Peterson v. Burke

• Court: District Court, D. Arizona
• Decided: April 22, 2020
• Docket: 2:20-cv-00106
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Jeffrey Peterson, No. CV-20-00106-PHX-MTL

10 Plaintiff, ORDER

11 v.

12 Gannett Company Incorporated, et al.,

13 Defendants. 14 15 Before the Court is the Motion to Dismiss Plaintiff’s Second Amended Complaint 16 With Prejudice filed by Defendants Gannett Co., Inc. (“Gannett”) and Phoenix 17 Newspapers, Inc. (“PNI”). (Doc. 61.) Gannett and PNI, the two remaining defendants in 18 this case, move to dismiss Plaintiff Jeffrey Peterson’s defamation claim regarding two 19 articles published in The Arizona Republic and on azcentral.com in 2017. They argue that 20 the one-year statute of limitations has expired as to the first article, and that Plaintiff, as a 21 public figure, has not adequately alleged actual malice as to the second. The motion is 22 granted; Plaintiff will be given partial leave to amend. 23 I. BACKGROUND 24 A. Parties 25 Plaintiff Jeffrey Peterson is a self-described “well-known technology entrepreneur” 26 and the founder and CEO of “the first online community for Hispanics, Quepasa.com, Inc.” 27 (Doc. 13-1 ¶ 17.) Founded in the late 1990s, Quepasa.com “maintains its place in history 28 as one of the top bilingual English/Spanish internet brands, and as the first social network 1 to trade publicly on a national stock exchange in the United States.” (Id. at ¶ 18.) The 2 website “became a national sensation” after a successful initial public offering and reached 3 peak market valuation of approximately $500 million. (Id. at ¶ 17). It was also “endorsed 4 by and did business with national and international celebrities, including Grammy-award 5 winning singer Gloria Estefan and actress Jennifer Lopez, who is the daughter of defendant 6 David Lopez.” (Id.) 7 Plaintiff claims that he gained various connections, political and otherwise, as the 8 founder of Quepasa.com. He befriended then-Arizona Attorney General Janet Napolitano 9 and “advocated for” her 2002 gubernatorial campaign. (Id. ¶¶ 21–23.) Following her 10 election, Governor Napolitano appointed Plaintiff as a director of the Arizona-Mexico 11 Commission. (Id.) Plaintiff “interacted frequently” with Governor Napolitano and her 12 associates in the coming years, including senior members of the Arizona Democratic Party 13 and the Democratic National Committee. (Id. ¶¶ 25–26.) He also maintained relationships 14 with other “significant political and business personalities in both the United States and 15 Mexico,” (id. ¶13(f)), including Dennis Burke, former U.S. Attorney for the District of 16 Arizona, and Marco Lopez Jr., former mayor of Nogales, Arizona. (Id.) 17 Gannett and PNI are the only remaining defendants in this case (collectively, 18 “Defendants”). Gannett is a media and marketing company and the largest newspaper 19 company in the United States. (Doc. 61 at 3.) PNI is a subsidiary of Gannett and publishes 20 The Arizona Republic newspaper and operates the website azcentral.com. (Id.) 21 B. Alleged “Retaliatory Campaign” 22 Plaintiff claims that after their “long-standing professional relationship and 23 friendship deteriorated,” Burke led a group of Plaintiff’s former associates in a “lengthy, 24 ongoing tortious campaign” to “silence and harm” him. (Id. ¶¶ 9-10.) Plaintiff states that 25 he has “significant personal knowledge” about Burke and his colleagues. He claims that 26 they sought to prohibit Plaintiff from sharing information about their allegedly improper 27 conduct, including certain political, business, and personal relationships with Mexican 28 officials. (Id. ¶ 9.) 1 As part of the alleged campaign against Plaintiff, “one or more false and defamatory 2 news articles” were published in The Arizona Republic and on azcentral.com.1 (Id. ¶ 12.) 3 First, on October 23, 2017, PNI published an article by reporter Craig Harris on 4 azcentral.com titled “State Orders Failed Internet Payday Loan Venture to Pay $250K to 5 Defrauded Investors” (the “October 2017 Article”).2 (Doc. 13-1 ¶¶ 143-144; Doc. 62-1.) It 6 describes the Arizona Corporation Commission’s order that Plaintiff and his two co-owners 7 of LoanGo, “a failed Chandler-based internet payday-loan company,” pay $250,000 in 8 restitution to five “defrauded” investors. (Doc. 62-1 at 2.) Plaintiff was also ordered to pay 9 a $15,000 fine. The article describes Plaintiff as “a former Arizona-Mexico Commission 10 member, major donor to Arizona Democratic candidates, and founder of Quepasa, a now- 11 defunct Latino online social-media outlet.” (Id.) 12 Second, on December 14, 2017, PNI published an article on azcentral.com, also by 13 Mr. Harris, titled “Once-High-Flying Quepasa Chief Jeff Peterson Under Fire as $9M Gone 14 in Online Startups” (the “December 2017 Article”).3 (Doc. 13-1 ¶¶ 151-152; Doc. 62-3.) 15 The article describes Plaintiff’s fundraising efforts for Mobile, another internet startup he 16 founded. It states that Mobile raised at least $8.6 million between 2013 and 2016 from 17 various investors. (Doc. 62-3 at 2-3.) Plaintiff also recruited board members including 18 Lopez Jr. and Burke. Mobile’s advisers and consultants “included Democratic National 19 Committee chairman and presidential candidate Howard Dean; ex-Phoenix May Phil 20 21 1 The two articles at issue were not attached to the Second Amended Complaint, but were attached to a declaration to the Motion to Dismiss. (Doc. 62.) Generally, if “matters outside 22 the pleadings are presented to and not excluded by the court” on a Rule 12(b)(6) motion, 23 “the motion must be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). An exception exists for documents whose “authenticity ... is not contested” and on 24 which “the plaintiff’s complaint necessarily relies.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (citation omitted). The Court may therefore consider the articles 25 without converting the motion to one for summary judgment. 26 2 The same article appeared in print in The Arizona Republic on October 24, 2017 with the headline “Online Firm Ordered to Repay Investors $250K.” (Doc. 61 at 3; Doc. 62-2.) 27 3 The same article appeared in print in The Arizona Republic on December 27, 2017 with 28 the headline “$9M Missing After Quepasa Founder’s New Startup Fails.” (Doc. 61 at 4; Doc. 62-4.) 1 Gordon; Mexican-American Grammy winner Pepe Aguilar; and Hollywood movie-maker 2 Howard ‘Hawk’ Koch.” (Id. at 3.) 3 The article reported that at the time of publication, “all the money is gone.” (Id.) It 4 describes former investors’ concerns with Plaintiff’s management of Mobile and reviewed 5 the company’s bank records. The article also states that Peterson developed an idea for “a 6 new Quepasa” in 2014, which ultimately became financially “intertwined” with Mobile. 7 (Id. at 7.) It states that investors and board members planned to turn over internal 8 documents to law enforcement, the IRS, and others “in hopes of bringing additional 9 investigations and forcing investors’ repayment.” (Id. at 8.) The December 2017 Article 10 states that Plaintiff “made his name in the Valley,” “had a track record of getting big names 11 to back him,” and “became a major donor to Democrats.” (Id. at 9.) 12 C. Procedural History 13 Plaintiff filed the original Complaint pro se in the United States District Court for 14 the District of Massachusetts on December 14, 2018. (Doc. 1.) He then filed the First 15 Amended Complaint after retaining counsel on January 4, 2019 (Doc. 6), and the Second 16 Amended Complaint on May 27, 2019. (Doc. 13-1.) The Second Amended Complaint 17 asserted claims for defamation, intentional infliction of emotional distress, tortious 18 interference with contract, civil conspiracy, and criminal harassment against a dozen 19 defendants, including Burke, Lopez Jr., the Democratic National Committee, Gannett, and 20 PNI, among others. On January 10, 2020, the District of Massachusetts granted Gannett’s 21 and PNI’s motion to transfer the case to this district pursuant to 28 U.S.C. § 1404(a).4 (Doc. 22 53.) Ten defendants have been dismissed from the case to date.5 Only Gannett and PHI 23 4 Gannett and PNI did not waive their ability to file a Rule 12(b)(6) motion by first filing a 24 motion to transfer under Rule 12(b)(3). A defendant must raise improper venue under Rule 12(b)(3) in its first Rule 12 motion; otherwise, the defense is waived. See Fed. R. Civ. P. 25 12(g)(2)-(h)(1)(a). However, “a defendant who omits a defense under Rule 12(b)(6)— 26 failure to state a claim upon which relief can be granted—does not waive that defense.” In re Apple iPhone Antitrust Litig., 846 F.3d 313, 317–18 (9th Cir. 2017), aff’d sub nom. 27 Apple Inc. v. Pepper, 139 S. Ct. 1514, 203 L. Ed. 2d 802 (2019). 28 5 On January 10, 2020, the District of Massachusetts dismissed Defendants Dennis K. Burke, Marco A. Lopez Jr., Victor Flores, the Honorable Lisa Flores, and Mario Diaz for 1 remain. The sole claim against them is for defamation. (Doc. 13-1 ¶¶ 200-204.) 2 Defendants filed the pending motion on February 21, 2020. (Doc. 61.) It argues, 3 first, that the October 2017 article falls outside of the one-year statute of limitations for 4 defamation claims. Second, Defendants argue that Plaintiff has failed to meet his 5 constitutional burden as a limited-purpose public figure to allege “actual malice” with 6 respect to the December 2017 Article. Plaintiff filed a response on March 6, 2020. (Doc. 7 63). Defendants filed a reply on March 13, 2020 (Doc. 65). 8 II. LEGAL STANDARD 9 To survive a motion to dismiss, a complaint must contain “a short and plain 10 statement of the claim showing that the pleader is entitled to relief” such that the defendant 11 is given “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. 12 Corp. v. Twombly, 550 U.S. 545, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2); Conley v. 13 Gibson, 355 U.S. 41, 47 (1957)). Dismissal under Rule 12(b)(6) “can be based on the lack 14 of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable 15 legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). A 16 complaint should not be dismissed “unless it appears beyond doubt that the plaintiff can 17 prove no set of facts in support of the claim that would entitle it to relief.” Williamson v. 18 Gen. Dynamics Corp., 208 F.3d 1144, 1149 (9th Cir. 2000). 19 The Court must accept material allegations in the Complaint as true and construe 20 them in the light most favorable to Plaintiff. North Star Int’l v. Arizona Corp. Comm’n, 21 720 F.2d 578, 580 (9th Cir. 1983). “Indeed, factual challenges to a plaintiff’s complaint 22 have no bearing on the legal sufficiency of the allegations under Rule 12(b)(6).” Lee, 250 23 F.3d at 688. Review of a Rule 12(b)(6) motion is “limited to the content of the complaint.” 24 North Star Int’l, 720 F.2d at 581. 25

26 lack of personal jurisdiction. (Doc. 50 at 18; Doc. 53.) Following the transfer, this Court dismissed Defendants Luis Borbon Holguin, Craig Harris, Suzanne Barr, David Lopez, and 27 the Democratic National Committee without prejudice pursuant to Fed. R. Civ. P. 4(m) for 28 lack of service on January 17, 2020. (Doc. 57.) It also dismissed fictitious defendants Jane Doe Diaz, White Entities 1-10, John & Jane Does 1-10, and Black Corporations 1-10. (Id.) 1 III. ANALYSIS 2 A. Time-Barred 3 Defendants first argue that Arizona’s one-year statute of limitations for defamation 4 claims has expired as to the October 2017 Article. Plaintiff argues that Massachusetts’s 5 three-year statute of limitations should apply because venue transfer is not “intended as a 6 weapon of dismissal in the Defendant[s’] arsenal.” (Doc. 63 at 4.) The Court agrees with 7 Defendants. 8 1. Choice of Law 9 Federal courts sitting in diversity generally apply the forum state’s choice of law 10 rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Orr v. Bank of Am., 11 285 F.3d 764, 772 n.4 (9th Cir. 2002). But when a case is transferred pursuant to 12 28 U.S.C. § 1404(a), as this case was, typically “the transferee court must follow the 13 choice-of-law rules of the transferor court.” Muldoon v. Tropitone Furniture Co., 1 F.3d 14 964, 965 (9th Cit. 1993) (citing Van Dusen v. Barrack, 376 U.S. 612 (1964)). This rule 15 “does not apply,” however, “when a case is transferred because venue was improper in the 16 transferor court, or because personal jurisdiction was lacking there; in those cases the 17 transferee court applies the default Klaxon rule for choice of law.” Hanson Crawford Crum 18 Family Law Grp., LLP v. Randall, No. 18-CV-03371-VC, 2019 WL 6699802, at *6 (N.D. 19 Cal. Dec. 9, 2019) (citing Nelson v. International Paint Co., 716 F.2d 640, 643 (9th Cir. 20 1983)). Further, in cases transferred under § 1404(a), the transferor court’s 21 “characterization of the transfer is not controlling.” Muldoon, 1 F.3d at 967. The transferee 22 court must determine whether the lawsuit was properly filed in the transferor court, and 23 whether the plaintiff is consequently entitled to that court’s choice of law rules. Id. 24 Here, the District Court for the District of Massachusetts transferred the case to the 25 District of Arizona because “public and private interest factors weigh strongly in favor” of 26 the transfer.6 (Doc. 50 at 16.) The court noted that “plaintiff’s choice of forum is the only 27

28 6 In the transfer order, the District Court for the District of Massachusetts specifically “decline[d] to engage in an extended choice-of-law analysis.” (Doc. 50 at 16.) 1 factor that weighs against transfer to the District of Arizona”; that “plaintiff fails to proffer 2 any reason why Massachusetts is a more convenient forum than Arizona”; that the “entirety 3 of the alleged conduct occurred in Arizona”; and that the “tenuous connection” between 4 the litigation and Massachusetts “further supports transfer.” (Id. at 14-15.) Based on the 5 transfer order and this Court’s independent review of the record, this case was not properly 6 filed in the District of Massachusetts. The Court will apply Arizona choice of law rules. 7 Arizona courts apply the rules set forth in the Restatement (Second) of Conflict of 8 Laws (1971) (“Restatement”). See Bryant v. Silverman, 703 P.2d 1190, 1191 (Ariz. 1985). 9 The Restatement states that the “local law of the forum determines … whether an action is 10 barred by the statute of limitations. This law also determines all matters involving the 11 application of the statute of limitations.” Restatement § 142(a). Accordingly, the Court will 12 apply Arizona’s statute of limitations. 13 2. Arizona Statute of Limitations 14 Arizona’s statute of limitations for defamation claims is one year. See A.R.S. § 12- 15 541(1). It begins to run, and the defamation action accrues, upon publication of the 16 defamatory statement. See Lim v. Superior Court In and For Pima City, 126 Ariz. 481, 482 17 (Ariz. Ct. App. 1980). The October 2017 Article was published on October 23, 2017. (Doc. 18 13-1 at 143.) Plaintiff filed the original complaint more than one year later, on December 19 14, 2018. (Doc. 1.) Plaintiff’s defamation claim with respect to the October 2017 Article 20 is therefore time-barred. 21 In response, Plaintiff argues that “transfer isn’t intended as a weapon of dismissal 22 in the Defendant[s’] arsenal.” (Doc. 63 at 4.) He claims that the Court should instead apply 23 Massachusetts’s three-year statute of limitations for defamation claims.7 In support of this 24 argument, Plaintiff states that the “interest of justice does not allow the preclusion of an 25 action because it becomes time-barred in the transferee forum.” (Id. at 5.) The one case 26 7 “The statute of limitations for a defamation claim is three years, Mass Gen Laws. Ch. 27 260, § 4, and the ‘general rule is that the accrual period begins upon publication of the 28 defamatory statement.’” McLaughlin v. Bos. Ret. Bd., 146 F. Supp. 3d 283, 290 (D. Mass. 2015) (citation omitted). 1 Plaintiff cites in support of this position, however, is inapposite. 2 In Burnett v. New York Cent. R.R. Co., 380 U.S. 424 (1965), the petitioner first sued 3 in Ohio state court within the statute of limitations period. The action was dismissed for 4 improper venue. Id. at 425. After dismissal, the petitioner filed an identical action in the 5 federal District Court for the Southern District of Ohio. The district court dismissed 6 because although the state court lawsuit was timely, the statute of limitations expired before 7 the federal case was filed. Id. The U.S. Supreme Court ultimately reversed, holding that 8 “petitioner’s state court action tolled the federal limitation provision and therefore 9 petitioner’s federal court action here was timely.” Id. at 426. In so ruling, the Court noted 10 “the unfairness of barring a plaintiff’s action solely because a prior timely action is 11 dismissed for improper venue after the applicable statute of limitations has run.” Id. at 430. 12 Burnett is distinguishable from the present case for multiple reasons. For one, this 13 case has never been dismissed. Burnett also involved a matter that was initially filed in 14 state court and subsequently re-filed in federal court. Id. at 425. Further, the Burnett case 15 involved only one applicable limitations period, whereas the issue at hand is whether one 16 of two possible statutes of limitations—Arizona’s or Massachusetts’s—applies. That case 17 also involved the tolling of a statute of limitations, which no party argues should apply 18 here. Id. at 426. Burnett does not support Plaintiff’s argument that the Massachusetts statute 19 of limitations should apply to this case. 20 Transfer of venue was not used as a “weapon” against Plaintiff. (Doc. 63 at 4.) 21 Rather, for the numerous reasons described by the District Court for the District of 22 Massachusetts, venue is proper in this district. This Court applies Arizona’s one-year 23 statute of limitations, which expired as to the October 2017 Article before Plaintiff filed 24 his original Complaint. 25 B. Defamation 26 Defendants next argue that Plaintiff’s defamation claim as to the December 2017 27 Article fails as a matter of law. (Doc 61 at 7.) A defamation claim generally requires a false 28 publication that brings “the defamed person into disrepute, contempt, or ridicule, or must 1 impeach plaintiff’s honesty, integrity, virtue, or reputation.” Godbehere v. Phoenix 2 Newspapers, Inc., 162 Ariz. 335, 341 (1989). When the plaintiff is a “public figure,” the 3 burden is heightened. To prevail on a defamation claim, a public figure plaintiff must also 4 prove (i) the falsity of the statements and issue and (ii) by clear and convincing evidence, 5 that the statements were made with “actual malice”; that is, with knowledge of falsity or 6 reckless disregard for the truth.8 See New York Times Co. v. Sullivan, 376 U.S. 254, 279- 7 80 (1964); Gertz v. Robert Welch, Inc., 418 U.S. 323, 345 (1974). Defendants argue that 8 the Second Amended Complaint demonstrates that Plaintiff is a public figure but that he 9 failed to adequately allege that Defendants acted with actual malice. 10 1. Public Figure 11 The Court first addresses whether Plaintiff is a “public figure.” This concept extends 12 beyond government officials and other policy makers. Public figures include “artists, 13 athletes, business people, dilettantes, anyone who is famous or infamous because of who 14 he is or what he has done.” Cepeda v. Cowles Magazines &Broad., Inc., 392 F.2d 417, 419 15 (9th Cir. 1968). The U.S. Supreme Court has identified two types of public figures: (1) all- 16 purpose public figures, who occupy “positions of such persuasive power and influence that 17 they are deemed public figures for all purposes,” and (2) limited-purpose public figures, 18 who “thrust themselves to the forefront of particular public controversies in order to 19 influence the resolution of the issues involved.” Gertz, 418 U.S. at 345. Because “[i]n either 20 case such persons assume special prominence in the resolution of public questions,” both 21 categories face a heightened burden. Id. at 351. 22 The Court does not find that Plaintiff is an all-purpose public figure. Defendants do 23

24 8 Through a series of landmark cases, the U.S. Supreme Court “has federalized major aspects of libel law.” Gertz, 418 U.S. at 370 (White, J. dissenting). While defamation clams 25 are brought under state law, no state may impose liability for a defamatory statement 26 regarding a “public official” or “public figure” unless the plaintiff proves that it was made with knowing falsehood or reckless disregard of the truth. New York Times Co., 376 U.S. 27 at 279-80 (public official); Curtis Publishing Co. v. Butts, 388 U.S. 130, 154-55 (public 28 figure). 1 not argue as much (Doc. 65 at 5), and all-purpose public figures generally require “clear 2 evidence of general fame or notoriety in the community, and pervasive involvement in the 3 affairs of society” Id. at 352. The Second Amended Complaint does not indicate that 4 Plaintiff is generally famous or that he wields vast influence in public affairs. (Doc. 13-1.) 5 The relevant inquiry is whether Plaintiff is a limited-purpose public figure. In 6 determining whether a defamation plaintiff is a limited-purpose public figure, courts look 7 to “whether (i) a public controversy existed when the statements were made, (ii) whether 8 the alleged defamation is related to the plaintiff’s participation in the controversy, and (iii) 9 whether the plaintiff voluntarily injected itself into the controversy for the purpose of 10 influencing the controversy’s ultimate resolution.” Makaeff v. Trump Univ., LLC, 715 F.3d 11 254, 266 (9th Cir. 2013). Limited-purpose public figures exist “[m]ore commonly” than 12 all-purpose public figures. Gertz, 418 U.S. at 351. 13 Defendants argue that, according to the Second Amended Complaint, Plaintiff is a 14 limited-purpose public figure “with respect to his high-profile business dealings.” (Doc. 61 15 at 7.) The Court agrees. Plaintiff states that he is a “well-known technology entrepreneur” 16 who founded the social networking site Quepasa.com, Inc. (Doc. 13-1 ¶ 11). As described 17 above, Quepasa.com’s status as a “national sensation” (id. ¶ 17) permitted Plaintiff to forge 18 relationships with “significant political and business personalities in both the United States 19 and Mexico.” (Id. ¶13(f).) Plaintiff was appointed as a director of the Arizona-Mexico 20 Commission as a result of these connections. (Id. ¶¶ 21–23.) He also maintained 21 relationships with former U.S. Attorney Burke and former Nogales Mayor Lopez, Jr.— 22 both of whom Plaintiff recruited to the board of Mobile, another company he founded. 23 Plaintiff states that Defendants engaged in a “retaliatory campaign” to “permanently 24 damage” his “reputation and credibility,” including through the two articles at issue. 25 (Id. ¶ 11-12.) It also alleges that Burke “reported facts he knew were false[] to the Arizona 26 Corporation Commission,” which “caused at least one investigation of the Plaintiff, the 27 Plaintiff’s business colleagues and business interests.” (Id. ¶ 14(a).) 28 These allegations, taken together, indicate that a “public controversy existed when 1 the statements were made”—that is, the allegations and investigations regarding Plaintiff’s 2 business practices. Makaeff, 715 F.3d at 266. The Second Amended Complaint also clearly 3 demonstrates that the “alleged defamation is related to the plaintiff’s participation in the 4 controversy,” and that Plaintiff “voluntarily injected” himself into the controversy. Id. The 5 Second Amended Complaint describes, in detail, Plaintiff’s efforts to engage in high- 6 profile business dealings and to court prominent connections, political and otherwise, to 7 promote himself and his businesses. (Doc. 13-1 at 15-18.) The Court finds, based on 8 Plaintiff’s own allegations, that he is a limited-purpose public figure. 9 Plaintiff argues that he is not a public figure because “in family conversations 10 around American kitchen tables or while the news is being watched, it’s likely no one 11 would know who Jeffrey Peterson is or was.” (Doc. 63 at 1.) That level of fame is not 12 required to become a limited-purpose public figure. As noted, although in “some instances” 13 a person achieves “such pervasive fame or notoriety” to become an all-purpose public 14 figure, it is “more common[]” that an individual become a public figure “for a limited range 15 of issues.” Gertz, 418 U.S. at 351; see also Harris v. Tomczak, 94 F.R.D. 687, 702 (E.D. 16 Cal. 1982) (holding that “nationwide fame is not required” to qualify as a public figure). 17 Plaintiff also argues that “[p]ast successes don’t make the Plaintiff a prominent figure like 18 President Trump of Mark Zuckerberg of Facebook fame.” (Id. at 2.) However, once 19 attained, an individual does not lose public figure status. See Partington v. Bugliosi, 56 20 F.3d 1147, 1152 n.8 (9th Cir. 1995) (“[E]very court of appeals that has specifically decided 21 this question has concluded that the passage of time does not alter an individual’s status as 22 a limited purpose public figure.”). 23 In reaching this conclusion, the Court notes that numerous other courts have found 24 limited-purpose public figures at the motion to dismiss stage. See, e.g., Resolute Forest 25 Prod., Inc. v. Greenpeace Int’l, 302 F. Supp. 3d 1005, 1017 (N.D. Cal. 2017) (“[Plaintiff’s] 26 own allegations about their world-wide reach and influence, as well as the public nature of 27 its work in forestry and sustainability, show that the company is a limited public figure for 28 purposes of its participation in the forestry industry…”); Heller v. NBCUniversal, Inc., No. 1 CV-15-09631-MWF-KS, 2016 WL 6573985, at *5 (C.D. Cal. Mar. 30, 2016) (finding a 2 limited-purpose public figure where “Plaintiff’s own allegations show that his relationship 3 with N.W.A. was the subject of great public interest that prompted him to write a book 4 recounting his side of the story.”); Biro v. Conde Nast, 963 F. Supp. 2d 255, 270 (S.D.N.Y. 5 2013), aff’d, 807 F.3d 541 (2d Cir. 2015), and aff’d, 622 F. App’x 67 (2d Cir. 2015) 6 (“Where the question whether a plaintiff is a public figure can be determined based upon 7 the pleadings alone, the Court may deem a plaintiff a public figure at the motion to dismiss 8 stage.”). Pursuant to his own allegations, Plaintiff is a limited-purpose public figure. 9 2. Actual Malice 10 The next issue is whether Plaintiff has adequately alleged that Defendants acted with 11 actual malice. As noted, to satisfy First Amendment concerns, a public figure plaintiff must 12 prove by clear and convincing evidence that the defendant made a defamatory statement 13 with actual malice—that is, “knowledge that it was false or with reckless disregard of 14 whether it was false or not.” Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 52 (1988) 15 (citing New York Times Co., 376 U.S. 254). Actual malice is “not measured by whether a 16 reasonably prudent man would have published or would have investigated before 17 publishing,” but by whether “the defendant in fact entertained serious doubts as to the truth 18 of [its] publication.” St. Amant v. Thompson, 390 U. S. 727, 731 (1968). The existence of 19 actual malice is a question of law. Milkovich v. Lorain Journal Co., 497 U.S. 1, 17 (1990). 20 The Court finds that Plaintiff has not adequately alleged that Defendants acted with 21 actual malice. Plaintiff apparently concedes this point. With respect to actual malice, his 22 response to Defendants’ motion states only, “the Plaintiff is not a prominent public figure, 23 and lacking that nomenclature, the Plaintiff is under no burden to prove actual malice, 24 although he’s prepared to do so.” (Doc. 63 at 4.). 25 Plaintiff has also not alleged actual malice under guiding case law. The Ninth 26 Circuit previously held that a plaintiff need only allege “the required state of mind 27 generally” because “the issue of actual malice ... cannot be properly disposed of by a 28 motion to dismiss, where the plaintiff has had no opportunity to present evidence in support 1 of his allegations.” Flowers v. Carville, 310 F.3d 1118, 1131 (9th Cir. 2002) (citation and 2 quotations marks omitted). The Supreme Court’s subsequent Iqbal decision contradicted 3 Flowers, however, in holding that actual malice is subject to a heightened pleading 4 standard. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (“[m]alice, intent, knowledge, 5 and other conditions of a person’s mind” must be pled under the “strictures of Rule 8”). 6 While the Ninth Circuit has not specifically addressed whether Flowers remains good law, 7 “the circuits that have considered the question have uniformly held that a claim may be 8 dismissed for failing plausibly to allege actual malice without permitting discovery.” 9 Resolute Forest Prods., 302 F. Supp. 3d at 1027-28; see also Michel v. NYP Holdings, Inc., 10 816 F.3d 686, 702 (11th Cir. 2016) (“[E]very circuit that has considered the matter has 11 applied the Iqbal/Twombly standard and held that a defamation suit may be dismissed for 12 failure to state a claim where the plaintiff has not pled facts sufficient to give rise to a 13 reasonable inference of actual malice.”). 14 This Court will, “consistent with the overwhelming weight of post-Iqbal authority,” 15 address whether Plaintiff has plausibly alleged that Defendants acted with actual malice at 16 the pleading stage. Miller v. Watson, No. 3:18-CV-00562-SB, 2019 WL 1871011, at *6 17 (D. Or. Feb. 12, 2019), report and recommendation adopted, No. 3:18-CV-00562-SB, 2019 18 WL 1867922 (D. Or. Apr. 25, 2019); see also Resolute Forest Prods., Inc. v. Greenpeace 19 Int’l, No. 17-cv-02824-JST, 2019 WL 281370, at *8 (N.D. Cal. Jan. 22, 2019) (“it is proper 20 to dismiss a complaint when the Court concludes the plaintiff fails to plead actual malice 21 as a matter of law” under the Rule 12(b)(6) standard); Wynn v. Chanos, 75 F. Supp. 3d 22 1228, 1238-40 (N.D. Cal. 2014) (dismissing defamation claim under Rule 12(b)(6) for 23 failure to allege actual malice). 24 The Second Amended Complaint contains two relevant allegations. First, it 25 describes the two articles as “intentionally orchestrated by Burke as the group leader, and 26 published by the Arizona Republic newspaper and on the azcentral.com website with ill- 27 will and knowledge of falsehood. The Complaint seeks redress for these statements which 28 were made with actual malice.” (Doc. 13-1 ¶ 12) (emphasis omitted). Second, “[w]hen 1 [d]efamatory statements were made regarding Peterson, Defendants acted with actual 2 malice.” (Id. ¶ 203.) The second statement notably applied to all twelve of the defendants 3 in the case at that time. Plaintiff also alleges that various individuals quoted in the article 4 “knew the statements [they] made in the article were false.” (Id. ¶¶ 159-162.) At no point, 5 however, does Plaintiff allege “factual content that allows the court to draw the reasonable 6 inference” that Gannett or PNI acted with actual malice regarding the December 2017 7 Article.9 Iqbal, 556 U.S. at 678. 8 Construed in the light most favorable to Plaintiff, the Second Amended Complaint’s 9 conclusory allegations are insufficient. See id., 556 U.S. at 678 (“Threadbare recitals of the 10 elements of a cause of action, supported by mere conclusory statements, do not suffice.”). 11 A public figure defamation plaintiff “must point to details sufficient to render a claim 12 plausible.” Resolute Forest Prod., 302 F. Supp. 3d at 1018 (citing Pippen v. NBCUniversal 13 Media, LLC, 734 F.3d 610, 614 (7th Cir. 2017). Plaintiff’s “formulaic recitations” that 14 Defendants acted with “ill-will and knowledge of falsehood” (Doc. 13-1 ¶ 12) and with 15 “actual malice” (id. ¶ 203) fall short. Resolute Forest Prod., Inc., 302 F. Supp. 3d at 1019 16 (citing Twombly, 550 U.S. at 555). Plaintiff has not made “any specific allegations that 17 would support a finding that [Defendants] harbored serious subjective doubts as to the 18 validity of [their] assertions.” Wynn, 75 F. Supp. at 1239. Plaintiff has failed to satisfy the 19 “demanding burden” for pleading actual malice. Id. He has therefore failed to state a claim 20 for defamation against Gannett and PNI as to the December 2017 Article. 21 C. Leave to Amend 22 Rule 15(a)(2) of the Federal Rules of Civil Procedure is a liberal standard, stating 23 9 As Defendants note, “alleging actual malice as to Gannett and PNI specifically is 24 something Plaintiff knows how to do.” (Doc. 61 at 10.) With respect to the October 2017 Article, the Second Amended Complaint states, “Defendant Phoenix Newspapers, and 25 Gannett Co. Inc., knew the statement characterized above--that Plaintiff, ‘is a … founder 26 of Quepasa, a now-defunct Latino online social-media outlet’ was not true because, among other reasons, the Arizona Republic itself had previously published numerous articles about 27 Quepasa…” (Doc. 13-1 ¶ 150; Doc. 61 at 10.) This statement indicates that Plaintiff could 28 have made allegations about Defendants’ state of mind with respect to the December 2017 Article, but chose not to do so. 1 that “[t]he court should freely give leave [to amend a pleading] when justice so requires.” 2 Fed. R. Civ. P. 15(a)(2). In granting a motion to dismiss, a district court should provide 3 leave to amend unless it is clear that the complaint could not be saved by any amendment. 4 See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 5 Exceptions to the general policy of granting leave exist “where the amendment: 6 (1) prejudices the opposing party; (2) is sought in bad faith; (3) produces an undue delay 7 in litigation; or (4) is futile.” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 8 946, 951 (9th Cir. 2006). 9 The Court finds that amendment would be futile as to the October 2017 Article, for 10 which the one-year statute of limitations has expired. As to the December 2017 Article, 11 this case has been pending since December 14, 2018, and Plaintiff has already amended 12 the complaint twice. The Court is accordingly concerned that further amendment would 13 produce “undue delay.” Id. Nonetheless, in light of the considerations above, the Court will 14 permit Plaintiff one final opportunity to amend the complaint. 15 IV. CONCLUSION 16 Accordingly, 17 IT IS ORDERED that Defendants’ Motion to Dismiss Plaintiff’s Second Amended 18 Complaint With Prejudice (Doc. 61) is granted. 19 IT IS FURTHER ORDERED allowing Plaintiff 21 days from the issuance of this 20 Order to file a Third Amended Complaint that conforms with the requirements set forth in 21 this Order. Because the Court is giving Plaintiff leave to amend, the Clerk of the Court 22 shall not enter judgment at this time. 23 IT IS FINALLY ORDERED that the oral argument previously scheduled for April 24 30, 2020 (Doc. 66) is hereby vacated. Upon full consideration of the pending motion, 25 relevant authorities, and related documents, the Court believes that oral argument would 26 not significantly aid the decisional process. See Fed. R. Civ. P. 78(b); LRCiv 7.2(f). 27 / / 28 / / 1 Dated this 22nd day of April, 2020. 2 Wichal T. dhurdle Michael T. Liburdi 5 United States District Judge 6 7 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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