Opinion
Case No. 2:20-cv-02200-JTF-atc
2021-07-14
Thomas HUGHES, M.D., Plaintiff, v. Malini GUPTA, M.D., G2Endo, and Consolidated Medical Practices of Memphis, PLLC, Defendants.
Ryan Saharovich, Lawrence Laurenzi, Burch Porter & Johnson PLLC, Memphis, TN, William David Irvine, Jr., DTO Law, New York, NY, for Plaintiff. James Bennett Fox, Jr., Clarence A. Wilbon, Adams and Reese, LLP, Memphis, TN, for Defendants.
Ryan Saharovich, Lawrence Laurenzi, Burch Porter & Johnson PLLC, Memphis, TN, William David Irvine, Jr., DTO Law, New York, NY, for Plaintiff.
James Bennett Fox, Jr., Clarence A. Wilbon, Adams and Reese, LLP, Memphis, TN, for Defendants.
ORDER DENYING DEFENDANTS’ COMBINED PETITION TO DISMISS AND HUGHES’ AND DEFENDANTS’ REQUEST FOR COSTS AND FEES
JOHN T. FOWLKES, JR., United States District Judge
Before the Court is Malina Gupta, M.D., G2Endo, and Consolidated Medical Practices of Memphis, PLLC's (collectively "Defendants") Combined Petition to Dismiss Pursuant to the Tennessee Public Participation Act, Tenn. Code Ann. § 20-17-101 (the "TPPA"), filed March 22, 2021. (ECF No. 39.) On April 16, 2021, Thomas Hughes, M.D. ("Hughes") filed a Response in Opposition. (ECF No. 46.) On April 23, 2021, Defendants filed a Reply. (ECF No. 50.) On May 7, 2021, Hughes filed a Sur-Reply in Opposition to Defendants’ Motion to Dismiss. (ECF No. 53.) For the following reasons, Defendants’ Motion to Dismiss is DENIED and Hughes’ and Defendants’ request for court costs and attorneys’ fees in accordance with the TPPA is DENIED .
I. FACTUAL BACKGROUND
Hughes’ claims can be divided into two categories. (ECF No. 1.) The first set of claims: breach of contract, conversion, and unjust enrichment, all arise out of Hughes’ employment with Defendants. (Id. at ¶¶ 65-84.) The second set of claims: malicious prosecution and intentional infliction of emotional distress, both arise out of the United States Department of Justice's investigation and criminal indictment of Hughes for allegedly fraudulently issuing himself prescriptions for testosterone, a Schedule II controlled substance. (Id. at ¶¶ 85-104.) Defendants now move to dismiss Hughes’ second set of claims: malicious prosecution and intentional infliction of emotional distress, on the grounds that they are based on Defendant Malina Gupta M.D.’s ("Gupta") communication with law enforcement. Defendants argue that Gupta, pursuant to the TPPA, had not only a right, but also an obligation to communicate with the Department of Justice about Plaintiff's transgressions. Tenn. Code Ann. § 20-17-101. (ECF No. 39, 1.) Thus, Defendants argue that Plaintiff's second set of claims should be dismissed. II. LEGAL STANDARD
The TPPA, also known as Tennessee's anti-SLAPP statute, became effective on July 1, 2019. Tenn. Code Ann. § 20-17-104. "[T]he purpose of this chapter is to encourage and safeguard the constitutional rights of persons to petition, to speak freely, to associate freely, and to participate in government to the fullest extent permitted by law and, at the same time, protect the rights of persons to file meritorious lawsuits for demonstrable injury." Id. at § 20-17-102. Under the TPPA, "[i]f a legal action is filed in response to a party's exercise of the right to free speech ... that party may petition the court to dismiss the legal action." Id. at § 20-17-104(a). "Exercise of the right of free speech" is defined as "a communication made in connection with a matter of public concern ... that falls within the protection of the United States Constitution or the Tennessee Constitution. Id. at § 20-17-103(3). A TPPA petition "may be filed within sixty (60) calendar days from the date of service of the legal action, or, in the court's discretion, at any time later that the court deems proper." Id. at § 20-17-104(b). "The petitioning party has the burden of making a prima facie case that a legal action against the petitioning party is based on, relates to, or is in response to that party's exercise of the right to free speech, right to petition, or right of association." Tenn. Code Ann. § 20-17-105(a). Further, "[a]ll discovery in the legal action is stayed upon the filing of a petition under this section. The stay of discovery remains in effect until the entry of an order ruling on the petition. The court may allow specified and limited discovery relevant to the petition upon a showing of good cause." Id. at § 20-17-104(d). "If the court dismisses a legal action pursuant to a petition filed under this chapter, the court shall award to the petitioning party: (1) [c]ourt costs, reasonable attorney's fees, discretionary costs, and other expenses incurred in filing and prevailing upon the petition; and (2) [a]ny additional relief, including sanctions, that the court determines necessary to deter repetition of the conduct by the party who brought the legal action or by others similarly situated." T.C.A. § 20-17-107(a)(1)-(2). "If the court finds that a petition filed under this chapter was frivolous or was filed solely for the purpose of unnecessary delay, and makes specific written findings and conclusions establishing such finding, the court may award to the responding party court costs and reasonable attorney's fees incurred in opposing the petition." Id. at § 20-17-107(b).
III. ANALYSIS
1. Dismissal of Hughes’ Claims based on the TPPA
Defendants argue that Hughes’ claims for malicious prosecution and intentional infliction of emotion distress should be dismissed because they are based on Gupta's statements to law enforcement, which constitutes an exercise of her right to freedom of speech on a matter of public concern. (ECF No. 39, 3.) Hughes argues that Defendants’ Motion to Dismiss, which is based on the TPPA, should be denied for three reasons. (ECF No. 46, 4.) First, Hughes argues that under federal law, the TPPA is not applicable to federal diversity cases. (Id. at 4-6.) Second, Hughes contends that the Motion is procedurally deficient under the plain language of the TPPA. (Id. at 6-7.) Third, Hughes argues that Defendants have failed to establish a prima facie case that Hughes’ malicious prosecution and intentional infliction of emotional distress claims are based on Gupta's First Amendment rights. (ECF No. 46, 7-8.)
a. The TPPA and Erie
Defendants argue that the substantive provisions of the TPPA are applicable in federal court. (ECF No. 50, 1-4 & 6). However, based on Erie R. Co. v. Tompkins , 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), Hughes contends that the TPPA does not apply in diversity cases because the statute is in direct conflict with the Federal Rules of Civil Procedure, namely Rules 8, 12, and 56. (ECF No. 46, 4.) Both parties cite Lampo Group, LLC v. Paffrath , No. 3:18-cv-01402, 2019 WL 3305143, at *1-4 (M. D. Tenn. July 23, 2019) in support of their conflicting positions. (See ECF No 46, 4-5; ECF No. 50, 3-4.)
As a threshold matter, the Court notes that this case is a matter of first impression within the Sixth Circuit. No appellate court within the Sixth Circuit has ruled on whether a Defendant can pursue a motion to dismiss under the TPPA in federal court. Beyond the Sixth Circuit, there appears to be a circuit split on the issue. Compare 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. 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), 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 the Federal Rules of Civil Procedure), 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), Liberty Synergistics Inc. v. Microflo Ltd. , 637 F. App'x 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). However, Lampo Group , a diversity case in the Middle District of Tennessee, is instructive on whether a Defendant could move forward under the California anti-SLAPP statute, which is analogous to the TPPA or Tennessee's anti-SLAPP statute. Compare Cal. Civ. Pro. Code § 425.16 with Tenn. Code Ann. §§ 20-17-104 & 105.
Generally, federal courts sitting in diversity should apply substantive state law and federal procedural law, unless there is a conflict. Tompkins , 304 U.S. at 71-80, 58 S.Ct. 817. In the instant case, there appears to be a conflict between state and federal law, namely the TPPA and Federal Rules of Civil Procedure 8, 12, and 56. This issue was addressed in Lampo Group . There, Defendants argued that California's anti-SLAPP statute should apply because California's substantive law governed the claim. Lampo Group , LLC , 2019 WL 3305143, at *1. In denying defendant's motion, the court concluded that the California statute was not applicable in federal court because like other anti-SLAPP statutes rejected by federal courts, the California statute imposed a requirement that a plaintiff establish a probability that he or she will prevail on the claim. However, in federal courts, the plausibility standard under Rules 8(a) and 12(b)(6) does not impose a probability requirement at the pleading stage. Id. at *3 (citing Bell Atlantic Corp v. Twombly , 550 U.S. 544, 558, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Cal. Civ. Proc. Code § 425.16(b)(3) ). Because both the state and federal rules purported to answer the same question—the applicable standard for granting pre-trial judgment to defendants in federal court—the court reasoned that California's anti-SLAPP statute was in direct conflict with the Federal Rules of Civil Procedure and could not be applied in federal court. Id. This Court finds no reason to move in a different direction.
Tennessee's anti-SLAPP statute contains the same standard for granting pre-trial judgment as California's anti-SLAPP statute. Compare Cal. Civ. Pro. Code § 425.16(b) with Tenn. Code Ann. §§ 20-17-104 & 105. Notably, the TPPA provides that:
"If a legal action is filed in response to a party's exercise of the right of free speech, right to petition, or right of association, that party may petition the court to dismiss the legal action."
...
The petitioning party has the burden of making a prima facie case that a legal action against the petitioning party is based on, relates to, or is in response to that party's exercise of the right to free speech, right to petition, or right of association. If the petitioning party meets this burden, the court shall dismiss the legal action unless the responding party establishes a prima facie case for each essential element of the claim in the legal action. Notwithstanding subsection, the court shall dismiss the legal action if the petitioning party establishes a valid defense to the claims in the legal action. The court may base its decision on supporting and opposing sworn affidavits stating admissible evidence upon which the liability or defense is based and on other admissible evidence presented by the parties. If the court dismisses a legal action pursuant to a petition filed under this chapter, the legal action or the challenged claim is dismissed with prejudice. If the court determines the responding party established a likelihood of prevailing on a claim: [t]he fact that the court made that determination and the substance of the determination may not be admitted into evidence later in the case; and the determination does not affect the burden or standard of proof in the proceeding.
...
It appears to this Court that the TPPA's pleading standard and burden-shifting framework is in direct conflict with Federal Rules of Civil Procedure 8 and 12, which define the criteria for assessing the sufficiency of a pleading before discovery, as well as Federal Rule of Civil Procedure 56, which sets forth the circumstances under which a court must dismiss a case before trial. Because the TPPA is in direct conflict with Fed. R. Civ. P. 8, 12, and 56, the Court finds that the TPPA does not apply in federal court. Therefore, Defendants’ TPPA Motion is Denied .
Because the Court concludes that the TPPA does not apply in federal court, the Court does not find is necessary to reach Hughes’ remaining arguments that Defendants’ Motion is procedurally deficient, and that Defendants have failed to meet their burden under the TPPA.
2. Court Costs and Attorneys’ Fees
Defendants request that they be awarded costs and attorneys’ fees incurred in bringing the TPPA claim. (ECF No. 39, 3; see also Tenn. Code Ann. § 20-17-107.) Likewise, Hughes submits that he should be awarded costs and reasonable attorneys’ fees incurred in opposing Defendants’ TPPA Motion because according to Hughes, the Motion is frivolous and/or was solely filed for the purpose of unnecessary delay. (ECF No. 46, 8; id. ) However, it cannot be said that the motion is frivolous, in light of the fact that similar issues across the country have resulted in a significant split of authority. As a result, the parties are not entitled to fees or costs under the TPPA for bringing or defending the TPPA petition. IV. CONCLUSION
For the reasons discussed above, Defendants’ Motion to Dismiss is DENIED and all requests for court costs and attorney fees are DENIED .
IT IS SO ORDERED this 14th day of July 2021.