Opinion
No. 00 Civ. 7550 (RLC)
April 2, 2001
KAY COLLYER BOOSE LLP, New York, New York Attorneys for Plaintiff.
TOBY M. J. BUTTERFIELD, TEENA H. (KIM) LEE, RALPH J. SUTTON (Pro Hac Vice).
WU KAO, P.L.L.C., New York, New York, Attorneys for Defendants.
OPINION
Plaintiff Microsoft Corporation ("Microsoft") moves to dismiss the counterclaim filed by defendants KE Computer, Inc., d/b/a International Computing Group, a/k/a ICG Computer Inc. ("ICG"), and Elton Chan, pursuant to Rule 12(b)(6), F.R. Civ. P., for failure to state a claim upon which relief may be granted. Defendants oppose this motion.
BACKGROUND
On October 5, 2000, Microsoft filed a complaint against the defendants alleging causes of action for copyright and trademark infringement, false designation of origin and unfair competition. Microsoft also demands the imposition of a constructive trust and an accounting. In substance, Microsoft alleges that defendants distributed counterfeit copies of Microsoft software. Defendants answered the complaint on November 9, 2000, and alleged one counterclaim. It is that counterclaim which is the subject of this motion.
The nature of the counterclaim is unclear. Defendants seem to allege a cause of action for libel and/or slander arising out of the allegations made by Microsoft in its complaint. In opposing this motion, defendants contend that the counterclaim is also for malicious prosecution. (Def.'s Affirmation in Opp'n ¶¶ 3, 8.)
DISCUSSION
The role of the court in evaluating a motion to dismiss is to determine whether the claim in question is legally sufficient. See Festa v. Local 3 Int'l Bhd. of Elec. Workers, 905 F.2d 35, 37 (2d Cir. 1990). The court must accept all well-pleaded factual allegations in the complaint — or in this case, the counterclaim — as true. See Tarshis v. Riese Org., 211 F.3d 30, 35 (2d Cir. 2000). The court may grant, however, a motion to dismiss where a pleading discloses an absolute defense or bar to recovery. See, e.g., Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 74 (2d Cir. 1998)
Regardless of how defendants characterize it, the counterclaim must be dismissed for several reasons. First, defendants have failed to comply with S.D.N.Y. Local Rule of Civil Procedure 7.1 (formerly Local Civil Rule 3(b)) which requires that a memorandum of law setting forth the legal arguments and authorities relied upon accompany any motion or opposition thereto. If a party fails to comply with this rule, the court has discretion to dismiss the motion, or grant the motion by default, as the case may be. See Local Civ. Rule, 7.1; Briarpatch Ltd., L.P. v. Pate, 81 F. Supp.2d 509, 511 n. 2 (S.D.N.Y. 2000) (Sweet, J.). In this case, the defendants only filed an affirmation in opposition to Microsoft's motion to dismiss and they did not cite to any legal authority. An affirmation alone will not satisfy the requirements of Rule 7.1. See Wenshou Wanli Food Co., Ltd., v. Hop Chong Trading Co., Inc., 98 Civ. 5045 (JFK), 2000 WL 964944, *3 (S.D.N.Y. July 11, 2000) (Keenan, J.).
S.D.N.Y. Local Rule of Civil Procedure 7.1 states: Except as otherwise permitted by the court, all motions and all oppositions thereto shall be supported by a memorandum of law, setting forth the points and authorities relied upon in support of or in opposition to the motion, and divided, under appropriate headings, into as many parts as there are points to be determined. Willful failure to comply with this rule may be deemed sufficient cause for the denial of a motion or for the granting of a motion by default.
Some courts have recognized that while granting a motion to dismiss a claim for failure to comply with Rule 7.1 is permissible, a less severe outcome may be warranted in the interests of justice or efficiency. See e.g., Briarpatch, 81 F. Supp.2d at 511 n. 2. The court need not face this dilemma, however, because defendants' counterclaim must be dismissed not only because of the procedural error made by defendants, but also based upon the merits of the claim.
The fact that both Microsoft and the court are left guessing as to the nature of the counterclaim demonstrates its fatal flaw. Defendants have failed to state their claim with adequate specificity to allow plaintiff a reasonable opportunity to defend against it. Such specificity is required by Rule 8(a), F.R. Civ. P. See Branum v. Clark, 927 F.2d 698, 704-5 (2d Cir. 1991)
Furthermore, to the extent that defendants' claim is based upon a theory of slander and/or libel, it is deficient. Defendants contend that Microsoft's allegations made in connection with this lawsuit are the basis of the slander/libel claim. Allegations made in the context of litigation, however, enjoy immunity from slander and libel claims. See Bridge C.A.T. Scan Assoc. v. Ohio-Nuclear Inc., 608 F. Supp. 1187, 1194 (S.D.N.Y. 1985) (Weinfeld, J.); Martirano v. Frost, 307 N.Y.S.2d 425, 426-27 (1969) To the extent that the defendants are making a claim for malicious prosecution, such a claim would only be appropriate if they are able to secure a favorable decision (such as dismissal, summary judgment or a favorable verdict) in the subject lawsuit. See O'Brien v. Alexander, 101 F.3d 1479, 1484 (2d Cir. 1996). There has been no such decision in this case.
New York law controls the state law claims alleged in defendants' counterclaim. The allegedly tortious conduct (i.e. the filing of this lawsuit) occurred in New York, the defendants are a New York corporation and a resident of New York, and all parties rely exclusively upon New York law in their motion papers. Furthermore, the laws at issue are conduct-regulating, rather than loss-allocating, and so, under New York choice of law rules, the law of the place of the tort governs. See Sheldon v. PHH Corp., 135 F.3d 848, 853 (2d Cir. 1998).
CONCLUSION
For the foregoing reasons, plaintiff's motion is granted and the defendants' counterclaim is dismissed without prejudice.
IT IS SO ORDERED.