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Absolute Privilege in Judicial Communications Does Not Extend to Parties’ Statements to the Media

On May 30, 2014, the Nevada Supreme Court issued its 4-3 opinion in Jacobs v. Adelson, et al., relative to the viability of a defamation action based upon a litigant’s statements to the media.

In Jacobs, a former executive of Las Vegas Sands Corporation (LVSC) had sued the company for wrongful termination. In the lawsuit, the plaintiff alleged, among other things, that the CEO of LVSC had demanded that the plaintiff engage in illegal activities, and that the plaintiff’s refusal to participate in such acts led to his eventual termination from the company.

After a hearing in the litigation, the Wall Street Journal (WSJ) published an online article that indicated that the LVSC CEO had provided a statement to the WSJ in which he allegedly said that the plaintiff’s claims were based on “outright lies and fabrications which seem to have their origins in delusion.” The plaintiff then amended his complaint to add a claim for defamation, based upon the CEO’s alleged statements to the WSJ. Specifically, the plaintiff alleged that the CEO’s statements “were false and defamatory, unprivileged, published maliciously and known to be false or in reckless disregard of the truth, and necessarily injurious to [his] professional reputation.”

The defendants filed a motion to dismiss the defamation claim, arguing that the statements were protected by absolute privilege relative to communications made in the course of judicial proceedings or, alternatively, were protected by a conditional privilege of reply. The district court agreed that the statements were absolutely privileged, and dismissed the defamation claim.

On appeal, and in an issue of first impression, the Nevada Supreme Court reversed the district court’s ruling. As the Court observed, generally, statements made during the course of judicial proceedings are considered absolutely privileged and cannot form the basis of a defamation claim. Such statements are protected because “the public interest in having people speak freely outweighs the risk that individuals will occasionally abuse the privilege by making false and malicious statements.” Accordingly, when an attorney or a non-attorney who is involved in litigation (or in good faith contemplates litigation) makes a statement that is related to such litigation, the absolute privilege applies, but only if the person to whom the statement is made is “significantly interested” in the proceeding.

However, the Nevada Supreme Court declined to extend that privilege to statements made to the media, because the media generally has no significant interest in the litigation. The Court held that the recipient’s “interest” in the litigation must turn on its legal relationship to the proceeding, not its interest as an observer. Thus, the Court concluded, “[a] nonparty recipient must have a relevant interest in, or a connection to, the outcome of the proceeding.” Because it found that the media held no more significant interest in the Jacobs litigation than the general public, the Court reversed the dismissal, and remanded the case to the district court for consideration of the parties’ remaining arguments.

Three justices dissented, expressing their concern that subjecting litigants who respond to allegations against them through media avenues – rather than through court filings and judicial arguments – to defamation claims improperly constrains their freedom of speech, based merely on the platform selected. The split decision suggests a possibility that the court could revisit the issue at an appropriate time in the future.