Court Case Expands Protection against Defamation Suits

Article excerpt

A federal judge's decision could bode well for nonprofits facing defamation lawsuits.

The Alexandria-based Community Associations Institute and its president, Barbara Byrd, recently won such a lawsuit levied by a former employee when a federal court in Virginia ruled that associations can - in some circumstances - make damaging statements that tarnish a person's professional reputation.

"It may significantly broaden the protection for association executives from defamation liability in certain circumstances. . . . It extends the scope of the `qualified privilege' protection for defamatory statements to include statements made to certain association members who do not serve on the board and may not even be committee members," said Jeffrey S. Tenenbaum, an association lawyer with Galland, Kharasch & Garfinkle in Washington.

The $1.25 million lawsuit stemmed from a letter Ms. Byrd wrote to at least two dozen CAI members regarding last year's termination of Debra Kaufman, the CAI's former head of education. The U.S. District Court for the Eastern District of Virginia has sealed that letter. Ms. Byrd and other CAI workers discussed Ms. Kaufman's performance with others outside the association as well.

Qualified privilege basically allows a trade group to discuss sensitive issues with its board, as well as with a few others involved in running the association. Historically, it would not have covered a majority of the members who received the letter.

The ruling broadens those who fall under the qualified privilege by allowing the CAI to discuss Ms. Kaufman's firing with those who have an "interest" in the circumstances and to whom the association owes a "legal, moral or social duty to say the words," the court wrote.

"This is a wider net than has historically been cast in association cases involving the qualified privilege and should provide a fair degree of protection to association executives who choose to inform certain interested members why, for instance, a particular employee has been terminated," Mr. Tenenbaum said.

Ms. Kaufman has 30 days from the May 28 ruling to appeal the case, but she hasn't made that decision, said her attorney, Suzanne Tsintolas, who practices with the D.C. firm of Wright, Robinson, Osthimer & Tatum.

"It's a lot of money, a lot of time and a lot of emotional grief to go through one of these," said Bob Diamond, the CAI's immediate past president. "We wanted to go to the end to vindicate the association's reputation and [Ms. Byrd's] reputation."

The CAI works to educate professionals and consumers involved in homeowner or condominium associations.

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