The United States District Court for the Eastern District of New York recently issued an opinion that may frustrate employers’ efforts to minimize unfavorable media attention caused by lawsuits brought against them. In that case, the court held that the plaintiffs’ comments at a press conference concerning alleged sexual harassment they claimed to have been subjected to at their former employer were protected by New York Civil Rights Law § 74, which insulates a speaker from potential liability arising out of “a fair and true report of any judicial proceeding,” and that the defendants’ counterclaims for defamation should thus be dismissed. See D’Annunzio v. Ayken, Inc., No. 11‑CV‑3303, __ F. Supp. 2d __, 2012 WL 2906248 (E.D.N.Y. July 17, 2012). The court ruled that the plaintiffs’ remarks constituted a “fair and true report of [the] judicial proceeding” because their complaint served as “the basis for each of the contested statements” and as such they were privileged statements under section 74.

At the press conference held by the plaintiffs to announce the filing of their lawsuit, during which they distributed copies of the complaint to the media, the plaintiffs stated that “throughout” their employment they were “sexually harassed continually” and that they had “complained to management, but nothing was done to stop it.” Two different media outlets ran stories repeating the plaintiffs’ statements and discussing the filing of the complaint. Because the plaintiffs’ remarks did not “imply misconduct beyond that alleged” in the complaint and “accurately reflect[ed] the allegations” in the complaint, the court found that section 74 insulated the plaintiffs from the defendants’ defamation claims. Further, the court found no evidence that the plaintiffs commenced the lawsuit in bad faith for the purpose of disseminating defamatory statements about the defendants, which would have rendered section 74 inapplicable.

Although the court found that section 74 shielded the plaintiffs’ comments, it rejected their claim that their comments were protected by the absolute privilege under New York common law accorded to communications made in the course of judicial proceedings. The court ruled that out-of-court statements and actions such as the plaintiffs’ distribution of the complaint are not covered by this absolute privilege. Id. at 6-7.  

On the one hand, the decision in D’Annuzio may encourage plaintiffs’ attorneys to plead broad allegations in complaints in order to allow them to later claim that any out-of-court statements are based on the contents of the complaint and thus privileged under New York Civil Rights Law § 74. On the other hand, however, by barring the application of the absolute privilege to out-of-court statements and by refusing to extend the protection of section 74 to statements implying misconduct beyond that claimed in the complaint, the court left the door open for the possibility of successful defamation claims based on such remarks.