Attorney Sidney Powell speaks at a press conference on election results in Alpharetta, Georgia, U.S., December 2, 2020. REUTERS/Elijah Nouvelage

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(Reuters) - Litigators can talk an awful lot of smack in court appearances and filings without having to worry about defamation. But when they step outside of the courtroom, it’s a different story: Litigation is not a “license to lie.”

I’m borrowing that thoroughly delicious phrase from a brief by voting equipment maker U.S. Dominion Inc, opposing a motion by former Donald Trump campaign lawyer Sidney Powell to dismiss Dominion’s $1.3 billion defamation suit. As I’ll explain, Powell’s lawyers argued, among other things, that she could not be liable for her accusations of vote manipulation because she made those statements in the context of Trump campaign litigation (or prospective litigation) to overturn 2020 election results.

On Wednesday, U.S. District Judge Carl Nichols of Washington, D.C., rejected that argument (and Powell’s other defenses) in a decision allowing Dominion to move ahead with its case against Powell and other defendants.

“An attorneys out-of-court statements to the public can be actionable, even if those statements concern contemplated or ongoing litigation,” Nichols wrote. “Powell cannot shield herself from liability for her widely disseminated out-of-court statements by casting them as protected statements about in-court litigation.”

Nichols’ opinion summarized a veritable parade of television interviews and press conferences in which Powell slung vote manipulation accusations at Dominion. In the judges view, Powell clearly crossed the contextual line between protected litigation-related statements and unshielded commentary thats outside the bounds of litigation.

But his decision made me curious about where, exactly, that line is drawn. Powell’s brief, after all, cited U.S. Supreme Court precedent holding that you dont have to be in court to be engaged in litigation-related activity. The courts 1963 ruling in NAACP v. Button arose from Virginia’s allegation that the NAACP was illegally soliciting clients when it distributed desegregation petitions, among other activities. The Supreme Court ruled that the First Amendment protected the NAACP’s lawyers and organizers when they advised prospective litigants about their rights.

Powells lawyers contended that she, like the NAACP, was engaged in litigation and prospective litigation “of momentous significance and immense public interest.” According to them, her TV appearances and press conferences were intended to publicize the evidence and legal theories she was espousing (or planned to espouse) in the Trump campaigns litigation challenges to election results. So under the Supreme Court’s reasoning in Button, Powell’s lawyers insisted, she was engaged in litigation-related activities protected by lawyers First Amendment privilege in court proceedings.

“It would make no sense, and serve no public purpose, to give immunity for statements made during the course of litigation – which are themselves public – but burden lawyers with the threat of billion-dollar defamation verdicts when the same allegations are made at press conferences and news releases announcing and discussing the case,” wrote Powell lawyers Lawrence Joseph and Howard Kleinhendler.

Dominion’s counsel at Clare Locke and Susman Godfrey tore into that argument in their opposition brief. Powell, they said, was asking the court to manufacture “a propaganda exception” for wild accusation, defying precedent that has permitted defamation suits against lawyers for statements made outside of court proceedings.

The most compelling citation in Dominion’s brief, by my reading, is Seidl v. Greentree Mortgage, a 1998 Colorado federal case. (Powell argued that Colorado law applies in Dominion’s suit.) The underlying facts are incredibly complex, but all you need to know is that the mortgage company countersued a plaintiffs lawyer for defamation after she issued an online press release announcing her client’s lawsuit against Greentree. The lawyer contended that she was immune, pointing to language in the Restatement (Second) of Torts that says lawyers have an absolute privilege to publish defamatory statements before or during litigation as long as the statements have “some relation to the proceeding.”

The Greentree court disagreed. Press releases and statements to reporters, the judge said, aren’t entitled to absolute privilege because press conferences aren’t judicial proceedings. The ruling explained that the key issue in determining whether the litigation privilege applies is the lawyers audience: Were the allegedly defamatory statements addressed to people with a recognized interest in the case or to outsiders? Journalists and members of the public have no interest except as observers, the court said. Lawyers can therefore face defamation claims based on press releases. The decision quoted 1962 precedent: “An attorney who wishes to litigate his case in the press will do so at his own risk.”

It’s probably telling that Powell’s lawyers, who did not respond to my email query, didn’t offer a single example in their reply brief of a case in which a court ruled that a lawyer’s comments at a press conference or in a press release were protected under the litigation privilege. Powell’s brief did not attempt to argue that members of the press or public had a sufficiently specific interest in the Trump campaign’s litigation to extend Powell’s privilege to out-of-court statements.

In Wednesdays opinion, Nichols noted a 2006 case from the District of Columbia U.S. Circuit Court of Appeals that highlights the critical question of the audience for allegedly defamatory statements. The case, Messina v. Krakower, stemmed from a dispute between two business partners. A lawyer representing one of them sent a letter to the other, outlining his client’s grievances and warning that there would be litigation if the other partner didn’t agree to negotiate a split.

The letter’s recipient argued that the litigation privilege didn’t apply because the lawyer sent a draft of the letter to a third person, whom he had proposed as a mediator. The D.C. Circuit acknowledged that lawyers can lose litigation privilege immunity from defamation claims when they publish statements to outsiders but said the proposed mediator had an interest in the threatened litigation so the privilege remained intact.

Sidney Powell, on the other hand, told everyone listening to her press conferences and television interviews that Dominion manipulated the results of the 2020 election. And now she’ll have to prove that those statements were not defamatory.

Read more:

Trump allies including Giuliani lose bid to dismiss Dominion vote machine lawsuits

Ex-Trump lawyer Powell asks judge to toss voting machine companys $1.3 billion lawsuit

Voting machine company sues pro-Trump lawyer Sidney Powell over wild accusations

Opinions expressed here are those of the author. Reuters News, under the Trust Principles, is committed to integrity, independence and freedom from bias.

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin. Reach her at alison.frankel@thomsonreuters.com

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