THE PATRIOT GROUP, LLC.
BRUCE W. EDMANDS & another.
Heard: September 17, 2018.
action commenced in the Superior Court Department on April
10, 2017. A pretrial motion to dismiss was heard by C.
William Barrett, J.
I. Siegal for plaintiff.
Michael J. Stone (Steven DiCairano also present) for the
Present: Blake, Wendlandt, & McDonough, JJ.
case, we address a Superior Court judgment dismissing an
otherwise well-pleaded complaint for defamation against an
attorney and his law firm by applying the so-called absolute
"litigation privilege." Concluding that the
litigation privilege-- which is essentially a complete
defense to defamation claims-- has no application to the
plaintiff's complaint, we reverse the judgment and remand
the matter for further proceedings consistent with this
review the allowance of a motion to dismiss pursuant to Mass.
R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974), accepting the
allegations in the complaint as true and drawing all
reasonable inferences in the nonmoving party's favor. See
Iannacchino v. Ford Motor Co., 451
Mass. 623, 625 n.7 (2 008); Baker v.
Wilmer Cutler Pickering Hale & Dorr, LLP, 91
Mass.App.Ct. 835, 842 (2017). "What is required at the
pleading stage are factual 'allegations plausibly
suggesting (not merely consistent with)' an entitlement
to relief." Iannacchino, supra at 636,
quoting Bell Atl. Corp. v.
Twombly, 127 S.Ct. 1955, 1966 (2007). "Factual
allegations must be enough to raise a right to relief above
the speculative level." Twombly, supra
Patriot's defamation complaint.
summarize the facts alleged in the complaint, again accepting
them as true for the purpose of our review. See
Harrington v. Costello, 467 Mass.
720, 724 (2014). In 2011, the plaintiff, The Patriot Group,
LLC (Patriot), obtained a judgment in excess of $20 million
against Steven C. Fustolo,  following litigation
arising out of a development project dispute. After Patriot
was unsuccessful in collecting its judgment, Patriot (along
with two other creditors) initiated involuntary bankruptcy
proceedings against Fustolo. As we explain below, one key to
our holding is that Attorney David M. Nickless, and not the
defendants Attorney Bruce W. Edmands or his law firm, Edmands
& Williams, LLC, (collectively, Edmands),  represented
Fustolo in the bankruptcy proceeding. Thereafter, Edmands,
purportedly acting as Fustolo's attorney, sent a letter
dated May 9, 2014, on his firm's letterhead (May 9
letter) to Patriot's counsel, Michael J. Fencer, (and
three others) that included a number of false statements of
fact about Patriot. Principally, the May 9 letter stated that
Patriot had committed tax fraud, and that Fustolo had filed
two whistleblower claims for award based on Patriot's tax
fraud, one with the Internal Revenue Service (IRS) and a
second with the Securities and Exchange Commission
(SEC).' The May 9 letter further
stated that Fustolo "anticipate[d] the possibility of
filing additional claims" against Patriot under other
Federal and State whistleblower statutes, and that Fustolo
would "pursue all available remedies in response to any
continuing or further acts of retaliation and
harassment." In addition, the May 9 letter falsely
asserted that Fustolo had "previously informed a Patriot
representative of his intention to notify the [IRS] of
Patriot's alleged tax fraud," that Patriot had filed
the involuntary bankruptcy petition against Fustolo "to
harass and intimidate [Fustolo] and destroy his
reputation," and that Patriot and its principal, John
Howe, had driven Fustolo into bankruptcy proceedings
specifically in retaliation for threatening to "blow the
whistle to the IRS and SEC" on Patriot's tax fraud.
and Fustolo were deposed in the latter's bankruptcy
proceeding. Fustolo could not recall a single
salient detail supporting the May 9 letter, including any
bases for the accusation that Patriot had committed tax
fraud. When queried further about the May 9 letter, Fustolo
generally invoked his Fifth Amendment right against
self-incrimination. Edmands testified that he reviewed,
edited, and sent the May 9 letter drafted by Fustolo, and
that he sent it out to intimidate Patriot and Howe, whom
Edmands perceived as "'bullies' toward his
long-time client, Fustolo." Edmands further testified
that without "inform[ing] himself" about the
details of the applicable IRS code and whistleblower award
statutes, he nevertheless was "willing to send the
letter because of the time constraints," and because
"[i]t might throw [Patriot's counsel in
Fustolo's bankruptcy case] off his game."
one-- including Edmands and Fustolo-- has proffered any
evidence to substantiate Edmands's accusation that
Patriot committed tax fraud. Although Edmands knew that many
allegations in the May 9 letter lacked any factual basis, he
knowingly and willfully assisted Fustolo's dissemination
of false allegations against Patriot by sending the letter to
Patriot's counsel and three others in the hope of
influencing the bankruptcy proceedings in Fustolo's
Fustolo republished the false statements regarding Patriot
contained in the May 9 letter through widely disseminated
Internet postings. To that end, Fustolo hired a specialist in
posting online content, Dylan Potter, to post
"blog" websites falsely claiming that Patriot
committed tax and securities fraud. At Fustolo's request,
Potter created a blog website entitled
whistleblowersinternationalblog.blogspot.com (WBI blog) using
BlogSpot (an Internet service owned by Google, Inc.). Fustolo
then sent Potter draft articles for the WBI blog, which
"in large part mirrored" the false tax fraud
allegations in the May 9 letter. One such posted article
referenced a "letter" from Fustolo's
"attorney" (inferentially, Edmands, whose letter
was not otherwise publicly available). Fustolo sent Potter
other articles that Potter then posted on the WBI blog,
repeating the tax fraud falsehoods about Patriot originating
in the May 9 letter. When questioned by Potter as to the
veracity of the content being posted, Fustolo stated,
"My attorney thinks [that Patriot is] on weak ground
about the underlying claim that the articles are false as
they are not."
has not committed any tax or securities fraud and no
regulatory agency has investigated or contacted Patriot
regarding such allegations. Patriot has never retaliated
against, nor has ever been accused of retaliating against, a
Superior Court proceedings.
April 10, 2017, Patriot filed its complaint for damages
against Edmands-- summarized above-- asserting claims that
Edmands had defamed Patriot with malice (count I), aided and
abetted Fustolo's defamation (count II), and conspired
with Fustolo to defame Patriot (count III). Claiming
principally that Patriot's defamation complaint was
barred by the absolute litigation privilege, and that the
complaint failed to allege sufficient facts to support
Patriot's claim that Edmands had aided and ...