Hoffman et al v. Bailey

Filing 191

ORDER: IT IS HEREBY ORDERED that the Hoffmans' 96 Motion to Dismiss Defendant David Bailey's Counterclaim [FRCP 12(b)(6)] is GRANTED. Bailey's 98 counterclaim pursuant to 18 U.S.C. 1514A is dismissed, while Bailey's countercla im for malicious prosecution is dismissed without prejudice. IT IS FURTHER ORDERED that the Hoffmans' 110 Special Motion to Strike Defendant David Bailey's Counterclaim and Seventh Affirmative Defense (LaCCP ART. 971) is DENIED AS MOOT. Signed by Judge Nannette Jolivette Brown on 4/26/2017. (mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PETER HOFFMAN, et al.

CIVIL ACTION

VERSUS

CASE NO. 13-5153

DAVID BAILEY

SECTION: “G”(5)
ORDER

In this case, Plaintiffs Peter and Susan Hoffman (collectively “the Hoffmans”) allege that
Defendant David Bailey (“Bailey”) sent an email to the Louisiana State Historic Preservation
Office in which Bailey allegedly made defamatory statements against the Hoffmans by accusing
them of fraudulently participating in a Louisiana tax incentive program.1 Pending before the Court
are the Hoffmans’ “Motion to Dismiss Defendant David Bailey’s Counterclaim [FRCP 12(b)(6)]”2
and the Hoffmans’ “Special Motion to Strike Defendant David Bailey’s Counterclaim and Seventh
Affirmative Defense (LaCCP ART. 971).”3 Having considered the motions, the memoranda in
support, the memoranda in opposition, the record, and the applicable law, the Court will grant the
Hoffmans’ motion to dismiss4 and deny as moot the Hoffmans’ special motion to strike.5

1

Rec. Doc. 1.

2

Rec. Doc. 107.

3

Rec. Doc. 110.

4

Rec. Doc. 107.

5

Rec. Doc. 110.

1

I. Background
A. Factual Background
In their complaint, the Hoffmans state that Susan Hoffman is owner of Seven Arts Pictures
Louisiana, LLC (“SAPLA”), which owns real property located at 807 Esplanade Avenue in New
Orleans, Louisiana (“the Property”).6 The Hoffmans aver that SAPLA engaged in substantial
rehabilitation of the Property in order to restore its historic character and to convert the Property
in order to be used as a motion picture post-production facility.7 The Hoffmans contend that
SAPLA obtained a letter from the Louisiana Department of Economic Development certifying that
the Property was eligible for Louisiana film infrastructure tax credits and received certification
from the United States Department of the Interior that the Property qualified for United States
historical rehabilitation tax credits.8 The Hoffmans also allege that SAPLA has requested, but has
not yet received, certification from the Louisiana State Historic Preservation Office (“SHPO”) that
the Property qualifies for Louisiana historic rehabilitation tax credits.9
According to the Hoffmans, Seven Arts Pictures Plc, an English public limited company
led by Peter Hoffman until November 9, 2011, hired Defendant David Bailey as its Finance
Director in August 2009.10 Bailey left that position in December 2009.11 Subsequently, in
November 2012, Bailey allegedly sent an e-mail to SHPO stating:

6

Rec. Doc. 1 at 2.

7

Id. at 3.

8

Id.

9

Id.

10

Id. at 4.

11

Id.

2

Dear Jessica
I was interested to read that Peter and Susan Hoffman have applied for
rehabilitation tax credits on 807 Esplanade, and have included them as revenue in
accounts filed with the SEC. This appears to contradict other evidence which
strongly indicates that Peter Hoffman and Susan Hoffman are the architects not of
a building, but of a major economic fraud. . . .
Who should I write to with the evidence I personally have that indicates that all the
applications made by the Hoffmans are fraudulent, that the amounts claimed were
probably not spent, and that some or all of the funds used to renovate the property
were improperly diverted from SAP Plc by way of a transfer to a related party
within 2 years of a SAP Plc becoming insolvent?
David J Bailey12
The Hoffmans claim that Bailey’s statements in the November 2012 e-mail were “untrue
and [were] made maliciously without any basis in fact and with an intent to damage plaintiffs’
reputations, successes, and good will,” and were intended “to embarrass plaintiffs and to damage
plaintiffs’ business relationships.”13 The Hoffmans contend that Bailey had never seen the relevant
reports summarizing the rehabilitation expenditures and had no responsibility for those expenses
during his time as PLC’s Finance Director.14 The Hoffmans argue that Bailey’s conduct constitutes
defamation and defamation per se.15
In response, Bailey contends that the Hoffmans’ lawsuit is without merit and “part of their
scheme of harassment, threats, intimidation, and retaliation” against Bailey for providing
assistance to the government in its investigation of the Hoffmans.16 According to Bailey, in August
of 2009, he was employed as Finance Director of Seven Arts Pictures Plc where he had access to

12

Rec. Doc. 1-3 at 30.

13

Id. at 5.

14

Id. at 5–6.

15

Id. at 6–8.

16

Rec. Doc. 98 at 1–2.

3

accounting records and other financial documents related to the Hoffmans’ “plans and schemes”
to receive tax credits on the 807 Esplanade Property.17 Bailey asserts that he became aware of
inconsistencies and misstatements in Seven Arts Pictures Plc’s records and of efforts by the
Hoffmans to “apply for and obtain and then resell for cash millions of dollars of tax credits with
respect to the 807 Esplanade Property.”18 Bailey further alleges that a series of articles published
in 2012 informed him that the Hoffmans were seeking millions of dollars in tax credits with respect
to the 807 Esplanade Property to help finance “$13.5 million” in redevelopment costs, which
Bailey asserts he knew was a false and inflated number.19 Thus, Bailey alleges that he sent his
November 24, 2012 email to Louisiana governmental employee Jessica Richardson that is the
subject of this defamation action.20
B.

Procedural Background
The Hoffmans filed a complaint in this matter on July 23, 2013. 21 On July 24, 2013, the

matter was assigned to Section “A” of the Eastern District of Louisiana.22 On February 25, 2014,
Judge Zainey entered an order of recusal from this matter, citing an indictment recently filed
against one of the plaintiffs in the matter.23 The case was then transferred to this Section, Section
“G.”24

17

Id. at 22.

18

Id.

19

Id. at 32–33.

20

Id. at 34.

21

Rec. Doc. 1.

22

Rec. Doc. 2.

23

Rec. Doc. 45.

24

Id.

4

Since this action was filed, the Hoffmans have been convicted of multiple wire fraud, mail
fraud, and conspiracy felonies in connection with tax credit applications regarding the 807
Esplanade Property.25 On September 14, 2016, Bailey filed a counterclaim against the Hoffmans
to recover damages caused by the Hoffmans’ allegedly “threatening, harassing, intimidating, and
retaliatory litigation” against Bailey under 18 U.S.C. § 1514A and Louisiana state law.26
Peter Hoffman filed the instant motion to dismiss Bailey’s counterclaim on October 5,
2016.27 Bailey filed an opposition on November 1, 2016.28 With leave of Court, Peter Hoffman
filed a reply on November 7, 2016.29 On October 13, 2016, Peter Hoffman also filed the instant
motion to strike Bailey’s counterclaim and seventh affirmative defense.30 Bailey filed an
opposition on November 1, 2016.31 With leave of Court, Peter Hoffman filed a reply on November
7, 2016.32 On November 9, 2016, Plaintiff Susan Hoffman filed a motion to join Plaintiff Peter
Hoffman’s pending motions,33 which the Court subsequently granted.34

25

Rec. Doc. 80-1 at 6; Rec. Doc. 81 at 9.

26

Rec. Doc. 98.

27

Rec. Doc. 107.

28

Rec. Doc. 115.

29

Rec. Doc. 124.

30

Rec. Doc. 110.

31

Rec. Doc. 117.

32

Rec. Doc. 124.

33

Rec. Doc. 126.

34

Rec. Doc. 159.

5

II. Parties’ Arguments
A.

The Hoffmans’ Arguments in Support of the Motion to Dismiss
In their motion, the Hoffmans argue that Bailey’s counterclaim should be dismissed for

failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. 35 The
Hoffmans first argue that Bailey’s counterclaim appears to allege a violation of 18 U.S.C. § 1514A,
a provision of the Sarbanes Oxley Act of 2012 that protects “whistleblowers.”36 The Hoffmans
argue that Bailey cannot assert a claim under Section 1514A, as he has not alleged that a complaint
was filed with the Secretary of Labor within 180 days of the violation as required by the statute.37
The Hoffmans further contend that a violation of Section 1514A requires proof of an “unfavorable
personnel action” caused by engaging in a “protected activity,” but that Bailey “walked off the
job” without notice.38 Moreover, the Hoffmans point out that this litigation arises out of an email
sent by Bailey in November of 2012, and that the litigation against Bailey was not commenced
until almost four years after Bailey left his position.39 Thus, the Hoffmans assert that there is no
causal link between any protected activity while Bailey was an employee and any adverse
personnel action.40
The Hoffmans also aver that Bailey has failed to state a claim under Louisiana Civil Code
Article 2135.41 According to the Hoffmans, when damages are caused by the filing of a lawsuit,

35

Rec. Doc. 107-1 at 1.

36

Id. at 3.

37

Id.

38

Id. at 4–5.

39

Id. at 4.

40

Id.

41

Id. at 5.

6

then an action under Article 2135 must satisfy the elements of an action for malicious
prosecution.42 However, the Hoffmans argue that there has not been a “bona fide termination [of
the action]” in favor of Bailey, a required element to state a claim for malicious prosecution.43
Thus, the Hoffmans assert that Bailey’s malicious prosecution counterclaim must be dismissed.44
B.

Bailey’s Arguments in Opposition to the Motion to Dismiss
Bailey first argues he has asserted a valid counterclaim alleging that the Hoffmans’ actions

violate 18 U.S.C. § 1514A, as the Sarbanes Oxley Act protects ex-employees like Bailey from
retaliatory acts.45 Bailey avers that, while Section 1514A does normally require filing a complaint
with the Secretary of Labor within 180 days after discovering the violation, “in this case the
company waived its defense of failure to file a complaint with the Secretary of Labor because of
the filing of this defamation action.”46 Bailey asserts that when Bailey became aware of the
Hoffmans’ fraudulent claims, the Hoffmans “took a preemptive strike at Bailey by suing him for
defamation.”47 Bailey contends that he was required to list his affirmative defenses in his Answer,
one of which includes retaliation for being a witness and providing information to government
officials regarding the Hoffmans’ allegedly fraudulent acts.48 Thus, according to Bailey, he did not
have sufficient time to file a complaint with the Secretary of Labor.49 Bailey also avers that, while

42

Id.

43

Id.

44

Id.

45

Rec. Doc. 115 at 2–3.

46

Id. at 2.

47

Id.

48

Id. at 2–3.

49

Id. at 3.

7

he did “walk out” of the office at the end of the employment, “the company” had constructively
discharged him from his employment when he was denied access to the office computing facilities
after telling Kate Hoffman, Peter Hoffman’s daughter, about the company’s insolvency and the
pervasive fraud in the company.50
Moreover, Bailey asserts that he has stated a state law claim for malicious prosecution
under Louisiana Civil Code article 1315, and that all the elements for a malicious prosecution
action have been satisfied.51 For example, Bailey argues that the requirement that there be a bona
fide termination of an action in favor of him will be met when he succeeds on this lawsuit based
on his absolute immunity.52 Bailey also avers that there is an absence of probable cause for this
proceeding, as the Hoffmans knew that Bailey’s words were truthful and that witnesses in judicial
proceedings are absolutely immune from civil liability in a defamation or retaliation suit.53 Bailey
argues that he has an absolute privilege to send a claim of fraudulent tax credits and building
renovations to the Louisiana State Historic Preservation Office.54
C.

The Hoffmans’ Arguments in Further Support of the Motion to Dismiss
In their reply brief, the Hoffmans argue that Bailey has not shown why the limitation period

of Section 1514A does not bar Bailey’s counterclaim.55 The Hoffmans assert that Bailey failed to
cite to any authority to support his argument that “the company” waived this defense by filing the

50

Id.

51

Id.

52

Id.

53

Id. at 4.

54

Id. at 4–5.

55

Rec. Doc. 124 at 2.

8

defamation action.56 Moreover, the Hoffmans contend that there is no causal relationship between
Bailey walking off his job in 2009 and the filing of this defamation action in 2013.57 The Hoffmans
also point out that Bailey does not address the fact that this action has not been terminated in his
favor as required to state a malicious prosecution claim under Louisiana state law.58 According to
the Hoffmans, Bailey did not allege that he had “witness immunity” in his answer, and even if he
had, it has no application to this action as Bailey’s allegedly defamatory remarks were not made
while testifying in a civil or criminal case.59
III. Law and Analysis
A.

Legal Standard on a Motion to Dismiss
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed “for

failure to state a claim upon which relief can be granted.”60 A motion to dismiss for failure to state
a claim is “viewed with disfavor and is rarely granted.”61 “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.’”62 “Factual allegations must be enough to raise a right to relief above the

56

Id. at 3.

57

Id. at 2.

58

Id.

59

Id. at 3.

60

Fed. R. Civ. P. 12(b)(6).

61

Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).

62

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2008)).

9

speculative level.”63 A claim is facially plausible when the plaintiff has pleaded facts that allow
the court to “draw a reasonable inference that the defendant is liable for the misconduct alleged.”64
On a motion to dismiss, asserted claims are liberally construed in favor of the claimant,
and all facts pleaded are taken as true.65 However, although required to accept all “well-pleaded
facts” as true, a court is not required to accept legal conclusions as true.66 “While legal conclusions
can provide the framework of a complaint, they must be supported by factual allegations.”67
Similarly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements” will not suffice.68 The complaint need not contain detailed factual allegations, but it
must offer more than mere labels, legal conclusions, or formulaic recitations of the elements of a
cause of action.69 That is, the complaint must offer more than an “unadorned, the defendantunlawfully-harmed-me accusation.”70 From the face of the complaint, there must be enough factual
matter to raise a reasonable expectation that discovery will reveal evidence as to each element of
the asserted claims.71 If factual allegations are insufficient to raise a right to relief above the

63

Twombly, 550 U.S. at 556.

64

Id. at 570.

65

Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); see also
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23 (2007).
66

Iqbal, 556 U.S. at 677–78.

67

Id. at 679.

68

Id. at 678.

69

Id.

70

Id.

71

Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009).

10

speculative level, or if it is apparent from the face of the complaint that there is an “insuperable”
bar to relief, the claim must be dismissed.72
B.

The Hoffmans’ Motion to dismiss
In their motion to dismiss, the Hoffmans move to dismiss two counterclaims alleged by

Bailey: (1) Bailey’s counterclaim for a violation of 18 U.S.C. § 1514A, the provision of the
Sarbanes Oxley Act of 2012 which protects “whistleblowers;” and (2) Bailey’s counterclaim for
malicious prosecution under Louisiana Civil Code article 1315.73 The Court will address each
claim in turn.
1.

18 U.S.C. § 1514A

First, Bailey alleges that the Hoffmans’ actions in this suit violated 18 U.S.C. § 1514A, as
they were the officers and employees of Seven Arts Pictures Plc, which Bailey alleges is registered
under section 12 of the Securities Exchange Act of 1935, and they have “threatened, harassed,
retaliated and otherwise discriminated against Bailey,” a former employee of Seven Arts Pictures
Plc.74 Bailey avers that the provisions of 18 U.S.C. § 1514A apply to post-termination activities
against former employees.75 According to Bailey, Peter Hoffman and his affiliates have a history
of harassing, intimidating, and retaliating against witnesses who have provided evidence and
testimony against him at various times.76

Moore v. Metro. Human Serv. Dep’t, No. 09-6470, 2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, C.J.)
(citing Jones v. Bock, 549 U.S. 199, 215 (2007)); Carbe v. Lappin, 492 F.3d 325, 328 n. 9 (5th Cir. 2007).
72

73

Rec. Doc. 107.

74

Id. at 41.

75

Rec. Doc. 98 at 40.

76

Id. at 18.

11

Pursuant to 18 U.S.C. § 1514A(a), “[n]o company with a class of securities registered under
section 12 of the Securities Exchange Act of 1934 . . . or any officer, employee, contractor,
subcontractor, or agent of such company . . . may discharge, demote, suspend, threaten, harass, or
in any other manner discriminate against an employee in the terms and conditions of employment
because of any lawful act done by the employee.” Such protected “lawful act[s]” include providing
information or otherwise assisting in an investigation regarding any conduct which the employee
reasonable believes constitutes a violation of, inter alia, any rule or regulation of the Securities
and Exchange Commission, or any provision of Federal law relating to fraud against
shareholders.77 Moreover, under 18 U.S.C. § 1514A(b)(1), a person who alleges a violation of
Section 1514(A)(a) must seek relief by: (1) filing a complaint with the Secretary of Labor; or (2)
if the Secretary does not issue a final decision within 180 days of filing the complaint, an action
may be filed in the appropriate district court of the United States.78 Additionally, Section
1514A(b)(2)(D) provides that an action under this Section “shall be commenced not later than 180
days after the date on which the violation occurs, or after the date on which the employee became
aware of the violation.”79
Here, Bailey does not allege in his counterclaim that he filed a complaint with the Secretary
of Labor regarding his claims under 18 U.S.C. § 1514A or that such a complaint was filed within
180 days after the alleged violations occurred. Instead, in his opposition memorandum, Bailey
argues that the Hoffmans “took a preemptive strike at Bailey by suing him for defamation” and

77

18 U.S.C. § 1514A(a)(1).

See Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 218 n.4 (2d Cir. 2014) (“Under § 1514A, complainants’ first
course of action in seeking relief must be to file a complaint with the Secretary of Labor.”); Allen v. Admin. Review
Bd., 514 F.3d 468, 475 (5th Cir. 2008) (“An employee must file a complaint with the Secretary no later than 90 days
after the date on which the alleged violation occurred.”).
78

79

18 U.S.C. § 1514A(b)(2)(D).

12

that, by doing so, the Hoffmans waived any requirement that Bailey first file his claim under 18
U.S.C. § 1514A with the Secretary of Labor.80 However, Bailey fails to cite to any language in the
statute or any other authority that would support such an interpretation of 18 U.S.C. § 1514A(b)(1).
Rather, the statute makes clear that an alleged violation of 18 U.S.C. § 1514A must first be raised
in a complaint to the Secretary of Labor, and a plaintiff may not file suit in federal district court
unless the Secretary of Labor fails to issue a final decision within 180 days.81 Indeed, as the First
Circuit has recognized, “Congress explicitly delegated to the Secretary of Labor authority to
enforce § 1514A by formal adjudication.”82 Thus, Bailey has failed to allege that he complied with
the statutory prerequisites necessary to file an action under 18 U.S.C. § 1514A in a federal district
court. Moreover, to the extent that Bailey argues the violation of 18 U.S.C. § 1514A occurred
when he was “constructively discharged” from his position in 2009, Bailey failed to allege that a
complaint was filed with the Secretary of Labor or that any such complaint was filed within 180
days of the alleged violation.83 Accordingly, pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, the Court finds that Bailey has failed to state a claim upon which relief may be
granted under 18 U.S.C. § 1514A. Therefore, the Court will dismiss Bailey’s counterclaim under
18 U.S.C. § 1514A.84

80

Rec. Doc. 115 at 2–3.

See, e.g., Murray v. TXU Corp., 279 F. Supp. 2d 799, 802 (N.D. Tex. 2003) (“A federal district court lacks
jurisdiction over a suit brought under § 806 of the Sarbanes–Oxley Act if (1) the plaintiff failed to file a complaint
with the Secretary of Labor within ninety days of the alleged violation; (2) the Secretary issued a final decision within
180 days of the filing of a § 806 complaint; (3) the plaintiff filed suit in a federal district court less than 180 days after
filing such a complaint; or (4) there is a showing that the Secretary failed to issue a final decision within 180 days due
to the plaintiff's bad faith.”).
81

82

Day v. Staples, Inc., 555 F.3d 42, 54 n.7 (1st Cir. 2009).

Id. (“A person who believes that he has been discriminated against in violation of the whistle-blower provisions of
the Sarbanes–Oxley Act must first file a complaint with the Secretary of Labor . . . within ninety days of the alleged
violation.”).
83

84

See Dawson Farms, LLC v. Farm Serv. Agency, 504 F.3d 592, 607 (5th Cir. 2007); Crisp v. Sears Roebuck & Co.,
No. 13-962, 2015 WL 12977378, at *17 (W.D. Tex. Mar. 4, 2015)(finding that, because plaintiff admitted to not filing

13

2.

Malicious Prosecution

Second, Bailey appears to assert a counterclaim for malicious prosecution under Louisiana
state law.85 In their motion, the Hoffmans argue that Bailey cannot state a claim for malicious
prosecution, as there has not been a “bona fide termination [of the action]” in favor of Bailey.86 In
response, Bailey contends that the requirement that there be a bona fide termination of an action
in his favor will be met when he succeeds in this lawsuit on absolute immunity grounds.87
Under Louisiana law, malicious prosecution is the wrongful institution or continuation of
a criminal or civil proceeding.88 To prevail in a malicious prosecution action, the plaintiff must
prove: (1) the commencement or continuance of an original criminal or civil proceeding; (2) its
legal causation by the present defendant against plaintiff who was defendant in the original
proceeding; (3) a bona fide termination in favor of the present plaintiff; (4) the absence of probable
cause for such a proceeding; (5) the presence of malice; and (6) damage conforming to legal
standards resulting to the plaintiff.89
Here, the Court notes that this matter is ongoing, and there has not been a termination of
this case in favor of Bailey as required to assert a malicious prosecution claim under Louisiana
law. As the Louisiana Supreme Court has recognized, the obvious purpose of the “bona fide

his claim for violation of 18 U.S.C. § 1514A within 180 of the date the violation occurred, the claim was time-barred,
and thus should be dismissed), aff’d, 628 F. App’x 220 (5th Cir. 2015).
85

See Rec. Doc. 115 at 3.

86

Rec. Doc. 107-1 at 5.

87

Rec. Doc. 115 at 3.

88

Keppard v. AFC Enterprises, Inc., 2000-2474 (La. App. 4 Cir. 11/28/01), 802 So. 2d 959, 965; Shepherd v. Williams,
2000-01506 (La. App. 3 Cir. 2/28/01), 780 So.2d 633 (quoting Frank L. Maraist & Thomas C. Galligan, Jr., Louisiana
Tort Law, Section 2-6(d) at 31 (1996)).
89

Miller v. East Baton Rouge Parish Sheriff's Department, 511 So.2d 446, 453 (La. 1987); see also Keppard, 802 So.
2d at 965; Kelly v. West Cash & Carry Building Materials Store, 99-0102 (La. App. 4 Cir. 10/20/99), 745 So.2d 743,
761.

14

termination” requirement is to ensure “that the underlying litigation is brought to a conclusion on
the merits before a malicious prosecution suit based on the underlying litigation is allowed to
proceed.”90 Moreover, Bailey cites to no authority to support the proposition that a malicious
prosecution claim can be preemptively asserted before the alleged malicious prosecution has been
terminated. By contrast, Louisiana courts routinely dismiss without prejudice malicious
prosecution lawsuits that are filed prior to the termination of the proceeding at issue, as they are
premature and should be filed after “a bona fide termination” of the proceeding in favor of the
plaintiff.91 Accordingly, the Court finds that, because Bailey’s claim is at least premature, Bailey
has failed to state a claim for malicious prosecution upon which relief can be granted pursuant to
Rule 12(b)(6). Therefore, the Court dismisses Bailey’s malicious prosecution counterclaim
without prejudice.92

90

Lemoine v. Wolfe, 2014-1546 (La. 3/17/15), 168 So. 3d 362, 368 (quoting Savoie v. Rubin, 01–3275, at 4 (La.
6/21/02), 820 So.2d 486, 488); see also Cheramie v. Assocs. Disc. Corp., 428 F.2d 1227, 1227 (5th Cir. 1970) (per
curiam) (affirming dismissal of a malicious prosecution claim as premature, as the action complained of was still
pending in state courts).
91

See Waguespack, Seago & Carmichael (A PLC) v. Lincoln, 1999-2016 (La. App. 1 Cir. 9/22/00), 768 So. 2d 287,
290 (sustaining a trial court’s dismissal of a plaintiff’s claim for malicious prosecution without prejudice, as it was
“premature and not actionable until the resolution of the federal court litigation in which the allegedly harmful
statements were made”); Grant v. Politz, 575 So. 2d 915, 918 (La. App. 2 Cir. 1991) (affirming lower court’s dismissal
of a malicious prosecution claim without prejudice when the prior action had not yet terminated); Weldon v. Republic
Bank, 414 So. 2d 1361, 1366–67 (La. App. 2 Cir. 1982) (concluding that a petition fails to state a cause of action for
malicious prosecution when it fails to allege the termination of the lawsuit and dismissing the suit without prejudice).
See generally Alpine Meadows, L.C. v. Winkler, 49,490 (La. App. 2 Cir. 12/10/14), 154 So. 3d 747, 768 (affirming
district court’s dismissal of a malicious prosecution claim without prejudice); Clinton v. Johnson, No. 13-871, 2014
WL 4851086, at *2 (S.D. Miss. Sept. 29, 2014) (noting that it is “axiomatic that a claim for malicious prosecution
does not accrue until the day the underlying proceeding has been terminated” and dismissing the claim without
prejudice when no final judgment in the underlying proceeding had occurred).
See Miller v. Am. Int'l Grp., Inc., 91 F. App’x 930, 931 (5th Cir. 2004) (per curium) (noting that a court should have
dismissed a state tort law claim without prejudice); Francois v. Par., No. 14-337, 2015 WL 711815, at *8 (E.D. La.
Feb. 13, 2015) (Brown, J.) (dismissing a premature malpractice claim without prejudice); see also Weldon v. Republic
Bank, 414 So. 2d 1361, 1366–67 (La. App. 2 Cir. 1982) (concluding that a petition fails to state a cause of action for
malicious prosecution when it fails to allege the termination of the lawsuit and dismissing the suit without prejudice).
92

15

C.

The Hoffmans’ Motion to Strike
Also pending before the Court is the Hoffmans’ “Special Motion to Strike Defendant

David Bailey’s Counterclaim and Seventh Affirmative Defense (LaCCP ART. 971),” which seeks
to strike the same counterclaims that the Hoffmans moved to dismiss pursuant to Rule 12(b)(6).93
However, because the Court grants the Hoffmans’ motion to dismiss Bailey’s counterclaims
pursuant to Rule 12(b)(6), the Court denies as moot the Hoffmans’ special motion to strike Bailey’s
counterclaims.
The Court further notes that the Hoffmans appear to also request that the Court strike
pursuant to Louisiana Code of Civil Procedure article 971 what Bailey styles a “seventh
affirmative defense.” Bailey’s “seventh affirmative defense” is related to and based on the
counterclaims dismissed by the Court. Specially, Bailey asserts that he “is entitled to offset, against
any claim of plaintiffs, all fees, costs and other damages which Bailey has suffered and to which
he is entitled compensation” under his counterclaims.94 Thus, because Bailey’s seventh affirmative
defense is premised on prevailing on his counterclaims, the Hoffmans’ special motion to strike the
affirmative defense is also moot, as the Court dismissed the counterclaims pursuant to Rule
12(b)(6). 95
IV. Conclusion
Based on the foregoing,

93

Rec. Doc. 110.

94

See Rec. Doc. 98 at 14.

Moreover, the Court further notes that, even if the counterclaims had not been dismissed, the Hoffmans’ special
motion to strike the seventh affirmative defense under Louisiana Code of Civil Procedure article 971 is improper, as
article 971 may only be used to strike a “cause of action.” However, Bailey’s seventh affirmative defense is not a
“cause of action,” and the Hoffmans have not pointed to any authority that an affirmative defense may be stricken
pursuant to Louisiana Code of Civil Procedure article 971. See, e.g., Louisiana Crisis Assistance Ctr. v. MarzanoLesnevich, 878 F. Supp. 2d 662, 672 (E.D. La. 2012) (Barbier, J.) (determining that that a special motion to strike
applies only to causes of action and not to specific requests for relief).
95

16

IT IS HEREBY ORDERED that the Hoffmans’ “Motion to Dismiss Defendant David
Bailey’s Counterclaim [FRCP 12(b)(6)]”96 is GRANTED. Bailey’s counterclaim pursuant to 18
U.S.C. § 1514A is dismissed, while Bailey’s counterclaim for malicious prosecution is dismissed
without prejudice.
IT IS FURTHER ORDERED that the Hoffmans’ “Special Motion to Strike Defendant
David Bailey’s Counterclaim and Seventh Affirmative Defense (LaCCP ART. 971)”97 is DENIED
AS MOOT.

26th
NEW ORLEANS, LOUISIANA, this _____ day of April, 2017.

_________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE

96

Rec. Doc. 107.

97

Rec. Doc. 110.

17