HR REPORT: DiChiara v. Town of Salem: Federal Court Re-Affirms Absolute Immunity from Defamation Claims

The information contained in this article is not intended as legal advice and may no longer be accurate due to changes in the law. Consult NHMA's legal services or your municipal attorney.

By decision dated July 12, 2023, the New Hampshire Federal District Court has re-affirmed that a person may not be sued for defamation if they bring concerns regarding potential employee criminal conduct to the attention of prosecuting authorities.

As background, it is a well-established New Hampshire common-law doctrine that formal and informal statements made to prosecuting authorities are entitled to absolute immunity from claims of defamation.  McGranaham v. Dahar, 119 N.H. 758, 770 (1979).  In Dahar, the Court held that “statements made in the course of judicial proceedings are absolutely privileged from civil actions, provided they are pertinent to the subject of the proceeding.”  The Court explained that this rule is necessary “to encourage participants in litigation, parties, attorneys and witnesses, to speak freely.”  The Court held that the scope of absolute immunity included statements made to police or prosecutors, even if they do not result in criminal charges.  The Court held that “potential harm to a person’s reputation is far outweighed by the substantial interests of society in encouraging citizens to report suspected criminal activity to the appropriate legal authorities, and to cooperate fully in investigations.”

The expectation to the absolute immunity standard arises when the statements made in judicial proceedings are not “pertinent to the subject of the proceeding.”  The Court held that “there is no reason to protect one who uses the form of a judicial proceeding merely as a pretext for circulating defamatory material.”  Statements made are immune unless they are not pertinent to the issue at hand.

The absolute immunity issue was recently revisited by the federal court in DiChiara v. Town of Salem.  In this case, Town officials informed the Attorney General’s office of their concern that DiChiara, a Town police officer, and other Town employees may have engaged in fraudulent activity in an effort to receive workers’ compensation benefits.  The Town provided the Attorney General with information regarding several employee workers’ compensation claims.  No criminal charges resulted. 

DiChiara sued the Town for defamation arising from the statements made to the Attorney General.  Additional claims resulted from the Town providing the Attorney General with DiChiara’s workers’ compensation and medical records. 

Based on these events, DiChiara filed a lawsuit against the Town.  The Federal Court ruled that the Town’s alleged “meritless and defamatory accusations of criminal fraud” to the Attorney General’s officer were not actionable.  The court noted that, even if these statements were actually defamatory, which remains a question the Court need not resolve, “those statements are subject to an absolute privilege under New Hampshire law and, therefore, cannot form the basis” of a defamation claim. 

Relying on the earlier Dahar decision, the Court explained that the same absolute immunity from defamation that exists during the pendency of a judicial proceeding also applies when a person seeks to initiate a criminal investigation.  The Court found that the Town had a reasonable belief that some employees may have committed fraud.  The Court held that because of that reasonable belief, the Town could not be found to have engaged in defamatory conduct when seeking the assistance of an investigative agency.

The Court also found no merit in the claims arising from disclosure to the Attorney General of DiChiara’s medical records.  The Court found that the Town had lawful possession of those records.  Using those records for a lawful purpose—to support allegations of potential criminal conduct—does not constitute an unlawful seizure or misuse of those records.

The existence of absolute immunity should be of great comfort to municipal employers, who occasionally obtain information suggesting that an employee has engaged in criminal conduct.  Even with absolute immunity protections, employers should make sure that there is a reasonable, good faith basis for believing that criminal conduct may have occurred before reporting to the police or prosecutors.  Employers should exercise care that they are not acting solely based on rumor or innuendo and that there is some factual support for the allegation.  When making a report, employers should stick to the issue at hand, and not submit gratuitous, unnecessary information unrelated to the alleged criminal conduct.  

This is not a legal document nor is it intended to serve as legal advice or a legal opinion.  Drummond Woodsum & MacMahon, P.A. makes no representations that this is a complete or final description or procedure that would ensure legal compliance and does not intend that the reader should rely on it as such.