Klayman v. Judicial Watch, Inc.
267 F. Supp. 3d 81
| D.D.C. | 2017Background
- Plaintiff Larry Klayman separated from Judicial Watch in 2003 and signed a severance agreement with a non‑disparagement clause covering officers and directors.
- Before the split Klayman had represented Jose Basulto and obtained a sizable judgment against Cuba (the "Cuba Judgment").
- In late November 2016 Basulto initially retained Klayman to enforce the Cuba Judgment; shortly thereafter Basulto informed Klayman that Judicial Watch would instead pursue enforcement.
- Klayman alleges Basulto told him that Judicial Watch had said Klayman lacked the resources to enforce the judgment, and that this statement induced Basulto to switch representation.
- Klayman sued Judicial Watch for breach of the severance agreement (non‑disparagement), defamation, and tortious interference with prospective economic advantage. Judicial Watch moved to dismiss under Rule 12(b)(6), arguing immunity/privileges and failure to state claims.
- The Court denied the motion to dismiss, finding privilege defenses premature on the pleadings and that Klayman plausibly alleged breach, defamation, and interference claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial proceedings privilege (absolute immunity for statements related to litigation) | Statement was not made in course of Judicial Watch representing Basulto; privilege therefore inapplicable | Statement related to Judicial Watch’s collection representation for Basulto and is absolutely privileged | Denied on pleadings: applicability of privilege is a factual issue; defendant must prove it later |
| Common‑interest/qualified privilege | No attorney‑client relationship alleged at time of statement so privilege does not apply | Statement protected by common‑interest privilege as communications to protect client interests | Denied on pleadings: factual dispute about relationship precludes dismissal |
| Breach of contract (non‑disparagement clause) | Statement by board member acting with officers falls within the agreement’s prohibition on disparagement by officers/directors | Statement not made by the named officers and thus not within clause | Sufficiently pleaded: allegations that director acted in concert with officers make breach plausible |
| Defamation | Statement falsely disparaged Klayman’s professional competence and caused loss of client; statement refers to Klayman given context | Statement was either protected by privilege or not defamatory / did not refer to Klayman | Sufficiently pleaded: statement capable of defamatory meaning and plausibly referred to Klayman; merits for jury/resolution later |
| Tortious interference with prospective economic advantage | Judicial Watch intentionally procured the loss of Klayman’s opportunity to represent Basulto through the statement | Claim fails because plaintiff did not plead a breached contract (defendant misframes claim) | Sufficiently pleaded: interference with prospective relations does not require an existing contract; allegations that statement caused loss of business are adequate |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must plausibly state a claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely conceivable)
- Finkelstein, Thompson & Loughran v. Hemispherx Biopharma, Inc., 774 A.2d 332 (D.C. 2001) (adopting Restatement formulation of judicial proceedings privilege)
- Messina v. Krakower, 439 F.3d 755 (D.C. Cir. 2006) (discussing scope of absolute privilege for attorneys)
- Moss v. Stockard, 580 A.2d 1011 (D.C. 1990) (defamation and qualified/common‑interest privilege standards)
- Casco Marina Dev., LLC v. District of Columbia Redevelopment Land Agency, 834 A.2d 77 (D.C. 2003) (distinguishing interference with contract from interference with prospective advantage)
- Teltschik v. Williams & Jensen, PLLC, 683 F. Supp. 2d 33 (D.D.C. 2010) (elements of tortious interference claims under D.C. law)