Privilege Not Unlimited in Scope
Absolute immunity does not, however, protect attorneys against claims alleging the pursuit of litigation for the unlawful, ulterior purpose of inflicting injury on the plaintiff and enriching themselves and their client, despite knowledge that their client’s claim lacked merit, the court cautioned. Such conduct constitutes the use of legal process in an improper manner or primarily to accomplish a purpose for which it was not designed. Absolute immunity also does not bar claims against attorneys for vexatious litigation or malicious prosecution.
Connecticut’s high court ultimately concluded that the appellate court correctly determined that attorneys are shielded by the litigation privilege from claims of fraud because fraudulent conduct by attorneys, while strongly discouraged (1) does not subvert the underlying purpose of a judicial proceeding, as does conduct constituting abuse of process and vexatious litigation, for which the privilege may not be invoked; (2) is similar in essential respects to defamatory statements, which are protected by the privilege; (3) may be adequately addressed by other available remedies; and (4) has been protected by the litigation privilege in federal courts, including the U.S. Supreme Court and the U.S. Court of Appeals for the Second Circuit for exactly the same reasons that defamatory statements are protected.
The dissent in the Connecticut Supreme Court held in Simms v. Seaman distinguished between fraud and defamation, stating that fraud is a far more serious offense. The dissenting opinion offered a novel solution to the problem, suggesting that the privilege, while strong, might be eliminated in cases where a court or disciplinary body has already sanctioned the lawyer for fraud or presented false evidence to the tribunal. “The majority’s concern about protecting lawyers from suit by opposing parties plainly has a great deal of appeal, allowing a litigant to sue the opposing party’s lawyer for inflicting emotional distress in the course of litigation, or saying things that the litigant deemed false would appear to run counter to that lawyer’s obligations to zealously advocate for his or her client,” opines John C. Martin, Chicago, cochair of the ABA Section of Litigation’s Ethics and Professionalism Committee. “Our adversary system would be hamstrung if lawyers had to worry about being sued merely because an opposing party’s feeling were hurt or the party did not agree with the substance of a lawyer’s arguments,” Martin adds. See Litigation Privilege Immunizes Lawyers from Fraud Actions
“That said, I am not sure the majority gives enough credit to the competing concerns. As the dissent [PDF] points out, the duty of zealous advocacy has its limits. A rule affording litigants unfettered rights to enforce ethical duties against opposing counsel by bringing fraud or other claims against attorneys has problems given the obvious concern that disappointed litigants might bring such claims, as a matter of course, after a decision that went against them,” explains Martin. “I do not know that the majority offers any suggestion as to why a privilege must attach even after a tribunal has determined that a lawyer did, in fact, violate his or her duties of candor to a court.” “The court was trying to pick its way through the thicket of what is in and what is out of bounds,” according to Bradford S. Babbitt, Hartford, a member of the Section of Litigation’s Content Management Committee, who has litigated the issue himself in Connecticut’s state courts and has seen how it can be used for good and ill. “We live in a society where the desire for vengeance is strong. The court of vexatious litigation is strong. The court must be careful about what is actionable as we do not want lawyers to be timid in their representation or to be looking over their shoulders when they act in good faith.”
While defamatory statements may be protected on free speech grounds, the extension of that protection to allegations of outright fraud designed to in effect steal from an insurance company would be breathtaking.” Virginia Sur. Co., Inc. v. Macedo, No. 08-5586, 2011 U.S. Dist. LEXIS 49077, at *17 (D.N.J. May 6, 2011) (quoting Moreira v. Peixoto, HNT-L-464-07, Unpub. Op. at 13 (Law. Div. Jun. 11, 2010) (denying motion to dismiss on litigation privilege and free speech grounds)); see also Brennan v. Palmieri, No. 07-4364, 2008 U.S. Dist. LEXIS 102152 (D.N.J. Dec. 12, 2008) (suggesting the privilege would be inapplicable against a properly pled fraud claim). Indeed, when a party engages in fraud, liability tends to expand. 7A C.J.S. Attorney & Client, § 142. 7 Am. Jur. 2d Attorneys at Law, § 233. See also Petrillo v. Bachenberg, 139 N.J. 472 (1995) (attorney owes no duty to third-parties save to refrain from fraud); Banco Popular, 184 N.J. at 161 (attorney liable for conspiracy to commit fraud).
Other rulings provide: The litigation privilege does not apply to illegitimate client representation. The litigation privilege is rooted in the objective of assuring counsel the freedom to zealously represent their client unhampered by the fear of civil recriminations from that zealous advocacy. See, e.g., Loigman, 185 N.J. at 579 (recounting the common law origins of the privilege in England and the United States). The privilege presumes statements made by counsel are spoken in the “course of judicial proceedings,” not in committing a fraud. Id. (citing Cutler v. Dixon, 76 Eng. Rep. 886, 887-88 (K.B. 1585)); Hodgson v. Scarlett, 117 Eng. Rep. 362, 363 (C.P. 1817); Hoar v. Wood, 44 Mass. (3 Met.) 193, 194 (1841).
- The court in Fellerman, supra, 99 N.J. at 498-507, and Nackson, supra, 114 N.J. at 531-
39, hold that trial courts have a responsibility to carefully balance the competing policies underlying the attorney-client privilege and the exceptions to that privilege, including the “crime or fraud” exception. [T]he attorney-client privilege does not protect communications concerning misconduct, criminal activity, or fraudulent acts in which the client is presently engaging.” In re Grand Jury Subpoena Duces Tecum Served upon Levy, 165 N.J. Super. 211, 216 (Law Div. 1978), aff’d o.b., 171 N.J. Super. 475 (App. Div. 1979). (3) the attorney-client privilege “is not absolute.” Fellerman v. Bradley, 99 N.J. 493, 502 (1985). “Like all evidentiary privileges, the attorney-client privilege . . . can conflict with other important policies of our judicial system.” Defendants do not argue, nor can they, that the privilege applies to spoliation conduct, thus leaving plaintiffs’ conduct based claims (i.e., fraudulent concealment) unchallenged by the litigation privilege. New Jersey Courts have in fact rejected the application of the privilege to spoliation conduct as opposed to statements. Scarpone v. Dionisio, No. 04-3140, 2007 U.S. Dist. LEXIS 19496 (D.N.J. Mar. 20, 2007) (“Moreover, the litigation privilege covers only communications; it does not protect [attorney defendant] from liability for his acts.”). Viviano v. CBS, 251 N.J. Super. 113, 127 (App. Div. 1991) (“Immunizing the willful destruction or concealment of evidence would not further the policy of encouraging testimonial candor.”); Eleuteri v. Eleuteri, No. 10-2002, 2011 U.S. Dist. LEXIS 32377, at *7 (D.N.J. Mar. 28, 2011).