Applying the Absolute Privilege to Defamation, Afforded in Judicial Proceedings, to Arbitration: A Logical Next Step for Ohio

• Author: Zachary B. Pyers - Daniel Bey
• Pages: 635-651

APPLYING THE ABSOLUTE PRIVILEGE TO DEFAMATION, AFFORDED IN JUDICIAL PROCEEDINGS, TO ARBITRATION: A LOGICAL NEXT STEP FOR OHIO ZACHARY B. PYERS, J.D., LL.M. AND DANIEL BEY, J.D., LL.M. * I. INTRODUCTION A. Issue/Thesis While the absolute privilege to defamation is indisputably recognized during judicial proceedings, its role during arbitration proceedings is anything but settled. This Article will examine whether the trend toward extending the privilege to statements made in connection with arbitration proceedings should be adopted in Ohio. B. Brief Discussion Arbitration is favored under Ohio law as an alternative method of dispute resolution that helps to ease the burden on courts while allowing potential litigants to fairly resolve disputes. 1 Although Ohio law has never specifically applied the absolute privilege to defamation that is afforded in judicial proceedings to arbitration proceedings, an examination of other jurisdictions makes it clear that a strong argument can be made for its extension to those proceedings. 2 This Article will first explore how absolute privilege in arbitration proceedings has been adopted in many states, including California, Maryland, South Carolina, and the District of Columbia, which are extensively covered in this Article. 3 Then, an argument will be made that the absolute privilege to defamation that is afforded to judicial proceedings should also be extended to arbitration proceedings under Ohio law. 4 Copyright © 2017, Zachary Pyers & Daniel Bey. 1 “[A]rbitration is favored because it provides the parties thereto with a relatively expeditious and economical means of resolving a dispute.” Schaefer v. Allstate Ins. Co., 63 Ohio St. 3d 708, 712, 590 N.E.2d 1242 (1992) (quoting Mahoning Cty. Bd. of Mental Retardation & Dev. Disabilities v. Mahoning Cty. TMR Educ. Ass’n., 22 Ohio St. 3d 80, 83, 488 N.E.2d 872 (1986)). 2 See infra Part II. 3 See infra Sections II.B– II.E. 4 See infra Part III. 636 CAPITAL UNIVERSITY LAW REVIEW [45:635 II. THE TREATMENT OF THE ABSOLUTE PRIVILEGE TO DEFAMATION IN OHIO AND ITS APPLICATION TO ARBITRATION PROCEEDINGS IN CALIFORNIA, MARYLAND, SOUTH CAROLINA, AND THE DISTRICT OF COLUMBIA The cases explored throughout this Article demonstrate how several states have extended the absolute privilege to defamation in arbitration proceedings. While these cases do not create an absolute privilege, they establish the framework and policy that Ohio should adopt when expanding its own arbitration privilege. A. Treatment of the Absolute Privilege to Defamation Under Ohio Law As recognized by Ohio’s Seventh District Court of Appeals, “the basic definition of defamation consists of a ‘false publication, made with some degree of fault, reflecting injuriously on a person’s reputation or exposing a person to public hatred, contempt, ridicule, shame, or disgrace, or affecting a person adversely in his or her trade, business or profession.’” 5 Ohio law recognizes both absolute and qualified privileges for certain statements, and these privileges constitute a defense to a defamation claim when the statements are made in connection with a judicial proceeding. 6 The rule regarding absolute privilege in judicial proceedings can be stated that “a statement made in a judicial proceeding enjoys an absolute privilege against a defamation action as long as the allegedly defamatory statement is reasonably related to the proceeding in which it appears.” 7 Notably, the privilege applies even if the speech is false or malicious. 8 According to Hoisington v. Jones , a Tenth District Court of Appeals case, the absolute privilege afforded in judicial proceedings not only applies to defamation, but also extends to other intentional torts associated with the judicial proceedings. 9 Further, the court recognized that the Supreme Court of Ohio has been steadfast in its favoring of access to the courts over the ability to seek redress for defamatory statements or other 5 Price v. Austintown Local Sch. Dist. Bd. of Educ., 897 N.E.2d 700, 705 (Ohio Ct. App. 2008) (citing A & B-Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. & Constr. Trades Council, 73 Ohio St. 3d 1, 651 N.E.2d 1283 (1995)). 6 Costanzo v. Gaul, 62 Ohio St. 2d 106, 403 N.E.2d 979 (1980). 7 Hecht v. Levin, 66 Ohio St. 3d 458, 460, 613 N.E.2d 585 (1993) (citing Surace v. Wuliger, 25 Ohio St. 3d 229, 495 N.E.2d 939 (1986)). 8 Surace , 25 Ohio St. 3d at 232; Erie Cty. Farmers’ Ins. Co. v. Crecelius, 122 Ohio St. 210, 171 N.E. 97 (1930). 9 Hoisington v. Jones, 10th Dist. Franklin Nos. 89AP-720, 89AP-743, 1990 WL 9270, *3 (Feb. 6, 1990) (citing Surace , 25 Ohio St. 3d 229, 495 N.E.2d 939 (1986)). 2017] ABSOLUTE PRIVILEGE TO DEFAMATION 637 intentional torts resulting from statements made during judicial proceedings. 10 The purpose of the absolute privilege to defamation in judicial proceedings is well established in Ohio case law. In Erie Cty. Farmers’ Ins. Co. v. Crecelius , the Supreme Court of Ohio addressed the purpose and basis for the absolute privilege to defamation, which was extended to statements made in connection with judicial proceedings. 11 Similarly to the courts in California and Maryland, the court found that the absolute privilege to defamation was ground in the fear that witnesses subject to suits for slander and libel would curtail their testimony in the face of civil liability. 12 The court feared that similar concerns would improperly influence attorneys, judges, and other public officials in the discharge of their duties to their clients and the public. 13 The court continued to state that “[t]he rule is grounded upon public policy, and it is of course recognized that as an incidental result it may in some instances afford immunity to the evil disposed and the malignant slanderer.” 14 As a consequence, the court endorsed the absolute immunity afforded by the rule because ruling any other way would open the door to a multitude of slander and libel suits, deterring honest claimants from pursuing a legal remedy and discouraging the administration of justice. 15 The Erie Cty. Farmers’ Ins. Co. decision was further endorsed by the Supreme Court of Ohio when it stated in Willitzer v. McCloud that parties in judicial proceedings are entitled to an opportunity to disclose all pertinent information within their knowledge to ensure the efficient administration of justice. 16 Finally, Ohio courts have recognized and accepted that the best policy is to apply the rule of absolute immunity liberally, even though the result may sometimes be harsh and the injured party may have no legal recourse. 17 Aside from judicial proceedings, under Ohio law, the absolute privilege to defamation has been recognized as also applying to some proceedings of a quasi-judicial nature; however, it has not been expanded 10 Id. 11 Erie Cty. , 122 Ohio St. at 214. 12 Id. 13 Id. 14 Id. at 215. 15 Id. at 215–16. 16 Willitzer v. McCloud, 6 Ohio St. 3d 447, 449, 453 N.E.2d 693 (1983) (citing 1 FOWLER V. HARPER & FLEMING JAMES, JR., THE LAW OF TORTS 423–26 (1956)). 17 See Surace v. Wuliger, 25 Ohio St. 3d 229, 233, 495 N.E.2d 939 (1986) (citing Justice v. Mowery, 430 N.E.2d 960 (Ohio Ct. App. 1980)). 638 CAPITAL UNIVERSITY LAW REVIEW [45:635 generally to statements made during arbitration. 18 As in other states that have expanded the absolute privilege to defamation, arbitration, a quasi-judicial proceeding, is favored under Ohio law. 19 In fact, the Supreme Court of Ohio has stated that Ohio courts and the Ohio General Assembly favor arbitration for public policy reasons. 20 The Supreme Court of Ohio also recognized that courts favor arbitration because it provides parties with an economical and expeditious way of resolving disputes outside the courtroom and has cleared “crowded court dockets.” 21 Consequently, the Supreme Court set the precedent that arbitration agreements should be upheld against “all doubts.” 22 With court dockets overflowing, judges backlogged, and new claims constantly arising, honoring arbitration agreements helps maintain efficiency and is more economical for everyone involved. Extending the absolute privilege to defamation to arbitration proceedings would allow for open communication during these 18 O’Neill v. St. Luke’s Med. Ctr., 8th Dist. Cuyahoga No. 70372, 1996 WL 684343, *5 (Nov. 27, 1996) (citing Moore v. Conliffe, 7 Cal. 4th 634, 645 (Cal. 1994) (holding that the absolute privilege not only applied to court proceedings but also to quasi-judicial proceedings such as a private arbitration, which are “functionally equivalent to court proceedings”) and Odyniec v. Schneider, 322 Md. 520, 534–35, 588 A.2d 786 (1991) (extending the absolute privilege to arbitration proceedings and holding that the “social benefit derived from free and candid participation by potential witnesses in the arbitration process is essential to achieve the goal of a fair and just resolution of claims”)). See also Barilla v. Patella, 760 N.E.2d 898, 906 (Ohio Ct. App. 2001) (“Communications made during unemployment proceedings, which are quasi-judicial in nature, are subject to an absolute privilege . . . .”); Baldwin v. Adidas Am., Inc., No. C-2-02-265, 2002 U.S. Dist. LEXIS 19626, *8 (S.D. Ohio July 29, 2002) (finding the United States Patent and Trademark Office, Trademark Trial and Appeals Board a quasi-judicial tribunal, and statements made in a petition thereto are “clothed with an absolute privilege.”). The RESTATEMENT (SECOND) TORTS § 587 (AM. LAW INST. 1966) also recognizes arbitration proceedings within the absolute privilege afforded to judicial proceedings. 19 Ball v. Ohio State Home Servs., 861 N.E.2d 553, 555 (Ohio Ct. App. 2006); Schaefer v. Allstate Ins. Co., 63 Ohio St. 3d 708, 711, 590 N.E.2d 1242 (1992). The law favors and encourages arbitration. See, e.g. , Brennan v. Brennan, 164 Ohio St. 29, 36, 128 N.E.2d 89 (1955). Provisions in a written contract to settle a controversy arising out of a contract or a refusal by one of the...