Killmer, Lane & Newman, LLP v. BKP, Inc.

• Docket Number: 21SC930
• Decision Date: 11 September 2023
• Citation: 2023 CO 47
• Parties: Killmer, Lane & Newman, LLP; Mari Newman; and Towards Justice, Petitioners v. BKP, Inc.; Ella Bliss Beauty Bar LLC; Ella Bliss Beauty Bar-2, LLC; and Ella Bliss Beauty Bar-3, LLC. Respondents
• Court: Colorado Supreme Court

1

2023 CO 47

Killmer, Lane & Newman, LLP; Mari Newman; and Towards Justice, Petitioners v. BKP, Inc.; Ella Bliss Beauty Bar LLC; Ella Bliss Beauty Bar-2, LLC; and Ella Bliss Beauty Bar-3, LLC. Respondents

No. 21SC930

Supreme Court of Colorado, En Banc

September 11, 2023

Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 20CA298

Attorneys for Petitioners Killmer, Lane & Newman, LLC and Mari Newman:

Treece Alfrey Musat P.C.

Reza D. Rismani

Denver, Colorado

Killmer, Lane & Newman, LLP

Thomas Kelley

Denver, Colorado

Attorneys for Petitioner Towards Justice:

Law Offices of Brian D. Gonzales, PLLC

Brian D. Gonzales

Fort Collins, Colorado

Harter Secrest & Emery LLP

Brian M. Feldman

Rochester, New York

Attorneys for Respondents:

Sherman & Howard LLC

Brooke A. Colaizzi

Raymond M. Deeny

Heather Fox Vickles

John T. Melcon

Denver, Colorado

Attorneys for Amicus Curiae Colorado Defense Lawyers Association:

Gordon Rees Scully Mansukhani LLP

John M. Palmeri

John R. Mann

Denver, Colorado

Attorneys for Amici Curiae Colorado Press Association, Colorado Broadcasters Association, Colorado Freedom of Information Coalition, Gannett Co., Inc., and American Civil Liberties Union Foundation of Colorado:

Hutchinson Black and Cook, LLC

Matthew A. Simonsen

Daniel D. Williams

Boulder, Colorado

Tierney Lawrence Stiles LLC

Edward T. Ramey

Denver, Colorado

Attorneys for Amicus Curiae Colorado Trial Lawyers Association:

Martinez Law Colorado, LLC

Anna N. Martinez

Denver, Colorado

Martinez Law, LLC

Esteban A. Martinez

Longmont, Colorado Attorneys for Amici Curiae Impact Fund, Colorado Cross-Disability Coalition, Disability Law Colorado, Legal Aid at Work, Public Counsel, and Public Justice:

Fox & Robertson, PC

Amy F. Robertson

Denver, Colorado

JUSTICE GABRIEL delivered the Opinion of the Court, in which CHIEF JUSTICE BOATRIGHT, JUSTICE MARQUEZ, JUSTICE HOOD, JUSTICE HART, JUSTICE SAMOUR, and JUSTICE BERKENKOTTER joined.

OPINION

GABRIEL, JUSTICE

¶1 In this case, we granted certiorari to consider whether the common law litigation privilege for party-generated publicity in pending class action litigation excludes situations in which the identities of class members are ascertainable through discovery.

¶2 We now conclude that the division erred in conditioning the applicability of the litigation privilege in pending class action litigation on whether the identities of class members are ascertainable through discovery. We reach this conclusion for two reasons. First, ascertainability is generally a requirement in class action litigation, and imposing such a condition would unduly limit the privilege in this kind of case. Second, the eventual identification of class members by way of documents obtained during discovery is not a substitute for reaching absent class members and witnesses in the beginning stages of litigation.

¶3 The question remains, however, whether the litigation privilege applies on the facts before us. We conclude that it does and that the five allegedly defamatory statements at issue, which merely repeated, summarized, or paraphrased the allegations made in the class action complaint, and which served the purpose of notifying the public, absent class members, and witnesses about the litigation, were absolutely privileged.

¶4 Accordingly, we reverse the judgment of the division below.

I. Facts and Procedural History

¶5 In 2018, two law firms, Killmer, Lane &Newman, LLP and Towards Justice (collectively, along with attorney Mari Newman of Killmer, Lane &Newman, "the attorneys"), filed on behalf of former employee and nail technician Lisa Miles and those similarly situated a federal class action lawsuit. This lawsuit named as defendants BKP, Inc.; Ella Bliss Beauty Bar LLC; Ella Bliss Beauty Bar-2, LLC; and Ella Bliss Beauty Bar-3, LLC (collectively, "the employer"), among others. The employer operates three beauty bars in the Denver metropolitan area.

¶6 Pertinent here, the class action complaint alleged that the employer's business operation was "founded on the exploitation of its workers." In support of this assertion, the class action complaint alleged that, in violation of the Fair Labor Standards Act and the Colorado Wage Claim Act, the employer

did not pay Lisa Miles or any of the other Service Technicians at any of its three stores any amount whatsoever for the hours that they spent cleaning and performing other mandatory chores. In fact, [the employer] did not employ janitors or a cleaning service and relied exclusively on the unpaid labor of its nail technicians and other Service Technicians to clean the salon.

¶7 The class action complaint further alleged that the employer exercised substantial control over the terms and conditions of the service technicians' work and "co-determined the policies, procedures, and rules, including those relating to compensation, benefits, and hours" governing the service technicians.

¶8 In addition, the class action complaint alleged a number of purported illegal pay practices, including a failure to pay for downtime, a failure to pay for pre- and post-shift work, the withholding of tips to compel service technicians to finish their additional "chores," and the failure to pay contractually mandated commissions, all of which resulted in unpaid overtime.

¶9 Lastly, the class action complaint alleged that the class members were "low-wage, hourly workers . . . who are unsophisticated, are unlikely to seek legal representation, cannot realistically navigate the legal system pro se, and whose small claims make it difficult to retain legal representation if they do seek it." ¶10 On the same day that the federal lawsuit was filed, Newman spoke at a press conference and made the following four statements:

For no pay whatsoever, they [i.e., the service technicians] have to clean the business, including the bathrooms, because Ella Bliss Beauty Bar is simply too cheap to pay its workers the money they deserve.

Instead of paying the workers for every hour that they work they [i.e., the employer] pick and choose and only pay for the hours they feel like paying.

It is time for businesses to quit financially exploiting women. Oppression of vulnerable workers remains all too common, and this is a particularly audacious case.

It's [i.e., conduct like that alleged is] fairly common in industries that employ populations they think they can take advantage of, like women or immigrants.

¶11 The attorneys also issued a press release that, in addition to repeating the third statement quoted above, stated, "Ella Bliss Beauty Bar forced its service technicians to perform janitorial work without pay, refused to pay overtime, withheld tips, and shorted commissions."

¶12 At least two Denver-based television stations aired stories that included video clips from the press conference, and at least four Denver-based news organizations printed stories about the press conference. In each such story, the media repeated one or more of the above-quoted statements.

¶13 Exactly one year later, the employer sued the attorneys in Denver district court, asserting that the five aforementioned statements were defamatory and intentionally interfered with contractual relations. The attorneys responded by moving to dismiss the employer's claims pursuant to C.R.C.P. 12(b)(5), arguing, among other things, that the suit was barred by the litigation privilege. Ultimately, the district court dismissed the employer's complaint without addressing the litigation privilege.

¶14 The employer appealed, and a division of the court of appeals reversed the district court's dismissal order. BKP, Inc. v. Killmer, Lane &Newman, LLP, 2021 COA 144, ¶ 81, 506 P.3d 84, 100. The division began its analysis by discussing the litigation privilege, as described in the Restatement (Second) of Torts section 586 (Am. L. Inst. 1977) ("Section 586"), case law from Colorado discussing the scope of the litigation privilege, and case law from other jurisdictions discussing the extent to which the litigation privilege applies to attorney press statements. BKP, Inc., ¶¶ 14-36, 506 P.3d at 90-93. Based on its reading of these authorities, the division assumed without deciding that "even if Colorado were one of the states that would generally deny the litigation privilege to any and all statements that lawyers make to the press," the cases on which the attorneys relied "would create a narrow exception to that general rule for some statements concerning class action cases." Id. at ¶ 37, 506 P.3d at 93. The division ultimately concluded, however, that this narrow exception did not extend to press statements concerning class action lawsuits when, as here, the class action complaint "undermine[d] the need to engage in that form of communication." Id. at ¶ 40, 506 P.3d at 94.

¶15 On this last point, the division explained that the attorneys' purported purpose in speaking at the press conference and issuing the press release was to promote their class action and potentially reach service technicians who had worked for the employer, so that such technicians "could join the suit as class members or additional class representatives, step forward as witnesses, or pursue the claims themselves outside the class action." Id. at ¶ 39, 506 P.3d at 93. In the division's view, however, the class action complaint undermined this stated purpose because it alleged that "[t]he exact size of the class will be easily ascertainable from [the employer's] records" and "[t]he contours of the class will be easily defined by reference to the payroll documents [the employer was] legally required to create and maintain." Id. at ¶ 41, 506 P.3d at 94 (...