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Randazza v. Cox

United States District Court, D. Nevada

May 21, 2014

MARC J. RANDAZZA, an individual, JENNIFER RANDAZZA, an individual, and NATALIA RANDAZZA, an individual, Plaintiffs,
v.
CRYSTAL COX, an individual, et al. Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO DISMISS AND DENYING PLAINTIFF'S MOTION TO STRIKE [DOCS. 179, 180]

JENNIFER A. DORSEY, District Judge.

This case arises out of the alleged targeting of Plaintiffs Marc Randazza, his wife Jennifer, and their young daughter Natalia, by Defendant Crystal Cox, a self-proclaimed "investigative blogger." Cox allegedly registered thirty-two internet domain names that incorporate Plaintiffs' first, middle, and last name, or combinations of the three. Cox allegedly used the domain names intending to capitalize on the use of the Randazza surname by offering services to rehabilitate Plaintiffs' reputation caused by Cox's actions.

After this Court granted Cox leave to file permissible counterclaims against Marc Randazza only, [1] Cox promptly filed a 22-page, single-spaced "Counter Complaint" against Plaintiff Marc Randazza and (non-party) the Randazza Legal Group ("the RLG").[2] Plaintiffs now move to dismiss the counterclaim in its entirety[3] or, alternatively, to strike the counterclaim[4] for exceeding the scope of the Court's leave order. The Court finds these motions appropriate for disposition without oral argument under Local Rule 78-2. The Court dismisses all of Cox's unauthorized third-party claims against the RLG. As to the claims against Mr. Randazza, the Court dismisses Cox's libel, defamation, and slander claim only to the extent it challenges statements made in a litigation context and thus protected by privilege; dismisses Cox's claims for harassment and First Amendment violation with prejudice, and Cox's claims for abuse of process, tortious interference with business advantage, and conspiracy without prejudice and with leave to amend only the abuse of process and tortious interference claims to cure deficiencies; and denies the motion to strike. The net effect of this order is that Cox's counterclaim remains only against Mr. Randazza and it consists of: a portion of claim 1 (libel, defamation, and slander only arising from statements made outside of litigation) and claim 4 (legal malpractice); all other counterclaims are dismissed, but Cox may file a motion asking for leave to amend her counterclaim to allege supplemental facts to support claims 3 (abuse of process) and 5 (tortious interference with business advantage) if she believes she can cure the deficiencies outlined below.

Discussion

I. Motion to Dismiss

Federal Rule of Civil Procedure 8(a) instructs, "[a] pleading that states a claim for relief must contain: (1) a short and plain statement of the grounds for the court's jurisdiction...; (2) a short and plain statement of the claim showing that the pleader is entitled to relief; and (3) a demand for the relief sought."[5] A district court may dismiss a claim under Rules 8(a) or 12(b)(6) for failing to state a claim upon which relief can be granted.[6] "To survive a motion to dismiss, a [claim] must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face."[7] "[A claimant's] obligation to provide the grounds' of [her] entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level."[8] The Court is also "not bound to accept as true a legal conclusion couched as a factual allegation."[9] To state a "plausible" claim for relief, the claimant must "plead[ ] factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged."[10] This requires a claimant to state "enough facts to raise a reasonable expectation that discovery will reveal evidence" of the allegations charged.[11] A pro se litigant's filings are to be judged by their function, with liberal construction of "inartful pleading[s]."[12]

A. Claims against the Randazza Legal Group

Cox's claims against the RLG are dismissed because they exceed the scope of the Court's leave order and amount to an unauthorized third-party complaint. The Court allowed Cox to state claims against Plaintiff Marc Randazza only.[13] Thus, Cox's inclusion of claims against the RLG exceeded the scope of leave granted by this Court when allowing Cox to file an amended counterclaim.

Moreover, Rule 14(a) of the Federal Rules of Civil Procedure limits any civil defendant's ability to assert claims against parties that were not originally named in the underlying complaint.[14] It provides that "[a] defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it."[15] Cox's claims against the RLG are based solely on allegations unrelated to the underlying cybersquatting claims in Plaintiffs' original complaint and the RLG is not a party to this litigation. Therefore, all claims against the RLG are unauthorized by rule or order and are therefore dismissed.

B. Cox's Counterclaims against Marc Randazza

1. Claim 1 - Libel, Assault, Slander

Cox's first counterclaim is entitled "U.S. Code > Title 28 ยง 4101/28:1332 Diversity-Libel, Assault, Slander 320 Assault, Libel, and Slander."[16] She begins this claim by realleging her prior 14 pages of single-spaced factual allegations and ads that Randazza "has knowingly, with actual malice, published false and defamatory statements to third parties regarding" her.[17] She further alleges that he "used privileged information" against her to defame and slander her and to "attempt to [s]abotage Cox's [N]inth [C]ircuit appeal and paint Cox out as a [c]riminal in regarding to proceedings of a civil trial." She concludes that Randazza "has used Forbes, NPR, Legal Bloggers, his law Firm[']s Blogs, WIPO Publications, Amicus Briefs, Court Filings, and more to [d]efame, [s]lander, harass and intimidate Cox, " and "has relentlessly conspired to get others to join him in painting" Cox-"his former client"- "out to be a criminal guilty of extortion without filing a criminal complaint."[18] Based on these allegations, the Court liberally construes this claim as one for defamation.[19]

In Nevada, a defamation claim requires a plaintiff to show: "(1) a false and defamatory statement of fact by the defendant concerning the plaintiff; (2) an unprivileged publication to a third person; (3) fault, amounting to at least negligence; and (4) actual or presumed damages."[20] Certain classes of defamatory statements, like "false statement[s] involving the imputation of a crime [have] historically been designated as defamatory per se, " and are actionable without proof of damages.[21]

Randazza moves to dismiss this claim arguing that Cox "does not specify what any of these allegedly false and defamatory statements are." Despite this, he goes on to argue that the statement "Cox is an extortionist" was made during the course of litigation and is entitled to absolute privilege. Thus, despite Randazza's suggestions to the contrary, (and a review of her allegations reveals that) Cox has specified and refers to the defamatory statement that "Cox is an extortionist" in several places throughout her counterclaim.[22] However, as some of the statements were made during the course of litigation, the Court turns its analysis to Randazza's secondary argument that the communications on which Cox's claim is based are immune from suit based on the judicial privilege.

Nevada recognizes "the long-standing common law rule that communications uttered or published in the course of judicial proceedings are absolutely privileged."[23] Although the scope of the absolute privilege for communications during judicial proceedings is "quite broad" and only need be "in some way pertinent to the subject of controversy, " it extends only to attorneys advocating for their clients and parties to the litigation.[24] This privilege is based on the policy that as officers of the court, attorneys ought to have "the utmost freedom in their efforts to obtain justice for their clients, "[25] and it affords parties the same protections as attorneys for defamatory statements made during or in anticipation of judicial proceedings.[26] Whether the absolute privilege applies is a question of law for the court.[27]

Cox has alleged some communications that fall within the scope of absolute privilege and are thus immune from suit and others that are not protected by the privilege and thus, actionable. Within the privilege are any statements made by Randazza during the course of, or in anticipation of, judicial proceedings. This includes any statements made by Randazza in court documents filed in this case or as an amicus curiae participant in the Obsidian Finance Group, LLC v. Cox[28] Ninth Circuit appeal. Therefore, to the extent that ...


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