On July 29, 2024, Justice Borrok of the New York County Commercial Division issued a decision in Peck v. Milbank LLP, 2024 NY Slip Op. 32596(U), holding that the judicial proceedings privilege did not bar a Judiciary Law Section 487 claim, explaining:
Under Judiciary Law § 487, any attorney who is guilty of any deceit or collusion or consents to any deceit or collusion with intent to deceive the court or any party must pay treble damages. This provision applies to an attorney acting in his or her capacity as an attorney, not to a party who is represented by counsel and who, incidentally, is an attorney. Deceit through non-disclosure is actionable – an attorney’s concealment from a court of a fact he or she is required by law to disclose is tantamount to the assertion of a false material fact.
The defendants are not correct that they are entitled to dismissal of the Judiciary Law § 487 cause of action based on the judicial proceedings privilege. To further the public policy goal of permitting persons involved in a judicial proceeding to write and speak about it freely among themselves, pertinent statements made in the course of such proceedings are protected by the judicial proceedings privilege. Whether a statement is at all pertinent to the litigation is determined by an extremely liberal test, and any doubts are to be resolved in favor of pertinence. The privilege is chiefly directed at protecting allegedly defamatory statements. Allowing such statements to be a basis for a defamation action would be an impediment to justice, because it would hamper the search for truth and prevent making inquiries with that freedom and boldness which the welfare of society requires. The privilege does apply to causes of action other than defamation, but it does not apply to malpractice or malicious prosecution. The privilege may apply to a cause of action for breach of fiduciary duty that is based on allegations of defamation, but it does not apply when such cause of action does not exclusively rely on allegedly defamatory statements made in the course of litigation or when the actions giving rise to the claim take place before the statement in question.
At the time she submitted an affidavit to the Surrogate’s Court, Ms. Slade was Norman Peck (i.e., the estate)’s lawyer. The rationale as to why the privilege does not apply to malpractice applies even more soundly to allegations of intentional misconduct. Lawyers may be held responsible for their conduct during a judicial or quasi-judicial proceeding under Judiciary Law § 487 and pursuant to their ethical obligations under the canons of professional responsibility. As discussed above, at bottom, the allegation is that Ms. Slade frustrated the search for the truth by intentionally deceiving the Surrogate’s Court and concealing her purported bias while she was an attorney of record in the Surrogate’s Court action. This is sufficient to state a cause of action under Judiciary Law § 487, and the judicial proceeding privilege simply does not apply because she was not merely a party represented by counsel who also happened to be an attorney herself at that time. For the avoidance of doubt, the other allegations concerning activities of Ms. Slade raise issues of fact as to what her role was at such other times which are not properly decided on a motion to dismiss – particularly because when asked at her deposition about why she was billing time during those other periods she indicated that the information was protected by the attorney-client privilege without further explanation.
(Internal quotations and citations omitted).