United States District Court, M.D. Tennessee, Nashville Division
MAGISTRATE JUDGE BROWN
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE.
before the Court are Plaintiffs'/Counter-Defendants'
and Third-Party Defendant's Joint Partial Motion to
Dismiss (Doc. No. 54),
Defendants'/Counter-Plaintiffs' Response (Doc. No.
69), and Plaintiffs'/Counter-Defendants' Reply (Doc.
No. 76). For the reasons set forth herein, the Joint Partial
Motion to Dismiss (Doc. No. 54) is GRANTED,
in part, and DENIED, in part. The
counterclaim and third-party claims for defamation are
dismissed. In all other respects, the Motion is denied.
Factual and Procedural Background
claims in this case arise out of the formation and operations
of Tennessee Hemp Supply, LLC. (Doc. No. 88). Plaintiffs Josh
Henrick and Jason Chambers contend they are owners of the
business, and Defendants Trinity Mealor and Brandon Harris
make the same claim. (Id.) Plaintiffs assert claims
for conversion, breach of fiduciary duty, fraud and
misrepresentation, unjust enrichment, conspiracy, violations
of the Tennessee Consumer Protection Act, Tenn. Code Ann.
§§ 47-18-101, et seq., trademark
infringement and violations of the Lanham Act, 15 U.S.C.
§§ 1114, et seq., false or fraudulent
trademark registrations, unfair competition, breach of
contract, breach of the covenant of good faith and fair
dealing, and unjust enrichment. As part of their Answer (Doc.
No. 49), Defendants Mealor and Harris assert counterclaims
for defamation, conversion, intentional interference with
business relationships, and trademark infringement. Defendant
Mealor has also asserted third-party claims for defamation
and malicious prosecution against Third-party Defendant Erin
Henrick. (Id.) Through the pending Motion,
Plaintiffs and Mrs. Henrick seek to dismiss the claims for
defamation, intentional interference with business
relationships, and malicious prosecution.
The Standards Governing Motions to Dismiss
considering a motion to dismiss, a court must determine
whether the plaintiff has sufficiently alleged “a claim
to relief that is plausible on its face.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct.
1955, 167 L.Ed.2d 929 (2007). A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Ashcroft v.
Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d
868 (2009). Well-pleaded factual allegations are accepted as
true and are construed in the light most favorable to the
nonmoving party. 129 U.S. at 1950; Mills v. Barnard,
869 F.3d 473, 479 (6th Cir. 2017).
and Third-party Defendant (hereinafter
“Counter-defendants”) argue the defamation claims
are barred by the “litigation privilege, ” and
are insufficiently pled under Rule 8 of the Federal Rules of
Civil Procedure. Counter-plaintiffs and Third-party Plaintiff
(hereinafter “Counter-plaintiffs) argue the defamation
claims are sufficiently pled, and the litigation privilege
does not apply because “[t]here are not presently facts
in the record from which the Court can determine whether the
defamatory statements were made inside or in anticipation of
this litigation.” (Doc. No. 69, at 3).
order to establish a claim for defamation under Tennessee
law, a plaintiff must show: (1) a party published a
statement; (2) with knowledge that the statement was false
and defaming to the other; or (3) with reckless disregard for
the truth of the statement or with negligence in failing to
ascertain the truth of the statement. Brown v. Christian
Bros. Univ., 428 S.W.3d 38, 50, (Tenn. Ct. App. 2013).
Tennessee courts have recognized a “litigation
privilege” that bars defamation claims for
“statements made in the course of judicial proceedings
which are relevant and pertinent to the issues.”
Jones v. Trice, 210 Tenn. 535, 360 S.W.2d 48, 50
(1962); see also Issa v. Benson, 420 S.W.3d 23, 28
(Tenn. Ct. App. 2013). The policy underlying the privilege
recognizes that “access to the judicial process,
freedom to institute an action, or defend, or participate
therein without fear of the burden of being sued for
defamation is so vital and necessary to the integrity of our
judicial system that it must be made paramount to the right
of an individual to a legal remedy where he [or she] has been
wronged thereby.” Jones, 360 S.W.2d at 51.
Tennessee courts have expressly extended this absolute
privilege to “communications preliminary to proposed or
pending litigation.” Myers v. Pickering Firm,
Inc., 959 S.W.2d 152, 159 (Tenn. Ct. App. 1997); see
also Issa, 410 S.W.3d at 28.
statements underlying the defamation counterclaim in this
case are as follows: (1) “stating to others on social
media and otherwise outside of any judicial proceeding that
counter-plaintiffs have stolen money and property from them
and do not in fact own the business that they created and
own;” (2) issuing “a press release to (among
others) WGNS News Radio stating that counter-defendants were
the owners of Tennessee Hemp Supply, LLC and that
counter-plaintiffs falsely claimed to be the owners;”
(3) stating “on social media that counter-plaintiffs
‘siphon[ed] all the monies off to a private
account;'” (4) posting “on social media that
counter-plaintiffs stole from them, that counter-plaintiffs
were an ‘embezzling fraud,' ‘embezzled more
than 100k' from them, called counter-plaintiffs
‘con artist and thief' and asked people to not do
business with them;” and (5) posting “[o]n social
media . . [stating that] counter-plaintiffs called customers
‘sheeple' and ‘unfairly and disgustingly
raised prices.” (Doc. No. 49, at 3-4).
their original Complaint, filed in state court on June 27,
2018, Counter-Defendants alleged Counter-Plaintiffs took over
the business, bank accounts, and other assets that were, in
fact, owned by Counter-Plaintiffs. (Doc. No. 2-3, at
¶¶ 9-30). A review of the pleadings reveals that
the first four statements underlying the defamation
counterclaim formed the core of the allegations made in this
case. All of the allegedly defamatory statements were
directly relevant and pertinent to the issues
addition, despite Counter-Plaintiffs' argument to the
contrary, it is apparent the statements were made preliminary
to proposed litigation. Based on the parties' pleadings,
it is undisputed that the business relationship at issue here
came to an abrupt end on June 24, 2018, when
Counter-Defendant Henrick attempted to fire
Counter-Plaintiffs. (Doc. No. 2-3 ¶¶ 16-18; Doc.
No. 20 ¶ 7). Counter-Defendants instituted this
litigation three days later. (Id.) Thus, the
allegedly defamatory statements were made in the three-day
period between the end of the business relationship and the
beginning of litigation. Having determined that the allegedly
defamatory statements were made preliminary to proposed
litigation and were relevant to the litigation, the Court
concludes the litigation privilege applies to bar the
statements alleged to be defamatory in the Third-Party
Complaint are that “third-party plaintiff [Trinity
Mealor] has stalked [Erin Henrick] and burglarized and stole
her property.” (Doc. No. 49, at 7). As discussed above,
the claims in this litigation include allegations of theft
and embezzlement of physical assets and bank accounts. Thus,
Mrs. Henrick's allegedly defamatory statement that Mr.
Mealor burglarized and stole her property is covered by the
litigation privilege for the reasons described above - the