January 25, 2017

Telling the truth is not a tort

By Deborah J. La Fetra Senior Attorney

Embedded in American mythology is the legend of young George Washington chopping down a cherry tree, and, when confronted by his father, confessing “I cannot tell a lie.” Since our earliest days, American law has placed high value on the communication of truthful information, in recognition that an open society encourages trade and business relationships and fair administration of justice. Thus, truth is a defense to defamation claims. Is it also a defense to the tort claim of intentional interference with contract? In Community Health Systems Professional Services Corp. v. Hansen, the Texas Supreme Court will decide this issue. PLF’s amicus brief, filed today, argues that truthful communication should be adopted as a categorical defense to intentional interference claims. If truth is not a defense to interference torts, then potential defendants will choose to keep themselves quiet, and the recipients of their communication in ignorance, to avoid being sued.

The case involves Dr. Henry Hansen’s complaints about the termination of his employment contract with a physicians’ group affiliated with College Station Medical Center. The hospital contracted with a professional services administration firm that evaluated physician performance and employment. The firm truthfully advised the hospital that Dr. Hansen had caused significant financial losses due to the combination of his very high salary, failure to see a sufficient number of patients, and a months-long refusal to accept referrals from two of the three primary referring doctors. Dr. Hansen sued the firm for intentional interference with his employment contract.

The Texas Supreme Court has long hewed to the principle that true statements cannot form the basis of a finding of defamation and the policy reasons underlying that bedrock rule apply with equal force to efforts to punish truthful speech under the rubric of tortious interference with contract. Just as state agencies demand and depend upon truthful communication when regulating businesses, so too do private commercial enterprises seek and require truthful information when making business decisions and weighing employment relationships. Moreover, if the Court were to decide that truthful speech can give rise to liability for tortious interference, it would then be obliged to tackle the question of whether such a rule runs afoul of the free speech guarantees in the Texas Constitution and the First Amendment to the United States Constitution. Hint: It does. As the Arizona Supreme Court said, “It is difficult to see anything defensible, in a free society, in a rule that would impose liability on one who honestly persuades another to alter a contractual relationship.”

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