Killmer Lane & Newman and Towards Justice filed a federal class action lawsuit alleging violations of the Fair Labor Standards Act and the Colorado Wage Claim Act. The same day, the attorneys held a press conference and issued a press release. At least two Denver-based television stations aired stories that included video clips from the press conference, and at least four Denver-based news organizations printed stories about the press conference, repeating one or more of the attorneys’ statements.  A year later, the employer sued the attorneys in Colorado State Court, asserting that the five aforementioned statements were defamatory and intentionally interfered with contractual relations.  The attorneys moved to dismiss, arguing, among other things, that the suit was barred by the litigation privilege.

The Court of Appeal observed that the attorneys’ purported purpose in speaking at the press conference and issuing the press release was to promote their class action and potentially reach service technicians who had worked for the employer, so that such technicians could join the suit as class members or additional class representatives, step forward as witnesses, or pursue the claims themselves outside of the class action. However, the class action complaint undermined this stated purpose because it alleged that “the exact size of the class will be easily ascertainable from the employer’s records” and “the contours of the class will be easily defined by reference to the payroll documents the employer was legally required to create and maintain.” Hence, the Court of Appeal reasoned, there was no need to communicate with the public and potential class members through the press. Accordingly, the litigation privilege did not apply.

The Colorado Supreme Court reversed.

Initially, the Court noted that permitting the defendant in a civil action to institute parallel litigation seeking to impose liability on a plaintiff’s lawyer could lead to adverse consequences, including impairing colorable claims by disrupting access to counsel, intimidating counsel with an almost certain retaliatory proceeding, distracting counsel by forcing counsel to defend a personal countersuit as well as the original lawsuit, and dampening the unobstructed presentation of claims.

The privilege, however, the Court noted, is not without limits. To fall within the privilege’s protection, the statements at issue must have some relation to the subject matter of the litigation. In addition, the statements must be made in furtherance of the objective of the litigation. And, although the litigation privilege may encompass statements that an attorney makes prior to trial such as conferences and other communications preliminary to the proceeding, it applies to such pre-litigation statements only if they have some relation to a proceeding that is actually contemplated in good faith. Thus, an attorney cannot make a defamatory statement and then cloak it in the privilege by subsequently filing a bad faith and meritless claim related to the otherwise tortious statement.

In this particular case, the Court found that, “in the context of class action litigation, ‘ascertainability’ has a specific meaning. It refers to the requirement that a proposed class be defined by objective criteria so that it is administratively feasible to ascertain whether or not a particular individual is a member of the class. Notably, many federal courts, including the District of Colorado in which the underlying class action lawsuit was filed, require that the class be ascertainable, even though ‘ascertainability’ is not specifically mandated by Rule 23 of the Federal Rules of Civil Procedure.  In light of this requirement, it is unsurprising that the attorneys alleged in the class action complaint that the class would be ascertainable, and we cannot agree that such an allegation removed the case from the protection that the litigation privilege affords for public statements like those at issue. If it did, then the efficacy of the privilege would be substantially diminished in class action litigation. We, however, perceive no basis for limiting the privilege in this way.

“Second, when, as here, the purpose of making the press statements was to promote the class action lawsuit and to contact unknown potential class members early in the litigation, it is immaterial whether the attorneys expected the class to be ascertainable from the employer’s business records. Although the division perceived no rational reason for the attorneys to use the press to promote the class action and reach absent class members given the allegation that the class would be easily ascertainable from the employer’s records and payroll documents, the division appears to have overlooked the fact that at the time the attorneys made the statements at issue, the employer’s records and payroll documents would not yet have been available to the attorneys. Indeed, the parties do not appear to dispute that such records are not typically available to class counsel until discovery, which occurs later in the litigation process. And as the attorneys argue, the eventual identification of class members by way of documents obtained during discovery is not a substitute for reaching absent class members and witnesses in the beginning stages of litigation when class counsel is shoring up their pleadings, locating additional class representatives, planning discovery, and crafting litigation strategy. Accordingly, early outreach through the press can benefit a class action regardless of whether it will ultimately be ‘easy’ to ascertain the class members from the employer’s records and documents that will be produced later during discovery.

“For these reasons, we conclude that the division erred in adopting and applying an ascertainability exception to defeat the protections of the litigation privilege in this case.”

 

Killmer Lane & Newman v. BKP, 535 P.3d 91 (Colo. 2023).