Articles Posted in Privileges

Virginia courts have long held that statements made in connection with judicial proceedings are entitled to absolute protection from defamation liability. To encourage truthfulness in litigation, Virginia public policy has extended an absolute privilege to statements made in a party’s pleadings, statements made during depositions, and to the testimony of witnesses at trial, provided the statements are generally relevant to the proceeding. But what protection, if any, should be afforded to pre-litigation statements, such as those contained in a demand letter to a prospective defendant?

Fairfax Circuit Court Judge R. Terrence Ney recently had the opportunity to consider whether a defamation claim could be based on allegedly defamatory statements made in a draft complaint forwarded to a small group of prospective defendants for purposes of exploring settlement opportunities prior to filing suit. The issue has not yet been decided by the Virginia Supreme Court, and is particularly interesting because the ethical rules that prohibit lawyers from making frivolous claims arguably do not apply to statements made outside a judicial proceeding. As a result, when drafting pre-litigation demand letters, many lawyers are far less assiduous in their fact-checking than they would be when filing an actual pleading with the court.

In a sense, the situation is similar to the question of whether to grant a privilege to a law firm’s statements in a press release announcing a lawsuit. If a complaint contains defamatory statements, they would not be actionable, even if made with knowledge of their falsity, due to the absolute privilege for statements made in judicial proceedings. A press release discussingFairfax_courthouse.jpg the lawsuit, however, is made outside the judicial proceeding, so it does not enjoy the same level of protection. Like a press release, a demand letter containing a draft complaint is very closely related to a judicial proceeding, or at least a contemplated one, but is not part of the proceeding itself.

In Virginia, as in other states, potentially defamatory statements made in official government proceedings receive protection from defamation claims. But some such statements get the benefit of absolute privilege, which means that even a knowingly false statement can’t be the basis of liability, while a larger category of statements receive only a qualified privilege. A qualified privilege gives the plaintiff an opportunity to show that the statement was made with malice — and to recover damages if he or she can prove that it was.

In Small v. Nogiec, the Supreme Court of Virginia examined remarks made by a county assistant administrator during a meeting of the Board of Supervisors of Isle of Wight County, and concluded that only a qualified privilege applies to the statements since they were not made in a legislative context. The court therefore unanimously upheld a jury verdict for the plaintiff.

In March 2007, Alan Nogiec retired from his job as the county’s director of Parks and Recreation. A few months before he retired, the county’s museum was damaged by heavy rains. In May 2007, Assistant County Administrator Patrick Small gave a report at a board meeting about efforts being undertaken to repair the museum. He said that IsleOfWight.jpgbefore the storm, information about the likelihood of flooding “had been suppressed” by the parks director and that this “borders on negligence in my opinion.”

Statements made by litigants and their attorneys in judicial proceedings cannot form the basis for a defamation action because they are protected by an absolute privilege. But what if an attorney, desirous of increased media exposure, takes copies of what might otherwise be considered slanderous statements and forwards them to the media? Do statements made in judicial proceedings lose their privileged status when republished to third parties? The answer, according to Norfolk judge Charles E. Poston, is that it depends on whether the attorney acted with malice.

In D’Alfio v. Theuer, a sea captain sued a lawyer who had filed at least one lawsuit against him on behalf of a client claiming employment discrimination. The lawsuit, the sea captain contended, contained numerous false and defamatory allegations, such as that the captain had ordered a seaman on his ship to be handcuffed in retaliation for speaking to a newspaper reporter and that he had threatened to put him in a straightjacket. What the captain found particularly troublesome, however, was that the seaman’s lawyer faxed a copy of the lawsuit to the media. He sued the lawyer for defamation.

The lawyer filed a “demurrer” (essentially a motion to dismiss the complaint) on the ground that the allegedly defamatory statements were protected by absolute or qualified privilege. Judge Poston overruled the demurrer and permitted the lawsuit to proceed.

Getting fired or laid off is hard enough without your boss trashing your reputation to your co-workers. I receive many calls from prospective clients interested in pursuing their former employer for defamation. Virginia employers, however, have a lot of leeway in what they can say about an employee being considered for termination before they will be liable for slander or libel. Virginia recognizes a qualified privilege against defamation claims where statements by an employer are made in connection with discharging that employee. To overcome that privilege, a plaintiff must prove common law malice by clear and convincing evidence.

Consider the recent Hanover County case of Koegler v. Green, decided on September 1, 2009. Carl Koegler sued his former employer, the Richmond-East Moose Lodge, as well as several of his former co-workers and employers, for defamation. The defendants demurred (i.e., moved to dismiss the case), citing the qualified privilege, and the court agreed with them and dismissed the case. The court emphasized that defamation claims against employers in Virginia will not be permitted to go forward absent strong evidence of malice.

The facts, according to the allegations in the complaint, were as follows: Mr. Koegler was employed by the Lodge in various positions over the years. An audit conducted by the international parent company resulted in Mr. Koegler’s termination in 2008. Some of Walkaway.jpghis former coworkers and managers talked to other employees about the firing. The acting Governor of the Lodge, for example, held a staff meeting and discussed what had been said in board meetings about Mr. Koegler and that Mr. Koegler had been suspended for stealing money. Another officer of the Lodge sent emails describing Mr Koegler as having “questionable character.” Mr. Koegler sued for defamation and harm to his reputation.

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