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Grand Canyon Skywalk Development, LLC v. Cieslak

United States District Court, D. Nevada

May 21, 2014

Grand Canyon Skywalk Development, LLC, et al., Plaintiffs,
David John Cieslak, Nicholas Scutari, and Scutari & Cieslak Public Relations, Inc., Defendants.


JENNIFER A. DORSEY, District Judge.

This once-complex business tort case previously involving tribal-sovereignty arguments now comes before this Court on a simple motion to dismiss and objections to Magistrate Judge Foley's Order denying the defendant's request for a stay pending resolution of this motion to dismiss. Docs. 19, 60. Defendants, an advertising agency and its two principals charged with promulgating a smear campaign that defamed the Plaintiffs, seek dismissal of Plaintiffs' defamation claims on statute-of-limitations grounds, for failure to state a viable claim, and under Nevada's anti-SLAPP statutes. Finding that the Plaintiffs' allegations survive each of these dismissal arguments, the Court denies the motion to dismiss and overrules as moot Defendants' objections to Judge Foley's order denying the stay during the pendency of this now-resolved motion to dismiss.


This case centers on the Grand Canyon Skywalk, a tourist attraction built in the Grand Canyon on land owned by the Hualapai Indian Nation in northern Arizona. Doc. 1. The project was originally conceived by Plaintiff David Jin and his company, Grand Canyon Skywalk Development, LLC ("GCSD"). Beginning in 1996, Jin inked a series of agreements with the Hualapai Tribe to develop the project, market it to tourists, and share the revenue. Doc. 1 at 4. On December 31, 2003, GCSD and a tribal-controlled entity, Sa' Nyu Wa, Inc., ("SNW") entered into a Development and Management Agreement that "provided for, among other things, the construction, management, and operation of the Skywalk and related facilities solely and exclusively by GCSD." Id. at 4-5. Plaintiffs claim that under the 2003 agreement, SNW was responsible for providing "the necessary utilities and infrastructure to the Skywalk site not only to allow construction to take place, but also to provide amenities to the public." Id. at 8. GCSD alleges that although it began constructing the Skywalk in 2006, the Tribe failed to deliver power, water, or wastewater to the project site, frustrating GCSD's efforts to construct a visitors' center as it was obligated to do under the 2003 Agreement; today, the visitor's center "stands an empty although nearly constructed shell." Id. at 8.

Plaintiffs claim that the Tribe could have secured up to $30 million in federal funding to assist in delivering utilities to the site, but the Tribe refused to do so. Id. at 9. Plaintiffs further allege that in 2011, following disputes about allocation of tourist revenue, "some of the defendants began conspiring to invent a justification to take GCSD and Jin's contractual rights, and decided to claim that it was the responsibility of GCSD and Jin to put in all of the infrastructure necessary for... the Skywalk." Id. at 8-9. Members of the Hualapai Tribal Council retained a Phoenix-based private public relations firm, Defendant Scutari & Cieslak Public Relations, Inc., whose principals were Defendants John Cieslak, Nicolas Peter Scutari, and during the February or March 2011 "time period, " Defendants devised a detailed strategy to blame the failure on Jin and GCSD, made false statements directly to the media in a memorandum ultimately leaked to the press, and ghostwrote a letter disparaging Plaintiffs to the Hualapi Tribe. See id. at 10-23. Plaintiffs contend that these false statements have damaged their business reputation nationally and globally. Id. at 23.

Plaintiffs originally sued Scutari & Cieslak and several members of the Hualapai Tribal Council for defamation, business disparagement, and civil conspiracy, but the tribal defendants were voluntarily dismissed, leaving only the advertising-agency defendants. See Docs. 63, 64. These remaining defendants move for dismissal of Plaintiffs' claims, arguing that their statements are not defamatory, some of them were communicated outside the two-year statute of limitations, and, alternatively, the whole case should be dismissed as an improper SLAPP suit. Doc. 17.[2]

Defendants also moved to stay discovery pending resolution of the motion to dismiss, Doc. 48, which Magistrate Judge Foley denied. Doc. 59. Defendants now object to that ruling and move this Court to reconsider it. Doc. 60. The Court denies both the motion to dismiss and the motion for reconsideration, permitting this case to now move forward.


A. Motion to Dismiss [Doc. 17]

Federal Rule of Civil Procedure 8(a) supplies the standard for pleadings in a federal cause of action and states, "[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."[3] A district court may dismiss a complaint for failing to state a claim upon which relief can be granted under Rule 12(b)(6).[4]

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face."[5] "[A] plaintiff's obligation to provide the grounds' of his 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."[6] The Court is also "not bound to accept as true a legal conclusion couched as a factual allegation."[7] To state a "plausible" claim for relief, the plaintiff must "plead[] factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged."[8] This requires a plaintiff to state "enough facts to raise a reasonable expectation that discovery will reveal evidence" of the allegations charged.[9]

1. Defendants have not shown that the statute of limitations bars claims based on any statements in the complaint.

Defendants argue that the memorandum, issued in February or March 2011, was "leaked" prior to April 8, 2011, such that Plaintiffs "discovered" it more than two years before they filed this suit on April 8, 2013. Doc. 17 at 13. Plaintiffs argue they need to conduct discovery into when the Memorandum was actually circulated to resolve this issue. See Doc. 22 at 21.

The statute of limitations for defamation in Nevada action is two years.[10] Typically a cause of action does not accrue until the party discovers it.[11] Although the April 8, 2013, complaint alleges the memorandum was "from" the February or March "timeframe, " it does not specify when in early 2011 the memorandum was leaked to the public or when the Plaintiffs discovered that publication, thus triggering the statute of limitations. Doc. 1 at 11 &n.3. Defendants offer no evidence to negate the plausible inferences from the well-pled facts that either: (1) the memorandum was leaked sometime after April 8, 2011 (two years before this suit commenced); or (2) even if it was leaked before ...

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