Prelitigation Communications Privileged

The Judicial Proceedings Privilege 
Post 5196

Judicial Proceeding Privilege Limits Litigation

In David Camp, and Laura Beth Waller v. Professional Employee Services, d/b/a Insurance Branch, and Brendan Cassity, CIVIL No. 24-3568 (RJL), United States District Court, District of Columbia (September 22, 2025) a defamation lawsuit filed by David Camp and Laura Beth Waller against Insurance Branch and Brendon Cassity alleging libel based on statements made in a letter accusing them of mishandling funds and demanding refunds and investigations.

The court examined whether the judicial proceedings privilege applieD to bar the defamation claims.

Case background:

Plaintiffs Camp and Waller, executives of NOSSCR and its Foundation, sued defendants Insurance Branch and Cassity over a letter alleging financial misconduct and demanding refunds and audits. The letter was sent after termination of a business agreement between the parties.

Content of the letter:

The letter accused plaintiffs of commingling funds, diverting payments, and misrepresenting the use of Insurance Branch's contributions, requesting refunds totaling $81,665 and $268,000, and demanding independent audits and investigations.

Defendants' motion to dismiss:

Defendants moved to dismiss the complaint under Rule 12(b)(6), arguing the judicial proceedings privilege bars the claims. The court may consider the letter as integral to the claim without converting the motion to summary judgment.

Judicial proceedings privilege test:

The privilege applies if (1) the statement was made in the course of or preliminary to a judicial proceeding, and (2) the statement relates to the underlying proceeding. This privilege protects prelitigation communications like demand letters to encourage dispute resolution without litigation.

Application of privilege to the letter:

The letter is considered a demand letter aimed at resolving disputes before litigation, implicitly threatening legal action without explicit deadlines or threats. It satisfies both prongs of the privilege test by raising the specter of litigation and relating to potential legal claims.

Legal standards for defamation:

To establish defamation plaintiffs must show a false defamatory statement published without privilege, fault amounting to at least negligence, and either legal actionability or special harm. The privilege negates the second element here.

ANALYSIS

To make out a prima facie case of defamation under District of Columbia law, a plaintiff must allege facts showing:

that the defendant made a false and defamatory statement concerning the plaintiff;
that the defendant published the statement without privilege to a third party;
that the defendant's fault in publishing the statement amounted to at least negligence; and
either that the statement is actionable as a matter of law irrespective of special harm, or that its publication caused the plaintiff special harm.

The District of Columbia has adopted the version of the judicial proceedings privilege set forth in § 586 of the Restatement (Second) of Torts, which provides: “An attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.”

The privilege applies not only in pending legal proceedings, but also to parties to potential litigation that has not yet commenced.

For the privilege to apply, two requirements must be satisfied:

the statement must have been made in the course of or preliminary to a judicial proceeding; and
the statement must be related in some way to the underlying proceeding
Court's ruling:

Because the letter falls within the judicial proceedings privilege, the court found plaintiffs' defamation claims were barred and denied their request to amend the complaint. The defendants' motion to dismiss was granted. Because the Letter was best viewed as a demand letter and an attempt to resolve the parties' differences without resorting to the judicial process, the judicial proceedings privilege applies and bars plaintiffs' claims.

ZALMA OPINION

Litigation, whether about torts or insurance disputes can be avoided by means of prelitigation communications the law has adopted the judicial proceedings privilege to allow parties to safely avoid litigation. The plaintiffs were offended by the attempt of the defendant to resolve a dispute short of litigation and defeated the privilege's purpose by suing for defamation. The court dismissed by applying the privilege.

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c) 2025 Barry Zalma & ClaimSchool, Inc.

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