Press v. Primavera

Background

Robert D. Press brought a diversity action against Patrick J. Primavera alleging defamation. Primavera was formerly the managing director of the New York office of TCA Fund Management Group Corp., an investment firm founded by Press. Press alleged that Primavera had responsibilities involving the firm’s investment-banking services, employees, fees, invoices, and reporting.

Press alleged that, after a whistleblower complaint was filed with the Securities and Exchange Commission (SEC), an internal investigation uncovered misconduct involving Primavera and others. Press further alleged that Primavera submitted a declaration to the SEC on December 22, 2020, that falsely blamed Press for the alleged misconduct. The statements allegedly included claims that the firm did not have an investment-banking department, that its staff could not perform the services described in its agreements, and that Press knew about those circumstances and about the uncollectibility of many fees. Press alleged that the statements damaged his reputation and contributed to his reaching a settlement with the SEC without admitting or denying the substantive allegations.

Primavera moved to dismiss the complaint, arguing that the statements were absolutely privileged because they were made during a judicial or quasi-judicial proceeding. Press opposed the motion.

Judicial Notice

The court took judicial notice of the date and fact of filing of two public documents: an SEC federal-court complaint involving TCA Group and related entities, and an SEC administrative order involving Press. The court did not treat those documents as proof that the allegations in them were true. The court also did not consider emails attached to Primavera’s motion because Primavera did not ask the court to take judicial notice of them.

Choice of Law

Because the case was based on diversity jurisdiction, the court used New York’s choice-of-law rules. It found meaningful differences among New York, Florida, and New Jersey law concerning absolute privilege for statements made during preliminary or investigative stages of judicial or quasi-judicial proceedings.

The court concluded that Florida law governed. Press was domiciled in Florida, his business was based there, and the complaint did not allege that the declaration was published nationally. The court therefore found that Florida had the most significant relationship to the defamation dispute.

Privilege Analysis

Under Florida law, a defamation plaintiff must allege that the defendant published a false statement about the plaintiff to a third party and that the statement caused injury. Primavera did not dispute that Press had alleged these elements. Instead, Primavera relied on an affirmative defense: absolute privilege.

Absolute privilege can protect statements made in judicial proceedings and in documents filed with a quasi-judicial body when the statements relate to the subject under review. Florida law also recognizes that some statements made during investigative or preliminary stages may receive only qualified privilege. A qualified privilege can be overcome by proof of express malice.

The court determined that an SEC administrative proceeding is quasi-judicial because it provides notice and an opportunity for a hearing, is adversarial, allows an opposing party to object to false statements, and permits later judicial review. Statements made during such a proceeding would therefore be absolutely privileged under Florida law.

But the court could not determine from the complaint and the judicially noticed documents when, and in what setting, Primavera made the declaration. The declaration was submitted after the SEC had begun investigating the matter and after the SEC filed a federal action involving TCA Group, but before the SEC issued its later administrative order involving Press. The court found it unclear whether the declaration was made during one of those proceedings or during an earlier investigation.

Because Florida law was unsettled regarding statements made before or during an investigation, the court held that more facts were needed. The parties would need to develop the timing, circumstances, and nature of the declaration and the related proceedings. The court also stated that, if only qualified privilege applied, factual issues concerning malice could not be resolved on a motion to dismiss.

Disposition

Judge Jennifer L. Rochon denied Primavera’s motion to dismiss. The court ordered Primavera to file an answer to Press’s claim within 21 days after the opinion and order, and ordered the parties to file a proposed case-management plan and scheduling order within 14 days after service of the answer.