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Qualified privilege as a defense in litigation

Qualified privilege as a defense in litigation
Werner, et al, v Costella, NYS Supreme Court (Justice Solomon) [not officially reported]

Under a legal concept called ?qualified privilege,? public employees are immune from liability for acts or omissions committed while acting properly in the execution of their official duties. Sometimes an individual will claim a ?qualified privilege? if sued for libel or slander. In the public service this type of case often arises following a disciplinary action. Courts have held that communications between public officials in connection with disciplinary investigations or the processing of a disciplinary action is protected by a ?qualified privilege.? In the Werner case, Justice Solomon sets out the basic rules followed in such situations.

Costella, an associate attorney employed by Werner, Zaroff, Slotnick, Stern and Askensky, told another attorney, Mark Novick, who was practicing in the same area of law, that the Werner, Zaroff firm ?had been indicted by either State or Federal authorities for crimes involving fraud, deceit and/or larceny.?

The firm sued Costella. Costella asked for summary judgment dismissing the action, claiming a qualified immunity based on the ?common interest doctrine?* and, in addition, argued that the firm failed to show any injury resulted from his statements.

Justice Solomon noted that under New York law, ?a qualified privilege arises when a person makes a bona fide communication upon a subject in which he or she has an interest, or a legal, moral or societal duty to speak, and the communication is made to a person having a corresponding interest or duty.? Once the privilege is established, the offended party has the burden of demonstrating that the communication was not made in good faith.

Here the court held that Costella failed to show that he enjoyed any ?common interest privilege? regarding his statements. Clearly Novick was not a member of the firm and thus Costella could not satisfy the ?organization? test. Further, Costella?s statement was deemed ?slanderous per se since it affected the law firm in its profession and the law presumes that damages will result and thus need not be proven. Justice Solomon denied Costella?s motion for summary judgment.

The potential importance of having a ?qualified privilege? is demonstrated by a case that is currently pending, Fry v McCall, [USDC, SDNY]. Federal district court judge John G. Koeltl, in an interim ruling, decided that Patricia Fry was not entitled to damages from the State Comptroller or his two deputies in their ?personal capacity.?

Fry alleged that she had been unlawfully terminated because she complained that her office?s reports on New York City?s financial situation were subjected to a politically motivated ?whitewash.? Judge Koeltl ruled that the three officials were shielded by a qualified immunity from personal liability in the $2.5 million lawsuit brought by Fry.

* The ?common interest qualified privilege? generally applies in situations where ?members of an organization discuss among themselves matters of concern to the organization.?

Full post as published by New York Public Personnel Law on March 23, 2010 (boomark / email).