1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Avid Telecom LLC, et al., No. CV-22-00558-TUC-JCH
10 Plaintiffs, ORDER
11 v.
12 David Frankel, et al.,
13 Defendants. 14 15 In this case, Plaintiff Avid Telecom1 alleges Defendant David Frankel2 defamed 16 Avid to telecom business groups, the public, and to multiple states attorneys general. Doc. 17 49 at 7, 9–11. Before the Court is Avid's "Motion for Voluntary Dismissal" with prejudice 18 under Rule 41(a)(2) of the Federal Rules of Civil Procedure. See Doc. 109. Frankel does 19 not oppose dismissal but seeks attorneys' fees as a condition of dismissal. Doc. 113 at 1. 20 Avid's Motion is fully briefed. See Doc. 117. For the following reasons, the Court will 21 grant Avid's Motion and declines to award costs and attorneys' fees. 22 I. Background 23 Avid Telecom is a common-carrier provider of long-distance telecommunications 24 services. Doc. 49 ¶ 1. Frankel is the highest-profile national advocate against illegal 25 robocalling. Doc. 49 ¶ 46. Avid alleges Frankel made false and misleading representations 26 about Avid during a presentation to telecom industry leaders, and to the Ohio and Indiana
27 1 Michael D. Lansky, L.L.C. dba Avid Telecom and Michael Lansky, individually. For convenience, the Court will use “Avid Telecom” or “Avid” to mean both Plaintiffs. 28 2 Together with ZipDX LLC, whose sole member is Frankel. The Court will use “Frankel” in the singular to mean both Defendants. 1 attorneys general. Doc. 49 ¶¶ 48, 51. Avid alleges that, as a direct result of these statements, 2 the Ohio and Indiana attorneys general issued onerous "Civil Investigative Demands" to 3 Avid, two of Avid's customers withdrew their business, and one cancelled an anticipated 4 contract. Id. ¶¶ 48, 118–19, 133–34, 152. Avid states six claims arising from these 5 allegations: (1) defamation, (2) false light invasion of Avid principal Michael Lansky's 6 privacy, (3–4) tortious interference with two business relationships, and (5–6) tortious 7 interference with prospective economic advantage from those relationships. Id. at 13–23. 8 In December 2022, Avid commenced this case, amending its complaint in January 9 2023. See Docs. 1, 18. In February, Frankel moved to dismiss under Arizona's anti-SLAPP 10 statute. Doc. 22. Frankel alleged that Avid's case was brought primarily to chill Frankel's 11 advocacy against illegal robocalling. See generally id. Following Ninth Circuit guidance 12 for state anti-SLAPP motions in federal court, the Court reviewed Avid's complaint under 13 Rule 12 and Rule 56 of the Federal Rules of Civil Procedure. Doc. 44. Most of Avid's 14 complaint passed Rule 12, see id. at 8–21, and the Court noted multiple factual disputes 15 requiring discovery under Rule 56(d). Id. at 21. 16 In May 2023, shortly before the Court decided Frankel's motion to dismiss, Frankel 17 notified the Court of a new case involving Avid. Doc. 43. In that case, 49 state attorneys 18 general brought 23 counts against Avid for violating anti-robocalling laws. See Doc. 31-1 19 at 86–121. 20 In June 2023, Avid filed its second amended complaint against Frankel. Doc. 49. In 21 August, Frankel filed a second motion to dismiss under Arizona's anti-SLAPP statute. Doc. 22 66. This time, Frankel challenged only the factual sufficiency of Avid's complaint. Id. at 1. 23 Briefing extended into October, and the Court again noted multiple factual disputes 24 requiring discovery under Rule 56(d). See Docs. 77, 80, 84; Doc. 100 at 9–11. Discovery 25 continued until the Court stayed the case pending resolution of Avid's motion for voluntary 26 dismissal. See Doc. 112. 27 Avid seeks to dismiss this case because the state attorney general suit has put Avid 28 out of business. See Doc. 109 at 2. That lawsuit resulted in widespread media coverage, 1 which in turn caused all Avid's customers to flee. Id. Faced with substantial losses and 2 mounting fees, and finding no opportunity for settlement, Avid seeks to focus its remaining 3 resources on its defense. Id. at 2–3. Without conceding the viability of its claims, Avid 4 moves for dismissal with prejudice. Id. at 5. 5 Frankel asks the Court to award attorneys' fees for basically the same reasons he 6 filed two anti-SLAPP motions: Frankel contends that Avid's lawsuit never had merit and 7 was always intended to harass and silence him. Compare, e.g., Doc. 113 at 3–5, with Doc. 8 22 at 11–14, with Doc. 66 at 7–17. Frankel reminds the Court that it previously said it 9 would consider attorneys' fees if Avid's lawsuit turned out to have been improperly 10 motivated or frivolous. Doc. 113 at 2 (citing Doc. 100 at 11). 11 II. Legal Standard 12 "[A]n action may be dismissed at the plaintiff's request … by court order, on terms 13 that the court considers proper." Fed. R. Civ. P. 41(a)(2); see also Kamal v. Eden Creamery, 14 LLC, 88 F.4th 1268, 1279 (9th Cir. 2023). In determining whether to award costs, courts 15 may consider, among other factors, "(1) the defendant's effort and expense in preparing for 16 trial, (2) any excessive delay or lack of diligence on the part of the plaintiff in prosecuting 17 the action, (3) insufficiencies in the plaintiff's explanation of the need for a dismissal; and 18 (4) the fact that a summary judgment motion has been filed by the defendant." Navajo 19 Nation v. Peabody Coal Co., 2009 WL 806636, *8 (D. Ariz. 2009); see also Santa Rosa 20 Mem'l Hosp. v. Kent, 688 F. App'x 492, 494 (9th Cir. 2017) (citing Williams v. Peralta 21 Cmty. Coll. Dist., 227 F.R.D. 538, 540 (N.D. Cal. April 28, 2005). The merits of the 22 plaintiff's case are also relevant. Santa Rosa, 688 F. App'x at 494 (citing Stevedoring Servs. 23 of Am. v. Armilla Int'l B.V., 889 F.2d 919, 921 (9th Cir. 1989)). 24 In the Ninth Circuit, attorneys' fees typically are not imposed as a condition when 25 the voluntary dismissal is with prejudice. Woytenko v. Ochoa, 2021 WL 763879, at *6 (D. 26 Ariz. 2021) (collecting cases). 27 III. Analysis 28 The only contested issue is whether to award Frankel costs and attorneys' fees. The 1 Court previously said it would consider attorneys' fees "when the evidence is in." Doc. 100 2 at 11. The evidence still is not in. Discovery is not complete, and no motion for summary 3 judgment is pending. Instead, Frankel offers the same arguments and exhibits previously 4 brought in two anti-SLAPP motions to dismiss. They did not persuade the Court 5 previously, and they are not persuasive now. Whatever Frankel alleges—indeed whatever 6 the truth of the matter may be—the Court cannot reach the factual merit of Avid's lawsuit 7 now. As for its legal merit, the Court notes that Avid survived an ersatz motion for 8 judgment on the pleadings, see Doc. 44 at 8, and Frankel specifically disavowed any legal 9 challenge in his second anti-SLAPP motion. See Doc. 100 at 8. For those reasons, the Court 10 rejects Frankel's now third effort to discredit Avid's motivation before summary judgment. 11 Avid's case is not so obviously meritless as to weigh in favor of awarding attorneys' fees. 12 The other factors weigh decisively against awarding attorneys' fees. Frankel has 13 incurred no effort or expense preparing for trial.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Avid Telecom LLC, et al., No. CV-22-00558-TUC-JCH
10 Plaintiffs, ORDER
11 v.
12 David Frankel, et al.,
13 Defendants. 14 15 In this case, Plaintiff Avid Telecom1 alleges Defendant David Frankel2 defamed 16 Avid to telecom business groups, the public, and to multiple states attorneys general. Doc. 17 49 at 7, 9–11. Before the Court is Avid's "Motion for Voluntary Dismissal" with prejudice 18 under Rule 41(a)(2) of the Federal Rules of Civil Procedure. See Doc. 109. Frankel does 19 not oppose dismissal but seeks attorneys' fees as a condition of dismissal. Doc. 113 at 1. 20 Avid's Motion is fully briefed. See Doc. 117. For the following reasons, the Court will 21 grant Avid's Motion and declines to award costs and attorneys' fees. 22 I. Background 23 Avid Telecom is a common-carrier provider of long-distance telecommunications 24 services. Doc. 49 ¶ 1. Frankel is the highest-profile national advocate against illegal 25 robocalling. Doc. 49 ¶ 46. Avid alleges Frankel made false and misleading representations 26 about Avid during a presentation to telecom industry leaders, and to the Ohio and Indiana
27 1 Michael D. Lansky, L.L.C. dba Avid Telecom and Michael Lansky, individually. For convenience, the Court will use “Avid Telecom” or “Avid” to mean both Plaintiffs. 28 2 Together with ZipDX LLC, whose sole member is Frankel. The Court will use “Frankel” in the singular to mean both Defendants. 1 attorneys general. Doc. 49 ¶¶ 48, 51. Avid alleges that, as a direct result of these statements, 2 the Ohio and Indiana attorneys general issued onerous "Civil Investigative Demands" to 3 Avid, two of Avid's customers withdrew their business, and one cancelled an anticipated 4 contract. Id. ¶¶ 48, 118–19, 133–34, 152. Avid states six claims arising from these 5 allegations: (1) defamation, (2) false light invasion of Avid principal Michael Lansky's 6 privacy, (3–4) tortious interference with two business relationships, and (5–6) tortious 7 interference with prospective economic advantage from those relationships. Id. at 13–23. 8 In December 2022, Avid commenced this case, amending its complaint in January 9 2023. See Docs. 1, 18. In February, Frankel moved to dismiss under Arizona's anti-SLAPP 10 statute. Doc. 22. Frankel alleged that Avid's case was brought primarily to chill Frankel's 11 advocacy against illegal robocalling. See generally id. Following Ninth Circuit guidance 12 for state anti-SLAPP motions in federal court, the Court reviewed Avid's complaint under 13 Rule 12 and Rule 56 of the Federal Rules of Civil Procedure. Doc. 44. Most of Avid's 14 complaint passed Rule 12, see id. at 8–21, and the Court noted multiple factual disputes 15 requiring discovery under Rule 56(d). Id. at 21. 16 In May 2023, shortly before the Court decided Frankel's motion to dismiss, Frankel 17 notified the Court of a new case involving Avid. Doc. 43. In that case, 49 state attorneys 18 general brought 23 counts against Avid for violating anti-robocalling laws. See Doc. 31-1 19 at 86–121. 20 In June 2023, Avid filed its second amended complaint against Frankel. Doc. 49. In 21 August, Frankel filed a second motion to dismiss under Arizona's anti-SLAPP statute. Doc. 22 66. This time, Frankel challenged only the factual sufficiency of Avid's complaint. Id. at 1. 23 Briefing extended into October, and the Court again noted multiple factual disputes 24 requiring discovery under Rule 56(d). See Docs. 77, 80, 84; Doc. 100 at 9–11. Discovery 25 continued until the Court stayed the case pending resolution of Avid's motion for voluntary 26 dismissal. See Doc. 112. 27 Avid seeks to dismiss this case because the state attorney general suit has put Avid 28 out of business. See Doc. 109 at 2. That lawsuit resulted in widespread media coverage, 1 which in turn caused all Avid's customers to flee. Id. Faced with substantial losses and 2 mounting fees, and finding no opportunity for settlement, Avid seeks to focus its remaining 3 resources on its defense. Id. at 2–3. Without conceding the viability of its claims, Avid 4 moves for dismissal with prejudice. Id. at 5. 5 Frankel asks the Court to award attorneys' fees for basically the same reasons he 6 filed two anti-SLAPP motions: Frankel contends that Avid's lawsuit never had merit and 7 was always intended to harass and silence him. Compare, e.g., Doc. 113 at 3–5, with Doc. 8 22 at 11–14, with Doc. 66 at 7–17. Frankel reminds the Court that it previously said it 9 would consider attorneys' fees if Avid's lawsuit turned out to have been improperly 10 motivated or frivolous. Doc. 113 at 2 (citing Doc. 100 at 11). 11 II. Legal Standard 12 "[A]n action may be dismissed at the plaintiff's request … by court order, on terms 13 that the court considers proper." Fed. R. Civ. P. 41(a)(2); see also Kamal v. Eden Creamery, 14 LLC, 88 F.4th 1268, 1279 (9th Cir. 2023). In determining whether to award costs, courts 15 may consider, among other factors, "(1) the defendant's effort and expense in preparing for 16 trial, (2) any excessive delay or lack of diligence on the part of the plaintiff in prosecuting 17 the action, (3) insufficiencies in the plaintiff's explanation of the need for a dismissal; and 18 (4) the fact that a summary judgment motion has been filed by the defendant." Navajo 19 Nation v. Peabody Coal Co., 2009 WL 806636, *8 (D. Ariz. 2009); see also Santa Rosa 20 Mem'l Hosp. v. Kent, 688 F. App'x 492, 494 (9th Cir. 2017) (citing Williams v. Peralta 21 Cmty. Coll. Dist., 227 F.R.D. 538, 540 (N.D. Cal. April 28, 2005). The merits of the 22 plaintiff's case are also relevant. Santa Rosa, 688 F. App'x at 494 (citing Stevedoring Servs. 23 of Am. v. Armilla Int'l B.V., 889 F.2d 919, 921 (9th Cir. 1989)). 24 In the Ninth Circuit, attorneys' fees typically are not imposed as a condition when 25 the voluntary dismissal is with prejudice. Woytenko v. Ochoa, 2021 WL 763879, at *6 (D. 26 Ariz. 2021) (collecting cases). 27 III. Analysis 28 The only contested issue is whether to award Frankel costs and attorneys' fees. The 1 Court previously said it would consider attorneys' fees "when the evidence is in." Doc. 100 2 at 11. The evidence still is not in. Discovery is not complete, and no motion for summary 3 judgment is pending. Instead, Frankel offers the same arguments and exhibits previously 4 brought in two anti-SLAPP motions to dismiss. They did not persuade the Court 5 previously, and they are not persuasive now. Whatever Frankel alleges—indeed whatever 6 the truth of the matter may be—the Court cannot reach the factual merit of Avid's lawsuit 7 now. As for its legal merit, the Court notes that Avid survived an ersatz motion for 8 judgment on the pleadings, see Doc. 44 at 8, and Frankel specifically disavowed any legal 9 challenge in his second anti-SLAPP motion. See Doc. 100 at 8. For those reasons, the Court 10 rejects Frankel's now third effort to discredit Avid's motivation before summary judgment. 11 Avid's case is not so obviously meritless as to weigh in favor of awarding attorneys' fees. 12 The other factors weigh decisively against awarding attorneys' fees. Frankel has 13 incurred no effort or expense preparing for trial. Discovery is not complete, and most of 14 last year was dedicated to motions practice. Avid has acted diligently in defending against 15 and defeating two anti-SLAPP motions, and discovery has not progressed at an unusually 16 slow pace considering the motions and issues involved. Avid's reason for dismissal makes 17 sense. And Avid seeks dismissal with prejudice, thereby avoiding the possibility of legal 18 prejudice to Frankel. After dismissal with prejudice, Frankel will be the prevailing party 19 and may therefore move for costs other than attorneys' fees. Woytenko, 2021 WL 763879 20 at *7 (citing Fed. R. Civ. P. 54(d)(1)). 21 For these reasons, the Court will exercise its discretion to grant Avid's Motion for 22 Voluntary Dismissal with prejudice and without conditioning it on an award of costs and 23 attorneys' fees. 24 IV. Order 25 Accordingly, 26 IT IS ORDERED GRANTING Avid's Motion for Voluntary Dismissal 27 (Doc. 109). This case is dismissed with prejudice. The Clerk of the Court shall enter 28 judgment accordingly. 1 IT IS FURTHER ORDERED GRANTING Avid's Motion to File Under Seal 2|| (Doc. 116). The Clerk of the Court shall file "Proposed Pages 5—6 of Reply" (lodged at 3|| Doc. 118) UNDER SEAL. 4 IT IS FURTHER ORDERED GRANTING Frankel's Motion to File Under Seal 5|| (Doc. 114). The Clerk of the Court shall file "Exhibit C" (lodged at Doc. 115) UNDER 6|| SEAL. 7 IT IS FURTHER ORDERED DENYING AS MOOT Avid's "Motion for 8 || Clarification" (Doc. 94). 9 Dated this 11th day of January, 2024. 10 f 4) . | HK Aa— / / John C. Hinderaker _/United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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