Bruno and Isaacson Secure Pre-Answer Dismissal of Libel Action

Jonathan Bruno and Deborah Isaacson moved to dismiss a libel per se claim against the firm’s clients, New York counsel for the co-defendant corporation.

Plaintiffs, who are also lawyers, represented the co-defendant corporation in a legal matter. The corporation agreed to pay plaintiffs for their legal work by issuing them shares of the corporation. Plaintiffs’ broker sold some of the shares and requested that the corporation’s stock transfer agent release the certificate for those shares.

Following the transaction, the co-defendants, who were local counsel to the corporation, sent a letter to plaintiffs advising of the corporation’s intent to rescind the issuance of the shares and the transaction issuing the shares to plaintiffs and demanding the return of the shares. The letter stated that plaintiffs failed to properly disclose conflicts of interest and failed to advise the corporation to obtain independent advice of counsel.  After plaintiffs received the letter, they emailed New York counsel, copying plaintiffs’ broker and the transfer agent, and asked New York counsel to confirm the transfer agent’s prior representation that the corporation could provide no legal basis to stop the processing of the transfer. Plaintiffs asked that the firm’s clients “reply all” in the response. They responded and attached a copy of local counsel’s letter previously sent to plaintiffs.

Plaintiffs alleged that the publication of the letter to the transfer agent and broker, which contained statements regarding plaintiffs’ purported conflicts of interest, constituted libel per se. Bruno and Isaacson successfully argued that plaintiffs failed to state a claim because the statements in the letter were non-actionable statements of opinion, were subject to a qualified privilege made in anticipation of litigation and the alleged defamatory statements in the letter related to plaintiffs’ single error in judgment, and the single-instance exception applied. Bruno and Isaacson also argued that plaintiffs authorized the publication of the letter.

The court agreed and dismissed the action in its entirety. The court held that the letter was a communication of pure opinion because it set forth and disclosed the facts upon which it was based, and as such it was not actionable. The court also held that the letter was not defamatory because it was prepared in the anticipation of litigation.