Gallagher v. Philipps ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 EDWARD R. GALLAGHER, Case No.: 20cv993-JLS(BLM) 11 Plaintiff, 12 ORDER DENYING DEFENDANT v. PHILIPPS’S EX PARTE MOTION TO 13 CONTINUE EARLY NEUTRAL DAVID PHILIPPS and KENNETH JOHN EVALUATION CONFERENCE AND CASE 14 BRAITHWAITE, II, in his capacity as MANAGEMENT CONFERENCE Secretary of the Navy, 15 Defendants. [ECF No. 28] 16 17 18 On September 28, 2020, Defendant David Philips (“Defendant Philipps”) filed an Ex Parte 19 Motion to Continue Early Neutral Evaluation Conference (“ENE”) and Case Management 20 Conference (“CMC”). ECF No. 28 (“Mot.”). The Court issued a briefing schedule on September 21 29, 2020 [ECF No. 30] and Defendant Kenneth John Braithwaite, II (“Defendant Braithwaite”) 22 and Plaintiff Edward R. Gallagher (“Plaintiff”) timely filed their oppositions on October 2, 2020. 23 ECF Nos. 31 (“Braithwaite Oppo.”) and 32 (“Gallagher Oppo.”). Defendant Philipps timely filed 24 a reply on October 6, 2020. ECF No. (“Reply”). 25 Defendant Philipps requests that the Court stay the ENE and CMC set for October 19, 26 2020 until District Judge Janis L. Sammartino rules on his pending motion to strike or, 27 alternatively, dismisses Plaintiff’s first amended complaint (the “anti-SLAPP motion”). Mot. at 2. In support of his motion, Defendant Philipps states that “Plaintiff’s claims target Mr. Philips’s 1 constitutionally protected speech” and “[c]ourts have made clear that early dismissal at the 2 pleading stage is especially appropriate in cases . . . that invoke significant First Amendment 3 rights.” Id. (citing Winter v. DC Comics, 30 Cal. 4th 881, 892 (2003)). In further support, 4 Defendant Philipps states that he anticipates that his pending anti-SLAPP motion will resolve all 5 of Plaintiff’s claims against him. Id. at 2. 6 Defendant Braithwaite argues that he opposes Defendant Philipps’s motion to the extent 7 Defendant Philipps does no seek a stay of all discovery and discovery would continue without 8 the benefits of the CMC or initial disclosures. Braithwaite Oppo. at 2. Initially, Defendant 9 Braithwaite contends that the CMC “allows the Court to set discovery deadlines and resolve or 10 at least offer helpful guidance regarding foreseeable disputes such as those regarding the 11 appropriate subject matter and scope of discovery.” Id. Furthermore, Defendant Braithwaite 12 asserts that the benefit of initial disclosures is that they “make the parties aware of ‘potential 13 sources of discoverable information and the general nature of that information.’” Id. at 3 14 (quoting New York Life Ins. Co. v. Morales, No. CIV.06CV1022-B(BLM), 2008 WL 2622875, at 15 *4 (S.D. Cal. July 1, 2008)). Defendant Braithwaite argues that initial disclosures “assist the 16 parties in determining which depositions and written discovery requests are necessary to prove 17 their claims or defenses” and “will undoubtedly help conserve the parties’ time and resources” 18 by promoting discovery requests that are “proportional to the needs of the case.” Braithwaite 19 Oppo. at 3. Finally, Defendant Braithwaite notes that he is not opposed to the Court granting a 20 stay of the ENE and CMC so long as the Court also stays all discovery until Defendant Philipps’s 21 Anti-SLAPP Motion is resolved. Id. at 4. 22 Plaintiff argues that Defendant Philipps’s Motion “does not present any valid reasons that 23 would constitute good cause for a continuance.” Gallagher Oppo. at 2. Plaintiff contends that 24 Defendant Philipps fails to establish why settlement discussions “could unnecessarily lengthen 25 the litigation” or why Plaintiff’s decision to consolidate his causes of action would affect the ENE, 26 CMC, or initial disclosures. Id. at 2-3. Specifically, Plaintiff asserts that the “discovery in this 27 case will significantly overlap for the various causes of action” and Defendant Philipps’s motion 1 in this matter even if he is no longer a party after resolution of his Anti-SLAPP motion.” Id. at 2 3. Additionally, Plaintiff argues that an ENE encourages early resolution of a case and presents 3 an opportunity to avoid lengthy litigation, which is the “very thing Defendant Philipps supposedly 4 wants to achieve.” Id. Plaintiff notes that Defendant Philipps’s defense is being funded by the 5 New York Times, which has a policy against settling defamation lawsuits. Id. Plaintiff contends 6 that “the real reason” why Defendant Philipps does not want to participate in the ENE is because 7 he is “prevented from engaging in good faith negotiations at the direction of the third-party 8 paying his fees.” Id. Finally, Plaintiff argues that “an anti-SLAPP motion brought in federal court 9 in California violates the Federal Rules of Civil Procedure (FRCP) when it prevents application of 10 the usual federal standards, including regarding discovery.” Id. (citing Rogers v. Home Shopping 11 Network, Inc., 57 F.Supp.2d 973 (C.D. Cal. 1999)). Therefore, Plaintiff asserts that Defendant 12 Philipps’s pending Anti-SLAPP Motion would violate the FRCP if this Court were to postpone the 13 ENE, CMC, or start of discovery. Id. at 4. 14 Defendant Philipps replies that good cause exists for a continuance of the ENE and CMC 15 because the “delay sought likely will be minimal” and “[i]t makes little sense to compel Mr. 16 Philipps to participate in what amounts to a second form of early case resolution . . . when the 17 legislature has already provided for early case resolution for this specific kind of case, via the 18 anti-SLAPP statute.” Reply at 2. Defendant Philipps also argues that, unless Plaintiff intends to 19 offer to compensate Defendant Philipps for his costs, the claims will not be resolved until the 20 Court rules on the anti-SLAPP motion, which triggers an automatic award of attorneys’ fees. Id. 21 Defendant Philipps further contends that Plaintiff’s speculation is misplaced in regard to 22 Defendant Philipps’s relationship with the New York Times being the reason for his refusal to 23 settle now. Id. Defendant Philipps argues that “Plaintiff’s claims are meritless and designed to 24 chill truthful, nonactionable reporting on matters of public record” and that Defendant Philipps 25 “has no interest in settling such a claim.” Id. Finally, Defendant Philipps asserts that a motion 26 to strike under California Civil Code of Procedure section 425.16 that challenges the legal 27 sufficiency of a plaintiff’s claim is reviewed under the same standard as a Federal Rule of 1 resolution of the motion. Id. at 3 (citing Planned Parenthood Fed’n of Am., Inc. v. Ctr. for Med. 2 Progress, 890 F.3d 828, 834 (9th Cir. 2018)). 3 Plaintiff’s reliance on Rogers is incorrect. In Rogers, the court stated that a defendant 4 may “file a special motion to strike immediately upon being served with the complaint” and this 5 “filing automatically stays all further discovery.” Rogers, 57 F. Supp. 2d at 980. The court 6 further noted that this stay of discovery occurs “[i]f a defendant makes a special motion to strike 7 based on alleged [legal] deficiencies in the plaintiff's complaint” in which case “the motion must 8 be treated in the same manner as a motion under Rule 12(b)(6).” Rogers, 57 F. Supp. 2d at 9 983; see also Planned Parenthood Fed'n of Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828, 10 834 (9th Cir.) (holding that “when an anti-SLAPP motion to strike challenges only the legal 11 sufficiency of a claim, a district court should apply the Federal Rule of Civil Procedure 12(b)(6) 12 standard and consider whether a claim is properly stated”). The Ninth Circuit affirmed Rogers 13 and stated, “on the other hand, when an anti-SLAPP motion to strike challenges the factual 14 sufficiency of a claim, then the Federal Rule of Civil Procedure 56 standard will apply” and 15 “discovery must be allowed, with opportunities to supplement evidence based on the factual 16 challenges, before any decision is made by the court.” Planned Parenthood, 890 F.3d at 834. 17 In his anti-SLAPP motion, Defendant Philipps moves for an order striking the second, 18 third, fourth, fifth, sixth, seventh, and eighth causes of action in Plaintiff’s first amended 19 complaint, or in the alternative, dismissing all of Plaintiff’s claims against him pursuant to Rule 20 12(b)(6). ECF No. 26 at 2. Defendant Philipps argues that his motion challenges only the legal 21 sufficiency of Plaintiff’s claims1, thereby requiring a stay of discovery. Id. at 3. However, upon 22 23 1 Defendant Philipps argues that Plaintiff’s libel claims fail because: (1) Plaintiff fails to identify 24 any specific defamatory statements; (2)Plaintiff did not timely demand a correction under either California or Florida law and did not plead he suffered special damages;(3) the articles at issue 25 constitute a fair and true report of government proceedings against Plaintiff; (4) Plaintiff cannot show any statement is substantially false; (5) other statements are non-actionable opinion; and 26 (6) other statements are not “of and concerning” Plaintiff. Id. at 3. Defendant Philipps further 27 contends that Plaintiff’s intentional infliction of emotional distress claim against him fails because (1) it is duplicative of his libel claims; (2) Mr. Philipps’s truthful news reporting about Plaintiff’s 1 || further inspection, the Court notes that Defendant Philipps‘s motion could involve issues of fact 2 addition to issues of law. Specifically, Defendant Philipps contends that “Plaintiff cannot show 3 || that any statement is false, much less substantially false.” Id. at 28. In conjunction with his 4 ||motion, Defendant Philipps filed 48 exhibits and a request for judicial notice. See Docket. This 5 ||indicates that Defendant Philipps is seeking for the Court to evaluate matters outside of the 6 ||pleadings to assess the merits of his motion. If so, the Court would be required to allow 7 || additional discovery to be done in order to supplement evidence based on factual challenges. 8 || Planned Parenthood, 890 F.3d at 834. 9 Accordingly, the Court DENIES Defendant Philipps’s ex parte motion to continue the ENE 10 CMC. The Court finds this case will benefit from a timely ENE and CMC. The ENE and CMC 11 || will remain as scheduled on October 19, 2020 at 9:30 a.m. and the parties must comply with 12 of the requirements set forth in the Court’s September 8, 2020 Notice and Order for Early 13 || Neutral Evaluation Conference and Case Management Conference. See ECF No. 25. 14 IT 1S SO ORDERED. 15 ||Dated: 10/7/2020 lobe Mager 16 Hon. Barbara L. Major 7 United States Maaistrate Judae 18 19 20 21 22 23 24 25 26 27 28 || that the reporting caused him “severe emotional distress.” Id.