Low, Ball & Lynch's

WEEKLY LAW RESUME

January 15, 2004 Issue By: Raymond Coates

Civil Procedure - Liability for Statements to Police

Lydia Ortiz Hagberg v. California Federal Bank FSB

California Supreme Court

(January 5, 2004)

California law provides immunity for statements made to law enforcement personnel to report suspected criminal activity on the part of another person. This Supreme Court decision explores whether there are any exceptions to this privilege.

Lydia Ortiz Hagberg opened an account at California Federal Bank FSB (Cal Fed). When she went to the bank to cash a check made out by Smith Barney, the check looked suspicious. The teller contacted Smith Barney, who informed her the check was not valid. A call was then placed to the police, who immediately dispatched personnel. While the police were en route, a second call to Smith Barney indicated that the initial response was erroneous and that the check was, in fact, valid. When the police arrived at the bank, they were informed that a mistake had been made and that the check was no longer considered suspicious. It was alleged that the police, however, proceeded to question Hagberg for some 20 minutes before releasing her.

Hagberg filed a complaint against Cal Fed alleging race discrimination, false arrest and false imprisonment, slander, invasion of privacy, intentional infliction of emotional distress, and negligence. Cal Fed answered and filed a motion for summary judgment based upon Civil Code section 47(b). Cal Fed contended the communications to the police were absolutely privileged. The trial court granted Cal Fed's motion for summary judgment. Hagberg appealed to the Court of Appeal, which affirmed the trial court order. Hagberg petitioned the Supreme Court for review, which was granted.

The Supreme Court affirmed the dismissal of this action. Civil Code section

47(b) establishes a privilege for communications made in any judicial proceeding or any other official proceeding authorized by law. This code section bars all tort causes of action except a claim for malicious prosecution. The Court stated that statements within the protection of

47(b) are not limited to statements made in the courtroom. It applies to any communication made in the course of a judicial proceeding to achieve the objects of the litigation. The privilege applies to communications made to law enforcement officials whose function it is to investigate and remedy wrongdoing.

The Court stated that the purpose of the privilege was to protect citizens so that they could communicate to government agencies reports of suspected illegal activity. The Court stated the overwhelming weight of authority of California cases have applied the privilege to various communications intended to instigate official investigation into wrongdoing. The Court felt that the claim of possible false and malicious communications to the police was overstated. It was more important to secure open channels of communication between citizens and law enforcement personnel. The Court stated that as a result, the privilege has been applied to all torts except malicious prosecution. Malicious prosecution is excepted because the policy of encouraging free access to the courts is outweighed by the policy of affording redress for individual wrongs when the requirements of favorable termination, lack of probable cause and malice are satisfied.

Because sufficient evidence was not raised to warrant consideration of the issue, the Court declined to consider whether proof that a business establishment has called for police assistance based on racial or ethnic prejudice gave rise to liability notwithstanding the privilege. In this case, the Court concluded the privilege was correctly asserted and affirmed the dismissal of this action.

A minority of three justices argued that reports of suspected criminal activity should be qualifiedly privileged, with liability allowed for communications made with malice.

COMMENT

A second opinion issued the same day by the Supreme Court entitled Mulder v. Pilot Air Freight applied this rule to a complaint for false imprisonment. Thus, the rule of this case has broad application to any case of this type. ____ To order a printed version of this analysis, or change your subscription information, reply to this transmission. Information regarding this and other WEEKLY LAW RESUME TM articles is available from Raymond Coates at

(650) 366-4000, RCoates@lowball.com or at WWW.LOWBALL.COM. The WEEKLY LAW RESUME TM is published fifty-two times a year, and is a complimentary publication of LOW, BALL & LYNCH, Attorneys at Law, a Professional Corporation, with offices in San Francisco, Redwood City and Monterey, California.

Gordon Hansen

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ghansen@lowball.com

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