On June 27, 2018, the Court of Appeals issued a decision in Stega v New York Downtown Hospital, which held that whether an absolute privilege applies to a communication made in the course of a quasi-judicial proceeding depends on the status of the subject of the communication.

In Stega, New York Downtown Hospital terminated the employment of plaintiff, a medical scientist, and removed her as chairperson of the hospital’s Institutional Review Board (IRB). Dr. Steven Friedman’s (the Acting Chief Medical Officer for Downtown Hospital) statements to the FDA during an investigation of Downtown Hospital’s IRBs about plaintiff, which discussed the reasons for the removal of plaintiff from her positions, were published in an Establishment Inspection Report (EIR) released by the FDA.

Plaintiff commenced a defamation action against Downtown Hospital, Friedman, and others, asserting that her professional reputation was damaged by the publication of defamatory statements about her made by Friedman to the FDA inspectors. Defendants filed a motion to dismiss. Supreme Court allowed plaintiff’s defamation claim against Downtown Hospital and Friedman to survive, concluding that the statements were not shielded by an absolute privilege because the FDA’s investigation had none of the indicia of a quasi-judicial proceeding. The Appellate Division reversed, concluding that the complained-of statements were made in a quasi-judicial context in which an absolute privilege protected them.

The Court of Appeals reversed again, holding that Friedman’s statements, as published in the EIR, were not protected by absolute privilege. Rather, the Court of Appeals held that qualified privilege, rather than absolute privilege, applies when the subject of the alleged defamation has no opportunity to rebut the allegedly defamatory statements.  As such, plaintiff’s action was remanded to the trial court, with the understanding that qualified privilege applies to the defamatory statements.  Plaintiff must still prove damages, but the claim has survived motion practice — for now.  Thanks to Meg Adamczak for her contribution to this post.  Please email Vincent Terrasi with any questions.