The Problem of Personal Jurisdiction in Cases of Online Defamation

​By Susann Nordvik
 
As the Information Age reaches the pinnacle of its estate, courts continue to struggle with questions of jurisdiction over disputes arising out of information and commentary posted online, usually on social media.  The courts in most jurisdictions have managed to find ways to shoehorn traditional notions of personal jurisdiction into the narrow slipper of internet discourse.  Nevertheless, there are classes of cases that continue to slip through the cracks in the carefully crafted framework. 

For example, most courts have taken what we would now consider “old timey” analyses of jurisdiction based on writing and telephone calls and applied them to online business transactions.  This is fine, because in the old days, one might be greeted by a door-to-door salesman, or receive a cold call from an enterprising telemarketer, and the resulting transaction is not unlike the type of situation one might have today by placing an order on Amazon.  Prior notions of “systematic contacts” and “minimum contacts” would still apply quite readily.  Thus, when you have an entity like Amazon, which has warehouses in many states across the country, and which processes billions of dollars in transactions annually, visiting virtually every home at least once, one could probably say that Amazon maintains “systematic” business contacts in every state in the Union. Therefore, Amazon as an entity could reasonably anticipate being haled into court in any one of the states for any issue that arose.

However, what happens when someone gets in an internet scrap with a “keyboard cowboy,” on Twitter, Reddit, or Facebook, only to subsequently find their good name associated with all kinds of bad conduct and various libelous references?  In those cases, the bad actor is not always easy to track down, and the “support” coming from the various tech giants is almost universally underwhelming.  Nevertheless, if by some miracle you are able to divine the identity of the transgressor, but you also find out (wait for it) he is on the other side of the country.  Now what?  Conventional wisdom would suggest that if you wanted to bring the scallywag before the court, you would have to file in his home state and county.  This is simply because you have a private actor sending messages out into the Twittersphere from the safety of his or her own home, and who may not even be aware of your location, much less intentionally availing him or herself of the benefits of the law of your home state.

In general terms, the idea of being sued in a court in a foreign jurisdiction is somewhat daunting, as you may be unable to travel and defend yourself in a meaningful way from 2,000 miles away.  This is why the United States Supreme Court in its landmark decision International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) determined that the Due Process Clause demands that personal jurisdiction must be exercised only if doing so does not offend “traditional notions of fair play and substantial justice.”  Id.  Virginia’s long arm statute, Virginia Code, § 8.01-328.1, was crafted with the concepts espoused by the International Shoe Court in mind.  However, application of those concepts in the world of Reddit and Facebook has proven challenging. 

Although the Virginia Supreme Court has not addressed the specific issue outlined in my “keyboard cowboy” example, you can develop hypotheses regarding the likely outcome of such a case by review of what courts have held when a nonresident writes a defamatory letter outside the forum state and mails it into the forum.  Previous cases have determined that such an act is not a “tortious act” within the forum as required under the Commonwealth’s long arm statute.  See St. Claire v. Righter, 250 F. Supp. 148, 151 (W.D. Va. 1966) disapproved on other grounds, Beaty v. M.S. Steel Co., 401 F.2d 157 (4th Cir. 1968); Loria v. Regelson, 38 Va. Cir. 283, 287 (1995). Similarly, defamatory remarks made by a nonresident over the telephone to a person receiving the call in Virginia are considered to have originated outside the forum and, thus, do not constitute an act within the state.  Bochan v. La Fontaine, 68 F. Supp. 2d 692, 700 n.26 (E.D. Va. 1999).

In St. Claire v. Righter, the United States District Court for the Western District of Virginia found that a defamatory letter sent to Virginia from outside the state did not establish personal jurisdiction over the defendant under the “tortious act” provision of the long arm statute.  250 F. Supp. at 151. The court reasoned that while the tortious injury occurred in Virginia, the harm was actually “caused by the act of writing and mailing the letters outside of Virginia.”  Id.  

Although the distinction may seem impossibly subtle, there is actually good reasoning behind it.  This is due to the manner in which the various provisions of the long arm statute work together.  Virginia Code, § 8.01-328(A)(3) provides that a court may exercise jurisdiction when an act within the Commonwealth causes tortious injury.  By contrast, § 8.01-328.1(A)(4) applies to tortious injury arising from an act outside the Commonwealth.  However, this latter provision only applies when the tortfeasor “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this Commonwealth.”  Consequently, the St. Claire court determined that a contrary holding would render Code § 8.01-328.1(A)(4) “completely obviated, as every set of facts which give rise to tortious injury could be brought within the terms of paragraph (3).” 250 F. Supp. at 151.

This rationale has been extended by the federal courts reviewing conduct occurring over the internet.  In Bochan v. La Fontaine, the United States District Court of the Eastern District of Virginia addressed the issue of whether defamatory remarks posted on the internet constitute a tortious act in Virginia under Code § 8.01-328.1(A)(3).  68 F. Supp, 2d at 694-703.  In Bochan, Texas and New Mexico residents separately posted defamatory remarks about a Virginia resident on an internet newsgroup.  Id. at 695.  The court held that Virginia’s long-arm statute did not grant jurisdiction over the New Mexico resident under (A)(3).  Id. at 700.  The court rejected the plaintiff’s argument that the tortious act occurred in Virginia merely because the defamatory remarks that originated in New Mexico were published in Virginia.  Id. at 700 n.26.  However, the court noted that because the statements made by the Texas resident were transmitted through a server that was physically located in Virginia, this constituted an act within the Commonwealth, and subject to jurisdiction under § 8.01-328(A)(3). 

At least one Circuit Court, Nathan v. Takeda Pharmaceuticals America, Inc., (Fairfax Cir. 2011) applied the rationale of Bochan and left open the possibility of exercising personal jurisdiction over a defendant who initiated an email or internet post in another state, but the material was then transmitted through a server or internet provider resident in Virginia.  This is an important consideration due to the fact that a number of social media platforms, such as Twitter, utilize data housing and servers provided by Amazon from its Northern Virginia data centers.  Consequently, a Virginia resident that has suffered defamation over the internet based on social media posts and commentary may be able to obtain a measure of relief in his or her home state, rather than having to resign themselves to a long-distance legal affair.  This possibility is not without its risks, however.  The tech giants tend to keep the whereabouts of their server facilities under tight wraps for security and other similar reasons.  Thus, the courts are likely to grasp on the idea that a would-be defendant is probably completely unaware that his or her nefarious missive would pass through the Dominion on its way to the “internet of everything.”  This returns us to the inevitable questions of purposeful availment, and ever-present balancing act of “traditional notions of fair play and substantial justice.”

If you're considering a defamation lawsuit in Virginia or Washington, D.C., especially if the defendant is not in the same state as you, please contact us for a consult about personal jurisdiction. 

By Katarina Nguyen
 
I.          What is defamation?
 
The elements of defamation in Virginia are “(1) publication of (2) an actionable statement with (3) the requisite intent.” Jordan v. Kollman, 612 S.E.2d 203, 206, 269 Va. 569 (Va. 2005). In litigation, the plaintiff has the burden of proving that a defamatory statement is false. Id. at 206-07 (citing Williams v. Garraghty, 249 Va. 224, 235, 455 S.E.2d 209, 216 (Va. 1995)). The standard for the burden of proof is by the preponderance of the evidence. Gazette, Inc. v. Harris, 229 Va. 1, 15, 325 S.E.2d 713, 724-24 (Va. 1985). “Preponderance of the evidence” is the standard burden of proof for most civil cases, which is a lower standard than “beyond a reasonable doubt” in criminal cases and “clear and convincing evidence” in certain types of civil cases.
 
The first element simple enough to understand: the defamatory statement has to be shared with other people. The third element gets more complicated with different types of intents for different types of defamation, but the general concept is still clear: the person making the defamatory statement had to intend it to be so. However, the second element tends to be the trickiest.
 
II.        What is an actionable statement?
 
The Virginia Supreme Court has held that an “actionable statement” is one that is both false and defamatory. Id. (citing M. Rosenberg & Sons v. Craft, 182 Va. 512, 518, 29 S.E.2d 375, 378 (Va. 1944)). Being a false statement is not enough to be actionable--the statement must also be defamatory. Conversely, being a defamatory statement with the required “sting” is not enough to be actionable--the statement must also be false.
 
III.       What is the defamatory “sting”?
 
The Court refers to this as the defamatory “sting” needed for the statement to be actionable. Schaecher v. Bouffault, 290 Va. 83, 92, 772 S.E.2d 589, 594 (Va. 2015). Actionable statements with the required defamatory “sting” are those that harm the person's reputation so much so that third parties or the community as a whole holds a poorer estimation of him or her, or that third parties feel deterred from associating with him or her as a result of the statement. Id. at 91-92, 772 S.E.2d at 595 (quoting Chapin v. Knight-Ridder, Inc., 993 F.2d 1097, 1092 (4th Cir. 1993)). Statements with the required defamatory “sting” also tend to shame or disgrace the person, cause others to scorn, contempt, or ridicule him or her, and gives him or her a ridiculous, odious, or infamous reputation. Id. at 92, 772 S.E.2d at 594.
 
IV.       What qualifies as a defamatory “sting” and an actionable statement?
 
While the definition of an “actionable statement” is broad, the Virginia Supreme Court has established certain categories of actionable statements as having a strong defamatory “sting”, so much so that the plaintiff would not have to show how exactly he or she was injured by the statement. Great Coastal Exp., Inc. v. Ellington, 334 S.E.2d 846, 849, 230 Va. 142, 146-47 (Va. 1985). These are actionable statements that constitute defamation “per se”. Actionable statements that do not constitute defamation per se are categorized as defamation “per quod”.
 
The four types of actionable statements that are defamatory per se are as follows:
 
1.     Stating that the person committed a criminal offense involving moral turpitude which, if charged, could result in indictment and punishment.
2.     Stating that the person is infected with a contagious disease which, if true, would exclude that person from society.
3.     Stating that the person is unfit to perform their official duties or job duties, or that the person lacks integrity to perform such duties.
4.     Making a statement that would prejudice the person in his or her profession or trade.
 
Id.
 
The Virginia Supreme Court has ruled that a crime of “moral turpitude” is where the offense is so base, vile, or depraved either in private or in social settings and is contrary to customary rules governing what is right and the duties that people who to each other.  Id. at 850 (quoting Tasker v. Commonwealth, 202 Va. 1019, 1024, 121 S.E.2d 459, 463 (Va. 1961)).
 
The statements have to strictly meet the foregoing requirements to qualify as actionable on a per se basis. For instance, falsely stating that the person drove a vehicle with expired registration tags perhaps may qualify as defamatory, but because no reasonable person would consider failing to renew their vehicle registration to be a base, vile, or depraved act, this statement would not qualify as actionable per se. Similarly, falsely stating that the person contracted influenza may be defamatory, but because it would not exclude that person from society, it would not be actionable per se.
 
V.        What doesn't qualify as a defamatory “sting” or an actionable statement?
 
Because there is a broad spectrum of what meets the definition of an actionable statement, it can often be easier to define an actionable statement by what does not qualify as actionable or otherwise lacks the required defamatory “sting”.
 
A.             Absolute Privilege
 
The Virginia Supreme Court has held that statements made as part of a judicial proceeding, so long as those statements are both material and relevant to the matter, are protected by absolute privilege. Mansfield v. Bernabei, 727 S.E.2d 69, 73 (Va. 2012) (citing Donohoe Constr. Co. v. Mt. Vernon Assocs., 235 Va. 531, 537, 369 S.E.2d 857, 860 (Va. 1988) (internal quotations omitted). Absolute privilege is not limited to just those statements made within a courtroom. Id. However, this privilege does not extend to “mere potential litigation”, so statements made prior to litigation may be actionable.  Id. (citing Lindeman v. Lesnick, 268 Va. 532, 537-38, 604 S.E.2d 55, 58 (Va. 2004)). But statements made as part of attempted settlement negotiations related to seriously considered proposed judicial proceedings are protected by absolute privilege if those statements are only made to people with an interest in the proposed judicial proceeding and the statements themselves are material and relevant to the matter. Id. at 75.
 
An example of a privileged pre-litigation statement is if the person prepares a settlement proposal or draft of a judicial filing and circulates it among parties who would be involved in the potential lawsuit. Statements made during the litigation, including in the courtroom, judicial filings, or at depositions, are also protected by absolute privilege.
 
B.             Qualified Privilege
 
The Virginia Supreme Court has recognized a defense of qualified privilege to what would otherwise be actionable statements. This type of privilege covers statements where the person making the statement has an interest or duty in the subject matter of the statement. 286 Va. at 338, 749 S.E.2d at 533 (citing Larimore v. Blaylock, 249 Va. 568, 572, 528 S.E.2d 119, 121 (Va. 2000)).
 
A classic example of qualified privilege is demonstrated by the case of Cashion v. Smith. In that case, two surgeons were providing emergency treatment to a patient, who died during the surgery. After the treatment, one of the doctors made several statements about the other doctor in front of the other members of the treatment team, including stating that the other doctor “purposefully didn't resuscitate” the patient, implying that the other doctor euthanized the patient. The Virginia Supreme Court affirmed the trial court's ruling that the statements were not actionable because the doctors both had an interest or duty in the subject matter of the statement, namely the quality of the patient's treatment.
 
However, simply because the person making the statement has an interest in the subject matter of the statement does not mean that he or she can say anything without consequence. Qualified privilege can be revoked if the plaintiff is able to show that (1) the person making the statement knew it was false or recklessly did not care if it was true or false, (2) the person making the statement communicated it to a third party with no interest or duty in the subject matter, (3) the person making the statement did so out of ill will or personal spite, (4) the person making the statement used disproportionately violent or strong language when compared against what was being alleged, or (5) the person making the statement did so in bad faith. Id. If any one of those arguments applies, then qualified privilege can be revoked.
 
Using the above Cashion v. Smith scenario as an example, if the doctor accusing the other doctor of purposefully failing to resuscitate the patient actually knew that the other doctor did, in fact, try to resuscitate the patient, but then made that statement anyway, then the qualified privilege is revoked and the statement becomes actionable.
 
C.            Rhetorical Hyperbole
 
The Virginia Supreme Court has held that statements qualify as rhetorical hyperbole and, therefore, are not actionable, if a third party could not reasonably infer from the statement that the person actually engaged in the described conduct. Cashion v. Smith, 286 Va. 327, 339-40, 749 S.E.2d 526, 533 (Va. 2013 (quoting Yeagle v. Collegiate Times, 255 Va. 293, 296, 497 S.E.2d 136, 127 (Va. 1998)). Rhetorical hyperbole can also encompass statements that are offensive, inappropriate, or insulting. 290 Va. at 92, 772 S.E.2d at 594. These types of statements lack a defamatory “sting” due to the fact that most reasonable people would not believe the statements as being the truth.
 
Exaggerations and extreme-language tends to qualify as rhetorical hyperbole. For example, a statement such as, “This person is a pig because they ate all of the restaurant's food in one meal,” would be considered rhetorical hyperbole because no reasonable person would believe that the subject person was a literal pig or that a single person could eat an entire restaurant's stock of food in a single sitting.
 
However, rhetorical hyperbole can still cross a line, carry the required defamatory “sting”, and therefore be deemed actionable statements under certain circumstances. If the statement accuses the person of lying, then an average third party reading or hearing that statement would not know if that statement was hyperbole or not.  Schaecher v. Bouffault, 772 S.E.2d 589, 599 (Va. 2015). Because of that, statements that accuse the person of lacking honesty or being a liar have been ruled as being potentially actionable statements depending on the circumstances. Id. at 600.
 
D.            Opinion
 
The Virginia Supreme Court has exempted statements of opinion from being deemed actionable statements because, like rhetorical hyperbole, they lack the required defamatory “sting”. In discussing what constituted an opinion, the Court defined it as being largely dependent on the speaker's point-of-view and being relative in nature. 286 Va. at 336, 749 S.E.2d at 533. But if the opinion is couched in language with factual connotations that can be proven false, then those statements can be actionable. Fuste v. Riverside Healthcare Ass'n, 265 Va. 127 575 S.E.2d 858, 861-62 (Va. 2003) (quoting WJLA-TV v. Levin, 264 Va. 140, 156, 564 S.E.2d 383, 392 (Va. 2002)). And insinuations within an opinion can cause the statement to become actionable. Hyland v. Raytheon Tech. Servs. Co., 277 Va. 40, 47, 670 S.E.2d 746, 751 (Va. 2009).
 
Using the previously explained scenario from Cashion v. Smith, the doctor's statement that the other doctor “purposefully didn't resuscitate” the patient is not an opinion because there are factual connotations and insinuations in that statement that can be proven false, which is either than the other doctor failed to perform the resuscitation treatment or actively stopped the resuscitation treatment from happening. But that doctor's remaining statements about how the other doctor “didn't really try”, gave “a very poor effort”, and “gave up on” the patient were all deemed to be opinions because they entirely depended on that doctor's point-of-view and were subjective in nature.
 
E.             Truth
 
The truth is always a strong argument against an alleged actionable statement. However, the defendant no longer has to raise the truth as an affirmative defense in defamation cases. 229 Va. At 15, 325 S.E.2d at 725. Rather, the plaintiff has the burden of proving that the actionable statement is both defamatory and false. Id.
 
VI.       What should I do if I think someone defamed me?
 
Defamation cases are all very fact-specific, meaning that no two cases are exactly alike. You will need to have the precise words that the person spoke or wrote in order to proceed with a defamation case in court. And you will also need background information and perhaps other statements that were made to establish the circumstances, conditions, and context of your case, which all directly impact the strength of your defamation case. And bear in mind that the statute of limitations for defamation is one year from when the cause of action accrues, which is generally from the date of the statement's publication. Va. Code Section 8.01-247.1. That means that if you suspect you have been defamed, you need to maintain a record of the statement, if possible, and determine whether to take legal action sooner rather than later.
 
If you need assistance in determining whether you have a potential defamation claim, please contact us for a consultation.

By Charles Michael Fulton

Many people in the metro-DC area have security clearances. When a legal issue arises, they are rightfully concerned about the impact on their security clearance and the corresponding impact on their careers. Like most legal questions, the answer is it depends—that is to say, it depends on your particular legal issue and the underlying facts. To give you some background on how we’d answer your question, however, this blog post will discuss the relevant portions of the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, 32 C.F.R. § 147 (2021), (the “Adjudicative Guidelines”).

The Adjudicative Guidelines list thirteen Guidelines outlining areas of concern for agency supervisors to apply to both initial and continuing eligibility for access to classified information. Each Guideline is assigned a letter from A to M. The first three Guidelines, A to C, along with Guideline L, deal with allegiance to the United States and foreign influences, including in activities outside of employment—generally not areas with which our clients are concerned. See 32 C.F.R. § 147.3–.5, .14 (2021). Guideline I outlines areas of concern relating to emotional, mental, and personality disorders. See 32 C.F.R. § 147.11 (2021).

For criminal issues, the analysis starts with Guideline J, entitled Criminal conduct. See 32 C.F.R. § 147.12 (2021). Guideline J is primarily concerned with a “serious” crime, but multiple “lesser” offenses can also be a basis for disqualification. 32 C.F.R. § 147.12(b)(2) (2021). It’s unclear whether the distinction between “serious” and “lesser” offenses follows the distinction between a felony and a misdemeanor—but the felony/misdemeanor distinction is probably a good rule of thumb. Note that, in Guideline J, agency supervisors are directed to consider allegations and admissions of criminal conduct, not just criminal charges. 32 C.F.R. § 147.12(b)(1) (2021).

As an example, assume you’ve been charged with reckless driving in Virginia. In Virginia, among other things, reckless driving is driving either twenty miles over the speed limit or over eighty-five miles per hour. Va. Code Ann. § 46.2-862. Reckless driving is a first-degree criminal misdemeanor. Va. Code Ann. § 46.2-868(a). First-degree criminal misdemeanors are subject to jail time of no more than twelve months and/or a fine of no more than $2,500.00. Va. Code Ann. § 18.2-11(a).

Applying the distinction between a felony and a misdemeanor, a single count of reckless driving in Virginia may not be sufficiently serious for an agency supervisor to revoke your security clearance. If this is your second or third reckless driving charge, however, it does provide a stronger basis for an agency supervisor to revoke a security clearance.

Fortunately, Guideline J provides some instructions on facts that could reduce a supervisor’s concern for serious or multiple lessor criminal offenses. Specifically, Guideline J instructs a supervisor to consider whether the alleged criminal behavior was in the past; was isolated; resulted from pressure or coercion; or was involuntary. 32 C.F.R. § 147.12(c)(1)–(4) (2021). Additionally, Guideline J instruct supervisors to consider whether the applicant was acquitted on the alleged criminal charges or whether there was “clear evidence of successful rehabilitation.” 32 C.F.R. § 147.12(c)(5)–(6) (2021).

For these reasons, if you’re accused of reckless driving in Virginia, and you don't need to attend driving school to resolve the charge, you could "save" driving school until the second such charge. Driving school may help you avoid the second conviction for reckless driving—and, if it does not, it may be evidence of rehabilitation. To prove that the rehabilitation was successful, however, you may want to reconsider driving over the speed limit—or to trade in your sports car for a mini van!

Additionally, several other Guidelines can factor into a criminal issue analysis. For example, are Guideline D directs agencies to consider the sexual behavior of an applicant—and first on the list is sexual behavior of a criminal nature. 32 C.F.R. § 147.6(a) (2021). You should consider these guidelines focusing on individual criminal behavior as well as Guideline J when you’re evaluating the effect of an allegedly criminal act on your security clearance.

These are just basic examples of how criminal allegations may affect your security clearance. A proper evaluation will require a fuller discussion of your facts and circumstances. If you have questions about how criminal allegations may impact your security clearance, please contact Steven Krieger Law, PLLC for a consultation on the matter.

This blog post on how a criminal allegation may affect your security clearance is part of a series of blog posts on how legal matters may affect a security clearance. For information on how a family law matter may affect your security clearance, click here. For information on how a civil matter may affect your security clearance, click here.

By Charles Michael Fulton

Many people in the metro-DC area have security clearances. When a legal issue arises, holders of security clearances are rightfully concerned about the impact on their security clearance and the corresponding impact on their careers. Like most legal questions, the answer is it depends—that is to say, it depends on your particular legal issue and the underlying facts. To give you some background on how we’d answer your question, this blog post will discuss the relevant portions of the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information, 32 C.F.R. § 147 (2021), (the “Adjudicative Guidelines”).

The Adjudicative Guidelines list thirteen Guidelines outlining areas of concern for agency supervisors to apply to both initial and continuing eligibility for access to classified information. Each Guideline is assigned a letter from A to M. For example, the first three Guidelines, A to C, along with Guideline L, deal with allegiance to the United States and foreign influences, including in activities outside of employment—generally not areas with which our clients are concerned. See 32 C.F.R. § 147.3–.5, .14 (2021).

For a civil matter, such as a lawsuit over a debt or a landlord/tenant dispute that ends up in litigation, the most relevant guideline is Guideline F, which deals with money concerns. See 32 C.F.R. § 147.8 (2021). Guideline F instructs supervisors to consider, among other things, an applicant’s history of not fulfilling financial obligations and an inability or unwillingness to satisfy debts. 32 C.F.R. § 147.8(b)(1),(3) (2021).

As an example, a debt collector sues a client for a debt that the client had long forgotten, never new existed, or was not actually the client’s obligation. This would likely be a concern for a supervisor in a security clearance review because it is an indicator that the client has a history of not fulfilling financial obligations.
As another example, a client failed to pay the full amount of rent (and late fees) due on his or her previous rental unit. This would also likely be a concern for a supervisor in a security clearance review because it is an indicator that the client has a history of not fulfilling financial obligations.

Fortunately, Guideline F provides some instructions on facts that could reduce concern for failing to pay debts. Specifically, Guideline F instructs supervisors to consider whether the issue happened a long time ago; the issue was isolated; the issue resulted from circumstance beyond the client’s control, due to extenuating circumstances such as loss of a job; and whether the client is actively working to resolve the issue or making an effort to repay his or her debts. 32 C.F.R. § 147.8(c)(1)–(4),(6) (2021).

To reduce concern for the first example, the client could point out that the debt arose a long time ago, and that the client has no other such debts on his or her record. Of course, the later would require the client to investigate whether the client did, indeed, have any other such outstanding debts—a great way to do this would be for the client to request several credit reports and carefully review the results.

To reduce concern for the example using unpaid rent, the client could point out that the unpaid rent was the result of unexpected circumstances, such as the loss of a job or, perhaps, the loss of a spouse or co-tenant. Further, the client could point to the fact that, hopefully, the client was actively trying to negotiate with his or her former landlord to reach a mutually agreeable settlement arrangement to resolve the debt.

If these examples do not answer your questions about how a civil claim you have, or someone has a claim against you that may affect your security clearance, please contact Steven Krieger Law, PLLC, for a consultation on the matter.

This blog post on how a civil matter may affect a security clearance is part of a series of blog posts on how legal matters may affect a security clearance. For information on how a family law matter may affect your security clearance, click here (coming soon). For information on how a criminal matter may affect your security clearance, click here (coming soon).

By Susann Nordvik, Katarina Nguyen, and Steven Krieger
 
“Every attorney shall be liable to his client for any damage sustained by the client through the neglect of his duty as such attorney.”[1]  This statutory provision stands for the common sense principle that attorneys are responsible for the actions they take as counsellors and representatives of their clients—just like everyone else who acts on behalf of others or who interacts with others.  However, because of the place where this principle stands, at the intersection of many areas of the law, this statutory obligation is not as straightforward as it appears. 
 
In civil situations, which is the area where most people will come into contact with, or require the services of, attorneys, a standard of ordinary care applies.[2]  However, what happens when a client believes that his or her counsel has breached that ordinary duty of care?
 
To prevail on a claim of legal malpractice, a client must establish the following:

1. That the client employed the attorney;
2. That the attorney failed to perform his or her services with an ordinary standard of care; and,
3. The client was damaged as a proximate result of the attorney’s failure to perform.

 
Employment of Counsel

The relationship between an attorney and client has been considered to be the most sacred relationship in the law.[3]  Because of the nature of the legal profession, it is possible that an attorney could be “employed” simply based upon the meting out of legal advice, even if no money ever changes hands, and regardless of whether a formal contract is formed.  However, generally speaking, because of the vagaries of legal situations, the formation of an attorney-client relationship requires actual interaction between the parties as opposed to the mere review of generic information, such as reading an article on an attorney’s website.  The formation of an attorney-client relationship requires the assent of both parties, either directly or impliedly.[4]  In formal terms, this relationship is known as “contractual privity.”[5] 

Nevertheless, it is possible that a third party could be what is known in the legal world as a “third party beneficiary” of legal services, and therefore, can stand in the shoes of the client for purposes of a legal malpractice claim.  For example, if a person engages an attorney to make out a will, and in the process names a specific beneficiary, that beneficiary is essentially the intended beneficiary of the agreement between the lawyer and the client.  If the attorney fails to properly safeguard the estate while making a will so that the assets do not pass to the client’s intended beneficiary, that beneficiary may be able to state a claim for malpractice against the attorney if the attorney cannot correct the error after the death of the testator.  This is precisely what happened in the case of Thorsen v. Richmond Society for the Prevention of Cruelty to Animals.[6] 

In Thorsen, the Richmond SPCA was able to maintain an action for legal malpractice on the grounds that the SPCA, which was the testator’s sole surviving beneficiary, was unable to receive the testator’s bequest of real property due to the error of the attorney Thorsen when preparing the will.  As a result, the property passed intestate to other members of the testator’s family, thereby damaging the SPCA and depriving it of the full bequest.[7]

The Virginia Supreme Court held that the third-party beneficiary doctrine was a well-reasoned exception to the privity requirement, thereby permitting a party to proceed with a malpractice action.[8]  However, if a third party cannot claim beneficiary status, the rule of contractual privity will prevent that third party from asserting a malpractice claim,[9] and a malpractice claim cannot be assigned by a client to another party.[10]  
However, in 2017, the year after the Court ruled on Thorsen, the Virginia legislature enacted Va. Code § 64.2-520.1, which arguably has the impact of undoing the Court’s ruling in the estate planning context. The statute says that only the individual or their personal representative can maintain an action for legal malpractice in the estate planning context, the cause of action for which accrues upon the completion of the representation, unless there is a specific reference to subsection (B) “expressly grant[ing] standing to a person who is not a party to the representation.”
While a third-party could bring a legal malpractice claims in other contexts, a client cannot assign a legal malpractice claim to someone else.[11] This is due to the court’s concern that legal malpractice claims would be sold and traded like a commodity, which means that an attorney could be sued for malpractice by someone they never met before and for whom they never rendered legal advice or services.[12]

Falling Below the Standard of Care

The employment of counsel establishes a duty on the part of the attorney to the client, and failing to meet, or falling below the standard of care constitutes breach of the duty owed the client.  The standard of care is based on what the ordinary, prudent attorney would do under the same or similar circumstances.  In fact, the Virginia Supreme Court has stated:  “[The attorney] is not to be answerable for every error or mistake, but on the contrary, will be protected if he acts in good faith, to the best of his skill and knowledge, and with an ordinary degree of attention.”[13]  In addition, a negligent attorney can also apply the defense of contributory negligence in the context of legal malpractice cases, or that the client’s own negligence contributed to the client’s resulting damages.[14]
​
An illustration of this comes into play when an attorney is asked to make a determination about the path the courts will take in an unsettled area of the law.  The attorney cannot “look into a crystal ball” and foresee what will happen, but he or she can review the existing law and make a reasoned judgment about how a court might rule.  In Virginia, there is no blanket “judgmental immunity,” however, the Supreme Court has held that “if an attorney exercises a ‘reasonable degree of care, skill, and dispatch’ while acting in an unsettled area of the law, which is to be evaluated in the context of ‘the state of the law at the time’ of the alleged negligence, then the attorney does not breach the duty owed to the client.”[15]

Resulting Damages

“‘Damage is an essential element of a cause of action. Without some injury or damage, however slight, a cause of action cannot accrue.’” [16] An injury may be something intangible, such as the loss of the right to pursue a legal claim because of an attorney’s failure to take timely action to sue;[17] or an injury may be a tangible effect, such as having a judgment entered against the client, even if the client had not paid the judgment, due to an attorney’s manifest error.[18] 

However, it should be noted that in the event that the damage suffered by the client is so financially catastrophic that the client finds himself or herself filing for bankruptcy protection as a result, any claim for legal malpractice that arose prior to the bankruptcy filing would become part of the bankruptcy estate.[19] As such, the future of the malpractice claim is determined by the bankruptcy trustee, who may opt either to prosecute the claim as an adversarial proceeding in the bankruptcy court, or abandon the claim, in which event the claim reverts to the client.[20]

Collectibility is also an issue the courts consider when the damage is the loss of an otherwise viable claim due to the attorneys’ negligence. Collectibility of a claim can act as a limit on “the measure of the legal malpractice plaintiff’s damages to how much the legal malpractice plaintiff could have actually recovered from the defendant in the underlying litigation, absent the attorney’s negligence, not simply to the face value of the lost claim.”[21]  This collectibility issue goes to proving the attorney’s negligence was the proximate cause of the client’s damages.[22]

Finally, a potential claimant must understand that as a contract action, only pecuniary losses are considered recoverable damages in a legal malpractice claim, but this includes losses that are “reasonably foreseeable when the contract is made.”[23]  Non-pecuniary losses, such as pain and suffering or emotional distress are not recoverable.[24] Likewise, punitive damages cannot be recovered “in the absence of an independent, willful tort giving rise to such damages.”[25]

Making a Timely Legal Malpractice Claim

One of the most important aspects of any legal claim is making the claim in a timely manner.  This requires taking action before the “statute of limitations” runs out.  A statute of limitations is a time period created by the legislature in which a legal action must be filed in court or the right to file the claim is lost forever.  The purpose of statutes of limitations is to provide sufficient time for a potential plaintiff to take action, but not allow so much time to pass that the claim becomes stale, witnesses become difficult to locate, or memories of the events fragment.  The time periods involved may appear to be somewhat arbitrary, but the time periods themselves are meant to strike a balance between the rights of an injured party, the interests of justice in a fair and complete hearing, and the interest of a potential defendant in finality.

Although there are notes of tort law in legal malpractice claims, the courts have largely concluded that the duty of the attorney arises out of the agreement to perform services for the client.  Consequently, the claim is a contract claim and governed by the limitations period for contracts.[26]  This time frame is 3 years for an oral contract and 5 years for a written contract.[27]

It is nevertheless possible to allege an “independent willful tort,” such as fraud, if the conduct of the attorney is of a type that would ordinarily be considered tortious, and the duty that the lawyer owes to the client arises in a manner not solely attributable to contract.[28]  As this concept suggests, the legal doctrines applicable to such unique situations can be highly complex, and necessitate analysis by experienced counsel to determine whether a given case involves a tort claim in addition to a contract claim.

The Code of Virginia states that the limitations period for contract claims commences on the date that the breach occurred, not the date that the breach was discovered by the client.[29]  Therefore, it is important to act quickly once you realize that your attorney or former attorney may have committed malpractice.  Nevertheless, the Supreme Court has also held that the “continuing representation” rule applies in legal malpractice claims that tolls the statute of limitations.  “[W]here there is an undertaking which requires a continuation of services, the statute of limitations does not begin to run until the termination of the undertaking. . .This special rule is applicable to a continuing agreement between attorney and client.”[30]  This prevents the client from being placed in the awkward position of having to take action against an attorney who is still performing services under the original agreement.  However, the termination of the last services performed on the particular undertaking is what controls the start of the statute of limitations period, even if the attorney represents the client for other matters.[31]

Applying These Requirements to Civil Litigation and Criminal Defense Cases
​
As discussed above, there is a certain degree of latitude given to the lawyer who attempts to discern what a court will do, but chooses wrongly.  This reasonable judgment rule commonly arises in litigation matters.  These situations are often referred to as “cases within cases,” because in order to establish damages for a lost claim against a litigation opponent, it must first be established that but for the attorney’s malpractice, the client would have prevailed in the underlying action.  This often necessitates a “mini trial” of the underlying claim to establish that the malpractice claimant would have won that original case.[32]  Consequently, whether or not your claim for litigation malpractice is a truly winnable case can be open to interpretation. 

Likewise, the threshold for an attorney malpractice claim in a criminal case is somewhat more robust than in other situations.  This is because the client must establish that he or she obtained post-conviction relief, and was legally innocent, entitling the client to release from incarceration.[33]  Generally this rule supports the public policy of the Commonwealth that “a criminal defendant may not profit from a crime in a subsequent legal malpractice action.”[34] 

Like most situations involving complex legal issues, claims are evaluated on a case-by-case basis, taking into consideration all of the facts that are unique to you.  Therefore, be sure to consult with competent counsel if you feel that you have a potential claim against an attorney that has represented you by contacting us for a consultation. 
 
* * * * *

[1] Va. Code, § 54.1-3906.

[2] Virginia does not have certifications for legal specialists, therefore, the general standard applies for all attorneys authorized to practice in the Commonwealth.

[3] Shipman v. Kruck, 593 S.E.2d 319, 324 (Va. 2004) (noting the “special trust and confidence inherent in the attorney-client relationship,” and quoting Allied Productions, Inc. v. Duesterdick, 232 S.E.2d 774, 776-77 (Va. 1977)).

[4] Bankers Credit Service of Vermont, Inc. v. Dorsch, 343 S.E.2d 339, 341 (Va. 1986) (“In order for an agreement to be binding, the parties must have assented to its terms.  This assent, however, need not be communicated by express words, but may be inferred from the conduct of the parties.”).

[5] See Ayyildiz v. Kidd, 266 S.E.2d 108, 112-13 (1980) (noting that an adverse party cannot institute a legal malpractice claim, as adverse parties are not in contractual privity with the attorney, nor are they intended beneficiaries of the agreement between lawyer and client).

[6] 786 S.E.2d 453 (Va. 2016).

[7] Id. at 457.

[8] Id. at 463; cf Copenhaver v. Rogers, 384 S.E.2d 593, 596 (Va. 1989) (noting that “[t]here is a critical difference between being the intended beneficiary of an estate and being the intended beneficiary of a contract between a lawyer and his client.”)  As Copenhaver indicates, although alleging third-party beneficiary status may permit a case to proceed, it is still necessary to prove that the individual claimant was specifically intended to benefit under the contract for legal services.  Such a situation may occur where a parent engages an attorney for the representation of an adult child, for example.  Although the child may also be considered a client of the attorney from a professional ethics standpoint, the child is clearly the intended beneficiary of the agreement between parent and lawyer.

[9] Johnson v. Hart, 692 S.E.2d 239, 243-44 (Va. 2010).

[10] MNC Credit Corp. v. Sickels, 497 S.E.2d 331, 333 (Va. 1988).

[11] Id. at 334.

[12] Id. at 333-34.

[13] Glenn v. Haynes, 66 S.E.2d 509, 512-13 (Va. 1951).

[14] Lyle, Siegal, Croshaw & Beale, P.C. v. Tidewater Capital Corp., 457 S.E.2d 28, 32, 249 Va. 426, 432 (Va. 1995).

[15] Smith v. McLaughlin, 769 S.E.2d 7, 14 (Va. 2015).

[16] Shipman v. Kruck 593 S.E.2d 319, 323 (Va. 2004) (quoting Keller v. Denny, 232 Va. 512, 520, 352 S.E.2d 327, 332 (Va. 1987)).

[17] Williams v. Joynes, 677 S.E.2d 261, 265 (Va. 2009).

[18] Shipman, 593 S.E.2d at 326 (“A client who suffers the entry of a judgment against him indeed suffers a legal injury or damage”)..

[19] See In re Sheikhzadeh, Case No.:  14-14219-BFK at **10-11 (E.D. Va. Bankr. Jun. 26, 2018); see also Shipman at 323 (the cause of action accrued during the bankruptcy petition, which vested in the Bankruptcy Trustee).

[20] Property held by the debtor prior to the filing of the petition, and scheduled under Section 521 of the Bankruptcy Code, reverts to the original holder after discharge and closure of the case if the property is not pursued by the trustee for the purpose of addressing the debtor’s debts through the bankruptcy estate.  However, bankruptcy is a complex field of law, and questions surrounding choses in action where a bankruptcy is involved should be addressed by competent bankruptcy counsel.

[21] Smith, 289 Va. at 261, 769 S.E.2d at 17 (Va. 2015).

[22] Id.

[23] Id. at 265 (What damages are recoverable in legal malpractice is governed by the law concerning damages in breach of contract cases, and thus “‘are limited to those losses which are reasonably foreseeable when the contract is made’” (quoting Kamlar Corp. v. Haley, 224 Va. 699, 706, 299 S.E.2d 514, 517 (Va. 1983)).

[24] Smith, 769 S.E.2d at 19.

[25] Id. (quoting O’Connell v. Bean, 556 S.E.2d 741, 743 (Va. 2002)).

[26] Oleyar v. Kerr, 225 S.E.2d 398, 400 (Va. 1976).

[27] Virginia Code, § 8.01-246.

[28] Goodstein v. Weinberg, 245 S.E.2d 140, 142 (Va. 1978). 

[29] Virginia Code, § 8.01-230.

[30] McCormick v. Romans, 198 S.E.2d 651, 654-55 (Va. 1973); see also Keller v. Denny, 352 S.E.2d 327, 330 (1987) (holding that “the breach of contract or duty occurs and the statute of limitations begins to run when the attorney’s services rendered in connection with that particular undertaking or transaction have terminated.”).

[31] Shipman, 593 S.E.2d at 324 (Va. 2004) (holding “[t]he proper inquiry is not whether a general attorney-client relationship has ended, but instead, when the attorney’s work on the particular undertaking at issue has ceased”); see also Moonlight Enters., LLC v. Mroz, 293 Va. 224, 232-33, 797 S.E.2d 536, 540 (Va. 2017).

[32] See e.g., Smith, 796 S.E.2d at 10-11.

[33] Id. at 13.

[34] Desetti v. Chester, 772 S.E.2d 907, 910 (Va. 2015) (citing Taylor v. Davis, 576 S.E.2d 445, 447 (Va. 2003); Adkins v. Dixon, 482 S.E.2d 797, 801-02 (Va. 1997)).

By Peter Anderson 

With alarming frequency, nursing homes are slipping arbitration clauses into the reams of paper elderly people musty sign when being admitted to a nursing home. There are 2.5 million Americans living in nursing homes or senior living centers. Some legal advocates believe that as many as 90% of large nursing homes in the U.S. now include arbitration agreements in their admissions contracts.

In many cases, these agreements allow nursing homes to avoid being sued in a normal civil court. This means there is no judge, no jury, and the proceedings in most cases will remain sealed from the public eye. If a person who is injured by a nursing home’s negligence as their case resolved through arbitration, the press will never hear about it, and a Google search will not reveal the case.

Arbitration was meant as a tool for business to resolve disputes quickly and efficiently to avoid courts. However, the use of arbitration has expanded over the past 30 years, and has been increasingly used to deprive consumers, who have little legal knowledge, of their rights. Today, asking the elderly to sign arbitration agreements has become standard industry practice.

​The nursing home industry argues that arbitration is good for business. Industry insiders say that claims subject to arbitration settle for 7% lower total cost to the business and three months sooner than claims with no arbitration. On the other hand, trial lawyers and consumer-rights advocates argue that arbitration agreements deprive consumers of a right to a fair trial and public proceeding.

Why Arbitration Agreements are Bad for Nursing Home Residents

There are several problems with arbitration agreements from my perspective. First, in many instances nursing home residents do not know what they are signing. Elderly consumers may have varying degrees of dementia and are presented with page after page of documents to sign before they can be admitted. Some provisions are benign – the nursing home first may ask the patient to sign a “resident’s rights” document. But, the nursing home may also bury an arbitration agreement in the middle. These agreements are very complex with legalese. The nursing home resident is anxious to be admitted and is not thinking about the wording of every sentence. If the resident has Alzheimer’s or dementia, it is unconscionable to ask such a person to sign a complex contract. But it happens all the time.

Second, arbitration agreements are known to result in lower awards. Instead of a jury hearing your case, who may be outraged by the allegations of neglect, an arbitrator will hear the case. An arbitrator is usually someone with knowledge of insurance disputes or an attorney. These people may have become numb to injury claims and may be less likely to award a large amount of money to a claimant. Further, arbitrators are often chosen from a short list of regional professionals. The same arbitrator can decide cases involving the same nursing home over and over again. This incentivizes arbitrators to keep repeat clients happy and give more favorable decisions to repeat offenders. Studies show that awards to plaintiffs can be as much as 35 percent lower.

Third, arbitration has different rules. What might be considered hearsay in civil court may be admissible under the lax rules of arbitration. Speculation about the cause of a resident’s injuries would be more likely to be heard in arbitration than in a regular court, which typically only allows expert witnesses to opine on causation.
 
Virginia Law on Nursing Home Arbitration Agreements

Under Virginia Code § 8.01-581.01, “a written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, except upon such grounds as exist at law or in equity for the revocation of any contract.” Unfortunately, courts have held that Virginia law favors arbitration provisions. Bishop v. Med. Facilities of Am. XLVII (47) Ltd. P'ship, 65 Va. Cir. 187 (2004).

However, if you have a claim against a nursing home and are trying to invalidate an arbitration provision, here are a few possibilities:

• Agency – The nursing home resident did not sign the contract herself, and the family member, or nursing home employee, who did not have a valid authority to do so.
• Competency – The nursing home resident did sign the contract herself, but was not competent to do so at the time. The contract can be invalidated by showing that the person had dementia or Alzheimer’s at the time the contract was signed.
• Waiver – A nursing home may waive the right to arbitrate by litigating an issue covered by arbitration. For example, if the nursing home has filed a lien for unpaid medical bills, that may act as a waiver of the entire arbitration agreement.
• Fraud – A nursing home may have fraudulently induced a nursing home resident to sign a contract by misrepresenting the contents of the agreement or making untrue promises with respect to the agreement, the nursing home, or nursing home arbitration clause.

Invalidating a nursing home arbitration clause is a tough task. If you are pursuing a nursing home negligence case (or another claim against the nursing home), it is important to hire an attorney who as experience in dealing with arbitration agreements. If you or loved one has a question about a nursing home arbitration clause or nursing home abuse, please contact us and we'll try to be helpful.

By Stephanie Minkoff
 
The short answer is, yes, thanks to recent changes by the Virginia legislature to the common law security deposit statute § 55-225.19.

There are two sets of laws that govern residential leases: common law (for private landlords unless they have multiple properties) or the Virginia Residential Landlord and Tenant Act (mainly for institutional landlords, buildings, or private landlords with several properties). The Virginia Residential Landlord and Tenant Act (“VRLTA”) always had a provision for attorneys' fees (see § 55-248.15:1), but tenants renting from private landlords who were exempt from the VRLTA could not get their attorneys’ fees recovered in a lawsuit to related to the return of a security deposit.
 
For reference, the VRLTA protects tenant’s apartments, rental homes, and federally subsidized housing in many different ways by imposing requirements on institutional and large residential landlords (defined as three or more properties subject to a residential lease). For more information on the rights of tenants in Virginia, please see our recent blog post on the subject.
 
Let’s say you have just moved out of your rental apartment and you now want to collect the security deposit you paid at the start of your lease. In Virginia, your landlord is obligated to return your security deposit with or without any deductions, which should be itemized with written notice, provided by the landlord, within 45 days after the termination of the lease (for both common law and VRTLA leases). 
 
There are several reasons that your landlord may decide to withhold payment, including outstanding rent payments (including late fees as specified in the rental agreement), money to cover unpaid utilities, excessive wear and tear on the unit, etc., The landlord must provide written notice of such payment obligations. Tenants should make sure landlords have updated address information where security deposits can be mailed and returned. In situations where there is more than one tenant subject to the rental agreement, the security deposit will be returned, less any deductions, with one check made payable to all tenants to a forwarding address provided (unless otherwise previously agreed to in writing). 
 
According to § 55-225.19, obligations in regards to security deposits by the landlord include:

• Itemized record of all deductions made by reason of the tenants noncompliance with § 55-225.4 during the preceding two years; and 
• Permit a tenant or his authorized agent or attorney to inspect such tenant's records of deductions at any time during normal business hours.
• Upon request by the landlord to a tenant to vacate, or within five days after receipt of notice by the landlord of the tenant's intent to vacate, the landlord shall provide written notice to the tenant of the tenant's right to be present at the landlord's inspection of the dwelling unit for the purpose of determining the amount of security deposit to be returned. If the tenant desires to be present when the landlord makes the inspection, he shall so advise the landlord in writing who, in turn, shall notify the tenant of the time and date of the inspection.
• Following the move-out inspection, the landlord shall provide the tenant with a written security deposit disposition statement including an itemized list of damages. If additional damages are discovered by the landlord after the security deposit disposition has been made, nothing herein shall be construed to preclude the landlord from recovery of such damages against the tenant, provided, however, that the tenant may present into evidence a copy of the move-out report to support the tenant's position that such additional damages did not exist at the time of the move-out inspection.
• If the tenant has any assignee or sublessee, the landlord shall be entitled to hold a security deposit from only one party in compliance with the provisions of this section.

 
If you feel that your landlord has not complied with his/her obligations and has not returned your deposit appropriately, and you are unable to resolve the dispute informally, you may decide to take legal action against your landlord. While you may consider handling the dispute yourself, inside or outside of court, hiring a professional with expertise related to the specific landlord and tenant laws in Virginia, doesn’t have to be a huge expense. Professional legal assistance can make the difference in obtaining a favorable outcome and with the recent legislative changes you are also able to request your attorneys’ fees associated with the litigation to recover your security deposit.
 
Feel free to contact Steven Krieger Law if we may be helpful in your security deposit dispute.