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Friday, November 15, 2019

Litigation privilege doesn't protect whistleblower counsel, court holds in defamation suit against attorney

The Massachusetts Appeals Court Wednesday affirmed the absolute litigation privilege as a defense to defamation, but rejected its application to a lawyer purporting to represent a whistleblower.

The case arose from a development dispute.  The essence of the alleged defamation concerned a letter from attorney-defendant Edmands accusing defamation plaintiff Patriot of tax fraud and retaliation against the attorney's client for his whistleblowing to the IRS and SEC.  Patriot alleged that Edmands moreover widely republished the accusations on internet platforms, including a whistleblower blog.  The court accepted Patriot's contention that the accusations against it were false.

The litigation privilege is an absolute privilege, so cannot be vitiated by a speaker's common law malice (ill will) or actual malice (knowledge of falsity or reckless disregard of truth or falsity).  The litigation protects an attorney acting as an attorney, even before litigation is initiated, but does not protect attorneys "'in counselling and assisting their clients in business matters generally,'" the court quoted precedent.

Edmands failed to establish the basis for the privilege as an evidentiary matter.  No whistleblowing complaints were filed with federal regulators, and the purported client denied representation by Edmands to that end.

Even had whistleblowing occurred, the court was skeptical that the litigation privilege would attach, given that whistleblowing does not necessarily precipitate any administrative or judicial process.  That point is important for attorneys representing whistleblowers.  Attorneys who help client-whistleblowers amplify their accusations in mass media, in even the most up-and-up of circumstances, might expect to find themselves targeted by retaliatory corporate ire.  The attorney should therefore take extra care to interrogate the truth of the whistleblower's claims.

The court remanded to the Superior Court for further proceedings. The case is The Patriot Group, LLC v. Edmands, No. 17-P-1397 (Mass. App. Ct. Nov. 13, 2019).  Blake, Wendlandt,and McDonough, JJ., were on the unanimous panel, Justice McDonough writing.

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