842 S.E.2d 95
N.C. Ct. App.2020Background
- Cardinal Innovations is a statutorily created Local Management Entity / Managed Care Organization and a local political subdivision; Richard Topping became CEO on July 1, 2015.
- A State Auditor performance audit (May 2017) led DHHS to investigate Cardinal; the investigation criticized severance provisions and compensation.
- Topping and three other executives resigned in Nov. 2017 and received two years’ severance (allegedly ~$1.7M); DHHS removed the board and a new board retained Meyers/McGuireWoods in Jan. 2018 to investigate.
- Meyers presented an investigative report to the Board (Mar. 23, 2018); the Board authorized filing suit and a press conference. Cardinal filed suit at 9:00 a.m. on Mar. 26, 2018; Meyers publicly presented substantially the same allegations at a press conference at 10:30 a.m. that day.
- Topping sued Meyers and McGuireWoods (May 30, 2018) for libel/slander per se, negligence, negligent infliction of emotional distress, and punitive damages; defendants moved to dismiss under Rule 12(b)(6), asserting absolute privilege and that negligence claims improperly repackaged defamation.
- The trial court struck portions of the complaint (improper reliance on Rules of Professional Conduct) but otherwise denied dismissal; defendants filed an interlocutory appeal and a petition for certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether interlocutory appeal is proper (substantial right) | Topping: denial of 12(b)(6) does not implicate a substantial right warranting interlocutory review | Meyers: denial of absolute privilege and refusal to dismiss negligence claims deprive defendants of immunity from suit / First Amendment rights | Appeal dismissed as interlocutory; defendants failed to show a substantial right or good cause for certiorari |
| Whether Meyers (investigatory counsel) is absolutely privileged for statements related to the judicial proceeding | Topping: investigatory role does not make Meyers part of the judicial proceeding; privilege not applicable | Meyers: retained as Cardinal’s counsel/agent for litigation preparation; privilege should attach regardless of investigatory vs litigation label | Majority: trial court erred to the extent it distinguished investigatory vs litigation counsel, but this does not supply interlocutory jurisdiction; no substantive reversal on privilege granted |
| Whether press-conference statements are absolutely privileged or protected as quasi‑judicial/legislative communications | Topping: statements to media outside court are not "in the course of a judicial proceeding" and so are not absolutely privileged | Meyers: statements mirrored court filings and were made in conjunction with a pending lawsuit or as part of a quasi‑judicial/legislative process of a local subdivision; privilege should apply | Held: out‑of‑court press conference sufficiently departs from the judicial/quasi‑judicial occasion; absolute privilege does not extend to these public media statements |
| Whether negligence-based claims attacking speech improperly circumvent defamation standards and require interlocutory review | Topping: negligence claims are valid and not duplicative in a way that demands interlocutory review | Meyers: negligence claims attack the same speech and improperly evade First Amendment and defamation defenses (actual malice, truth); risk of chilling speech and inconsistent verdicts | Held: at Rule 12(b)(6) stage, misapplication of actual malice or duplication does not implicate a substantial right; interlocutory review denied; court expressed no opinion on the merits |
Key Cases Cited
- Bouligny, Inc. v. Steelworkers, 270 N.C. 160 (statement of absolute privilege and its narrow core)
- Boyce & Isley, PLLC v. Cooper, 169 N.C. App. 572 (distinguishing Rule 12 and summary judgment for First Amendment substantial‑right analysis)
- Burton v. NCNB, 85 N.C. App. 702 (definition of "made in due course of a judicial proceeding" and out‑of‑court relevance test)
- Boston v. Webb, 73 N.C. App. 457 (press release following internal investigation not entitled to absolute privilege)
- Andrews v. Elliot, 109 N.C. App. 271 (out‑of‑court publication to media not within judicial‑proceeding privilege)
- Angel v. Ward, 43 N.C. App. 288 (qualified vs absolute privilege in quasi‑judicial context where communication was requested as part of personnel process)