Peterson v. Burke ( 2020 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Jeffrey Peterson, No. CV-20-00106-PHX-MTL 10 Plaintiff, ORDER 11 v. 12 Gannett Company Incorporated, et al., 13 Defendants. 14 15 Before the Court is the Motion to Dismiss Plaintiff’s Third Amended Complaint 16 With Prejudice filed by Defendants Gannett Co., Inc. (“Gannett”) and Phoenix 17 Newspapers, Inc. (“PNI”). (Doc. 70.) For the following reasons, Defendants’ motion is 18 granted; the Third Amended Complaint is dismissed with prejudice.1 19 I. BACKGROUND 20 Plaintiff brings claims for defamation and false light under Arizona law. (Doc. 68 21 at 40, 46.) The Court previously described the relevant factual allegations and procedural 22 history in this case. (Doc. 67 at 1–5.) They need not be repeated here. 23 In ruling on Defendants’ Motion to Dismiss Plaintiff’s Second Amended 24 Complaint, the Court found that the one-year statute of limitations had expired on 25 Plaintiff’s defamation claim as to an October 23, 2017 article published by PNI on its 26 27 1 Neither party has requested oral argument. Both parties have submitted legal memoranda 28 and oral argument would not have aided the Court’s decisional process. See Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998); see also LRCiv 7.2(f); Fed. R. Civ. P. 78(b). 1 website, azcentral.com, and in the Arizona Republic newspaper.2 (Id. at 8.) The Court found 2 that, as to his defamation claim regarding a December 14, 2017 article, which also appeared 3 online and in print,3 Plaintiff was a limited-purpose public figure “with respect to his high- 4 profile business dealings.” (Doc. 67 at 10.) He was therefore required to allege “actual 5 malice.” See New York Times Co. v. Sullivan, 376 U.S. 254, 279–80 (1964). The Second 6 Amended Complaint did not do so. The Court found that amendment would be futile as to 7 the October 2017 article, but permitted Plaintiff “one final opportunity” to amend the 8 complaint with respect to the December 2017 article. (Doc. 67 at 15.) 9 Plaintiff has since filed a Third Amended Complaint with new factual allegations 10 regarding the December 2017 article, which is now the only publication at issue. He has 11 also added a new claim for false light under Arizona law. (Doc. 68 at 46.) Defendants have 12 moved to dismiss the Third Amended Complaint with prejudice. The motion is fully 13 briefed. (Docs. 70–72.) 14 II. LEGAL STANDARD 15 To survive a motion to dismiss, a complaint must contain “a short and plain 16 statement of the claim showing that the pleader is entitled to relief” such that the defendant 17 is given “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. 18 Corp. v. Twombly, 550 U.S. 545, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2); Conley v. 19 Gibson, 355 U.S. 41, 47 (1957)). Dismissal under Rule 12(b)(6) “can be based on the lack 20 of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable 21 legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). A 22 complaint should not be dismissed “unless it appears beyond doubt that the plaintiff can 23 24 2 The article, by reporter Craig Harris, appeared on azcentral.com with the headline “State Orders Failed Internet Payday Loan Venture to Pay $250K to Defrauded Investors” and in 25 the Arizona Republic with the headline “Online Firm Ordered to Repay Investors $250K.” 26 (Doc. 61 at 3; Doc. 62-2.) 3 The article, also by Mr. Harris, appeared on azcentral.com with the headline “Once-High- 27 Flying Quepasa Chief Jeff Peterson Under Fire as $9M Gone in Online Startups” and in 28 the Arizona Republic with the headline “$9M Missing After Quepasa Founder’s New Startup Fails.” (Doc. 61 at 4; Doc. 62-4.) 1 prove no set of facts in support of the claim that would entitle it to relief.” Williamson v. 2 Gen. Dynamics Corp., 208 F.3d 1144, 1149 (9th Cir. 2000). 3 The Court must accept material allegations in the Complaint as true and construe 4 them in the light most favorable to Plaintiff. North Star Int’l v. Arizona Corp. Comm’n, 5 720 F.2d 578, 580 (9th Cir. 1983). “Indeed, factual challenges to a plaintiff’s complaint 6 have no bearing on the legal sufficiency of the allegations under Rule 12(b)(6).” Lee v. City 7 of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). Review of a Rule 12(b)(6) motion is 8 “limited to the content of the complaint.” North Star Int’l, 720 F.2d at 581. “Determining 9 whether a complaint states a plausible claim for relief will . . . be a context-specific task 10 that requires the reviewing court to draw on its judicial experience and common sense.” 11 Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). 12 III. DISCUSSION 13 This case implicates the protections afforded to freedom of speech by the First 14 Amendment of the United States Constitution. There exists a “profound national 15 commitment to the principle that debate on public issues should be uninhibited, robust, and 16 wide-open.” New York Times Co., 376 at 270. Further, constitutional protections for 17 defendants in defamation cases “surely demonstrate the Court’s recognition of the 18 Amendment’s vital guarantee of free and uninhibited discussion of public issues.” 19 Milkovich v. Lorain Journal Co., 497 U.S. 1, 22 (1990). Nonetheless, “[s]ociety has a 20 pervasive and strong interest in preventing and redressing attacks upon reputation.” 21 Rosenblatt v. Baer, 383 U.S. 75, 86 (1966). First Amendment protections must also be 22 balanced with the ability of individual plaintiffs to seek redress for reputational and other 23 damages. See Palin v. New York Times Co., 940 F.3d 804, 816 (2d Cir. 2019). 24 These considerations are heightened in the context of public figures, because a “rule 25 that would impose strict liability on a publisher for false factual assertions would have an 26 undoubted ‘chilling’ effect on speech relating to public figures that does have constitutional 27 value.” Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 52 (1988). Acknowledging these 28 interests, the United States Supreme Court has developed a “a federal rule that prohibits a 1 public official from recovering damages for a defamatory falsehood relating to his official 2 conduct unless he proves that the statement was made with ‘actual malice’—that is, with 3 knowledge that it was false or with reckless disregard of whether it was false or not.” New 4 York Times Co., 376 U.S. at 279–80. This requirement has been extended to limited- 5 purpose public figures. See Gertz v. Robert Welch, Inc., 418 U.S. 323, 351 (1974). Here, 6 the Court addresses whether Plaintiff, a limited-purpose public figure, has met his burden 7 to allege actual malice in connection with his defamation and false light claims. 8 A. Defamation 9 A defamation claim generally requires a false publication that brings “the defamed 10 person into disrepute, contempt, or ridicule, or must impeach [the] plaintiff’s honesty, 11 integrity, virtue, or reputation.” Godbehere v. Phoenix Newspapers, Inc., 162 Ariz. 335, 12 341 (1989). When the plaintiff is a “public figure,” he or she must also prove (i) the falsity 13 of the statements at issue and (ii) by clear and convincing evidence, that the statements 14 were made with “actual malice.” See New York Times Co., 376 U.S. at 279–80; Gertz, 418 15 U.S. at 345. As noted, “actual malice” is “knowledge that it was false or with reckless 16 disregard of whether it was false or not.” Hustler, 485 U.S. at 52 (citing New York Times 17 Co., 376 U.S. 279–80).4 18 The Court previously found that Plaintiff was a limited-purpose public figure “with 19 respect to his high-profile business dealings.” (Doc. 67 at 10.) It cited, as examples, 20 Plaintiff’s self-described status as a “well-known technology entrepreneur” who founded 21 the social networking site Quepasa.com, Inc. (“Quepasa”), which became a “national 22 sensation”; Plaintiff’s relationships with “significant political and business personalities in 23 both the United States and Mexico”; his appointment as a director of the Arizona-Mexico 24 Commission; and his recruitment of former United States Attorney Dennis Burke and 25 former Nogales Mayor Marco Lopez, Jr. to the board of Mobile, another company he 26 founded. (Id.) (citing Doc. 13-1). These assertions remain in the Third Amended 27 4 As this Court acknowledged in the prior order, the U.S. Supreme Court “has federalized 28 major aspects of libel law.” Gertz, 418 U.S. at 370 (White, J. dissenting); (Doc. 67 at 9 n.8). 1 Complaint. (Doc. 68 ¶¶ 11, 13(f), 17, 23, 57, 63.) Plaintiff also does not dispute, in his 2 response to the pending motion to dismiss, that he is a limited-purpose public figure. (Doc. 3 71 at 2.) 4 Accordingly, the Court addresses whether Plaintiff has sufficiently alleged that 5 Defendants acted with actual malice. Actual malice is “not measured by whether a 6 reasonably prudent man would have published, or would have investigated before 7 publishing,” but by whether “the defendant in fact entertained serious doubts as to the truth 8 of [its] publication.” St. Amant v. Thompson, 390 U. S. 727, 731 (1968). The existence of 9 actual malice is a question of law. Milkovich, 497 U.S. at 17. “[I]t is proper to dismiss a 10 complaint when the Court concludes the plaintiff fails to plead actual malice as a matter of 11 law” under the Rule 12(b)(6) standard. Resolute Forest Prods., Inc. v. Greenpeace Int’l, 12 No. 17-cv-02824-JST, 2019 WL 281370, at *8 (N.D. Cal. Jan. 22, 2019). 13 The Court previously found that the Second Amended Complaint’s “conclusory 14 allegations” were insufficient to allege that Defendants had acted with actual malice.5 (Doc. 15 67 at 14.) Plaintiff has since added five allegations in connection with his defamation claim. 16 (Doc. 68 at 43–46.) Defendants argue that the new allegations are either not defamatory in 17 nature or that Plaintiff has not alleged actual malice. (Doc. 70 at 4–6.) The Court analyzes 18 Plaintiff’s allegations in turn. 19 1. $9 Million “Gone” 20 The article’s headline, as it appeared online, was “Once-high-flying Quepasa chief 21 Jeff Peterson under fire as $9M gone in online startups.” (Doc. 68-1 at 1.) Plaintiff takes 22 issue with the word “gone.” (Doc. 68 at 43.) He states that the article is “false and 23 defamatory” because it “goes on to explain how the money had been spent, and that it 24 5 The Second Amended Complaint contained two relevant allegations. First, it described 25 the two articles as “intentionally orchestrated by Burke as the group leader, and published 26 by the Arizona Republic newspaper and on the azcentral.com website with ill-will and knowledge of falsehood. The Complaint seeks redress for these statements which were 27 made with actual malice.” (Doc. 13-1 ¶ 12) (emphasis omitted). Second, “[w]hen 28 [d]efamatory statements were made regarding Peterson, Defendants acted with actual malice.” (Id. ¶ 203.) 1 didn’t merely vanish.” (Id.) That the money was “gone,” according to Plaintiff, “implies 2 theft.” (Id.) 3 As Defendants note, Plaintiff does not allege actual malice with respect to this 4 statement. (Doc. 70 at 6.) Further, “a defamatory meaning must be found, if at all, in a 5 reading of the publication as a whole.” Kaelin v. Globe Commc’ns Corp., 162 F.3d 1036, 6 1040 (9th Cir. 1998); see also Knievel v. ESPN, 393 F.3d 1068, 1075 (9th Cir. 2005) (“The 7 context in which the statement appears is paramount in our analysis.”). As Plaintiff notes, 8 the text of the article describes how the money was spent. (Doc. 68-1 at 6–8.) Further, on 9 a motion to dismiss a defamation claim, the Court “must interpret the article as it would 10 appear to the average reader to decide whether it can reasonably bear the meaning ascribed 11 to it by plaintiff.” Barger v. Playboy Enterprises, Inc., 564 F. Supp. 1151, 1154 (N.D. Cal. 12 1983), aff’d, 732 F.2d 163 (9th Cir. 1984). The Court finds that the average reader would 13 understand the word “gone” to mean that the money was no longer available, as opposed 14 to that it was stolen. Given that Plaintiff has not alleged that this statement was actually 15 false, he cannot allege that Defendants acted with “knowledge that [this statement] was 16 false or with reckless disregard of whether it was false or not.” Hustler Magazine, Inc., 485 17 U.S. at 52. The article’s headline is not actionable. 18 2. “High-School Dropout” 19 Plaintiff also objects to the article’s statement that he was a “high-school dropout.” 20 (Doc. 68 at 43.) Plaintiff states that he does not meet the definition of “dropout” as a 21 “person who has abandoned a course of study or who has rejected conventional society to 22 pursue an alternative lifestyle.” (Id.) Rather, Plaintiff states that he left school with parental 23 permission and later received a Graduate Equivalency Diploma. (Id.) 24 To survive a motion to dismiss, a defamation plaintiff must establish that the 25 publication is “reasonably capable of sustaining a defamatory meaning.” Cochran v. NYP 26 Holdings, Inc., 58 F.Supp.2d 1113, 1121 (C.D. Cal. 1998), aff’d, 210 F.3d 1036, 1038 (9th 27 Cir. 2000). “It is for the court to decide [whether a statement is actionable defamation] in 28 the first instance as a matter of law.” Knievel, 393 F.3d at 1074 (citation omitted). The 1 Court finds that the term “high-school dropout” is not defamatory as a matter of law 2 because the “average reader” would understand the term as someone who left high school 3 before graduating. Barger, 564 F. Supp. at 1154. Plaintiff does not dispute that this is a 4 true statement. And “[s]ubstantial truth is an absolute defense to a defamation action in 5 Arizona.” Read v. Phoenix Newspapers, Inc., 169 Ariz. 353, 355 (1991). 6 Plaintiff also argues that Defendants “intentionally omitted the fact that Peterson re- 7 enrolled in a well-respected academic institution, Harvard University, and became a degree 8 candidate there, in his 30’s.” (Doc. 68 at 43.) But Defendants “had no obligation to present 9 the context [Plaintiff] would have preferred.” Lundin v. Discovery Commc’ns Inc., 352 F. 10 Supp. 3d 949, 962 (D. Ariz. 2018), aff’d, 796 F. App’x 942 (9th Cir. 2020); see also 11 Brokers’ Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1108 (10th Cir. 2017) 12 (“The omission of additional favorable information from an otherwise true publication does 13 not render a statement materially false.”). For these reasons, this statement is not 14 actionable. 15 3. Plaintiff “Wanted Guidance” 16 The article states that, after Plaintiff founded Quepasa, “he wanted guidance on what 17 to do next.” (Doc. 68 at 43–44.) Plaintiff argues that this statement is false because he was 18 not “seeking guidance” or “adrift and in need of direction.” (Id. at 44.) Plaintiff states that 19 Defendants knew that this statement was false because the article later states that a Mesa 20 businessman, Ross Farnsworth Jr., provided $400,000 in capital for Plaintiff’s new 21 company, Mobile. Plaintiff asserts that he needed capital, not advice, from Mr. Farnsworth. 22 (Id.) 23 Here, Plaintiff himself notes that the rest of the article provides context for the 24 “guidance” he sought. See Kaelin, 162 F.3d at 1040 (“[A] defamatory meaning must be 25 found, if at all, in a reading of the publication as a whole.”). Further, as noted, a defamation 26 claim requires a false publication that brings “the defamed person into disrepute, contempt, 27 or ridicule, or must impeach [the] plaintiff’s honesty, integrity, virtue, or reputation.” 28 Godbehere, 162 Ariz. at 341. It is not conceivable that “wanting guidance,” even if false, 1 could bring Plaintiff into disrepute, contempt, or ridicule. As this statement is not 2 “reasonably capable of sustaining a defamatory meaning,” it is not actionable. Cochran, 3 58 F.Supp.2d at 1121. 4 4. “Meteoric Crash” 5 Plaintiff also takes issue with the statement, “And like Quepasa, which ultimately 6 had a meteoric crash, Mobile has essentially busted.” (Doc. 68 at 44.) Plaintiff argues that 7 this statement was false and defamatory because Defendants knew that Quepasa did not 8 have a “meteoric crash.” He notes that the Arizona Republic had followed Quepasa through 9 years in which Plaintiff “held the company together instead of letting it ‘crash,’ as did many 10 other ‘dot-com’ companies.” (Id. at 44.) Plaintiff cites to articles from 2002 and 2006 11 demonstrating that he previously “saved” and “revitalize[ed]” Quepasa. (Id. at 44–45.) He 12 states that Quepasa’s ultimate outcome was “dramatically different from how it was 13 portrayed by Defendants” because Quepasa ultimately merged with a company called 14 MeetMe; the “surviving corporation was purchased in March 2020 by NuCom 15 group . . . for $500,000,000.” (Id. at 45.) 16 Quepasa is not a party to this lawsuit. To be “actionable as a matter of law, 17 defamatory statements must be published in such a manner that they reasonably relate to 18 specific individuals.” Hansen v. Stoll, 130 Ariz. 454, 458 (Ct. App. 1981). The burden rests 19 on the plaintiff to show that the publication was “of and concerning” him. Id. Here, Plaintiff 20 only objects to Defendants’ characterization of Quepasa’s financial history. Plaintiff “may 21 not challenge statements, even if untrue and capable of defamatory meaning, on behalf of 22 the institution.” Haswood v. Am. Polygraph Ass’n, No. CV-14-00253-PHX-GMS, 2015 23 WL 846420, at *7 (D. Ariz. Feb. 26, 2015). 24 Further, even if this statement were actionable on Plaintiff’s behalf, Defendants’ 25 prior articles do not support Plaintiff’s assertion that the statement was “written with actual 26 malice.” (Doc. 68 at 44.) Plaintiff argues that, based on the present article, Defendants 27 knew that Quepasa was not “roadkill along the information superhighway.” (Id.) But it is 28 common sense that Quepasa’s previous success is irrelevant to whether it ultimately 1 “crashed.” Plaintiff cannot bring a defamation claim based on this statement because it was 2 not “of and concerning” him. Hansen, 130 Ariz. at 458. And even if he could, Plaintiff has 3 not alleged actual malice. 4 5. Criminal Defense Attorney 5 The article also stated, “Peterson has hired Chris Rapp, a Phoenix criminal defense 6 attorney. Rapp declined to comment.” (Doc. 68 at 45.) Plaintiff argues that this statement 7 is defamatory because he never hired Mr. Rapp, but instead hired his law partner, Andrew 8 Pacheco, “with whom Plaintiff has a long-standing business relationship.” (Id.) He states 9 that Defendants acted recklessly “especially in light of the fact that Attorney Rapp wouldn’t 10 comment one way or the other.” (Id.) Plaintiff states that the “implication is clear” that he 11 was a “criminal, who need[ed] a ‘criminal attorney,’ when in reality,” he is a “law-abiding 12 citizen who has never been convicted of a crime in any jurisdiction.” (Doc. 68 at 46.) 13 Despite Plaintiff’s argument, his own complaint states that he “retained the law firm 14 of Ryan Rapp & Underwood, lawyers Andrew Pacheco and Chris Rapp, to communicate 15 with Burke.” (Id. at 29 ¶ 140.) Further, Plaintiff does not dispute that he contracted with 16 Mr. Pacheco, Mr. Rapp’s law partner. He also does not dispute that Mr. Rapp is a criminal 17 defense attorney. (Doc. 68 at 51.) A defendant cannot be liable for defamation “for 18 publishing a statement that although not literally true, was substantially true.” Heuisler v. 19 Phoenix Newspapers, Inc., 168 Ariz. 278, 285 n.4 (Ct. App. 1991). Further, “[s]light 20 inaccuracies will not prevent a statement from being true in substance, as long as the ‘gist’ 21 or ‘sting’ of the publication is justified.” Id. Even if Plaintiff hired Mr. Pacheco, as opposed 22 to Mr. Rapp, the Court finds that the “gist” of the statement was that Plaintiff hired an 23 attorney. As Plaintiff does not allege that this is false, the statement is not defamatory. 24 * * * 25 Ultimately, in viewing the allegations in the light most favorable to Plaintiff, the 26 Court finds that Plaintiff has not stated a claim for defamation. A public-figure-defamation 27 plaintiff “must point to details sufficient to render a claim plausible.” Resolute Forest 28 Prod., Inc. v. Greenpeace Int’l, 302 F. Supp. 3d 1005, 1018 (N.D. Cal. 2017) (citing Pippen 1 v. NBCUniversal Media, LLC, 734 F.3d 610, 614 (7th Cir. 2017)). Although Plaintiff has 2 attempted to point to more details than in his Second Amended Complaint, his allegations 3 fail for the reasons described above. He has failed to state a claim for defamation against 4 Defendants either because the statements are not possibly defamatory or because he has 5 failed to allege actual malice. 6 B. False Light 7 Plaintiff has also alleged, for the first time, a claim for false light against Defendants. 8 (Doc. 68 at 46.) To state a claim for false light under Arizona law, a plaintiff must 9 demonstrate that “(1) the defendant, with knowledge of falsity or reckless disregard for the 10 truth, gave publicity to information placing the plaintiff in a false light, and (2) the false 11 light in which the plaintiff was placed would be highly offensive to a reasonable person in 12 the plaintiff’s position.” Doe v. Oesterblad, No. CV–13–01300–PHX–SRB, 2015 WL 13 12940181, at *5 (D. Ariz. June 9, 2015) (quoting Desert Palm Surgical Grp., P.L.C. v. 14 Petta, 343 P.3d 438, 450 (Ariz. Ct. App. 2015)); see also Restatement (Second) of 15 Torts § 652E (Am. Law Inst. 1977). As with defamation, a public official bringing a false 16 light claim must allege actual malice. See Godbehere, 162 Ariz. at 342 (“Any doubt about 17 the application of the actual malice element of the false light tort to public figures has been 18 eliminated.”). 19 Plaintiff identifies eight additional statements in connection with his false light 20 claim. (Doc. 68 at 47–51.) He asserts that Defendants “must have entertained serious 21 doubts” about the truth of each one.6 (Id.) Defendants, in turn, argue that Plaintiff’s 22 “threadbare allegations” do not plausibly state a claim for relief. 23 1. Investors’ Retirement Accounts 24 The article states, “[w]ith Peterson and other company fundraisers bringing in cash, 25 some Mobile investors parted ways with their individual retirement accounts or 401(k) 26 6 To the extent that Plaintiff reasserts the statements regarding the $9 million “gone,” that 27 he was a “high-school dropout,” that he sought guidance, Quepasa’s “meteoric crash,” and 28 attorney Chris Rapp, those statements also fail as to the false light claim. (Doc. 68 at 47- 51 ¶¶ A1, A2, A3, A6, A13.) 1 funds in hopes of making it big with the latest online business sensation.” (Doc. 68 at 48 2 ¶ A4.) Plaintiff states that the reporter “must have entertained serious doubts concerning 3 the veracity of this claim because it came from a source with an ax to grind, and was not 4 verified by those who allegedly tapped into their 401(k) funds.” (Id.) Even if that is true, 5 however, “failure to investigate, sloppy investigation, poor reporting practice and the like 6 are not per se actual malice.” Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 488 7 (1986). Plaintiff’s allegations do not rise to the level of actual malice. As Plaintiff has not 8 alleged actual malice, this statement is not actionable for false light. 9 2. The Money was “Gone” 10 The article also states, “[t]oday, however, all the money is gone. By September 11 2016, [Mobile] had a zero balance, according to Chase Bank records produced for Burke 12 this year by the company’s chief financial officer.” (Doc. 68 at 48 ¶ A5.) Plaintiff’s 13 argument is akin to that relating to the article’s headline. Plaintiff argues that Defendants 14 knew that the money was not “‘gone,’ but that it had been allocated in an earnest attempt 15 to keep a startup afloat.” (Id.) Plaintiff does not dispute that the money was “gone,” as in 16 no longer available, from Mobile’s account. Further, as with defamation claims, to qualify 17 as false light invasion of privacy, the publication must give “publicity to information 18 placing the plaintiff in a false light.” Oesterblad, 2015 WL 12940181, at *5 (emphasis 19 added). This assertion relates to Mobile, not to Plaintiff, and is therefore not actionable. 20 3. Immuebles Carso 21 The article also describes the Arizona Republic’s review of Mobile bank records, 22 which indicated that at least $770,759 was paid to a company, Immuebles Carso, controlled 23 by Mexican billionaire Carlos Slim. (Doc. 68 at 49 ¶ A7.) Plaintiff states that “with nothing 24 more than a tip from Defendant Burke, the Defendants must have entertained serious doubt 25 as to the true purpose of the payment to Immuebles Carso.” (Id.) This statement is wholly 26 speculative. Further, “failure to investigate will not alone support a finding of actual 27 malice.” Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 657, 692 (1989). This 28 statement is not actionable. 1 4. Emails 2 The article also quotes an email from Mr. Burke to Plaintiff stating, with respect to 3 Mobile, “[t]he bank statements are what I anticipated—massive spending void of any 4 business sense, with little to none directed to the actual platform and quite a windfall for 5 you, personally.” (Doc. 68 at 49 ¶ A8.) Plaintiff states that the “Defendants must have 6 entertained serious doubts as to the authenticity” of the emails because there is no 7 indication that they “were verified by the Internet server which is routine when emails are 8 introduced in Court for evidentiary purposes.” (Id.) The emails were reviewed for a 9 newspaper article, not for admission in court. And, even if true, “[m]ere negligence is not 10 enough to demonstrate actual malice.” Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180, 11 1187 (9th Cir. 2001). Plaintiff has not stated a false light claim with respect to this 12 statement. 13 5. Corporate Theft 14 The article also states, “Burke accused Peterson in his email of corporate theft, 15 noting investors’ money was spent at Men’s Warehouse, Nordstrom Rack, on designer 16 luggage and at $600-a-night hotels.” (Doc. 68 at 50 ¶ A9.) Plaintiff stated that without 17 hearing from him, “or his former corporate officers, the Defendants must have entertained 18 serious doubts that the expenses could not have been a legitimate business expense.” (Id.) 19 Again, “failure to investigate, sloppy investigation, poor reporting practice and the like are 20 not per se actual malice.” Dombey, 150 Ariz at 488. This statement is not actionable. 21 6. $150,000 Loan 22 Plaintiff also cites to the article’s statement that “Burke recently told The Republic 23 that Mobile also loaned [Mobile president Justin Billingsley] $150,000 that was not 24 repaid.” (Doc. 68 at 50 ¶ A10.) Plaintiff argues that “Defendants must have entertained 25 serious doubts as to the truth of this allegation” because it was refuted by an attorney, Don 26 Bivens, who had previously represented Plaintiff. (Id.) The article specifically includes Mr. 27 Bivens’s response, however. (Doc. 68-1 at 8.) Further, this statement refers to Mobile and 28 Mr. Billingsley, not to Plaintiff, and is therefore not actionable. 1 7. Bankruptcy 2 The article also states that Plaintiff put Inter123, a company he controlled, into 3 “Chapter 11 bankruptcy protection in Las Vegas after two former attorneys who were owed 4 $158,190 sued him for nonpayment and won court judgments against his company.” (Doc. 5 68 at 50 ¶ A11.) Plaintiff states that “Defendants must have held serious doubts that the 6 debt owed to the lawyers was the motivation for the Chapter 11 filing.” (Id.) Plaintiff does 7 not dispute that he put Inter123 into Chapter 11 bankruptcy, nor that this occurred after two 8 former attorneys sued the company. (Id.) As Plaintiff has not alleged that this statement is 9 false, he cannot allege false light. 10 8. Internal Documents 11 Lastly, the article states, “[i]nvestors and some board members plan to turn over the 12 various companies’ internal documents, including bank records, to law enforcement, the 13 Corporation Commission, Peterson’s Las Vegas bankruptcy trustee and the IRS in hopes 14 of bringing additional investigations and forcing investors’ repayment, one board member 15 told The Republic.” (Doc. 68 at 50 ¶ A12.) Plaintiff asserts that “Defendants had to have 16 entertained serious doubt about the Plaintiff’s alleged criminal conduct because for every 17 allegation made by Defendant Burke and others, there existed a reasonable alternative 18 explanation.” (Id.) Again, a failure to investigate these purported “reasonable alternative 19 explanations” is not actual malice. Dombey, 150 Ariz. at 488. This statement is not 20 actionable.7 21 * * * 22 The Court concludes that Plaintiff has failed to state a claim of false light. See 23 Hunley v. Orbital Scis. Corp., No. CV-05-1879-PHXDGC, 2007 WL 977384, at *2 (D. 24 Ariz. Mar. 29, 2007) (dismissing false light claim for failure to allege falsity and because 25 7 A statement that expresses “an interpretation, a theory, conjecture, or surmise, rather than 26 claiming to be in possession of objectively verifiable facts” generally is not actionable. Partington v. Bugliosi, 56 F.3d 1147, 1156 (9th Cir. 1995) (citing Haynes v. Alfred A. 27 Knopf, Inc., 8 F.3d 1222, 1227 (7th Cir. 1993)). It appears that this statement is conjecture 28 about forward-looking statements and is therefore not actionable. Because the parties did not raise this argument, the Court will not further analyze it. 1 the statements amounted to no more than “trivial indignities”). A court “typically will infer 2 actual malice from objective facts. These facts should provide evidence of negligence, 3 motive, and intent such that an accumulation of the evidence and appropriate inferences 4 supports the existence of actual malice.” Solano v. Playgirl, Inc., 292 F.3d 1078, 1085 (9th 5 Cir. 2002). Here, Plaintiff has not alleged actual malice to support a false light claim 6 because the facts on which he relies are either wholly speculative or are, by Plaintiff’s own 7 admission, not false statements. Plaintiff has failed to state a claim for false light. 8 C. Leave to Amend 9 Rule 15(a)(2) of the Federal Rules of Civil Procedure states that “[t]he court should 10 freely give leave [to amend a pleading] when justice so requires.” Fed. R. Civ. P. 15(a)(2). 11 Exceptions to the general policy of granting leave exist “where the amendment: 12 (1) prejudices the opposing party; (2) is sought in bad faith; (3) produces an undue delay 13 in litigation; or (4) is futile.” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 14 946, 951 (9th Cir. 2006). Here, the Court finds that amendment would both produce an 15 undue delay and would be futile. 16 As to undue delay, this case has been pending since December 14, 2018.8 (Doc. 1.) 17 Plaintiff has already amended the complaint three times. The Court previously noted that 18 Plaintiff would have “one final opportunity to amend the complaint.” (Doc. 67 at 15.) Also, 19 relevant to the “delay issue is whether the moving party knew or should have known the 20 facts and theories raised by the amendment in the original pleading.” Jackson v. Bank of 21 Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990). Here, Plaintiff’s remaining allegations all 22 relate to a December 2017 article. There is no conceivable reason that Plaintiff would know 23 additional facts or theories to raise in a Fourth Amended Complaint that he has not raised 24 in the first four filings. Relatedly, given Plaintiff’s opportunities to amend the complaint, 25 the Court finds that further amendment would be futile. The Third Amended Complaint 26 will be dismissed with prejudice. 27 28 8 The case was transferred to this District on January 14, 2020. (Doc. 53.) IV. CONCLUSION 2 Accordingly, 3 IT IS ORDERED that Defendants’ Motion to Dismiss Plaintiff's Third Amended Complaint With Prejudice (Doc. 70) is granted. The Third Amended Complaint is 5 || dismissed with prejudice. 6 IT IS FURTHER ORDERED directing the Clerk of the Court to terminate this case and enter judgment accordingly. 8 Dated this 29th day of December, 2020. 9 Wichal T. Hburde i Michael T. Liburdi 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -15-