E-Alert Case Updates

Lawyers Entitled to Absolute Privilege for Defamation Claim

Norman v. Borison
No. 70 (Md. 2011)
by Kevin M. Cox, Associate
Semmes, Bowen & Semmes (www.semmes.com)

The Plaintiff was an equal-shares owner in the Maryland-registered limited liability company, Sussex Title (“Sussex”). Defendants, all lawyers, filed on behalf of their clients a proposed class action lawsuit against multiple defendants–companies, including Sussex, for the defendants’ alleged participation in “the single largest mortgage scam in Maryland’s history . . . .” Plaintiff filed suit against the Defendants claiming that they defamed him by republishing the pleadings, which contained allegedly defamatory statements, to the press and on the Internet, and by making verbal comments to the press about the lawsuit.

The defendants provided to the press a copy of a state court complaint regarding Plaintiff’s alleged actions in the mortgage scam, immediately prior to its being filed in the Circuit Court for Prince George’s County. The following day, the Baltimore Sun newspaper published an article about the lawsuit. The article identified the defendants, including Sussex. The article did not identify Plaintiff. Later, the complaint was voluntarily dismissed and re-filed in the United States District Court for the District of Maryland. Again, Plaintiff was not sued or named in the initial Federal court Complaint. The next day, the Baltimore Sun published an article about the federal litigation relating to the mortgage scam. The Federal court Complaint was amended on two occasions, and on the second occasion identified the Plaintiff by name, but did not name him as a Defendant.

Later, the Defendants created a website on which they posted links to three iterations of the Federal court Complaint. Defendants claimed that the website was intended to “give notice to the class about the lawsuit.” Thereafter, Plaintiff filed a Complaint for defamation in the Circuit Court for Montgomery County. The Complaint alleged that Defendants defamed Plaintiff by circulating copies of the State and Federal court Complaints to a newspaper reporter, the Internet, and by speaking to a reporter. The trial court dismissed Plaintiff’s Montgomery County Circuit Court Complaint. Plaintiff appealed to the Court of Special Appeals of Maryland, which concluded that “allegedly defamatory statements are [nonetheless] protected by absolute privilege.” Thus, the Court of Special Appeals affirmed the judgment of the Circuit Court for Montgomery County. The Court of Appeals of Maryland granted certiorari, to consider whether “the trial court erred in concluding that the absolute privilege extended to the republication of incomplete judicial proceedings to the press and on the Internet.”

Although an understated principle in Maryland case law, the application of an absolute privilege differs depending on whether the tortfeasor is a witness/party/judge, or an attorney of record in the case. For witnesses, parties, and judges, Maryland employs the “English” rule, which provides that the putative tortfeasor enjoys absolute immunity from civil liability, even if the statement is wholly unrelated to the underlying proceeding. For attorneys whose appearances are entered in a case, however, Maryland follows the majority “American” rule and requires that the defamatory statement have some rational relation to the matter at bar before unfurling the umbrella of absolute privilege. The privilege extends not only to statements made in the courtroom, but also to statements published in documents which have been filed in judicial proceedings.

Regarding the Defendants’ publication of the Complaints to the press, the Court stated that the Complaint was simply a third-party communication, made extrinsic to an imminent proceeding. Therefore, the Court evaluated whether the underlying proceeding satisfied the two-prong test of Gersh v. Ambrose, which it did manifestly. The Court analyzed whether the context of the challenged statements supported the conclusion that they were made during the course of the proceeding. Defendants, at worst, published their alleged defamatory statements in a draft version of their ultimate pleading, which they handed-over to the press on the same day the pleading was filed. By republishing or reporting on those pleadings, the press could be seen as a tool assisting in the notification to potential class members of the contemplated proceedings. Thus, the Court concluded that the Defendants issued those statements during the course of the putative class action.

Regarding the Defendants’ republication of the Federal Complaints on the Internet, at the time of the republication the Complaints were already public documents. Once a document is made public, Maryland law does not limit who, where, or the extent to which one may view that document. Thus, publication of the public Federal Court Complaints did not bar application of the absolute privilege.

Finally, regarding the Defendants’ verbal statements to the press, the Court concluded that an absolute privilege protected the Defendants because the contemplated proceeding in the courts met the two-part Gersh test. It appeared that the Defendants made the statements while promoting public awareness of their proposed class action claim and, thus, while participating in the course of the proceeding. Therefore, an absolute privilege applied to the Defendants’ challenged statements.