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Lampo Group, LLC v. Paffrath

United States District Court, M.D. Tennessee, Nashville Division

July 23, 2019




         Before the Court is Defendants Kevin Helmut Paffrath, the Paffrath Organization, and Meetndone Corporation's Motion for Leave to File Anti-SLAPP Motion (Doc. No. 29). Plaintiff, the Lampo Group, LLC d/b/a Ramsey Solutions (“Ramsey”), has responded in opposition (Doc. No. 33), and Defendants have replied (Doc. No. 45). For the reasons discussed below, the motion will be denied.

         Defendants seek leave to file a “special motion to strike” under California's anti-Strategic Lawsuit Against Public Participation (“anti-SLAPP”) statute, Cal. Civ. Proc. Code §425.16. Defendants argue that they should be afforded the opportunity to file an anti-SLAPP motion because California substantive law governs certain claims in this action and, under California state law, Defendants are permitted to file this type of motion to strike. (Doc. No. 30 at 4).[1]

         Plaintiff opposes Defendants' motion for leave, arguing that Defendants should not be permitted to file an anti-SLAPP motion under California procedural law because Tennessee, rather than California, law governs all the claims in this action. (Doc. No. 33 at 3-8).[2] Plaintiff also argues that the Court should not permit Defendants to file their motion because it is untimely and would be futile. (Doc. No. 33 at 8-10).

         Because the Court finds that California's anti-SLAPP statute is not applicable in federal court even if California law (at least California substantive law) is applicable in this diversity action, the Court declines to resolve the choice-of-law issue at this time. Instead, the Court resolves this motion on another, well-recognized basis.


         “It is a long-recognized principle that federal courts sitting in diversity ‘apply state substantive law and federal procedural law.'” Shady Grove Orthopedic Associates, P.A. v. Allstate Ins. Co., 559 U.S. 393, 417 (2010) (citing Hanna v. Plumer, 380 U.S. 460, 465 (1965)). But “[w]hen both a federal rule and a state law appear to govern a question before a federal court sitting in diversity, ” federal courts apply a “two-step framework” to determine which law controls. Id. at 421. First, the court must determine whether the federal and state rules “can be reconciled (because they answer different questions).” Id. at 410, 130 S.Ct. 1431. If they cannot, the second step requires the court to determine whether the federal rule violates the Rules Enabling Act, 28 U.S.C. § 2072(b). Id. In other words, if the state and federal rules answer different questions, or if the federal rule is not valid under the Rules Enabling Act, a federal court exercising diversity jurisdiction should apply the state law. Id.


         The question of whether state anti-SLAPP statutes are applicable in federal court appears to be a matter of first impression in the Sixth Circuit, [3] and sister circuits and other district courts have taken varying approaches to this issue.[4] Compare Carbone v. Cable News Network, Inc., 910 F.3d 1345, 1357 (11th Cir. 2018) (Georgia's anti-SLAPP statute's motion-to-strike provision was procedural rule that conflicted with Federal Rules of Civil Procedure), Abbas v. Foreign Policy Grp., LLC, 783 F.3d 1328, 1337 (D.C. Cir. 2015) (“A federal court exercising diversity jurisdiction therefore must apply Federal Rules 12 and 56 instead of the D.C. Anti-SLAPP Act's special motion to dismiss provision.”), Intercon Sols., Inc. v. Basel Action Network, 969 F.Supp.2d 1026, 1042 (N.D. Ill. 2013), aff'd, 791 F.3d 729 (7th Cir. 2015) (holding that Washington's anti-SLAPP statute could not be applied in federal court); and Los Lobos Renewable Power, LLC v. Americulture, Inc., 885 F.3d 659, 672-73 (10th Cir. 2018) (holding New Mexico's anti-SLAPP statute was solely a procedural mechanism that did not apply in federal court), with Godin v. Schencks, 629 F.3d 79, 81 (1st Cir. 2010) (concluding that Maine's anti-SLAPP statute was substantive and therefore cognizable in federal court), Block v. Tanenhaus, 815 F.3d 218, 221 (5th Cir. 2016) (assuming without explicitly deciding that Louisiana's anti-SLAPP statute applies in federal court), and U.S. ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963, 973 (9th Cir. 1999) (holding that California's anti-SLAPP statute may be applied in federal court);[5] see also Liberty Synergistics Inc. v. Microflo Ltd., 637 Fed.Appx. 33, 34 n.1 (2d Cir. 2016) (“[W]e do not reach the issue of whether [California's] anti-SLAPP statute is applicable in federal court.”) (citation omitted).

         Having examined the various approaches, this Court finds persuasive the reasoning provided in Abbas and Carbone-that the “Federal Rules of Civil Procedure [8, ] 12[, ] and 56 establish the standards for granting pre-trial judgment to defendants in cases in federal court. A federal court must apply those Federal Rules instead of the [California's] Anti-SLAPP Act's special motion to [strike] provision.” Abbas, 783 F.3d at 1333.

         In Abbas, the D.C. Circuit held that D.C.'s Anti-SLAPP special motion to dismiss provision, which requires plaintiffs to show “a likelihood of success on the merits” to survive the motion, directly conflicts with Federal Rules of Civil Procedure 12 and 56. Specifically, the court found that the probability requirement of D.C.'s anti-SLAPP law and “Federal Rules of Civil Procedure 12 and 56 ‘answer the same question' about the circumstances under which a court must dismiss a case before trial.” Id. at 1333-34. And those rules “answer that question differently: [Federal Rules 12 and 56] do not require a plaintiff to show a likelihood of success on the merits.” Id. at 1334.

         In Carbone, the Eleventh Circuit squarely rejected the use of anti-SLAPP procedure in federal courts. 910 F.3d at 1356. After examining the split among its sister circuits, the court decisively sided with the D.C. Circuit's position set forth in Abbas. Id. The court concluded that Georgia's anti-SLAPP statute, which requires plaintiffs to establish “a probability” that he or she “will prevail on the claim” asserted in the complaint (per O.C.G.A. § 9-11-11.1(b)(1)), directly conflicts with Rules 8 and 12, which “define the criteria for assessing the sufficiency of a pleading before discovery.” Id. at 1350 (“[T]he plausibility standard under Rules 8(a) and 12(b)(6) plainly ‘does not impose a probability requirement at the pleading stage.'”) (quoting Bell Atl. Corp v. Twombly, 550 U.S. 544, 556 (2007)). The court also concluded that Georgia's anti-SLAPP statute probability requirement conflicts with Rule 56, which only requires a “nonmovant designate specific facts showing that there is a genuine issue for trial.” Id. at 1351 (internal citation and quotation marks omitted).

         Like the District of Columbia's and Georgia's anti-SLAPP laws, Cal. Civ. Proc. Code §425.16 requires plaintiffs to “establish that there is a probability that [he or she] will prevail on the claim.” §425.16(b)(3).[6] Thus, both the state and federal rules purport to answer the same question-the applicable standard for granting pre-trial judgment to defendants in federal court. See Abbas, 783 F.3d at 1333. As discussed above, the Court is persuaded by the opinions of the D.C. and Eleventh Circuits and finds that given its probability standard, California's anti-SLAPP statute is in direct conflict with the Federal Rules of Civil Procedure.

         Next, the Court turns to the second question it must answer, i.e., whether Federal Rules of Civil Procedure 8, 12, and 56 violate the Rules Enabling Act and the Constitution. The Court has little difficulty determining that they do not. Under the Rules Enabling Act, Congress provided the Supreme Court with the authority to “prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts . . . and court of appeals.” 28 U.S.C. § 2072(a). A rule created under this authority “shall not abridge, enlarge or modify any substantive right.” Id. § 2072(b). According to Supreme Court, the test for determining the validity of a Federal Rule is “whether a rule really regulates procedure-the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them.” Sibbach v. Wilson & Company, 312 U.S. 1, 14 (1941). Based on the decisions identified above-which confirm the validity of Rules 8, 12, and 56 under the Rules Enabling Act and/or the Constitution-the Court need not recreate the analysis here. See Abbas, 783 F.3d at (“It follows that Rules 12 and 56 are valid under the Rules Enabling Act.”); Carbone, 910 F.3d at 1357 ...

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