OPINION
{1} This appeal involves two overlapping claims in tort: defamation and prima facie tort. In granting summary judgment against Robert Hagebak on his defamation claim, the district court held, as a matter of first impression in New Mexico, that intracorporate communications among corporate employees and agents are not “published” to third parties, and therefore cannot be the basis for a claim in defamation. The district court also granted summary judgment against the claim in prima facie tort, because it was based on the same alleged conduct as the claim for defamation. We reverse summary judgment on both claims and remand for further proceedings.
BACKGROUND
{2} Hagebak is a psychologist who practiced in Texas for thirty years before moving to New Mexico in June 1995 to accept a position with Los Aamos Family Council (LAFC). During Hagebak’s employment at LAFC, Anita Stone was LAFC’s fiscal officer and Michael Duxler was the clinical director. In January 1996, Duxler terminated Hagebak’s employment with LAFC. During testimony at a corporate grievance hearing requested by Hagebak, Stone described Hagebak’s patient load, productivity, billing, and the fiscal impact of Hagebak’s performance. Stone’s testimony was largely critical of Hagebak. Following the hearing, the LAFC Board of Directors voted to deny Hagebak’s request for reinstatement.
{3} Hagebak filed suit against LAFC, Duxler, and Stone in January 1999, alleging in several different counts that he had been unjustly terminated and damaged in “an effort to cover up improprieties in [LAFC’s] billing and fiscal management.” This appeal concerns only Hagebak’s claims against Stone for defamation and prima facie tort. Hagebak contended that Stone made false statements about him at the grievance hearing and portrayed him as incompetent in his profession, adversely affecting his chances for reinstatement and damaging his professional reputation. The district court granted summary judgment against Hagebak on those claims and Hagebak appeals.
DISCUSSION
{4} Summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ciup v. Chevron U.S.A., Inc.,
Defamation: Intracorporate Communication Exception to Publication
{5} Defamation, which is defined in New Mexico as a wrongful and unprivileged injury to a person’s reputation, requires publication to be actionable. See UJI 13-1001 NMRA 2002 (defining defamation); UJI 13-1002(B) NMRA 2002 (listing elements of defamation action, including publication); see also Clough v. Adventist Health Sys., Inc.,
{6} A number of jurisdictions have recognized an intracorporate communication exception to the law of defamation, holding that communications among the employees, officers, or agents of a corporation are not “published,” because they do not extend beyond the corporation. See, e.g., Starr v. Pearle Vision, Inc.,
{7} In electing to adopt this exception, the district court ruled that each of Stone’s statements was “an intracorporate communication made by [Stone] within the scope of her duties as an employee of [LAFC]. Therefore, [Stone] did not publish defamatory statements concerning ... Hagebak. Since there was no publication, there is no cause of action for defamation.” The parties agree that Stone’s statements were intracorporate communications made by Stone within the course of her employment at LAFC to other employees and agents of the corporation. Thus, the only remaining question is whether the district court was correct in recognizing the exception under state law. We now turn to an analysis of that question.
{8} Courts are split over the intracorporate communication exception. See generally Jane M. Draper, Annotation, Defamation: Publication by Intracorporate Communication of Employee’s Evaluation,
{9} The intracorporate communication exception derives from agency theory. Sack, supra, § 2.5.3.1. A corporation can act only through its agents or employees. Under agency theory, employees acting on behalf of the corporation are “ ‘not third persons vis-avis the corporation.’ ” Hayes v. Wal-Mart Stores, Inc.,
{10} The exception finds some support in public policy. To make an informed decision, corporations need to communicate internally in a free and candid manner. The possibility of litigation may make employees less willing to come forward with truthful statements about sensitive corporate matters. A chilling effect on employee communication may impede a corporation’s ability to investigate important subjects like alleged employee misconduct. As a result, the corporation may be less likely to take necessary corrective action, even if in the best interests of the corporation, its shareholders, and the public. See, e.g., Lovelace,
{11} On the other hand, a number of jurisdictions have rejected the intracorporate communication exception. See, e.g., Jones v. Britt Airways, Inc.,
{12} Some of these jurisdictions acknowledge the need to protect corporations with regard to internal communications. They disagree, however, that corporations require what amounts to an absolute privilege barring all defamation lawsuits. They prefer, instead, a qualified privilege that precludes lawsuits if the defamatory statements are made in good faith. See, e.g., Jones,
{13} Qualified privilege applies when a statement is made in good faith during the discharge of a public or private duty. UJI 13-1012 NMRA 2002 (itemizing circumstances leading to abuse of qualified privilege, such as when the speaker knew or should have known the statement was false or published for an improper purpose or beyond what was reasonably necessary); Baker v. Bhajan,
{14} Courts that reject the intracorporate communication exception conclude that a qualified privilege adequately protects the corporation from unwarranted defamation liability, while at the same time affording some protection to vulnerable employee reputations. Kelly,
{15} This split among the authorities implies a policy choice. The absolute exception protects intracorporate communications from resulting litigation, but at a huge cost. False statements knowingly made, even malicious lies disseminated with devastating effect on one’s reputation, are all protected on an equal plane with statements innocently made in the best interest of the corporation. Courts that apply the intracorporate communication exception “will not inquire into the issue of malice.” Kennedy, 69 Wash. L.Rev., at 250 (stating that intracorporate immunity fails to adequately protect accused employees from reputation damage). Thus, one flaw in the intracorporate communication exception is that it can be overinelusive.
{16} The qualified privilege approach, on the other hand, recognizes that “damage to one’s reputation within a corporate community may be just as devastating as that effected by defamation spread to the outside.” Luttrell,
{17} In arguing for an absolute privilege, Stone attempts to draw an analogy between the intracorporate communication exception and the absolute privilege for statements made in judicial and legislative proceedings. Although we appreciate that the offending statements were made while Stone was testifying at a formal grievance hearing, the argument does not persuade us. Traditionally, New Mexico courts have been very circumspect in recognizing absolute privilege. As we noted in Baker, “[t]he application of an absolute privilege is confined to very few situations in which there is an obvious policy in favor of complete freedom of expression regardless of the defendant’s motives.”
{18} Absolute privileges are “based chiefly upon a recognition of the necessity that certain persons, because of their special position or status, should be as free as possible from fear that their actions in that position might have an adverse affect upon their own personal interests.” Restatement (Second) of Torts § 584 (comparing in introductory note that absolute privilege to conditional or qualified privilege). Corporate employees and agents do not enjoy such a “special position or status.”
{19} Unlike speech involving public figures, which implicates the interests of the public and raises important constitutional issues, intracorporate speech primarily concerns private interests in corporate efficiency. Compare Lovelace,
{20} The interest of the corporation in an absolute privilege is at least partially driven by economic factors, such as the cost of defending against defamation lawsuits or purchasing insurance to cover the cost of such lawsuits. See generally David Boies, The Chilling Effect of Libel Defamation Costs: The Problem and Possible Solution, 39 St. L.U. L.J. 1207 (1995) (discussing litigation costs in defending against defamation lawsuits). Although the lack of an absolute intracorporate communication exception may expose corporations to defamation liability, thereby affecting insurance rates and operating costs, that cost may properly be considered part of the price of accountability in a free and responsible society. “If effected in order to provide reasonable remedies for injuries we recognize for important policy reasons, the possibility of increased insurance costs furnishes no reasonable basis for denying injured persons a fair remedy.” Fernandez v. Walgreen Hastings Co.,
{21} We think it is of no small significance that the intracorporate communication exception has been rejected by the Restatement (Second) of Torts: “The communication within the scope of his employment by one agent to another agent of the same principal is a publication not only by the first agent but also by the principal and this is true whether the principal is an individual, a partnership or a corporation.” Restatement (Second) of Torts § 577 cmt. i (1977). Leading tort treatises take a similar view. See generally W. Page Keeton, Dan B. Dobbs, Robert E. Keeton & David G. Owen, Prosser and Keeton on the Law of Torts § 113, at 798 (5th ed.1984) (stating that there may be publication when a statement is made to a third party, even if the statement is made to the defendant’s own agent, employee or officer, or even where the defendant is a corporation); 2 Fowler V. Harper, Fleming James, Jr., & Oscar S. Gray, The Law of Torts § 5.15 n. 21, at 124 (2d ed.1986) (acknowledging contrary authority, but asserting that the “prevailing view” is that communication within a corporation does constitute publication); but see Sack, supra, § 2.5.3.2 (arguing that intracorporate communication exception to publication should be recognized when the subject of the communication is not an employee). See generally Draper,
{22} In balancing competing policy interests, we conclude that the Restatement (Second) of Tort position is the better view. See Schmitz v. Smentowski,
Prima Facie Tort
{23} The district court also granted summary judgment on the ground that Hagebak’s prima facie tort claim is “based upon the same alleged conduct which forms the basis of his defamation cause of action.” [RP 1161] Although Hagebak’s affidavit alleged that Stone also disseminated misleading information about him months before the grievance hearing, the court struck Hagebak’s affidavit for lack of personal knowledge. See Rule 1-056(E) NMRA 2002 (requiring that affidavits “shall be made on personal knowledge”). Hagebak does not appeal the district court’s order striking his affidavit and appears to concede that both the defamation and prima facie tort claims arise out of Stone’s statements at the grievance hearing. We must determine whether the district court erred in concluding that common facts, shared by Hagebak’s two claims, preclude a prima facie tort claim as a matter of law.
{24} New Mexico first recognized a cause of action for prima facie tort in Schmitz,
{25} Because not every intentionally caused harm gives rise to an actionable tort, we apply a balancing test to determine whether there is a cause of action under prima facie tort theory. See Beavers v. Johnson Controls World Servs., Inc.,
{26} New Mexico courts have also accepted the view that prima facie tort may be pleaded in the alternative. See Schmitz,
if at the close of the evidence, [a] plaintiffs proof is susceptible to submission under one of the accepted categories of tort, the action should be submitted to the jury on that cause and not under prima facie tort. Thus, double recovery may not be maintained, and the theory underlying prima facie tort — to provide [a] remedy for intentionally committed acts that do not fit within the contours of accepted torts-may be furthered, while remaining consistent with modern pleading practice.
Id. (citations omitted). While we agree that the shared facts that characterize Hagebak’s claims for defamation and prima facie tort might preclude submitting both claims to the jury, we are not convinced that this circumstance made summary judgment appropriate as a matter of law.
{27} Although prima facie tort is not to become a “ ‘catch-all’ alternative for every action that cannot stand on its own legs,” this Court has, under certain circumstances, been willing to recognize a prima facie tort claim, even though the conduct in question bore a resemblance to another cause of action. Beavers,
{28} Hagebak argues that although the factual bases of his claims overlap, these two claims are distinct. Hagebak contends that his prima facie tort claim “goes far beyond simple defamation} ][and] amounts to deliberate injury, in furtherance of an illegal scheme, with injurious intent and injurious result.” Essentially, Hagebak alleges that Stone was a co-conspirator in a massive fraud, and that she testified falsely against him as a means toward that end.
{29} Prima facie tort liability is determined through the application of a very fact-specific balancing process. See, e.g., Beavers,
CONCLUSION
{30} We reverse the entry of summary judgment against Hagebak and remand for further proceedings.
{31} IT IS SO ORDERED.