Anti-SLAPP Statute Raised in Another High-Profile Federal Court Case

Lanny Davis and his related companies, which are defendants in a defamation suit pending in DC federal court that is captioned 3M v. Boulter, today filed a motion to dismiss the suit under DC’s anti-SLAPP statute.

The complaint, which was filed on June 28, 2011, alleges that, in early 2007, a 3M subsidiary acquired all of the outstanding shares of Acolyte, a British company engaged in the business of developing and marketing products whose aim was to detect certain dangerous microorganisms. It alleges that, at the time of the acquisition, Acolyte’s only commercially viable product was a device that allegedly allowed hospitals and clinics to screen patients for methicillin-resistant MRSA.

It alleges that, after its acquisition of Acolyte, consumer trials showed that it was far less effective at identifying methicillin-resistant MRSA than 3M had been led to believe and that, for this and other reasons, 3M determined that the product was not commercially viable. The complaint alleges that, because the Sales and Purchase Agreement allowed the former shareholders to receive payments on the sales of the product, 3M offered them the payments they would have received through December 2009 (less than $2 million). The complaint alleges that the former shareholders demanded over $66 million.

3M alleges that, because no amicable resolution could be reached, one of the former shareholders sought to increase pressure on 3M by asserting that large institutional investors were preparing to sell 3M stock in large quantities. It alleges that other former shareholders sued for breach of contract in the United Kingdom. It alleges that, while that action was pending, the former shareholders orchestrated a public relations related campaign to force 3M to pay a large amount in settlement of the action, including the issuance of false press releases; the submission of a “citizens petition” to the Food & Drug Administration; orchestrated public demonstrations; and the creation of a website containing false allegations. It alleges that Davis and his related companies were intimately involved in these efforts.

It alleges that one of the former shareholders then intimated to 3M that, if the lawsuit was not settled on terms favorable to the shareholders, there would be “consequences” from British Ministry of Defense, which allegedly had a stake in Acolyte prior to its purchase from 3M. According to the complaint, “[i]t does appear, however, that Defendants have exercised their influence with the U.K. government and the Ministry of Defense to cause 3M to lose business opportunities with those entities.” The complaint asserts five causes of action: (1) intimidation and blackmail (under U.K. law); (2) tortious interference with prospective business relationships and economic advantage; (3) commercial defamation; (4) aiding and abetting; and (5) civil conspiracy.

The Davis defendants’ memorandum argues that the lawsuit must be dismissed as to the Davis defendants because the statements about which 3M is complaining were acts “in furtherance of the right of advocacy on issues of public interest.” Specifically, they argue, “Davis’s statements – contained in press releases, public demonstrations, and the FDA Citizens’ Petition – are all connected with an issue of high public interest: the deadly MRSA bacterium, 3M’s failure to obtain FDA approval for a fast, highly reliable, inexpensive device (already approved in the U.K and E.U.) that can quickly detect the presence or MRSA and thus save countless individuals from serious illness or, all too often, death.”

They argue that, given this showing, 3M must demonstrate that they have a likelihood of success on their claims, which they cannot do. Specifically, they argue that 3M has not shown that the statements were false or made with the requisite degree of intent to prevail on the defamation claim. They also argue that the challenged statements were privileged under the “fair comment” or “common interest” privileges. It argues that the remaining causes of action fail for a variety of pleading or other deficiencies.

Notably, the 47-page memorandum does not address the D.C. Home Rule argument made by Daniel Snyder in his opposition to the anti-SLAPP motion filed by the City Paper and its reporter. Nor does it address the Erie argument made by the Sherrod plaintiff in opposition to the anti-SLAPP motion filed by the defendants there.  (As you may recall, the court denied the Sherrod defendants’ anti-SLAPP motion on July 28, 2011 in a “minute order,” and, to date, has not issued an opinion explaining why the motion was denied). The Erie argument was also part of the plaintiff’s opposition in the Farah v. Esquire case. While the Davis defendants will certainly have an opportunity to respond to these arguments in their reply brief, it is somewhat surprising that they did not address them at all in their opening brief, given the prior briefing on these issues.

Leslie Machado

About: Leslie Machado

Mr. Machado counsels and advises a diverse range of clients on various areas of law. He is also an experienced litigator, having tried cases to verdict in state and federal courts. View all posts by Leslie Machado
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