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Texas Court Denies Summary Judgment in Case Accusing Attorney of Posting Defamatory Statements on Firm Website

Wednesday, March 7, 2012
Rebecca L. Tsai | Bloomberg Law Rhodes Colleges, Inc. v. Johnson, No. 10-cv-00031, 2012 BL 45156 (N.D. Tex. Feb. 27, 2012) Consumer rights attorneys Julie E. Johnson and Kay L. Van Wey were partners at the firm of Van Wey & Johnson, L.L.P., until 2009, when they created independent law firms. After the split, Johnson maintained the websites for her new firm and the old partnership, both of which contained information regarding educational fraud litigation. Both websites contained statements about the for-profit school Everest College, which was defending several lawsuits brought by students represented by Johnson. In January 2010, Everest sued Johnson, Van Wey, and their affiliated law firms for libel, among other claims, in the U.S. District Court for the Northern District of Texas. Both parties moved for summary judgment.

Attorney Immunity

Defendants filed a motion for summary judgment based on the doctrine of attorney immunity and the judicial proceedings privilege. Under the attorney immunity doctrine, "attorneys cannot be held civilly liable for damages to non-clients, under any theory of recovery, for actions taken in connection with representing a client." (Quoting Reagan Nat'l Adver. of Austin, Inc. v. Hazen, No. 03-05-00699-CV, 2008 BL 159008 (Tex. App. July 29, 2008).) Whether the doctrine applies depends on "whether the attorney's conduct was part of the discharge of his duties in representing a party in a lawsuit." (Quoting Taco Bell Corp. v. Cracken, 939 F. Supp. 528, 532 (N.D. Tex. 1996).) Moreover, the doctrine applies only to "an attorney's conduct in representing existing clients." Defendants argued that the doctrine applied because the statements on the websites represented "an attempt to identify witnesses who might also become clients and who had had unsatisfactory experiences with Everest." The Court rejected this argument, noting that defendants failed to "establish[] beyond peradventure that the allegedly defamatory statements were published in an attempt to obtain corroborating witnesses to support the cases of existing clients." As it pointed out, the websites included statements such as "Our attorneys will stand with you against educational fraud" and "Contact the [defendants'] law firm for a free consultation." These statements, the Court opined, "would enable a reasonable trier of fact to find that Johnson was using her website to attractnew clients, not to gather evidence for her existing cases."

Judicial Proceedings Privilege

The judicial proceedings privilege provides that "[c]ommunications in the due course of a judicial proceeding will not serve as the basis of a civil action for libel or slander, regardless of the negligence or malice with which they are made." (Quoting James v. Brown, 637 S.W.2d 914, 916 (Tex. 1982).) In Texas, the privilege applies, in relevant part, to "an attorney's defamatory statements made when attempting to obtain evidence for proposed or pending litigation." Similar to its analysis of the attorney immunity doctrine, the Court determined that defendants had not established beyond peradventure that a reasonable trier of fact could "only find that the allegedly defamatory statements were posted in an attempt to identify witnesses or gather evidence." Rather, a reasonable person could surmise that the statements were intended to identify prospective clients. The Court therefore denied defendants' motion for summary judgment with respect to the attorney immunity doctrine and judicial proceedings privilege. Nevertheless, the Court granted defendants' motion for summary judgment dismissing all claims against Van Wey and her new firm as they were not involved with the allegedly defamatory statements in any manner.

Truth as a Defense

Everest sought summary judgment with respect to the statement, "The school is not accredited," which appeared on Johnson's websites. Specifically, Everest argued that the statement was defamatory because it was untrue—the school was accredited by the Accrediting Council for Independent Colleges and Schools (ACICS). Defendants countered that Everest nonetheless "lacks meaningful accreditation" because it is not certified by the Southern Association of Colleges and Schools (SACS), and thus, "other mainstream universities will not accept transfer of Everest's credits." Siding with defendants, the Court found that the statement was ambiguous because a "reasonable person considering the websites in question as a whole could have understood that the statement [meant] that Everest was not accredited by an agency whose approval would enable Everest students to transfer their credits to mainstream universities." It therefore concluded that Everest had failed to meet its burden of establishing that the statement was unambiguous and denied its motion for summary judgment. DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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