Comments on Recent Cases: February 2021
Part of my work involves reading court decisions to keep abreast of how judges decide the types of cases I handle. Below, I share some thoughts on recent decisions.
New York Federal Court Dismisses Most Defamation Claims Against Journalist
Defendants in litigation are naturally upset when news media publicize negative allegations against them. Some even sue newspapers for defamation, hoping to recover money to compensate them for the losses they suffered because of the dissemination of false claims. But these claims may be hard to win.
For example, an independent journalist and a newspaper published articles about a lawyer who was accused by the government of failing to prevent his client from violating securities laws. The lawyer sued the journalist and the newspaper, claiming his reputation was ruined. The Manhattan federal court recently dismissed most of the defamation claims because most of the published statements stated only what the government had alleged, not what the journalists reported to be true. But it did not dismiss a defamation claim against the independent journalist, who wrote that the plaintiff was part of a “crew of bad actors,” because the government did not actually allege that.
This case illustrates how reporters need to be careful in how they report allegations, but also the technical nature of defamation claims.
Only Evidence That Meets Technical Rules May Be Used to Obtaining a Judgment Without Trial in New York Courts
Parties to a litigation often argue that no trial is necessary for the court to enter a judgment in their favor. They do so by submitting evidence that they should win and arguing that their adversary has no contrary evidence. Although the rules of evidence are somewhat relaxed in these motions, movants still need to confirm to some minimum rules.
For example, a Manhattan appellate court recently reversed a summary judgment that the trial court had granted to some defendants. The defendants submitted weather reports to prove that they had no obligation to clear ice from their driveway because the storm that caused it was ongoing. But because the reports were not made by someone who had formally sworn to tell the truth, they were insufficient evidence to support a judgment.
Cases like this one reveal the importance of ensuring that the evidence a party submits to court conforms to the applicable rules.
Litigants Should Consider the Effect of Non-Disclosure Agreements, Even When Litigating Claims
People frequently sign non-disclosure agreements, promising to keep certain information confidential. Those agreements may not, however, prohibit a signatory from using that confidential information in a lawsuit. But to do so, the signatory may have to ask a judge’s permission to disclose the information privately to the court.
A recent decision by a Manhattan appellate court reflects what happens when a signatory does not follow the proper protocol. In that case, a former employee included confidential information in the complaint of a lawsuit. He claimed that he was allowed to do so because of the “litigation privilege,” which protects plaintiffs from defamation claims arising from their allegations in court. The appellate court held that the employer may have a breach of contract claim against the former employee and that the “litigation privilege” did not apply because the employer did not allege defamation.
Cases like this one should caution signatories to confidentiality agreements about the need to respect those agreements when filing complaints.
Lenders May Keep Accidental Payment of $900 Million
In New York, if someone sends money by accident, they may be entitled to get it back. But there is an exception called the “discharge-for-value” defense. It applies when the money is (1) sent to someone to whom the money is owed, (2) the recipient did not lie to get the money, and (3) the recipient did not know about the mistake.
This principle was applied in a recent case where Citibank accidentally wired almost a billion dollars to lenders on loans it administered. It demanded the money back, but the Manhattan federal court decided after a trial that the lenders could keep the money because they were entitled to treat the accident as a pre-payment on their loan.
This case illustrates why borrowers should be very careful when wiring money to lenders, and may help clarify the rules for recovering accidental payments.