Questions of Fact Preclude Dismissal on Litigation Privilege Grounds of Claim Based on Defendant's Alleged Pre-Ligitation Defamatory Statement

On March 25, 2019, Justice Masley of the New York County Commercial Division issued a decision in Phramus, Inc. v. Metropolitan Opera Assn., Inc., 2019 NY Slip Op. 30834(U), holding that questions of fact precluded dismissal on litigation privilege grounds of claim based on a defendant's alleged pre-litigation defamatory statement, explaining:

The court agrees with defendants that the March 15, 2018 statement of the Met's attorney, made on the day that this action was commenced, is protected by the litigation privilege as a response to plaintiffs' commencement of this action that is clearly pertinent to the claims. The court does not agree, at this juncture, that the same privilege extends to and protects the March 12, 2018 statement made by the Met on its public website before this case was filed.

Statements made in connection with a proceeding before a court are privileged if material and pertinent to the questions involved. In light of the public and policy interests underpinning privilege, the privilege is liberally applied irrespective of an attorney's motive for making the challenged statement, notwithstanding the merits of the underlying action, and whether the challenged statement is made by the attorney or by a party. The determination of whether a statement made in the course of judicial proceedings is pertinent to the proceeding also constitutes a question of law for the court.

Given the interest in permitting free inquiry, the test for determining whether a statement is at all pertinent to the litigation is extremely liberal.

Thus, if, by any view or under any circumstances, a statement may be considered pertinent, it is pertinent. While New York courts have found that statements made in anticipation of litigation-such as cease and desist letters sent, ostensibly, to prevent unnecessary litigation-that privilege is not in every instance absolute. Other courts applying New York law have found that application of the privilege to statements may be precluded where there are issues of fact whether the remarks were made in good faith anticipation of litigation.

As in Lambe, and as the Court of Appeals cautioned in Front, Inc., the court declines to apply, as a matter of law, the litigation privilege to the Met's March 12, 2018 website statement at this early stage of the litigation as there are issues of fact as to the Met's good faith anticipation of litigation, the purpose of publishing those statements on its public website, and the pertinence of those statements to an action that was not yet filed. In the interest of prudence, to avoid overapplication of the litigation privilege, and in furtherance of the justice-seeking policy underpinning the litigation privilege itself, the court declines to apply the privilege to the March 12, 2018 statements at this time.

Accordingly, the sixth cause of action. is dismissed only insofar as it seeks relief for the March 15, 2018 statement of counsel.

(Internal quotations and citations omitted).

Civil litigation can involve claims that cause real reputational harm, but not every statement can be the subject of a defamation claim. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about whether statements about you or your business can be the basis for a claim for defamation.