New Albany Main Street Properties, LLC D/B/A Port of Louisville v. R. Wayne Stratton, Cpa, 677 S.W.3d 345

Port of Louisville leased a facility from the Riverport Authority; Riverport sued to terminate the lease and the court ordered the dispute to arbitration while retaining jurisdiction.
Riverport submitted expert reports and testimony by CPA R. Wayne Stratton asserting Port underreported income by ~$6M, a ground for lease breach.
Port’s own expert showed Stratton mischaracterized checks as income; Riverport withdrew Stratton’s reports/testimony on that ground.
The arbitrator found no breach; the trial court confirmed the award.
Port then sued Stratton for defamation and professional malfeasance; Stratton moved to dismiss asserting the judicial statements privilege and lack of any duty to Port.
The trial court and Court of Appeals dismissed; the Kentucky Supreme Court affirmed dismissal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the judicial statements privilege bars Port's defamation claim	Privilege shouldn't apply to these statements; they caused reputational harm	Statements were made in a court-ordered arbitration and are privileged	Privilege applies; dismissal proper
Whether further discovery is required to test extrajudicial communications	Discovery might reveal defamatory statements made outside arbitration	Complaint alleges only in-arbitration statements; no fishing expedition warranted	No further discovery required; complaint fails as pled
Whether expert witnesses should have only a qualified privilege	Paid experts should be subject to qualified privilege to deter biased testimony	Experts' statements in judicial proceedings are covered by absolute privilege	No separate rule for experts; absolute privilege applies in this court-ordered arbitration
Whether Stratton owed Port a duty (professional malfeasance)	Stratton owed a duty of ordinary care; foreseeability supports a negligence claim	No legally cognizable relationship; no duty owed to opposing party or its counsel’s expert	No duty owed to opposing party; professional-malfeasance claim fails

Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019) (recognizes absolute privilege for statements made in judicial proceedings)
Morgan & Pottinger, Attys., P.S.C. v. Botts, 348 S.W.3d 599 (Ky. 2011) (two-part test: statements must be preliminary/in-course-of judicial proceeding and material/pertinent)
General Elec. Co. v. Sargent & Lundy, 916 F.2d 1119 (6th Cir. 1990) (articulates scope test for litigation privilege citing Restatement)
Schmitt v. Mann, 163 S.W.2d 281 (Ky. 1942) (policy rationale endorsing privilege to promote administration of justice)
Seiller Waterman, LLC v. RLB Props., Ltd., 610 S.W.3d 188 (Ky. 2020) (no duty of care owed by opposing counsel to adverse party)
Toler v. Sud-Chemie, Inc., 458 S.W.3d 276 (Ky. 2014) (explains balance between free communication in litigation and private reputational interests)