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Fridman v. Bean LLC

United States District Court, District of Columbia

January 15, 2019

MIKHAIL FRIDMAN, PETR AVEN, and GERMAN KHAN Plaintiffs,
v.
BEAN LLC a/k/a FUSION GPS and GLENN SIMPSON Defendants.

          MEMORANDUM OPINION (JANUARY 14 2019) [DKT. ## 19, 20]

          RICHARD J. LEON United States District Judge

         This is a defamation action for monetary damages brought by three Russian businessmen-Mikhail Fridman, Petr Aven, and German Khan ("plaintiffs")-against political opposition research firm Fusion GPS and its principal Glenn Simpson ("defendants"). Pending before me are defendants' motions to dismiss under the DG. Anti-Strategic Lawsuits Against Public Participation ("Anti-SLAPP") Act of 2010, DG. Code §§ 16-5501-5505, and Federal Rule of Civil Procedure 12(b)(6). [Dkt. ## 19, 20]. On September 26, 2018, the parties presented oral argument on these motions, and on November 7, 2018, the parties submitted supplemental briefing. [Dkt. ## 43, 44]. Upon consideration of the pleadings and the relevant law, and for the reasons set forth below, defendants' motions to dismiss are DENIED.

         BACKGROUND

         Plaintiffs claim that defendants falsely accused them and their business consortium, Alfa, of engaging in criminal and other misconduct in conjunction with the Russian government and its president, Vladimir Putin. See generally Am. Compl. [Dkt. # 17]. Plaintiffs allege that defendants are liable for defamatory statements contained in one of the seventeen written Company Intelligence Reports 2016 ("CIRs") that collectively comprise what is now known publicly as the "Trump Dossier" or simply the "Dossier." Id. at ¶¶ 1-2. According to the Amended Complaint, defendants were hired first by the Washington Free Beacon and later by a law firm representing the Democratic National Committee and the Hillary Clinton presidential campaign to conduct political opposition research against then-candidate Donald Trump. Id. at ¶ 15. To perform this research, defendants engaged former British intelligence officer turned private investigator Christopher Steele and his company Orbis Business Intelligence Limited. Id. at ¶ 3. Steele allegedly used his sources in Russia to create the CIRs and compile the Dossier. Id.

         At issue in this case is CIR 112. CIR 112 is titled "RUSSIA/US PRESIDENTIAL ELECTION: KREMLIN-ALPHA GROUP CO-OPERATION," which, according to plaintiffs, implies that they, through Alfa, "cooperated in the alleged Kremlin-orchestrated campaign to interfere in the 2016 U.S. presidential election." Id. at ¶ 19 (alleging that nearly all of the CIRs bear headings related to alleged Russian interference in the 2016 United States presidential election and/or ties between the Russian government and the 2016 campaign of now-President Donald Trump). CIR 112, which defendants attached to their motion to dismiss, describes plaintiffs' and Alfa's purported relationship with Putin, including (1) "[significant" political favors done by plaintiffs for Putin in exchange for business and legal favors done by Putin for Alfa; (2)'an "illicit cash" delivery by an "Alpha executive" to Putin while Putin was the Deputy Mayor of St. Petersburg; (3) "informal advice" given by two of plaintiffs to Putin regarding Russian foreign policy toward the United States; and (4) compromising information held by Alfa about Putin as a source of leverage. See [Dkt. # 20-2]. Plaintiffs claim that the foregoing statements are false and defamatory because they accuse plaintiffs and their business of "maintaining] a highly inappropriate, and even criminal, relationship with Putin" and, by implication, involvement in the Russian government's campaign to interfere with the 2016 United States presidential election. Am. Compl. ¶ 23.

         The Amended Complaint asserts that defendants knew that the CIRs contained "unverified" and potentially inaccurate information gathered from sources and "subsources" unknown to them. Id. at ¶¶ 3-4, 13, 16, 18. In 2016, defendants allegedly arranged for Steele to brief select members of the media about the contents of the then-incomplete Dossier, including CIR 112, to "generate interest in the Dossier and secure eventual public dissemination of its content." Id. at ¶¶ 6, 18. These briefings were followed soon after by media articles describing the Dossier's contents. Id. In addition, defendants allegedly published the Dossier and CIR 112 to multiple other third parties. Id. at ¶ 18. Ultimately, on January 10, 2017, media organization BuzzFeed, Inc. published the entire Dossier online, including CIR 112. Id. at ¶ 8.

         ANALYSIS

         I. D.C. Anti-SLAPP Act

         The D.C. Anti-SLAPP Act imposes a heightened pleading standard where a defendant makes "a prima facie showing that the claim at issue arises from an act in furtherance of the right of advocacy on issues of public interest." D.C. Code § 16-5502(b). Upon such a showing, a plaintiff can survive dismissal only by "'demonstrating] that the claim is likely to succeed on the merits." Id. Defendants contend that they have made the required threshold showing, that plaintiffs cannot show a likelihood of success, and that, therefore, D.C.'s Anti-SLAPP law forecloses plaintiffs' defamation action. See Mem. in Supp. of Defs.' Special Mot. to Dismiss Under the D.C. Anti-SLAPP Act [Dkt. # 19-1]. I disagree. How so?

         As a general matter, federal courts sitting in diversity, as I am here, are called on to apply local substantive law and federal procedural rules. Hanna v. Plumer, 380 U.S. 460, 465 (1965) (citingErie R.R. Co. v. Tompkins, 304 U.S. 64 (1938)). Where local substantive law and a validly promulgated federal rule address the same question but differ as to the answer, the federal rule controls. Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398-99 (2010). Applying this framework, then-Judge Kavanaugh wrote for our Circuit in Abbas v. Foreign Policy Group, LLC, 783 F.3d 1328 (D.C. Cir. 2015) that a federal court sitting in diversity must apply Federal Rules of Civil Procedure 12 and 56 rather than D.C.'s Anti-SLAPP law, as the former are valid and "answer the same question" differently than the latter. Id. at 1334-37.

         Defendants respond that the D.C. Court of Appeals later rejected Abbas in Competitive Enterprise Institute v. Mann, 150 A.3d 1213 (D.C. 2016). See Novak v. Capital Mgmt. & Dev. Corp., 452 F.3d 902, 907 (D.C. Cir. 2006) (federal court's "duty" in resolving question of D.C. substantive law "is to achieve the same outcome" that the D.C. Court of Appeals would reach). Were that true, Mann would control here so long as it "clearly and unmistakably" resolves the disputed question. See Easaw v. Newport, 253 F.Supp.3d 22, 35 (D.D.C. 2017). Unfortunately for defendants, however, three of my colleagues on this Court recently have held that Mann does not sufficiently resolve this issue and that, therefore, Abbas remains the controlling law in our Circuit. See Cockrum v. Donald J. Trump for President, Inc., 319 F.Supp.3d 158, 165 n.2 (D.D.C. 2018) (Huvelle, J.) ("The Court continues to adhere to its view that controlling precedent precludes the application of D.C.'s Anti-SLAPP Act in federal court."); Fairbanks v. Roller, 314 F.Supp.3d 85, 94-95 (D.D.C. 2018) (McFadden, J.); Libre By Nexus v. Buzzfeed Inc., 311 F.Supp.3d 149, 160-61 (D.D.C. 2018) (Mehta, J.). Indeed, for this very reason defense counsel candidly admitted at oral argument that defendants are "swimming uphill on the application of the Anti-SLAPP Act" in this case. Mot. to Dismiss Hr'g Tr. 22 (Sept. 26, 2018) [Dkt. #41]. Given the sound reasoning employed in the foregoing decisions, the hill is steep, and the current is strong. I decline to ease either.

         Accordingly, defendants' motion to dismiss under D.C.'s Anti-SLAPP Act is DENIED.

         II. Rule 12(b)(6)

         To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face."' Ashcroft v. Iqbal,556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A facially plausible claim requires "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. "The Court assumes the truth of all well-pleaded factual allegations in the complaint and construes reasonable inferences from those allegations in the plaintiffs favor[.]" Sissel v. U.S. Dep't of Health & Human Servs.,760 F.3d 1, 4 (D.C. Cir. 2014). In addition to the complaint's factual allegations, the Court may consider "documents attached to or incorporated in the complaint, matters of which courts may take judicial notice, and documents appended to ...


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