ROBERT CUCINOTTA, AN INDIVIDUAL; AND KARIM MASKATIYA, AN INDIVIDUAL, Appellants,
DELOITTE & TOUCHE, LLP, A DELAWARE CORPORATION; AND LARRY KRAUSE, AN INDIVIDUAL, Respondents.
Appeal from a district court order granting summary judgment in a defamation action. Eighth Judicial District Court, Clark County; Elizabeth Goff Gonzalez, Judge.
Cooper Levenson April Niedelman & Wagenheim, P.A., and Jerry S. Busby, Las Vegas; Beus Gilbert PLLC and Scot Stirling and Leo Beus, Scottsdale, Arizona, for Appellants.
Morris Law Group and Rosa Solis-Rainey, Las Vegas; Paul, Weiss, Rifkind, Wharton & Garrison LLP and Charles E. Davidow, Washington, D.C.; Paul, Weiss, Rifkind, Wharton & Garrison LLP and Brad S. Karp and Andrew J. Ehrlich, New York, New York, for Respondents.
BEFORE THE COURT EN BANC. 
In this opinion, we consider whether information divulged by a registered accounting firm in accordance with the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, is subject to an absolute privilege in a defamation action. We conclude that an accounting firm should be encouraged to freely disseminate information concerning alleged illegal acts as long as the disclosure is made pursuant to federal securities law and made to the appropriate level of management. In recognition of the reporting responsibilities delegated to accounting firms to protect the investing public, we adopt the rule set forth in the Restatement (Second) of Torts section 592A (1977), and consequently, we conclude that one who is required by law to publish defamatory matter is absolutely privileged to publish it. Accordingly, we affirm the district court's summary judgment albeit on different grounds.
In 2007, respondent Deloitte & Touche, LLP, a registered public accounting firm, performed a third-quarter financial audit for Global Cash Access Holdings, Inc. (GCA), a publicly traded company providing cash access services to the gaming industry. Respondent Larry Krause, a certified public accountant employed by Deloitte, served as an independent auditor for many clients in the gaming industry, including GCA. During the course of a financial audit for another gaming client, Krause obtained an intelligence bulletin authored by the Federal Bureau of Investigation (FBI) that contained information about alleged illegal acts committed by GCA and two members of its board of directors, appellants Robert Cucinotta and Karim Maskatiya. Due to the serious allegations in the intelligence bulletin, Deloitte's senior management and in-house counsel contacted the FBI and the Department of Justice (DO J) to confirm the validity of the document. Although the DOJ advised against further dissemination of the document, Deloitte believed it had a duty under federal securities law to disclose the allegations within the intelligence bulletin to GCA's Audit Committee, which is a subcommittee of GCA's Board of Directors. Deloitte's in-house counsel prepared a script summarizing the allegations in the intelligence bulletin. Krause, along with a senior Deloitte auditor, subsequently communicated the allegations in the intelligence bulletin to the Audit Committee via conference call.
The script stated, in part, that Deloitte had "learned from a credible, confidential source that serious allegations have been made regarding transactions and conduct involving Global Cash Access and its principals." Deloitte listed the allegations, all of which were serious in nature. Deloitte requested that the Audit Committee conduct an independent investigation.
GCA issued a press release announcing that it would delay filing its third-quarter report pending the conclusion of an internal investigation. The investigation performed by a national law firm with experience in regulatory and compliance issues revealed no evidence of misconduct on the part of GCA, Cucinotta, or Maskatiya. GCA accepted the findings and issued a delayed third-quarter report. GCA's stock price significantly declined as a result of the delay in reporting. Soon thereafter, Cucinotta and Maskatiya resigned from GCA's Board of Directors.
Subsequently, Cucinotta and Maskatiya filed a complaint for defamation and tortious interference against Deloitte and Krause. They alleged that Deloitte published defamatory statements to the Audit Committee and knowingly interfered with their contractual relationships and prospective economic advantage with GCA as a result of the defamatory statements. Upon the completion of limited pre-answer discovery, Deloitte filed a motion for summary judgment, arguing that both the defamation and tortious interference claims failed as a matter of law because its communications with the Audit Committee were absolutely or conditionally privileged. The district court granted Deloitte's motion for summary judgment, concluding that Deloitte's communications to the Audit Committee were protected by a conditional privilege as Cucinotta and Maskatiya did not present evidence that would permit a reasonable jury to conclude that Deloitte acted with actual malice. The district court further concluded that Deloitte's communications were also privileged for purposes of the tortious interference claim. Although the district court found that Deloitte had a duty under federal securities law to disclose the allegations to the Audit Committee in order for the Audit Committee to investigate the allegations, the district court found it unnecessary to reach a conclusion as to whether Deloitte's statements were absolutely privileged. This appeal followed.
At the turn of the twentieth century, Lawrence R. Dicksee, Professor of Accounting at the University of Birmingham and Lecturer at the London School of Economics, advocated that auditors ought to be granted absolute privilege in their reporting obligations. Lawrence R. Dicksee, Auditing: A Practical Manual for Auditors (Robert H. Montgomery ed., American ed. 1905). He proffered that "[i]f the Auditor is of the opinion that something which has been done by the Directors, or by any outside persons, calls for the attention of stockholders, he should . . . feel no hesitation in expressing his view." Id. at 269.
Dicksee's theory of candid and forthright disclosure in the auditing profession is now being encouraged by Deloitte who argued below and continues to argue on appeal that this court should adopt an absolute privilege for individuals required by law to publish defamatory statements as articulated by the Restatement (Second) of Torts section 592A (1977). The Restatement provides that "[o]ne who is required by law to publish defamatory matter is absolutely privileged to publish it." Id. We review the applicability of an absolute privilege de novo. See Clark Cnty. Sch. Dist. v. Virtual Educ. Software, Inc., 125 Nev. 374, 382, 213 P.3d 496, 502 (2009). Although the district court did not reach a conclusion as to whether Deloitte's communications to the Audit Committee were absolutely privileged, ...