Facts
- David Shulick, a Pennsylvania attorney, represented Stone Commercial Brokerage in a New York lawsuit and retained Jeffrey Cassuto, a New York attorney, as local counsel.
- Cassuto was later terminated as local counsel during the course of the Stone litigation.
- After the Stone matter moved toward settlement, a dispute arose between Shulick and Cassuto over Cassuto’s claimed unpaid fees.
- Cassuto emailed a group involved in the Stone case—including Shulick, the named plaintiff, Stone’s chief executive officer, and several other attorneys—stating that he was asserting an attorney’s lien on the settlement proceeds and demanding that he be listed as counsel on the settlement documents and on the settlement check.
- Cassuto’s email used a subject line referencing the settlement and the caption of the Stone lawsuit.
- Shulick responded by sending a “reply all” email to the same recipients, stating that Cassuto was apparently under the influence of a substance and asserting that substance abuse was the reason Cassuto had been terminated from the representation.
- Cassuto filed a defamation action (libel per se) against Shulick in the Southern District of New York, contending the email accused him of conduct incompatible with fitness to practice law.
- Shulick moved for summary judgment, arguing the email was absolutely privileged under New York’s judicial-proceedings privilege and, alternatively, that the statements were nonactionable opinion.
Issues
- Whether Shulick’s reply-all email, sent to parties and attorneys involved in settling the underlying case and addressing Cassuto’s fee-lien demand, was protected by New York’s absolute privilege for statements made in connection with judicial proceedings.
- Whether that absolute privilege can apply where the allegedly defamed lawyer was no longer counsel of record in the underlying litigation.
- Whether, independent of privilege, the challenged statements were nonactionable opinion under New York defamation law.
Decision
- The court granted Shulick’s motion for summary judgment and dismissed Cassuto’s complaint.
- The court held Shulick’s email was absolutely privileged because it was sent in connection with the underlying litigation’s settlement and an ongoing dispute about Cassuto’s claimed lien and fees, and it was circulated only among participants with a direct interest in that matter.
- The court also indicated that, even absent absolute privilege, the email’s wording and context supported treating the statements as protected opinion rather than actionable assertions of fact.
Legal Principles
- Under New York law, statements made by participants in a judicial proceeding (including attorneys) are absolutely privileged against defamation liability when the statements have some relation to the proceeding.
- The “some relation” requirement is applied broadly; the communication need not be admissible evidence or strictly relevant in an evidentiary sense so long as it is connected to the dispute being litigated or resolved.
- Absolute privilege is a complete defense to defamation and is not defeated by allegations of spite, bad faith, or knowledge of falsity.
- The privilege may extend beyond filings and courtroom remarks to out-of-court communications made in the course of, or in connection with, litigation, including settlement communications and attorney-fee disputes, when shared within the group of interested participants.
- Under New York defamation law, statements of opinion are not actionable where, in context, they would be understood as subjective judgment rather than verifiable fact, and where they do not imply undisclosed defamatory facts.
Conclusion
Because the alleged defamation arose in a reply-all email exchange about settlement distribution and Cassuto’s asserted lien for attorney’s fees in the underlying Stone litigation, and because the communication was directed to the parties and lawyers involved in that matter, the court held the email fell within New York’s absolute judicial-proceedings privilege, barring Cassuto’s libel-per-se claim and warranting summary judgment for Shulick.