Commercial Division Blog
Litigation Privilege Bars Defamation Claim
On November 28, 2017, the First Department issued a decision in Peters v. Coutsodontis, 2017 NY Slip Op. 08308, holding that the litigation privilege barred a defamation claim, explaining:
Supreme Court properly concluded that the alleged defamatory statements were pertinent to the 2005 action and therefore absolutely protected by the judicial proceedings privilege. The statement in the complaint alleging that Peters fraudulently awarded himself an employment contract, was obviously related to the fraud allegations. The statement regarding the authenticity of the power of attorney related to Peters' ability to award himself the contract, and was thus pertinent to the allegation that Peters engaged in self-dealing. Public policy favors having litigants speak freely in judicial proceedings.
There are no facts alleged supporting a conclusion that the instant litigation is a sham action brought solely to defame, which would otherwise destroy the privilege. Coutsodontis prosecuted his claims in the 2005 action, opposed plaintiff's motion to dismiss the 2005 action, and appealed the order of dismissal. His failure to prevail on the 2005 action does not vitiate the privilege, since if the privilege existed only in cases that were ultimately sustained, none of the persons whose candor is protected by the rule — parties, counsel or witnesses — would feel free to express themselves.
(Internal quotations and citations omitted).
Civil litigation can involve claims that cause real reputational harm. As this decision shows, such claims usually are not actionable. We are experienced in advising clients and other counsel on what can be done in such a situation. Contact Schlam Stone & Dolan partner John Lundin at email@example.com if you or a client have questions about defamatory accusations made in the context of a civil lawsuit.