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January 5, 2004

Hagberg v. California Federal Bank (2004) 32 Cal.4th 350

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The California Supreme Court holds that the litigation privilege protects all reports of criminal activity to law enforcement.

Lydia Ortiz Hagberg was reported to the police based on a bank employee’s suspicion that she was presenting a counterfeit check.  The bank employee learned that the check was legitimate, and attempted but was unable to stop the police from questioning Hagberg.  Hagberg’s lawsuit alleged seven causes of action, all premised on the assumption that the report was initiated because she is Hispanic.

The trial court granted summary judgment based on the absolute privilege embodied in Civil Code § 47(b), known as the litigation privilege.  Acknowledging the potential for abuse, the court nonetheless felt that the right to contact law enforcement must be without threat of recourse.

The Supreme Court, agreed, relying on its discussion of the absolute privilege of § 47(b) set forth in the seminal case of Silberg v.  Anderson (1990) 50 Cal.3d 205.  The litigation privilege assures the utmost freedom of communication between citizens and public authorities

whose responsibility is to investigate and remedy wrongdoing.  The Court agreed with the trial court that threat of litigation in response to reports of criminal activity hampers the right of access to the government.  The risk of criminal prosecution for false reports of criminal activity is a sufficient deterrent to false reporting.

The phrase “judicial proceedings” extends beyond the courtroom to pre-litigation statements.  Statements made in quasi-judicial proceedings are entitled to the same protection.  By analogy many cases have extended the privilege to statements made to administrative agencies to initiate the enforcement of a law as part of an “official proceeding” within the statute’s protection.  The majority of cases also extend the absolute privilege to reports to law enforcement.  The court reviewed these cases, noting the social benefit of unfettered access to law enforcement agencies.

The court disapproved of the one Court of Appeal opinion that had extended only a qualified privilege to reports of criminal activity to law enforcement on the basis that such reports did not come within the definition of “official proceedings.” The critical question is the aim of the communication, not the forum in which it takes place.  If the communication is made in anticipation of or is designed to prompt official proceedings, the communication is protected.

The Supreme Court pointed out that ultimately the truth of a report of criminal activity is tested in a criminal trial, replete with procedural protections for the accused.  Fears that citizens will use law enforcement in personal vendettas are overstated and assume that law enforcement is unable to discern between legitimate reports and personal complaints.

The Court also noted that Civil Code § 47.5 allows a peace officer to bring a defamation complaint against anyone knowingly and maliciously alleging false misconduct or criminal actions against the officer.  Courts have agreed that this statute is an exception to the general rule that a communication to an official agency designed to prompt action is protected by the litigation privilege.

Analogies to earlier cases holding that a private citizen would not be liable for the tort of false imprisonment for a mistaken, but good faith, report of criminal activity were unavailing.  Those cases failed to analyze whether the litigation privilege provided a defense even if the conduct was in bad faith.  In addition the earlier cases did not distinguish between conduct, which is not covered by the litigation privilege, and communication, which is.

The Court declined to analyze Hagberg’s argument that the litigation privilege should not bar discrimination claims because her evidence to support this claim was unpersuasive.  This question was left open for another case with a more compelling factual showing of discrimination.

Comment: This decision is of importance to attorneys because they are frequently involved in their client’s actions in reporting suspected criminal conduct, and are often parties in subsequent lawsuits if the report of criminal activity turns out to be false or mistaken.  While this case provides significant protection for both clients and attorneys reporting suspected criminal activity, not all issues have been resolved.  First, the court approved of the distinction between conduct and communication when analyzing the litigation privilege.  Second, the court left open the issue of whether proof that a false report of criminal activity is prompted by discriminatory intent is sufficient to overcome the bar of the litigation privilege.


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