by Dona Szak
Two recent decisions of the Texas Supreme Court address the scope of a lawyer’s potential liability to non-clients. The cases are Haynes & Boone, LLP v. NFTD, LLC, 2021 Tex. LEXIS 423 (May 21, 2021) and Landry’s, Inc. v. Animal Legal Def. Fund, 2021 Tex. LEXIS 414 (May 21, 2021). The Landry’s case is especially notable for its discussion of a lawyer’s potential liability for misstatements to the press or on social media.
In Haynes & Boone, the Court considered the scope of the attorney immunity doctrine. The doctrine generally immunizes a lawyer from a liability to an opposing litigant for the lawyer’s litigation conduct. Until the Texas Supreme Court’s decision in Haynes & Boone, it was uncertain whether the doctrine extended outside of the litigation context.
The Haynes & Boone suit arose from misstatements about a client’s financial condition that the firm’s lawyers allegedly made in the course of a transaction to sell the client’s business. The Texas Supreme Court concluded that attorney immunity applies in all adversarial contexts – including transactional matters – in which an attorney has a duty to zealously and loyally represent a client, when the claim against the attorney is based on the kind of conduct attorney immunity traditionally protects. Accordingly, “attorney immunity protects an attorney against a non-client’s claim when the claim is based on conduct that (1) constitutes the provision of ‘legal’ services involving the unique office, professional skill, training, and authority of an attorney, and (2) the attorney engages in to fulfill the attorney’s duties in representing the client within an adversarial context in which the client and the non-client do not share the same interests and therefore the non-client’s reliance on the attorney’s conduct is not justifiable.”
The attorney immunity doctrine is limited to the lawyer’s provision of legal services to a client. Attorney immunity will not protect a lawyer when he or she provides business services to a client, nor will the doctrine shield a lawyer who issues a press release or publicity on behalf of a client, because those are not traditional professional functions of a lawyer.
In Landry’s, a set of lawyers issued press releases and statements on social media regarding a contemplated lawsuit that they planned to file against Landry’s. The lawyers asserted that Landry’s violated the Endangered Species Act based on the company’s alleged mistreatment of tigers. The lawyers sent Landry’s and the U.S. Secretary of the Interior a pre-suit notice letter as required under the statute. The lawyers then issued statements to the press and on social media, along with links to the notice letter. Landry’s sued the lawyers for, among other things, defamation and business disparagement based on the lawyers’ publication of the allegations. The trial court granted the lawyer defendants’ motions to dismiss the case under the Texas Citizens Participation Act (TCPA). The court of appeals affirmed, but on different grounds. The appellate court assumed that Landry’s met its burden to establish the element of its claims under the TCPA, but nevertheless affirmed the dismissal based on attorney immunity or the judicial-proceedings privilege.
The Supreme Court determined that neither the attorney immunity doctrine nor the judicial-proceedings privilege applied to the lawyers’ alleged misstatements to the press and on social media. The Court noted that attorney immunity and the judicial-proceedings privilege are separate and distinct defenses that serve different purposes. “Attorney immunity is a comprehensive affirmative defense protecting attorneys from liability to non-clients,” but immunity does not protect a lawyer who issues a press statement because publicity statements “do not partake of the office, professional training, skill, and authority of an attorney.” Rather, “[a]nyone – including press agents . . . – can publicize a client’s allegations to the media, and they commonly do so without the protection of immunity.” The Court concluded that “many defenses to liability are available to attorneys who use the media to publicize their clients’ allegations, but the absolute defense of attorney immunity is not among them.”
The Court also declined to extend the judicial-proceedings privilege to the lawyers’ publicity statements, because the statements were not made in the course of a judicial or quasi-judicial proceeding. Under the judicial-proceedings privilege, “[c]ommunications in the 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.” The Court noted that “Texas law has been less than clear on whether the judicial-proceedings privilege applies to statements to the media or the public in which parties or their attorneys publicize defamatory allegations raised in a lawsuit. Some courts have extended the privilege to attorneys who publicize their clients’ defamatory allegations to the media, as long as the allegations arise from a judicial proceeding. Other courts have declined to extend the privilege that far. We find the latter view more persuasive.”
The Court explained that the judicial-proceedings privilege is intended to promote open and vigorous litigation of matters inside the courtroom. The requirement that a protected statement bear some relation to a judicial proceeding “cannot be stretched so far as to include publicity statements that merely address the same subject matter as the suit.” Although public knowledge of litigation is of value, that value is protected by the many defenses available in defamation law and the First Amendment. Insofar as the suit against Landry’s, the TCPA and other defenses could protect the lawyer-defendants from liability, but the judicial-proceedings privilege cannot.
The Landry’s case is noteworthy because it restricts the judicial-proceedings privilege to statements that are made in the proceeding itself. This is a departure from the more expansive way that other courts, including the Houston and Dallas courts of appeals, have applied the privilege.