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Klayman v. Judicial Watch, Inc.

United States District Court, District of Columbia

August 30, 2017

LARRY KLAYMAN, Plaintiff,
v.
JUDICIAL WATCH, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          COLLEEN KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant's [7] Motion to Dismiss, brought pursuant to Federal Rule of Civil Procedure 12(b)(6). The following factual narrative is gleaned from the allegations of the complaint, which are taken as true solely for purposes of the pending motion: Plaintiff separated from Defendant Judicial Watch in September 2003. Compl. ¶ 9. As part of the separation, the parties executed a severance agreement, which included a non-disparagement clause. Id. Before his separation from Judicial Watch, Plaintiff represented Jose Basulto (“Basulto”) in suing the Republic of Cuba and its political leaders, and obtained a sizable judgment (the “Cuba Judgment”). Id. ¶¶ 7-8. Following the separation, Defendant allegedly made no effort to enforce the Cuba Judgment. Id. ¶ 11. On November 25, 2016, Plaintiff and Basulto entered an agreement retaining Plaintiff's legal services to enforce the Cuba Judgment. Id. ¶ 12. However, on or about November 30, 2016, Basulto informed Plaintiff that he would, instead, have Defendant seek enforcement of the Cuba Judgment. Id. ¶ 14. In the course of that conversation, Basulto allegedly provided Plaintiff with information showing that, on or about November 30, 2016, Defendant had stated that “Plaintiff did not have the resources or means to legally seek to enforce the Cuba Judgment . . . .” Id. Basulto allegedly switched representations on the basis of this statement. Id.

         Dismissal is sought either on the basis that Defendant is immunized from liability, or because the complaint fails to state a plausible claim for relief. For the reasons discussed below, it is premature to rule on Defendant's immunity defenses, and the complaint alleges plausible claims for breach of contract, defamation, and tortious interference with prospective economic advantage. Accordingly, upon consideration of the pleadings, [1] the relevant legal authorities, and the record for purposes of the pending motion, the Court shall DENY the [7] Motion to Dismiss.

         LEGAL STANDARD

         Pursuant to Rule 12(b)(6), a party may move to dismiss a complaint on the grounds that it “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “[A] complaint [does not] suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual allegations that, if accepted as true, “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.

         In deciding a Rule 12(b)(6) motion, a court may consider “the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, ” or “documents upon which the plaintiff's complaint necessarily relies even if the document is produced not by the plaintiff in the complaint but by the defendant in a motion to dismiss.” Ward v. District of Columbia Dep't of Youth Rehab. Servs., 768 F.Supp.2d 117, 119 (D.D.C. 2011) (internal quotation marks omitted). Here, the Court has limited its Rule 12(b)(6) analysis to the allegations of the complaint, and the exhibits attached to the complaint.

         DISCUSSION

         The Court begins with Defendant's assertions of privilege, before turning to assess whether Plaintiff has stated plausible claims for relief.

         Judicial Proceedings Privilege

         Defendant contends that it is entitled to absolute immunity under the judicial proceedings privilege for the alleged statement to Basulto. The District of Columbia has adopted the judicial proceedings privilege as articulated in section 586 of the Restatement (Second) of Torts (1977):

An attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.

See Finkelstein, Thompson & Loughran v. Hemispherx Biopharma, Inc., 774 A.2d 332, 338 (D.C. 2001); Messina v. Krakower, 439 F.3d 755, 760 (D.C. Cir. 2006). Defendant contends that the privilege applies because the statement to Basulto relates to “Judicial Watch's representation of Basulto in the collection effort as it advised regarding the best strategy for achieving the client's goal of successfully collecting the Cuba Judgment.” Def.'s Mem. at 5. The problem with this contention, however, is that it assumes a fact not alleged in the complaint. Rather, according to the allegations-assumed to be true for purposes of the pending motion-Defendant Judicial Watch had not sought enforcement of the Cuba Judgment on behalf of Basulto after Plaintiff's separation from the organization. This lack of activity is what allegedly resulted in Basulto retaining Plaintiff in November 2016. Consequently, while it may be true that the statement at issue was made in the course of Defendant's representation of Basulto, Defendant will need to adduce evidence of this contention in later stages of this proceeding.[2] Until then, the Court cannot conclude that Defendant was participating in the prospective litigation as counsel at the time the statement was made.

         Common Interest Privilege

         For similar reasons, dismissal is not appropriate on the basis of the common interest privilege. “To come within the protection of the ‘common interest' privilege, the statement must have been (1) made in good faith, (2) on a subject in which the party communicating has an interest, or in reference to which he has, or honestly believes he has, a duty to a person having a corresponding interest or duty, (3) to a person who has such a corresponding interest.” Moss v. Stockard, 580 A.2d 1011, 1024 (D.C. 1990). Here, Defendant contends that the statement falls within the common interest privilege because the “statement represents that class of communications that attorneys make, indeed, are obligated to make, to protect a client's economic interest . . . .” Def.'s Mem. at 6. As already discussed, the complaint does not allege that Judicial Watch and Basulto were in an attorney-client relationship at the time the statement was made, meaning dismissal on the basis of this privilege is not appropriate at this ...


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