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NY Court of Appeals Ruling States Firms Can No Longer Be Sued for Defamation Based on Information Regarding Reasons for Termination
April 5, 2007 (New York, NY) - Proskauer Rose LLP, an international law firm with over 700 lawyers worldwide, has won an important victory in the New York Court of Appeals on behalf of client MetLife, Inc. In its decision in Rosenberg v. MetLife, Inc., the Court held that statements made by a securities firm on a Uniform Termination Notice for Securities Industry Registration (U-5 form) are subject to an absolute privilege and therefore cannot be the subject of a suit for defamation brought by the terminated employee. The case was brought against MetLife by a former insurance salesman who alleged defamation, among other charges, based on statements made by MetLife on his U-5 form.
"New York employers in the securities sector no longer need to fear the costly defamation litigation that often accompanies the filing of a U-5 form," said Steven E. Obus, partner in Proskauer's Litigation and Dispute Resolution Department, who served as lead attorney on the case. "The U-5 form is central to the National Association of Securities Dealers' enforcement process and this decision will encourage candor among securities firms."
In oral argument before the New York Court of Appeals on February 13, Mr. Obus argued on behalf of MetLife that statements in a U-5 form are made in the context of a quasi-judicial proceeding and therefore subject to absolute privilege. In addition, the firm argued that the application of an absolute privilege ensures full and accurate disclosure, thus serving the significant public interest of protecting investors from potentially unscrupulous brokers. The Court agreed, ruling that the interest in ensuring accurate reporting of the reasons for the termination of registered representatives justifies the need for the application of an absolute - as opposed to qualified - privilege.
Proskauer's victory in this case demonstrates the strength of the firm's interdisciplinary approach. By bringing together strong capabilities in securities litigation and labor and employment law, the team representing MetLife, which included Mr. Obus, Steven Yarusinsky, Steven H. Holinstat, and Patrick J. Lamparello, was able to secure a favorable result in this important matter.
Proskauer's Litigation and Dispute Resolution Department is comprised of over 200 lawyers and its Labor and Employment Department is comprised of nearly 175 lawyers, all practicing from the firm's offices in New York City, Los Angeles, Washington, Boston, Boca Raton, Newark, New Orleans and Paris. Proskauer practices in a wide range of forums across the nation and abroad including federal and state courts, administrative and regulatory agencies, and national and international arbitral tribunals.
About Proskauer Rose
Proskauer Rose, founded in 1875, is an international law firm providing a wide variety of legal services to clients worldwide from offices in Boca Raton, Boston, Chicago, Hong Kong, London, Los Angeles, New Orleans, New York, Newark, Paris, São Paulo, and Washington, D.C. The firm has wide experience in all areas of practice important to businesses and individuals including corporate finance, mergers and acquisitions, general commercial litigation, corporate governance matters, conducting internal corporate investigations, white collar criminal defense, private equity and fund formation, patent and intellectual property litigation and prosecution, labor and employment law, real estate transactions, bankruptcy and reorganizations, trusts and estates, and taxation. Its clients span industries including chemicals, entertainment, financial services, health care, information technology, insurance, internet, lodging and gaming, manufacturing, media and communications, pharmaceuticals, real estate investment, sports, and transportation. The firm can be found online at http://www.proskauer.com.
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