by managers and supervisors usually enjoy a qualified privilege against defamation claims. The privilege generally insulates such statements from liability absent clear and convincing evidence of malice or some other indicator that the privilege has been abused. When an employer makes a false and defamatory statement about an employee, but that statement is protected by a qualified privilege that has not been lost or abused, the statement is not actionable.

Of course, before the question of privilege even comes into play, there is the matter of whether the statement at issue is defamatory in the first place. In Regina M. Zarrelli v. City of Norfolk, Ms. Zarrelli sued the City of Norfolk, Virginia (her former employer) along with the City’s Commonwealth’s Attorney, Gregory D. Underwood, based in part on being required to apologize to a vendor. It didn’t work, and the case was dismissed both because the statements were not defamatory, and because even if they were, they were protected by qualified privilege.
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In bankruptcy court, the presumption in favor of public access to judicial records can be overcome if “scandalous or defamatory matter” is contained in a paper filed therein. (See 11 U.S.C. Section 107). Curiously, there is an absolute judicial privilege for statements made in connection with and relevant to a judicial proceeding, so normally one wouldn’t expect to find “defamatory matter” in a court filing. Still, there is a relevance requirement to be entitled to the privilege, and there’s always a possibility that potentially defamatory or scandalous statements will be made in a court filing that have nothing to do with the underlying merits. And that’s exactly what happened in the recent case of Robbins v. Tripp.

Attorney John W. Tripp was handling a case in bankruptcy court when certain issues arose relating to perceived problems with his practice. The court ordered him to prepare and file a report containing details relating to his organization of files, supervision of staff, communication with clients, and related matters. The bankruptcy court instructed that the report be written “candidly and not as an advocate for any party to this matter.” Mr. Tripp moved for leave to file the report under seal, based in part on Section 107’s “scandalous or defamatory” provision. The motion was granted, and the trustee appealed.
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Otherwise defamatory statements made in connection with and relevant to a judicial proceeding are absolutely privileged against defamation claims. The so-called “judicial privilege” is broad and applies to all forms of communication during litigation. The doctrine encourages unrestricted speech in litigation which in turn promotes compromise and settlement. The United States Bankruptcy Court for the Eastern District of Virginia recently held that not only does the privilege extend to communications outside the courtroom, but that when litigation is pending, the communication need not be made to an interested party to qualify for protection.

The case is Chesapeake Trust v. Chesapeake Bay Enterprise, Inc. (In re Potomac Supply Corp.), decided December 31, 2013. The bankruptcy court had approved the debtor’s sale of its operations to an unrelated entity called Potomac Supply, LLC. Chesapeake Bay Enterprise (CBE), an entity who had also negotiated to buy the debtor’s operations, filed a motion to reconsider. Potomac Supply’s attorney sent an email to CBE’s attorney, asking for two exhibits that were missing from the reconsideration motion and making a reference to “all of the fraudulent financing proposals we received from your client…” CBE responded with a third-party complaint alleging that the email was defamatory. The third-party defendants moved to dismiss, relying on the absolute judicial privilege.
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