DENVER (Legal Newsline) - Lawyers who held a news conference to announce a proposed class action against a chain of nail salons can be sued for defamation over their claims workers were shortchanged on pay and forced to clean bathrooms for free, a Colorado appeals court ruled.
Overturning a trial court’s dismissal of the lawsuit on First Amendment and other grounds, the Colorado Court of Appeals Division A held that lawyers can be sued when they publicize their allegations more broadly than necessary to reach potential clients or class members.
BKP Inc. and its Ella Bliss Beauty Bar salons sued attorney Mari Newman and law firms
Kilmer Lane & Newman and Towards Justice after they held a May 2018 news conference to announce a class action lawsuit over pay and working conditions. At the conference and in a subsequent news release, the lawyers made several accusations including stating that “for no pay whatsoever,” the workers “have to clean the business, including the bathrooms, because (Ella Bliss) is simply too cheap to pay its workers the money they deserve.”
The lawyers also accused the company of only paying workers for the hours it felt like paying, refusing to pay overtime, withholding tips and shortchanging them on commissions.
“Oppression of vulnerable workers remains all too common, and this is a particularly audacious case,” the lawyers concluded, noting that such practices are “fairly common in industries that employ populations they think they can take advantage of, like women or immigrants.”
A trial judge dismissed the lawsuit for failure to state a claim, ruling that the statements were protected by the First Amendment as opinion or by the Noerr-Pennington doctrine, which covers some statements by lawyers in litigation. The lawyers also argued their statements were protected under the litigation privilege, which provides broad license to make statements, even before a lawsuit is filed, to further the client’s case.
The appeals court reversed those decisions on everything but several statements that could be construed as opinion, including that Ella Bliss was “simply too cheap to pay its workers the money they deserve.”
The other statements ran afoul of limits to the litigation privilege, however, the appeals court ruled. State courts have split on whether public statements are fully protected by the litigation privilege, the appeals court said, and few have considered the specific question of press releases in conjunction with a class action.
Some have held lawyers cross the line when they engage in “excessive publication,” like the firms that invited a reporter to a meeting for potential clients in a lawsuit against a funeral home. The Arizona Supreme Court said the lawyers could be liable for statements the reporter later published because they weren’t necessary for pursuing the case. But other courts have held that press conferences are protected as the most efficient way to reach potential class members.
In this case, the appeals court decided the attorneys weren’t protected because they didn’t need to publicize their claims to a wide audience since payroll records would identify the potential class members.
“There was no need to educate potential class members through the press when, to reiterate, the members of the class for the federal lawsuit would be `easy’ to identify,” the court ruled.
The appeals court also rejected arguments based upon the Noerr-Pennington doctrine, named after a pair of U.S. Supreme Court decisions that protect the right to speak freely when petitioning the government. That doctrine doesn’t provide the same level of protection against defamation claims by lawyers and doesn’t apply at all in this case, the court ruled.