In re American Continental/Lincoln Savings & Loan Securities Litigation

Lexecon (plaintiff) was an economic consulting firm. Daniel Fischel (plaintiff) was a law professor and an employee of Lexecon. Lexecon and Fischel helped firms prepare their defenses in a class-action lawsuit involving alleged securities-law violations. A group of law firms (collectively, the law firms) (defendants) assisted the plaintiffs in the lawsuit. The law firms attempted to add Lexecon and Fischel as defendants in the class-action lawsuit, alleging that Lexecon and Fischel had learned of securities violations committed by their clients and continued to aid the firms regardless. In 1990, after filing five previous complaints in the case, the law firms proposed a sixth complaint that included allegations against Lexecon and Fischel. The proposed sixth complaint was passed around to parties on the litigation’s service list. Though the proposed sixth complaint was never filed, the complaint that the law firms eventually filed against Lexecon and Fischel was substantially the same. In 1992 Kevin Roddy, a partner in one of the law firms, wrote a letter to the National Law Journal (the letter) alleging that Lexecon had performed wrongful activities on behalf of firms involved in the class-action lawsuit. Though their initial attempts were unsuccessful, the law firms successfully added Lexecon as a named defendant. Lexecon and Fischel sued the law firms in federal district court for malicious prosecution, abuse of process, and defamation, arguing that the law firms attempted to add Lexecon and Fischel as named defendants to the class-action lawsuit to harm their reputations and to prevent them from consulting with the defendant firms during the litigation. The district court dismissed the malicious-prosecution and abuse-of-process claims, holding that the allegations made against Lexecon and Fischel were not baseless and did not lack probable cause. The remaining defamation claims relied on the proposed sixth complaint and the letter. The law firms moved for summary judgment, arguing that the proposed sixth complaint and the letter were not defamatory.