THIS ISSUE

The Incredible Shrinking Litigation Privilege

Parties & Attorneys Still Have Protection For Statements Made Within Litigation - But Increasingly Few Places Elsewhere

Litigation

-By J. Malcolm DeVoy, Esq.

Andrew Cash

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Nevada’s absolute privilege for statements made by litigants and their attorneys in the course of a dispute has been winnowed down in recent years. For many high-stakes cases, an attorney’s job extends beyond the courtroom, and reaches into the media. Skilled litigators are called upon to not only deal with the court and opposing counsel, but the media as well. Historically, these statements were protected by Nevada’s absolute privilege for communication made during or in connection with litigation. Today, after a trio of decisions—the latest of which was decided by the Nevada Supreme Court in February of 2017—whether an attorney’s statements to the press would be privileged is far less certain.

The Litigation Privilege’s Recent History and Constriction by the Nevada Supreme Court.

In Shapiro v. Welt,1 the Nevada Supreme Court revisited the issue of the litigation privilege, which it addressed during 2014, and at length, in Jacobs v. Adelson2 and Greenberg Traurig LLP v. Frias Holding Company.3 In Jacobs, the Supreme Court maintained that communications made by an attorney or party in the “litigation setting,” and which are “in some way pertinent to the subject of the controversy” are still absolutely privileged. The Court, however, found that that statements made to someone who is not directly involved with the litigation is protected by the absolute privilege only if the recipient is “significantly interested” in the proceeding. Ultimately, the Supreme Court concluded that statements made to the Wall Street Journal regarding its coverage of ongoing litigation were not protected by the litigation privilege, and an action for defamation could proceed based upon that communication.

Later in 2014, the Supreme Court recognized yet another limitation to the litigation privilege. Faced with the question of whether an action for legal malpractice based on an attorney’s statements during a dispute was barred by the litigation privilege, the Supreme Court recognized a legal malpractice exception to the litigation privilege.4 This was an issue of first impression for the Supreme Court, which ultimately decided that extending the litigation privilege to claims of legal malpractice made for “unsound policy.”5 Whatever the rationale, the decision’s result further winnowed of the protections afforded by the litigation privilege.

The Shapiro Decision Adds New Uncertainty to the Litigation Privilege’s Application.

The Shapiro decision, like Jacobs, left the litigation privilege unchanged: All that is required for statements to be protected is that they are contemplated in good faith6 and related to the litigation. Shapiro, like Jacobs before it, focused on the second prong of this test, specifically when—and whether—statements can qualify as “related to” the litigation. Rather than draw a bright line test, or give guidance at all, the Shapiro decision cautioned that the decision about the privilege’s application is fact-specific and must be made on a case-by-case basis.7

Although the litigation privilege’s shield against liability for parties and attorneys for statements made during litigation remains intact, its scope of applicability has shrunk. The Shapiro decision echoes Jacobs, noting that statements regarding litigation must be made to someone significantly interested in the dispute to enjoy the litigation privilege; following Jacobs, this relationship presumably requires ties closer than an interested member of the media. The Nevada Supreme Court declined to offer further guidance as to what will qualify as having a “significant interest” in the litigation’s outcome, which potentially is to the detriment of both attorneys and their clients alike. The Shapiro decision’s guiding dicta, cautioning that the application of the privilege is a case-by-case matter, potentially chills the speech of attorneys and makes them targets for nuisance lawsuits intended to stymie their progress in other litigation.

While Nevada’s litigation privilege never provided talismanic immunity against parties and their lawyers being sued for their statements, recent decisions cast a shadow over attorneys’ ability to zealously represent their clients’ interests, particularly when they extend beyond the courtroom. Attorneys have never been fully immune from the consequences for their statements: The State Bar of Nevada can always discipline them for intemperate remarks, and no one is free from the social consequences of their statements or conduct. Lowering the bar to bringing lawsuits against attorneys and their clients for statements made to third parties during litigation, however, invites making them targets of collateral actions to obstruct, obfuscate, and obtain an advantage in the initial proceeding. As unlikely as this outcome is for less glamorous cases, the Shapiro decision’s affirmation of the litigation privilege’s fact-specific application adds a new dimension of intrigue and strategy to cases where millions are at stake—and inevitably covered by media—rendering negligible the incremental cost of an additional lawsuit to test the litigation privilege’s application.


J. Malcolm (“Jay”) DeVoy is the owner of DeVoy Law P.C. DeVoy focuses on providing representation in commercial disputes, serious personal matters, and advising medical professionals and practices about issues including HIPAA, the Stark Law, and the Anti-Kickback Statute.

References
1 133 Nev. Adv. Op. 6 (2017).
2 130 Nev. Adv. Op. 44, 325 P.3d 1282 (2014).
3 130 Nev. Adv. Op. 67, 331 P.3d 901 (2014).
4 130 Nev. Adv. Op. 67, 331 P.3d at 904.
5 Id.
6 Or, for matters not in pending litigation, made under serious consideration. Shapiro, 133 Nev. Adv. Op. 6 at 10.
7 Id.

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