Litigation Privilege Bars Lawsuit as to Alleged Defamatory Statement Made by Litigant

The plaintiff (an attorney) sued his former client, defendant Shai Harmelech, to collect on an unpaid legal bill. In the course of that lawsuit, the trial judge asked the parties if they would be interested in participating in a mediation to resolve the dispute. In response to the court’s request, Harmelech sent an email to his lawyers, calling plaintiff some rather “choice” names and rejected the offer to participate in mediation. He accidentally copied the plaintiff on the email. The issue in MacNaughton v. Harmelech, 2018 N.J. Super. Unpub. LEXIS 127 (App. Div. Jan. 19, 2018) was whether that email sent by defendant to his lawyers could be subject to a defamation action or whether his statement was protected by the litigation privilege.

Plaintiff W. James MacNaughton, a New Jersey attorney, had represented defendant in a lawsuit in Chicago. Harmelech disputed the plaintiff’s legal bill and, ultimately, MacNaughton sued defendant to collect his fee.

The trial judge in the collection lawsuit asked whether the parties were interested in pursuing mediation. At the same time, the defendant learned that the plaintiff was apparently reaching out to his other creditors to force him into involuntary bankruptcy.

Upon learning of plaintiff’s actions, Harmelech sent an email to his attorneys asking that they not agree to mediation and referenced plaintiff’s actions in trying to force him into bankruptcy. In his email, he said to his lawyers that plaintiff is “[not] to be trusted,” he was trying to put him in involuntary bankruptcy, and “[a]s you can see he is a liar thief and no good drunk.”

Unfortunately, Harmelech also copied plaintiff on this email – which resulted in this defamation action. The defendant tried to obtain a dismissal of the defamation action through summary judgment. While that motion was denied, the court held a hearing under Rule of Evidence 104 to rule on the defendant’s claim that the litigation privilege would protect his statement made to his attorneys.

Under New Jersey law, there is a litigation privilege that is an absolute privilege to any communication: “(1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” Hawkins v. Harris, 141 N.J. 207 (1995).

After holding the Rule 104 hearing and hearing the testimony of the parties, the trial court judge concluded that the statement was protected by the absolute privilege and dismissed the complaint.

The plaintiff appealed, contending that not all of the prongs of the Hawkins test were met. Hence, he argued that the statements made by the defendant should not be protected by the litigation privilege and that he should be able to sue the defendant for defamation. Specifically, he claimed that the third and fourth prongs of the test were not met and that the litigation privilege should not extend to statements in which “there are no safeguards for abuse.”

The Appellate Division, rejected these arguments and affirmed the trial court’s decision, dismissing the case. The Court noted that it has been the long-standing law of this State to protect statements made in judicial or quasi-judicial proceeds that have some relation to the case. This privilege is based upon the public policy that persons should be permitted “to speak and write freely without the restraint of fear of an ensuing defamation action.” Further, the Court stated that the privilege extends beyond statements made in the courtroom during a trial, extends to “all statements in connection with the judicial proceeding,” and “certainly protects a litigant engaged in a private conference with an attorney regarding litigation.”

The Appellate Division found that this email “falls squarely” within those statements protected by the litigation privilege. Whether defendant had a genuine belief in the alleged defamatory statement made was irrelevant. The Court ruled that “[a]ll that matters is that he made the statement to his lawyers in the course of directing them in the conduct of the case.”

Even though the statement was made in a private conversation, the Appellate Division also rejected the argument that there would be no safeguard for abuse. A court retains judicial oversight based upon its “inherent power to sanction a party for behavior that is vexatious, burdensome and harassing.”

Tags: defamation, Litigation Privilege