McLaughlin v. Copeland

• Decision Date: 15 June 1978
• Docket Number: Civ. No. 77-218.
• Citation: 455 F. Supp. 749
• Parties: Francis X. McLAUGHLIN, Plaintiff, v. Lammot du Pont COPELAND, Jr., et al., Defendants.
• Court: U.S. District Court — District of Delaware

455 F. Supp. 749

Francis X. McLAUGHLIN, Plaintiff, v. Lammot du Pont COPELAND, Jr., et al., Defendants.

Civ. No. 77-218.

United States District Court, D. Delaware.

June 15, 1978.

Francis X. McLaughlin, pro se.

Arthur G. Connolly, Jr., Wilmington, Del., for Lammot du Pont Copeland, Jr.

Richard A. Levine, Wilmington, Del., for E. Norman Veasey.

MEMORANDUM AND ORDER

BLAIR, District Judge, Sitting by Designation.

This tort action was originally brought in the United States District Court for the District of Maryland under 28 U.S.C. § 1332 after removal from the Circuit Court for Baltimore County pursuant to 28 U.S.C. § 1441. All defendants then moved to dismiss the complaint for lack of in personam jurisdiction and, in an opinion reported at 435 F.Supp. 513, the court ruled that it lacked personal jurisdiction over one of the three defendants and transferred the case to the United States District Court for the District of Delaware pursuant to 28 U.S.C. § 1406(a). After the recusal of the judges of the Delaware District Court, Chief Justice Burger assigned the case to the undersigned judge who, for the purposes of the instant action, sits as a judge of the United States District Court for the District of Delaware.

The Complaint

The plaintiff, Francis X. McLaughlin, alleges that defendants Lammot du Pont Copeland Junior and Senior conspired with Thomas A. Shaheen (and others) to defraud the creditors of the Winthrop Lawrence Corporation. Winthrop Lawrence is allegedly co-owned by Copeland Jr. and a corporation controlled by Shaheen. The details of this scheme are more fully exposited in the jurisdictional opinion found at 435 F.Supp. 513.

In 1970, Winthrop Lawrence and Copeland Jr. filed Chapter XI bankruptcy petitions in Baltimore and Wilmington, respectively. Defendant Veasey and his law firm were retained to represent Copeland Jr. in the Wilmington bankruptcy proceeding. McLaughlin appeared in that proceeding on behalf of Pappas, one of Copeland Jr.'s alleged creditors, and made several references to the allegedly fraudulent and potentially criminal activities of the Copelands. Shortly thereafter, McLaughlin advised the defendants that his client, who was also a claimant against Winthrop, had instructed him to file a class action against Copeland Sr., Copeland Jr., and others on behalf of all creditors of the Winthrop Lawrence Corporation.

The basic thrust of McLaughlin's complaint is that after learning of his investigation of their misconduct, the defendants became fearful that the plaintiff would publicly expose the Copelands' allegedly fraudulent activities and entered into an agreement to "discredit, defame and damage" him in an effort to forestall exposure and force the abandonment of the threatened class action. This scheme to discredit McLaughlin is alleged to have included an attempt to entice the plaintiff into committing the crime of extortion and violating DR 7-105 of the Code of Professional Responsibility in connection with his representation of Pappas. It is this alleged conspiracy which forms the basis of plaintiff's suit.

McLaughlin contends that Veasey, acting for himself, his client Copeland Jr., and Copeland Sr., "undertook a concerted effort to discover something `actionable against'" either McLaughlin or his client, and that this effort increased when Veasey was informed of McLaughlin's intention to submit the results of his investigation to a congressional committee for referral to the Justice Department or the F.B.I.

In February of 1975 McLaughlin and Veasey met in Baltimore to discuss settlement of Pappas' claim against Copeland Jr. It is alleged by McLaughlin that Veasey's true purpose in attending the meeting was to "induce, entice or otherwise entrap" the plaintiff into violating the Code of Professional Responsibility's rule against "threatening a criminal prosecution to obtain advantage in a civil matter." Plaintiff further alleges that when this plan failed, Veasey maliciously and falsely prepared a memorandum suggesting that McLaughlin had committed the crime of extortion and violated the Code of Professional Responsibility. The gravamen of his complaint is that Veasey's subsequent transmission of the memorandum, supporting documents from his file, and an explanatory letter dated March 5th to the judge presiding at the Wilmington bankruptcy proceeding together with the publication of copies of the March 5th letter to the attorneys of record in that proceeding, constituted libel and malicious interference in his business as a practicing attorney.

Upon receipt of the March 5th letter and enclosures, Judge Schwartz referred the matter to the Disciplinary Board of the District of Columbia Bar which concluded, after a hearing, that the evidence was insufficient to support a finding that McLaughlin had violated the Code of Professional Responsibility. McLaughlin contends that Veasey's publication of the letter and supporting documents to Judge Schwartz "caused" a false and malicious complaint to be instituted against him with the disciplinary board, and that both the initial publication to the judge and attorneys, and the initiation of the disciplinary proceeding were acts in furtherance of a pre-existing conspiracy between Veasey and the Copelands. These allegations are divided into three counts: libel (Count II), civil conspiracy to libel, discredit and otherwise damage (Count I), and malicious interference with business (Count III). Defendants have moved to dismiss the complaint pursuant to F.R.Civ.P. 12(b)(6).

Libel

In his memorandum in opposition to defendants' motion to dismiss, McLaughlin correctly concedes that "statements made by an attorney during the course of judicial proceedings are absolutely privileged even if those statements are defamatory and irrespective of the motive of the statements as long as the alleged defamatory statement is pertinent, relevant and material to any issue present in the judicial proceeding." See, e. g., United States v. Hurt, 177 U.S.App.D.C. 15, 20, 543 F.2d 162, 167 (1976); Petty v. General Accident Fire & Life Assurance Corp., 365 F.2d 419, 421 (3d Cir. 1966) (applying New Jersey law); Read v. Baker, 430 F.Supp. 472, 475-76 (D.Del. 1977) (applying Pennsylvania law but noting that Delaware law is identical with respect to privileged communications in judicial proceedings); Tatro v. Esham, 335 A.2d 623, 626 (Del.Super.1975). Plaintiff further concedes that a letter of complaint written to a grievance commission of a bar association is generally held to be absolutely privileged, see Kerpelman v. Bricker, 23 Md.App. 628, 329 A.2d 423 (1974), and that the publication in question "was in a judicial proceeding and has some relevancy to the proceedings, or in the alternative, initiated a judicial proceeding. . . ."

In an attempt to avoid the legal implications of these concessions, McLaughlin argues that in sending the letter and accompanying documents to other counsel in the proceedings defendants "impliedly waived" the absolute privilege which he admits attached to the published material. Plaintiff cites no authority in support of this assertion and the relevant authority is in fact well settled to the contrary. The absolute privilege accorded to statements made in connection with a judicial proceeding is not qualified so as to exclude such statements when they are published to attorneys representing parties with an interest in the proceeding. "Where made in a proceeding or action the privilege is not limited to pleadings and affidavits in the proceedings or to statements made by the parties or their attorneys in open court. If made in letters between the parties or their attorneys or addressed to the court in connection with the proceeding they are likewise privileged provided they are pertinent thereto." Simon v. Stim, 11 Misc.2d 653, 176 N.Y.S.2d 475, 476 (1958). See also Theiss v. Scherer, 396 F.2d 646, 648-49 (6th Cir. 1968); Richeson v. Kessler, 73 Idaho 548, 255 P.2d 707, 707-08 (1953). The substance of Veasey's letter was directly related to the status of his negotiations in the Wilmington bankruptcy proceeding and the attorneys who received copies of the letter were retained by parties to that proceeding. Since the sending of copies of Veasey's March 5th letter to Judge Schwartz to the attorneys in question falls squarely within the claimed privilege, such publication cannot be construed as a waiver of that privilege.

McLaughlin attempts to bolster his waiver argument with the assertion that...