On August 2, 1990, the Museum filed its motion for summary
judgment. The parties agreed to an adjournment of the motion
until December 7, 1990 to accommodate the scheduling of
discovery. A subsequent agreement adjourned the return date of
the motion to February 11, 1991, when oral argument was heard. In
an opinion of May 9, 1991, this court granted the Museum's
summary judgment motion. 764 F. Supp. 838.
On December 31, 1990, the McNallys filed this motion to amend.
On that same date, the McNallys filed a libel action against
Stern in New York State Court. The state court libel action is
based on the same alleged statements that are put forth here as
grounds for amending the complaint.
Oral argument on the motion to amend was heard on February 15.
The facts in the underlying action are set forth in this
court's opinion of May 9 granting the Museum's summary judgment
motion (the "Opinion"), familiarity with which is assumed for the
purposes of the instant motion.
Shortly after the McNallys commenced their action in the
District Court of New Jersey, Yarnall retained Stern as counsel.
On December 20, 1989, Christopher Kilbourne, a reporter for
The Record, a New Jersey newspaper, contacted Stern to
interview him for an article about the McNallys' lawsuit. During
the course of the interview, which lasted approximately 25
minutes, Stern is alleged to have made certain statements that
appeared in the Record in an article published on December 31,
1989. The article included a discussion of the claims and
defenses of the parties, as well as of the debate over the
authentication of stained glass windows believed to be by the
artist John La Farge ("La Farge"), an issue in the McNallys'
The article contains several statements by Stern. Stern is
quoted as saying that although Yarnall has not specifically said
that the windows owned by the McNallys are not by La Farge,
Yarnall "certainly is not persuaded that they should be included
in the [Catalogue Raisonne] and given the seal of authenticity."
Stern is further quoted as saying that McNally has a "houseful of
Standard for Motion to Amend
Rule 15(a) provides that leave to amend a complaint "shall be
freely given when justice so requires." The Supreme Court has,
however, interpreted Rule 15 to permit such amendments only when
the party seeking the amendment (1) has not unduly delayed, (2)
is not acting in bad faith or with a dilatory motive, (3) when
the opposing party will not be unduly prejudiced by the
amendment, and (4) when the amendment is not futile. Foman v.
Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222
An amendment is considered futile if the amended pleading fails
to state a claim or would be subject to a motion to dismiss on
some other basis. See, e.g., S.S. Silberblatt, Inc. v. East
Harlem Pilot Block, 608 F.2d 28, 42 (2d Cir. 1979); Freeman v.
Marine Midland Bank-New York, 494 F.2d 1334, 1338 (2d Cir.
1974). Thus, if the alleged statements are protected by a
privilege either under the Constitution or under New York law,
amendment to the complaint would be futile as the cause of action
pleaded would not survive a motion to dismiss, and leave to amend
should therefore be denied.
The Privilege Conferred by The New York Civil Rights Law
Section 74 of the New York Civil Rights Law (McKinney's 1991)
provides, in pertinent part, that "[a] civil action cannot be
maintained against any person, firm or corporation, for the
publication of a fair and true report of any judicial proceeding
. . . which is a fair and true headnote of the statement
published." Thus, the question becomes whether Stern's alleged
statements that the McNallys owned "a houseful of quasi-La
Farges" constitutes a "fair
and true report" of a judicial proceeding within the meaning of §
New York courts have extended the privilege to comments made by
attorneys to the press in connection with the representation of
their clients. Branca v. Mayesh, 101 A.D.2d 872, 476 N.Y.S.2d 187
(2d Dep't 1984); Ford v. Levinson, 90 A.D.2d 464,
454 N.Y.S.2d 846 (1st Dep't 1982). The privilege does not extend,
however, to parties who maliciously institute a proceeding
alleging false and defamatory charges and publicize them in the
press. Williams v. Williams, 23 N.Y.2d 592, 298 N.Y.S.2d 473,
246 N.E.2d 333 (1969).
In Ford, the plaintiff filed a libel action against
defendant, an attorney, based on statements that the attorney had
made to the press in connection with an earlier action commenced
against plaintiff on behalf of the defendant's clients. The court
dismissed the libel action against the attorney, on the grounds
that the attorney's comments were a fair representation of his
clients' claims against Ford, and therefore were absolutely
privileged under § 74.
In Martin v. Beigel, 15 Med.L.Rptr. 2261 (Sup.Ct.Columbia
Cty. 1988), the court made a similar finding of absolute
privilege based on § 74. In Martin, the defendant attorneys had
filed an action in federal court containing allegations of fraud,
misrepresentation, improper use and appropriation of funds, and
violations of the securities laws. After the filing of the suit,
the defendants made several statements to the press and issued a
press release. These statements were the subject of a libel
action in state court, which action the court dismissed. The
court held that the allegedly libelous statements fell within the
privilege conferred by § 74 where "it appears that all of the
statements published by the defendants are of and concerning the
complaint in the underlying federal litigation, and constitute
substantially accurate descriptions or characterizations of such
complaint." Id. at 2663.
Stern's alleged statements at issue in the instant case are
similarly statements relating to the underlying litigation.
Stern's statement that the McNallys own a "houseful of quasi-La
Farges" relates directly to a possible position to be taken by
Yarnall as a defense to McNally's charges, namely, that Yarnall's
allegedly defamatory statements as to the authenticity of the
disputed works of art were true, and that the disputed works were
really not by La Farge. Stern in his alleged statement was merely
restating his client's position in defending the action.
Stern's situation is further to be distinguished from the
situation that the rule in Williams seeks to avoid. Unlike the
attorneys in Williams, Ford, or Martin, Stern did not
initiate the underlying action. He did not seek publicity for the
action by holding a press conference on the allegations; his
comments were instead solicited. The alleged statements appeared
in an article that gave balanced treatment to both sides of the
controversy and clearly identified Stern as Yarnall's lawyer. The
effect of the alleged libel in these circumstances was therefore
far less than the possible effect of statements that were held
privileged in Ford or Martin.
For the reasons set forth above, Sterns' alleged statement
falls within the absolute privilege conferred by § 74 of the New
York Civil Rights law. The proposed amendments to the complaint
would not survive a motion to dismiss, and therefore amendment
would be futile. Accordingly, the motion for leave to amend is
It is so ordered.