Hoffman et al v. Bailey

Filing 269

ORDER: IT IS HEREBY ORDERED that Hoffman's 139 Motion for Partial Summary Judgment (FRCP 56) is GRANTED IN PART and DENIED IN PART. The motion is granted in part to the extent that the element of publication to a third party is admitted. The motion is denied in part as to the remaining issues raised by Hoffman, including: (1) if Bailey's words were defamatory per se; (2) fault; (3) falsity; (4) conditional privilege; (5) presumed damages; and (6) punitive damages. Signed by Judge Nannette Jolivette Brown on 6/20/2017. (jls)

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 litigation, 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, according
to the Hoffmans, accusing them of fraudulently participating in a Louisiana tax incentive program.1
Pending before the Court is Plaintiff Peter Hoffman’s “Motion for Partial Summary Judgment
(FRCP 56).”2 Having considered the motion, the memoranda in support and in opposition, the
record, and the applicable law, the Court hereby grants in part and denies in part the motion.
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”).3 The Hoffmans aver that SAPLA engaged in substantial
rehabilitation of the Property in order to restore its historic character and to convert the Property

1

Rec. Doc. 1.

2

Rec. Doc. 139.

3

Rec. Doc. 1 at 2.

1

so that it could be used as a motion picture post-production facility.4 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.5 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.6
According to the Hoffmans, Peter Hoffman was the Chief Executive Officer of Seven Arts
Pictures Plc (“SAP Plc”), an English public limited company, until November 9, 2011.7 Bailey
worked as the company’s Finance Director from August 2009 until he left in December 2009.8
Subsequently, on November 29, 2012, Bailey allegedly sent an e-mail to SHPO stating:
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.
http://stock-bb.com/seven-arts-pictures-plc-pink-sapx/ has several discussions on
this matter.
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?
4

Id. at 3.

5

Id.

6

Id.

7

Id.

8

Id. at 4.

2

David J Bailey9
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.”10 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 SAP Plc’s Finance Director.11 The Hoffmans argue that Bailey’s conduct
constitutes defamation and defamation per se.12
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.13 According to Bailey, while he
was employed as Finance Director of SAP Plc in 2009, he had access to accounting records and
other financial documents related to the Hoffmans’ “plans and schemes” to receive tax credits on
the 807 Esplanade Property.14 Bailey asserts that he became aware of inconsistencies and
misstatements in SAP 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.”15
Bailey further alleges that a series of articles published in 2012 informed him that the Hoffmans

9

Rec. Doc. 1-3 at 30.

10

Rec. Doc. 1 at 5.

11

Id. at 5–6.

12

Id. at 6–8.

13

Rec. Doc. 98 at 1–2.

14

Id. at 22.

15

Id.

3

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.16 Thus, Bailey alleges that he sent his November 24, 2012 email that is the subject
of this defamation action to Louisiana governmental employee Jessica Richardson.17
B.

Procedural Background
The Hoffmans filed a complaint in this matter on July 23, 2013. 18 On July 24, 2013, the

matter was assigned to Section “A” of the Eastern District of Louisiana. 19 On August 26, 2013,
Bailey filed a motion to dismiss for lack of personal jurisdiction, for improper service of process,
and for improper venue, and in the alternative, a special motion to strike pursuant to Louisiana
Code of Civil Procedure article 971.20 On January 14, 2014, Judge Zainey stayed discovery
proceedings in this matter pursuant to Louisiana Code of Civil Procedure article 971(D) until the
Court issued a ruling on the motion to strike.21 On January 27, 2014, Judge Zainey denied both the
motion to dismiss and the special motion to strike.22
On February 6, 2014, Judge Zainey held a status conference at which Bailey expressed his
intention to seek certification for an interlocutory appeal of Judge Zainey’s order denying Bailey’s
special motion to strike.23 On that same day, Judge Zainey administratively stayed this matter

16

Id. at 32–33.

17

Id. at 34.

18

Rec. Doc. 1.

19

Rec. Doc. 2.

20

Rec. Doc. 3-2 at 1.

21

Rec. Doc. 37.

22

Rec. Doc. 38.

23

Rec. Doc. 39.

4

“pending resolution of that appeal.”24 However, no appeal was filed at that time.25 Rather, on
February 21, 2014, Bailey filed a motion for reconsideration of Judge Zainey’s January 27, 2014
Order on the new grounds that Peter Hoffman was indicted in the Eastern District of Louisiana on
February 6, 2014, on six counts of conspiracy and wire fraud relating to his submission of false
applications for more than $1.1 million of tax credits with respect to the property at issue in this
case.26 On February 25, 2014, Bailey also filed a motion to lift the administrative stay so his motion
for reconsideration could be considered.27
On February 25, 2014, Judge Zainey recused himself “[i]n light of the indictment recently
filed against one of the plaintiffs,” and the case was randomly realloted to this Court, Section
“G.”28 On December 23, 2015, this Court lifted the stay imposed by Judge Zainey, as Bailey was
not pursuing an interlocutory appeal of Judge Zainey’s Order denying Bailey’s special motion to
strike.29 The same day, the Court denied Bailey’s motion for reconsideration, as Bailey had not
previously raised the Rule12(b)(6) arguments that he made in his motion for reconsideration and
had not moved for reconsideration of the denial of his special motion to strike.30 The Court further
noted that “if Bailey wishes to file a motion to dismiss or a motion for summary judgment, the
Court will consider such a motion at that time.”31

24

Id.

See Rec. Doc. 77 at 11 (this Court noting that, as of December 23, 2015, no appeal of Judge Zainey’s Order
had been filed).
25

26

Rec. Doc. 43-1 at 2.

27

Rec. Doc. 44.

28

Rec. Doc. 45.

29

Rec. Doc. 77.

30

Rec. Doc. 78 at 23.

31

Id. at 24.

5

On December 30, 2015, Bailey filed a new motion to dismiss pursuant to Rule 12(b)(6), in
which he requested that the Court take judicial notice of several filings in the criminal actions
against the Hoffmans and argued that the Hoffmans failed to state a claim upon which relief could
be granted in light of those criminal convictions.32 On February 3, 2016, the Court denied the
motion.33 The Court determined that, on a motion to dismiss, it could only take judicial notice of
the fact that the Hoffmans were convicted of mail fraud, wire fraud, and conspiracy to commit
mail or wire fraud generally, but not of the facts underlying the convictions that Bailey pointed to
in support of his motion to dismiss.34 The Court further concluded that the Hoffmans had
sufficiently alleged that Bailey’s email constitutes defamation per se, and thus the Court denied
Bailey’s motion to dismiss under Rule 12(b)(6).35 On February 10, 2016, Bailey filed a notice of
appeal to the Fifth Circuit on the grounds that he was entitled to immunity from the defamation
claims,36 which the Fifth Circuit dismissed for lack of jurisdiction.37
Since this action was filed, the Hoffmans have been convicted on multiple counts of wire
fraud, mail fraud, and conspiracy in connection with tax credit applications regarding the 807
Esplanade Property.38 On September 14, 2016, Bailey filed counterclaims 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 for

32

Rec. Doc. 80.

33

Rec. Doc. 87.

34

Id. at 22.

35

Id.

36

Rec. Doc. 89.

37

Rec. Doc. 95.

38

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

6

malicious prosecution.39 On April 26, 2017, the Court granted the Hoffmans’ motion to dismiss
pursuant to Rule 12(b)(6) and dismissed Bailey’s counterclaims for failure to state a claim upon
which relief could be granted.40 The Court determined that: (1) Bailey had failed to allege that he
complied with the statutory prerequisites necessary to file an action under 18 U.S.C. § 1514A, and
thus dismissed his claim under Section 1514A; and (2) Bailey failed to allege that there had been
a “bona fide termination” of this proceeding in his favor as required to assert a malicious
prosecution claim under Louisiana state law.41 The Court dismissed Bailey’s premature malicious
prosecution claim without prejudice.42 On April 26, 2017, the Court denied the Hoffmans’ motion
for sanctions against Bailey’s counsel for filing Bailey’s counterclaims.43
On March 2, 2017, Peter Hoffman (“Hoffman”) filed the instant motion for partial
summary judgment.44 On March 15, 2017, the Court granted Bailey’s expedited motion for an
extension of time to file an opposition to Hoffman’s motion for summary judgment and continued
the submission date for Hoffman’s motion to April 19, 2017.45 On April 12, 2017, Bailey filed an
opposition.46 On April 19, 2017, Hoffman filed a reply with leave of Court.47 On April 19, 2017,
with leave of Court, Bailey filed an amended opposition memorandum.48 On April 26, 2017,

39

Rec. Doc. 98.

40

Rec. Doc. 191.

41

Id.

42

Id.

43

Rec. Doc. 190.

44

Rec. Doc. 139.

45

Rec. Doc. 154.

46

Rec. Doc. 164.

47

Rec. Doc. 178.

48

Rec. Doc. 180.

7

Bailey filed a sur-reply with leave of Court.49 On April 28, 2017, with leave of Court, Hoffman
also filed a sur-reply.50
II. Parties’ Arguments
A.

Peter Hoffman’s Arguments in Support of the Motion
In his motion, Hoffman moves for entry of partial summary judgment on seven issues

pursuant to Federal Rule of Civil Procedure 56.51 In particular, Hoffman argues that there are no
disputed issues of material fact with regard to the following: (1) Bailey’s email constitutes
defamation per se; (2) Bailey’s email was published on November 24, 2012, to Jessica Richardson,
an employee of SHPO; (3) Bailey made the defamation without any reasonable grounds for
believing the statement was true; (4) Bailey is not entitled to any conditional privilege; (5) the
statements in Bailey’s email are false; (6) because Bailey’s email constitutes defamation per se,
the Hoffmans “suffered presumed injury to reputation and pain, humiliation and suffering,
irrespective of proof of any pecuniary loss;” and (7) the Hoffmans are entitled to recover punitive
or exemplary damages pursuant to Louisiana Civil Code article 3546.52 Hoffman avers that this
motion will resolve all issues in this action except for whether Bailey acted with malice or “reckless
disregard” of the truth or falsity of his statements.53
1.

Defamation per se

First, Hoffman asserts that, in the February 13, 2016 Order denying Bailey’s motion to
dismiss pursuant to Rule 12(b)(6), this Court “ruled that the Bailey Defamation is defamation per

49

Rec. Doc. 193.

50

Rec. Doc. 201.

51

Rec. Doc. 139-2 at 5.

52

Id. at 5–7.

53

Id. at 7.

8

se under Louisiana law.”54 Hoffman further contends that Bailey’s email constitutes defamation
per se because Bailey allegedly accused the Hoffmans of committing fraud, which Hoffman asserts
implicates criminal conduct and tends to injure the Hoffmans’ personal and professional
reputations.55
2.

Publication

Second, Hoffman avers that Bailey has admitted to publishing his email to SHPO on
November 29, 2012.56 Hoffman also points out that Bailey was “deemed to have admitted
publication of the Bailey Defamation” by the Magistrate Judge when he failed to timely respond
to the Hoffmans’ request for admissions regarding publication.57
3.

Fault

Third, Hoffman argues that, as this Court noted in its Order denying Bailey’s motion to
dismiss, fault, as well as falsity and damage, are presumed in cases of defamation per se under
Louisiana law.58 Thus, Hoffman contends that he must only establish a prima facie case of
negligence, and that the ultimate burden is on Bailey to prove that he did not act negligently when
making the allegedly defamatory statements.59 However, Hoffman further asserts that the
Louisiana Supreme Court case that set a minimum standard of fault of negligence for defamation
cases was decided on First and Fourteenth Amendment grounds.60 Because Judge Zainey held that

54

Id. at 13 (citing Rec. Doc. 87 at 20).

55

Id. at 5.

56

Id. at 13 (citing Rec. Doc. 98).

57

Id. (citing Rec. Doc. 130).

58

Id. (citing Rec. Doc. 87 at 27).

59

Id.

60

Id. at 14 (citing Kennedy v. Sheriff of East Baton Rouge, 935 So. 2d 669, 675 (La. 2006)).

9

Bailey has no First Amendment rights, Hoffman avers, the Louisiana Supreme Court’s holding in
Kennedy does not apply, and thus “Hoffman in this case need not prove even negligence.”61
Nonetheless, Hoffman contends, negligence is presumed in defamation per se cases.62
Additionally, Hoffman argues that the undisputed facts show that Bailey acted with
“reckless disregard” for the truth or falsity of his statements, and thus was at least negligent.63
Hoffman asserts that he “testified to Bailey’s personal animus toward him” in his affidavit “arising
out of Mr. Hoffman’s criticism of Bailey’s incompetence as a public company financial director”
and Bailey’s alleged false representations about his skills.64 Hoffman points out that Bailey’s
Answer relies only on the alleged truth of his statements, and not on a “good faith mistake”
defense.65
Moreover, Hoffman argues that “Bailey’s negligence, if not reckless disregard of the truth
or falsity of the Bailey Defamation, is established by” a number of allegedly undisputed facts. For
example, Hoffman points to: (1) Bailey’s inclusion of Mrs. Hoffman in his statements, even though
Hoffman contends that Bailey has never met Mrs. Hoffman or spoken with her; (2) Bailey’s
deemed admissions that the Property was rehabilitated, that the “before” and “after” photos of the
Property are authentic, that the expenses incurred by SAPLA are set forth in the Compilation
Report, that the renovated Property met the standards for historic rehabilitation, and that SAPLA
was entitled to Historic Credits for its qualified rehabilitation expenditures; (3) that no
investigation or criminal charges have ever been brought against the Hoffmans regarding

61

Id.

62

Id.

63

Id.

64

Id.

65

Id.

10

SAPLA’s claim of Historic Credits, which Hoffman contends was the subject of Bailey’s email,
as opposed to the “very different claims for Infrastructure Credits, wholly irrelevant to Historic
Credits,” upon which the Hoffmans’ criminal convictions were based; and (4) Bailey, whose
employment at SPA Plc ended in 2009, did not review or have access to any documents submitted
for the certified Compilation Report in 2012.66 Additionally, Hoffman argues that Bailey had “no
knowledge whatsoever of the items claimed as qualified historic rehabilitation expenses in the
Compilation Report in 2012,” as he did not have responsibility for these expenses while employed
at SPA Plc.67 Hoffman contends that Bailey also did not have knowledge of any evidence in the
possession of the U.S. Attorney on the date of his allegedly defamatory statements.68
4.

Conditional Privilege

Fourth, Hoffman asserts that Bailey has no conditional privilege defense.69 Hoffman avers
that he has requested in a separate motion that the Magistrate Judge strike Bailey’s Answer,70 and
thus Bailey has not affirmatively pleaded conditional privilege.71 Hoffman argues that even if the
Court were to consider Bailey’s Answer, his affirmative pleading of a conditional privilege is
insufficient, as it merely claims “the benefit of the doctrine of privilege/ conditional privilege”
generally without specifying which type of privilege Bailey affirmatively asserts.72

66

Id. at 15–16.

67

Id. at 17.

68

Id.

69

Id. at 18.

70

The Court notes that the motion that Hoffman refers to was denied as moot by the Magistrate Judge. See
Rec. Doc. 131. The Magistrate Judge granted in part Hoffman’s motion for reconsideration of that Order to the extent
that Plaintiff’s request for admissions were deemed admitted, but denied in part Hoffman’s motion for reconsideration
in “all other respects.” Rec. Doc. 138.
71

Rec. Doc. 139-2 at 18.

72

Id. at 18–19.

11

i.

Common interest privilege

Hoffman further contends that Bailey has no “common interest” or “duty to speak”
conditional privilege, as he had no duty to report any alleged fraud that occurred after Bailey left
his employment at SPA Plc and his employment agreement prohibited disclosing confidential
information learned during his employment.73 Additionally, Hoffman alleges that Bailey had no
interest in the Historic Credits, as they were filed by different legal entities that Bailey did not
work for.74 According to Hoffman, Bailey cannot claim the common interest privilege because he
is a “vitriolic, disgruntled ‘volunteer’ who seeks to harm the Hoffmans for his own reasons
unrelated to his former duties to [SAP Plc.]”75
ii.

Public interest privilege

Moreover, Hoffman avers that Bailey is not entitled to the “public interest” conditional
privilege as defined by the Restatement (Second) of Torts, as it applies only to communications
“to law enforcement officers of expected criminal authorities” in support of “prevention of crimes
and apprehension of criminals.”76 However, according to Hoffman, Bailey was fully aware that
the Hoffmans were under investigation at the time he made the allegedly defamatory statements,
and thus there was no interest present in preventing a crime or preventing a criminal from
“escaping detention.”77 Hoffman further contends that Bailey sent his email to SHPO, which is not
a law enforcement agency and does not enforce Louisiana’s tax laws.78 According to Hoffman, the

73

Id. at 20.

74

Id.

75

Id.

76

Id. (emphasis omitted).

77

Id. at 21.

78

Id.

12

public interest privilege is also limited to victims or witnesses of a suspected crime, and not
“disgruntled” volunteers who “have no percipient knowledge of the alleged ‘crime.’”79
5.

Falsity

Fifth, Hoffman argues that falsity is presumed in defamation per se cases, and thus the
burden shifts to Bailey to rebut it.80 Hoffman also avers that “issuance of the Certifications” and
the Compilation Report further shows the falsity of Bailey’s various statements.81 For example,
Hoffman points out that Bailey did not provide any evidence or documents to support his allegedly
defamatory statement that he had “evidence that indicates that all the applications made by the
Hoffmans are fraudulent.”82 According to Hoffman, Bailey also could not know whether his
statement that the “amounts claimed [in the tax credit application] were probably not spent” was
true, as he never saw any of the proofs of payments or other records delivered to auditors.83 Indeed,
Hoffman states that all the amounts claimed in the Compilation Report were paid.84 Hoffman also
argues that Bailey’s statement that “some or all of the funds used to renovate the property were
improperly diverted from [SPA Plc] by way of transfer to a related party” is false, as no money
“used to renovate the property” were due to SPA Plc.85

79

Id.

80

Id. at 22.

81

Id.

82

Id.

83

Id.

84

Id. at 23.

85

Id.

13

6.

Presumed Damages

Sixth, Hoffman contends that injury to reputation and humiliation and suffering is
presumed in cases of defamation per se.86 Hoffman argues that Judge Zainey has determined that
Bailey has no First Amendment rights, and even if the First Amendment were applicable, it does
not limit presumed damages awards in defamation cases against non-media defendants such as
Bailey.87 Moreover, Hoffman alleges that his testimony establishes that Bailey’s statements were
a “painful humiliation with state officials” and “dramatically affected [Hoffman’s] business in Los
Angeles and with his principal lender.”88 Hoffman asserts that he “is widely known in the motion
picture business,” and avers that his testimony establishes presumed damages to Hoffman’s
reputation of $250,000.89
7.

Punitive Damages

According to Hoffman, Louisiana Civil Code article 3546 provides that punitive damages
cannot be awarded in Louisiana unless authorized by “the law of the state where the resulting
injury occurred” or “the law of the state where the person whose conduct caused the injury is
domiciled.”90 Hoffman avers that he is a resident of California, and that punitive damages for
defamation are permitted by the laws of California if the defamation was made with malice.91
Moreover, Hoffman argues that Bailey is a resident of England, and that “the law of England and

86

Id.

87

Id.

88

Id.

89

Id.

90

Id. at 24.

91

Id. (citing Ca. Civ. Code § 48(c)).

14

Wales” provides the Court with discretion to award punitive damages if the “decision to publish
was made knowing it to be wrong or reckless as to whether it was wrong.”92
B.

Bailey’s Arguments in Opposition to the Motion
Bailey opposes Hoffman’s motion for partial summary judgment. 93 The Court notes that,

in his opposition memorandum, Bailey does not specifically address Hoffman’s arguments on any
of the seven issues raised by Hoffman. Rather, Bailey provides the Court with a series of factual
allegations and exhibits drawn largely from Bailey’s Declaration attached to the opposition which
Bailey contends demonstrates that all of the material facts of this case are in dispute.94
According to Bailey, Peter Hoffman, Susan Hoffman, and their business partner, Michael
Arata (“Arata”), purchased the 807 Esplanade Property to renovate it and convert it into a postproduction film facility.95 Bailey avers that Louisiana’s film infrastructure tax credits allows
individuals or businesses to receive an amount equal to 40% of their qualified and audited film
infrastructure expenditures, and that, upon certification, the applicant can sell the certification to
local businesses and individuals to use as state tax credits.96 Bailey contends that on February 26,
2009, the Hoffmans and Arata applied for the Louisiana film infrastructure tax credits “for money
they claimed had been spent” on the 807 Esplanade Property, and on June 19, 2009, they received
approximately $1.1 million in tax credits.97 Bailey asserts that Arata then purchased the tax credits

92

Id. (citing Broome v. Cassell, [1972] AC 1027, 1079 C-E, 1088 G-1089A, 1094 C-E, 1101 D-G, 1121,
1130 D-F; John v. Mirror Group Newspaper Ltd., [1997] QB 586, 618 G-619A).
93

Rec. Doc. 180 at 1.

94

Id.

95

Id.

96

Id. at 2.

97

Id.

15

at a discount and sold them to local businesses and individuals for a profit.98 Bailey alleges that on
May 15, 2014, the Hoffmans were indicted by a grand jury for, among other actions, submitting
false and misleading tax credit applications and submitting false and misleading internal
accounting records and invoices to auditors to make it appear that certain expenditures were
made.99 Bailey avers that the Hoffmans were convicted of the conspiracy to commit mail or wire
fraud charge, and Peter Hoffman was convicted of sixteen counts total in relation to their
rehabilitation of the Property.100
Bailey alleges that, in addition to the infrastructure tax credits, the Hoffmans also applied
for State and Federal Historic Preservation tax credits with the Louisiana Division of Historic
Preservation.101 According to Bailey, Susan Hoffman, on behalf of SAPLA, applied for the federal
tax credits on January 11, 2008, May 9, 2008, and June 29, 2012.102 Bailey asserts that the federal
tax credits were certified and that the owner of the building at the time, Steven Markoff, received
more than $2.4 million in federal tax credits, i.e. 26% of the final rehabilitation cost of
$9,298,234.103 However, Bailey argues that it “doesn’t add up” that the estimate of rehabilitation
costs went from $2,000,000 on May 9, 2008, to the final alleged cost of over $9 million.104 Bailey
avers that Susan Hoffman testified that she only spent $3.5 million.105

98

Id.

99

Id. at 3.

100

Id.

101

Id. at 4.

102

Id.

103

Id.

104

Id.

105

Id.

16

Bailey points out that Susan Hoffman, on behalf of SAPLA, did not apply for the state
historic tax credits until July 9, 2012.106 In that application, Bailey asserts, Susan Hoffman again
estimated the cost of rehabilitation at $2 million; however, according to Bailey, that was nine days
after Susan Hoffman represented in her federal historic tax credit application that the rehabilitation
was completed and that the total cost was over $9.2 million.107 Bailey alleges that the Louisiana
Department of Revenue has refused to grant these applications for state historic tax credits.108
Next, Bailey states that on July 28, 2009, he was selected to be Chief Financial Officer of
SAP Plc.109 Bailey represents that he was a chartered accountant and had previously trained with
Deloitte for seven years, where he was an auditor and a Forensic Accountant specializing in the
investigation and prosecution of fraud and money laundering.110 Bailey argues that he had
“substantial evidence upon which to allege that the entirety of the seven arts structure was tainted
by fraud, and had the professional skills, ability, and professional advice from attorneys and law
enforcement to be certain of this.”111 According to Bailey, he knew, or had reasonable grounds to
believe, that: (1) funds were diverted from SAP Plc in the United Kingdom to SAPLA in Louisiana
without proper authorization or recording; (2) Peter Hoffman and his daughter, Kate Hoffman,
who served as the COO of SAP Plc, had been engaged in the systematic falsification of corporate
documents, financial transactions, signatures, and cash movements since 2008; (3) Peter Hoffman
and Kate Hoffman were engaged in the fraudulent “circular transfer” of funds to inflate or misstate

106

Id.

107

Id.

108

Id.

109

Id.

110

Id. at 5.

111

Id.

17

the amount spent on the 807 Esplanade Property; and (4) Bailey knew those funds which had been
spent on the 807 Esplanade Property were tainted by fraud.112 Bailey states that he continued to
track, through public sources, the expenditures on the Property from December 2009 until
December 2012.113
Bailey avers that, prior to sending the email, he had received substantial professional advice
from attorneys and law enforcement regarding reporting the Hoffmans’ activity and did not act
negligently in making his allegations.114 According to Bailey, while he was employed at SAP Plc,
he was involved in “detailed work to secure tax credits” on the Property. 115 Bailey contends that
he prepared “financial support and analyses for notes for potential lenders and tax credit brokers,”
and that he raised “significant issues” related to SAP Plc’s claim for tax credits to Peter Hoffman
and Kate Hoffman directly.116 Bailey argues that the “tax credits allegedly due from 807 Esplanade
were material to the accounts of SAP Plc and the receipt of cash on the dates due was critical to
the solvency of SAP Plc.”117
Bailey avers that in November 2009, Peter Hoffman visited the United Kingdom to try to
resolve some of the accounting issues raised by Bailey and the auditors, and during that visit,
members of the accounting team advised Bailey that approximately $857,000 was transferred to
SAP Plc from a United States bank used by SAP Inc.118 Bailey argues that this money was being

112

Id.

113

Id.

114

Id.

115

Id.

116

Id. at 7.

117

Id. at 8.

118

Id.

18

“circled around” between SAPLA and the Los Angeles office.119 According to Bailey, this was
done to “create false expenditure records, or to inflate expenditure on which tax credits could be
claimed as a matter of routine, not just in respect” to the 807 Esplanade Property.120
Bailey points out that in November 2009, he made a report to the Board of SAP Plc and
Kate Hoffman in which he informed them that there “appear[s] to be substantial uncertainties over
the tax credits and production costs” of a particular production and that there “also appears to have
been the circling of $2,511,993 to create production costs . . . that were then used to claim tax
credits.”121 Bailey asserts that on November 6, 2009, he reported to the audit committee by email
that “he had serious concerns about the accounting records, amounting to a very high risk of
regulatory breach or fraud.”122
According to Bailey, he left SAP Plc on December 10, 2009, because he was owed unpaid
wages and because the company lacked cash and risked insolvency, and because of the “clear
indications that serious frauds may already have occurred.”123 Bailey asserts that he then contacted
the law firm Peters and Peters and worked with a “senior partner” there to report the “extensive
list of frauds, false accounting, corporate government failures and legal matters” that Bailey
discovered while working at SAP Plc.124 Bailey argues that he had a professional obligation and

119

Id.

120

Id.

121

Id. at 9–10.

122

Id. at 10.

123

Id. at 13.

124

Id.

19

legal duty to report his suspicions to the proper authorities in the United Kingdom and United
States.125According to Bailey, SAP Plc was made insolvent on November 9, 2011.126
Bailey contends that he worked with the authorities in the United Kingdom to investigate
and gather information on the allegedly fraudulent activities of SAP Plc, and that in May 2011, the
Serious Fraud Office in London referred the case to the SEC in New York.127 Bailey argues that
the reports he provided to the Serious Fraud Office officially established him as a “whistleblower”
in the United Kingdom and granted him “full legal protection from harassment and prosecution by
SAP Plc or any of its directors in the UK.”128 Bailey states that on August 2, 2012, he mailed a
“bundle of documents, a statement, and findings in respect of 807 Esplanade to” Jim Letten at the
U.S. Attorney’s Office for the Eastern District of Louisiana to “ask him to investigate SAPLA and
the transactions that funded 807 Esplanade.”129 Bailey alleges that he did not receive a response.130
Bailey asserts that there are “many items” that were part of the Hoffmans’ felony convictions “that
also apply to the expenditures for the historic credits.”131 Finally, Bailey states that he sent the
email to SHPO and reported this “to protect the public and the state of Louisiana,” and because he
had a professional duty to report “what he determined to be illegal activity.”132

125

Id.

126

Id. at 14.

127

Id.

128

Id. at 15.

129

Id.

130

Id.

131

Id.

132

Id.

20

In his Declaration attached to his opposition, Bailey further avers that Peter Hoffman was
quoted in an article published on June 29, 2012, as saying that the 807 Esplanade Property “was
bought for $1.7 million, but by the time other expenditures were added in, the project grew to
$13.5 million.”133 Bailey contends that he was “immediately aware that these numbers conflicted
with claims made in 2009.”134 Bailey asserts that the public reports regarding the application for
historic rehabilitation credits for the 807 Esplanade Property were “widely at odds with the
financial facts, as Mr. Bailey knew them to be from first hand,” and that the numbers “could not
possibly be true.”135 Bailey argues that “[g]iven that Mr. Bailey was aware that SAPLA had no
income of its own, other than that which had passed from SAP Plc and SAE Inc., and given that
Mr. Bailey was fully aware of the total amount spent by December 2009, it was reasonable and
Mr. Bailey was entitled to say . . . that the monies had not been spent as claimed.”136 Bailey avers
that in November 2012, he made various telephone calls to Louisiana and New Orleans
departments to determine who to send his information to and was led to Jessica Richardson at
SHPO.137 Thus, according to Bailey, he emailed Jessica Richardson and Nichole Morris, “who ran
the Historic Buildings team,” “with a question as to whom Mr. Bailey should report the allegations
and evidence” he had regarding the Hoffmans’ allegedly fraudulent activity. 138

133

Rec. Doc. 164-9 at 33.

134

Id. at 34.

135

Id.

136

Id. at 35.

137

Rec. Doc. 164-9 at 43.

138

Id.

21

C.

Hoffman’s Arguments in Further Support of the Motion
In his reply memorandum, Hoffman points out that Bailey’s opposition does not address

any of the seven issues raised by Hoffman in his motion, make any legal arguments, or cite to any
cases.139 Thus, Hoffman “presumes all these issues are stipulated and conceded.”140
Hoffman argues that, to the extent that Bailey’s response opposes the motion, it appears
that Bailey contends that his allegedly defamatory statements were true. 141 However, Hoffman
argues that Bailey has not produced any admissible evidence establishing that any or all of his
factual contentions in his allegedly defamatory statement are true.142 According to Hoffman,
Bailey’s response shows “why this action was necessary to hopefully bring an end to Bailey’s
merciless jihad of defamation against Mr. Hoffman, his family and his associates.”143
Hoffman asserts that Bailey makes several factual contentions regarding SAPLA’s
applications for the infrastructure tax credits, which was the subject of the Hoffmans’ convictions,
but that Bailey’s allegedly defamatory statements addressed the historic tax credits for which no
charges have ever been brought.144 Hoffman also argues that Bailey produced no competent
evidence that the Louisiana Department of Revenue “has refused to allow” the historic credits, and
that the Louisiana Department of Revenue “has not and cannot de-certify the state Historic Credits
claimed by SAPLA and certified by SHPO.”145 Hoffman avers that it is irrelevant that the original

139

Rec. Doc. 178 at 2.

140

Id. at 3.

141

Id.

142

Id. at 4.

143

Id.

144

Id.

145

Id. at 5.

22

estimate of construction costs in 2008 was $2 million while the final rehabilitation costs were over
$9 million.146 Moreover, Hoffman alleges that the 2012 application related to the expenditures
accrued up to June 30, 2012, and was not solely limited to the expenditures up to December 2009
when Bailey left SPA Plc.147 Hoffman further asserts that Kate Hoffman “had no involvement
whatsoever in any expenditures on the Property or any ‘circular transfer’ of funds” at all, and that
Bailey presents no evidence of this.148
Hoffman contends that Bailey also does not present any competent evidence, from the time
of his employment or the “public sources” he cites, that any of the historic tax credit applications
were fraudulent.149 According to Hoffman, the only overlapping expenditures between the
infrastructure tax credits and the historic tax credits are the claims for interest and developer fees,
which have nothing to do with the amounts allegedly spent prior to December 2009. 150
Additionally, Hoffman avers that the basis for the convictions on the infrastructure tax credits was
that the interest and developer fees were not paid, but that, with regard to the historic tax credits,
“payment is not required for purposes of claiming qualified historic rehabilitation expenditures.”151
“Therefore, there could be no fraud in seeking Historic Credits by submission of false ‘proof of
payment’ because in fact no ‘proof of payment’ was required.”152

146

Id.

147

Id. at 6.

148

Id.

149

Id. at 7.

150

Id.

151

Id. at 8.

152

Id. at 9.

23

Furthermore, Hoffman provides a number of evidentiary objections to Bailey’s opposition
and attachments.153 Hoffman argues that Bailey attaches “unverified and unauthenticated Exhibits
to his Statement of Contested Material Facts.”154 Hoffman also objects to Bailey’s Declaration “in
its entirety as it is unexecuted and not sworn before a taker of oaths.”155 Hoffman avers that Bailey
is not subject to Louisiana law regarding statements made under penalty of perjury, and thus his
statements can be evidence only if sworn.156 Accordingly, Hoffman lists over 150 paragraphs in
Bailey’s Declaration to which Hoffman objects on foundation, relevancy, lack of personal
knowledge, improper opinion, hearsay, authentication, and/or best evidence grounds.157
Finally, Hoffman argues that Bailey’s allegedly defamatory statements were in fact false,
and Bailey has provided no evidence to suggest otherwise.158 Thus, Hoffman asserts that there is
no triable issue of material fact that some or all of the assertions in Bailey’s allegedly defamatory
statements are “anything but false.”159
D.

Bailey’s Arguments in Further Opposition to the Motion
In his sur-reply, Bailey disputes that he conceded the issues raised by Hoffman in

Hoffman’s motion for partial summary judgment.160 Bailey contends that his response was

153

Id. at 10.

154

Id.

155

Id.

156

Id.

157

Id. at 10–12.

158

Id. at 12–13.

159

Id.

160

Rec. Doc. 193 at 1.

24

disputing the facts that Hoffman alleges are uncontested.161 Bailey states that he has always argued
that his email to SHPO was not defamation, “because it was true and because Bailey had a
conditional privilege to make the statements in the email.”162 Bailey states that he “has admitted
that he sent the email to the SHPO and he has admitted that the email says what it says,” but he
has not admitted that it constitutes defamation.163
Bailey argues that Hoffman’s assertion that conditional privilege does not apply here
because SHPO has no investigative personnel is incorrect. 164 According to Bailey, Tom Boulton,
an Inspector General of the State of Louisiana, “had been in contact with the SHPO and was
investigating the historic tax credit application of the Plaintiffs prior to Bailey sending the email
asking the SHPO where he should send his information regarding what he knew about fraudulent
transactions regarding the tax credit applications for the rehabilitation of 807 Esplanade
Avenue.”165 Bailey asserts that Kristin Sanders, an employee of SHPO, testified in her deposition
that she knew of the ongoing inspection by the Inspector General and forwarded Bailey’s email to
Boulton, who eventually replied to Bailey and made further inquiries into the 807 Esplanade
Property.166 Thus, Bailey argues that because Bailey’s report of fraudulent activity sent to SHPO
was correctly forwarded to the Inspector General for investigation, a conditional privilege exists
for Bailey’s email communication to SHPO.167

161

Id.

162

Id. at 2.

163

Id.

164

Id.

165

Id.

166

Id.

167

Id.

25

Bailey avers that, as a qualified chartered accountant with experience in forensic
accounting investigating fraud, he had a duty to report what he knew about the Hoffmans’ allegedly
fraudulent activity.168 Bailey alleges that he had “substantial evidence upon which to allege that
the entirety of the seven arts structure was tainted by fraud, and had the professional skills, ability,
and professional advice from attorneys and law enforcement to be certain of this.”169 Bailey
represents that he received advice from a “senior partner of Peters and Peters,” who “planned for
Bailey to report” what he knew to the criminal and tax authorities in the United Kingdom and the
United States.170 Bailey contends that he first reached out to United States Attorney Jim Letten in
August 2012 to report the irregularities, but he did not receive a response.171 Subsequently, Bailey
avers that he became aware of website and media reports regarding the funding of the rehabilitation
of the 807 Esplanade Property in October 2012, and that these reports were “widely at odds with
the financial facts” of which Bailey was aware.172 Bailey asserts that he made various telephone
calls to departments in the “NOLA civil and tax administration to try to find the correct person to
send information to,” and this led him to sending his email to Jessica Richardson at SHPO in
November 2012.173 According to Bailey, because he had a duty to report the fraudulent activity to
the government agency to whom the Hoffmans were applying for tax credits, Bailey had a

168

Id. at 3.

169

Id.

170

Id. at 4.

171

Id.

172

Id.

173

Id. at 5.

26

conditional privilege to make such a report.174 Whether Bailey abused such a privilege here, Bailey
argues, is a question of fact for the factfinder.175
Bailey further argues that he did not concede that the Hoffmans suffered injury to their
reputation, as he asserts that any damage to their reputation was caused “by their own acts of being
convicted of felony charges.”176 Bailey also points out that this email was not circulated in the
public, and that the Hoffmans “cannot show that anyone knew of this email,” as it was only
forwarded to the Inspector General who was already investigating the Hoffmans.177 Bailey argues
that the Hoffmans cannot show that the single email sent to SHPO caused any additional
damage.178
Moreover, Bailey asserts that Louisiana has a general public policy against punitive
damages, and that Peter Hoffman mispresents the Louisiana Code that allows for punitive damages
in two specific situations.179 Bailey contends that article 3546(1) does not apply here because it
considers the law of the state where the allegedly injurious conduct occurred, which is in
Louisiana.180 Bailey further asserts that that article 3546(2) also does not apply here because it
considers the law of the state where the injury occurred, which Bailey argues was also in

174

Id.

175

Id.

176

Id.

177

Id.

178

Id. at 6.

179

Id.

180

Id.

27

Louisiana.181 Thus, Bailey avers that punitive damages are not permitted in this case.182
Furthermore, Bailey points out that neither of the Hoffmans requested punitive damages in their
complaint, and the Hoffmans should be precluded from requesting punitive damages for the first
time at this late stage of litigation.183
E.

Hoffman’s Arguments in Further Support of the Motion
In his “Sur-Rebuttal Memorandum,” Hoffman asserts that it appears that Bailey has

conceded “fault” as an issue for adjudication, as, according to Hoffman, Bailey “makes no good
faith or ‘negligence’ plea in abatement of his offense.”184 Hoffman also avers that Bailey is
foreclosed from contesting the “fault” issue “by his deemed admissions to Mr. Hoffman’s Request
for Admissions.”185 Hoffman argues that Bailey’s admission of “fault” also “eliminates the socalled ‘common interest’ privilege, the basis of Bailey’s mis-described ‘duty to speak,’” as any
such privilege is abused if the defamer is found to be at fault. 186 Additionally, Hoffman contends
that the “common interest” privilege is limited to “appropriate persons within the employer’s
walls,” and thus Bailey cannot claim this privilege for defamation to SHPO three years after his
employment terminated.187
Moreover, Hoffman argues that the “public interest” privilege is not triggered by any “duty
to speak,” as it is a victim or percipient witness’s right to respond to ongoing criminal behavior,

181

Id.

182

Id.

183

Id. at 7.

184

Rec. Doc. 201 at 1.

185

Id.

186

Id.

187

Id. at 2.

28

as opposed to a “disgruntled ‘volunteer’ long removed from and indeed never at the ‘scene of the
crime.’”188 Hoffman points out that Bailey failed to cite to any authority that every “whistleblower”
removed from the crime is protected by the “public interest” privilege. 189 Moreover, Hoffman
asserts that, even if Bailey had this right, it did not extend to defaming Hoffman to SHPO, which
has no law enforcement responsibilities.190
Finally, Hoffman avers that Section 3546(1) allows for punitive damages here, as Bailey
prepared and published his email from England and caused injury to Hoffman in California.191
Hoffman argues that the “purpose of Section 3546(1) is to not protect a tortfeasor who resides in
a jurisdiction that permits punitive damages awards and who injures a party residing in a
jurisdiction that protects him or her with awards of punitive damages.”192
III. Law and Analysis
A.

Legal Standard for Motions for Summary Judgment
Summary judgment is appropriate when the pleadings, the discovery, and any affidavits

show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.”193 When assessing whether a dispute as to any material fact exists, the court
considers “all of the evidence in the record but refrains from making credibility determinations or
weighing the evidence.”194 All reasonable inferences are drawn in favor of the nonmoving party,

188

Id.

189

Id.

190

Id.

191

Id. at 3.

192

Id.

193

Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
194

Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008).

29

but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and
conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.”195
If the record, as a whole, “could not lead a rational trier of fact to find for the non-moving party,”
then no genuine issue of fact exists and the moving party is entitled to judgment as a matter of
law.196 The nonmoving party may not rest upon the pleadings, but must identify specific facts in
the record and articulate the precise manner in which that evidence establishes a genuine issue for
trial.197
The party seeking summary judgment always bears the initial responsibility of informing
the Court of the basis for its motion and identifying those portions of the record that it believes
demonstrate the absence of a genuine issue of material fact. 198 Thereafter, the nonmoving party
should “identify specific evidence in the record, and articulate” precisely how that evidence
supports his claims.199 To withstand a motion for summary judgment, the nonmoving party must
show that there is a genuine issue for trial by presenting evidence of specific facts. 200 The
nonmovant’s burden of demonstrating a genuine issue of material fact is not satisfied merely by
creating “some metaphysical doubt as to the material facts,” “by conclusory allegations,” by
“unsubstantiated assertions,” or “by only a scintilla of evidence.”201 Rather, a factual dispute
precludes a grant of summary judgment only if the evidence is sufficient to permit a reasonable

195

Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.

196

Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986).

197

See Celotex, 477 U.S. at 325; Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).

198

Celotex, 477 U.S. at 323.

199

Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994).

200

Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012) (citing Anderson v. Liberty, 477 U.S. 242, 248–

49 (1996)).
201

Little, 37 F.3d at 1075.

30

trier of fact to find for the nonmoving party. Hearsay evidence and unsworn documents that cannot
be presented in a form that would be admissible in evidence at trial do not qualify as competent
opposing evidence.202
B.

Legal Standard for Louisiana Defamation Law
A cause of action for the tort of defamation arises out of Louisiana Civil Code article

2315.203 “Defamation involves the invasion of a person’s interest in his or her reputation and good
name.”204 The five elements of defamation under Louisiana law are: “(1) defamatory words; (2)
publication to a person other than the one defamed; (3) falsity; (4) malice; and (5) resulting
injury.”205 Some Louisiana courts set forth the “actual or implied malice” requirement as the “fault
(negligence or greater) on the part of the publisher.”206 In sum, the Louisiana Supreme Court has
articulated that, in order to prevail on a defamation claim, a plaintiff must prove “that the
defendant, with actual malice or other fault, published a false statement with defamatory words

202

Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987); Fed. R .Civ. P. 56(c)(2).

203

Starr, 978 So. 2d at 388; Costello v. Hardy, 03-1146, at 12 (La.1/21/04), 864 So. 2d 129, 139.

204
Starr, 978 So. 2d at 388; Costello, 864 So. 2d at 139 (citing Fitzgerald v. Tucker, 98-2313, at 10 (La.
6/29/99), 737 So.2d 706, 715; Trentecosta v. Beck, 96-2388, at 10 (La. 10/21/97), 703 So. 2d 552, 559; Sassone v.
Elder, 626 So. 2d 345, 350 (La. 1993).
205
Bell v. Rogers, 29,757 (La. App. 2 Cir. 8/20/97), 698 So. 2d 749, 753 (citing Brannan v. Wyeth
Laboratories, Inc., 526 So.2d 1101, 1105 (La.1988); Kosmitis v. Bailey, 28,585 (La. App. 2 Cir. 12/20/96), 685 So.
2d 1177, 1179); See Cangelosi v. Schwegmann Bros. Giant Super Markets, 390 So. 2d 196, 198 (La. 1980) (“To
maintain an action in defamation, the following elements must be shown: (1) defamatory words; (2) publication; (3)
falsity; (4) malice, actual or implied; and (5) resulting injury.”); Wyatt v. Elcom of Louisiana, Inc., 34,786 (La. App.
2 Cir. 6/22/01), 792 So. 2d 832, 835 (“The five essential elements of defamation are defamatory words, publication,
falsity, malice, and resulting injury.”). Several Louisiana courts consider only four elements for the tort of defamation,
although the four element approach is substantively the same as the five element articulation for defamation. See
Kennedy v. Sheriff of E. Baton Rouge, No. 05-1418 (La. 7/10/06), 935 So. 2d 669, 674 (considering only four elements
for defamation: “(1) a false and defamatory statement concerning another; (2) an unprivileged publication to a third
party; (3) fault (negligence or greater) on the part of the publisher; and (4) resulting injury.”); Wood v. Del Giorno,
2006-1612 (La. App. 4 Cir. 12/19/07), 974 So. 2d 95, 98 (same).
206
Kennedy, 935 So. 2d at 674; Wood, 974 So. 2d at 98; see generally 12 William E. Crawford, Louisiana
Civil Law Treatise: Tort Law § 17.4 at 312 (2000).

31

which caused plaintiff damages.”207 If even one of the required elements of the defamation tort is
lacking, the cause of action fails.208 Nonetheless, even if a plaintiff makes a prima facie showing
of the essential elements of a defamation claim, a defendant may prevail by showing either that:
(1) the statement was true, as truth is an absolute defense to defamation claims under Louisiana
law; or (2) that the statements were protected by an absolute or qualified privilege.209
With regard to the first element of a defamation claim, i.e. whether the communication
consisted of “defamatory words,” the Louisiana Supreme Court has held that “[t]he question of
whether a communication is capable of a particular meaning and whether that meaning is
defamatory is ultimately a legal question for the court.”210 To make this determination, courts must
consider whether a listener “could have reasonably understood the communication, taken in
context, to have been intended in a defamatory sense.”211 In other words, the legal issue to be
decided by the Court is whether a particular statement is “objectively capable of having a
defamatory meaning . . . considering the statement as a whole, the context in which it was made,
and the effect it is reasonably intended to produce in the mind of the average listener.”212 If the
Court concludes in the plaintiff’s favor that a statement is capable of a defamatory meaning, then

207

Costello, 864 So.2d at 139; Trentecosta, 703 So. 2d at 559 (quoting Sassone, 626 So.2d at 350).

208

Costello, 864 So.2d at 140; Douglas v. Thomas, 31,470, at 3 (La. App. 2 Cir. 2/24/99), 728 So. 2d 560,
562; Kosmitis v. Bailey, 28,585, at 2 (La. App. 2 Cir. 12/20/96), 685 So. 2d 1177, 1180.
209

Costello, 864 So.2d at 141 (citing Doe v. Grant, 01-0175, at 9 (La. App. 4 Cir. 1/29/03), 839 So. 2d 408,
416; Arledge v. Hendricks, 30,588, 4 (La. App. 2 Cir. 6/26/98), 715 So.2d 135, 139); Wood, 974 So. 2d at 98 (“Even
when a plaintiff makes a prima facie showing of the essential elements of defamation, recovery may be precluded if
the defendant shows either that the statement was true, or that it was protected by a privilege, absolute or qualified.”);
Wyatt v. Elcom of Louisiana, Inc., 34,786 (La. App. 2 Cir. 6/22/01), 792 So. 2d 832, 835 (“Truth is an absolute defense
to the action for defamation.”).
210

Costello, 864 So. 2d at 140 (citing Sassone, 626 So. 2d at 352).

211

Id.

212

Kosmitis, 685 So. 2d at 1180 (citing Sassone, 626 So. 2d at 352; Taylor, 519 So. 2d at 306) (emphasis in

original).

32

the question of whether the “communication capable of a defamatory meaning was so understood
by the recipient” is one for the factfinder.213 That is, if the Court finds that a “particular statement
is objectively capable of having a defamatory meaning,” then “the actual recipient’s subjective
understanding or perception of the communication as defamatory becomes a factual issue for the
jury.”214 By contrast, if the Court determines that the words at issue are not objectively capable of
having a defamatory meaning, then the plaintiff’s claim is not actionable and may be dismissed on
a defendant’s summary judgment.215
Louisiana courts have determined that a statement is “defamatory” if it “tends to harm the
reputation of another so as to lower the person in the estimation of the community, deter others
from associating or dealing with the person, or otherwise exposes the person to contempt or
ridicule.”216 “Words which convey an element of personal disgrace, dishonesty, or disrepute are
defamatory.”217 In Louisiana, defamatory words have also traditionally been defined into two
categories: those that are “defamatory per se” and those that are simply “susceptible of a
defamatory meaning.”218 “Words which expressly or implicitly accuse another of criminal
conduct, or which by their very nature tend to injure one’s personal or professional reputation,
without considering extrinsic facts or circumstances, are considered defamatory per se.”219 When
a plaintiff proves (1) the communication of words that are defamatory per se and (2) publication

213

Fitzgerald v. Tucker, 98-2313 (La. 6/29/99), 737 So. 2d 706, 720 n.7 (citing Sassone, 626 So. 2d at 352

214

Kosmitis, 685 So. 2d at 1180.

215

Id.

216

Kennedy, 935 So. 2d at 674.

217

Costello, 864 So.2d at 140 (citing Fitzgerald, 737 So.2d at 716).

218

Id. (citing Lemeshewsky v. Dumaine, 464 So. 2d 973, 975 (La. App. 4 Cir. 1985)).

219

Id. (citing Kosmitis, 685 So. 2d at 1180; Lemeshewsky, 464 So. 2d at 975).

n. 9).

33

of those words to a third party other than the plaintiff (i.e. the first and second elements of a
defamation claim), then the last elements of (3) falsity, (4) malice (or fault), and (5) injury are
presumed.220 Thus, in cases where the plaintiff demonstrates that the words published were
defamatory per se, the burden shifts to the defendant to rebut the presumed elements.221 When the
words are not defamatory per se, the plaintiff must prove each element of the defamation tort.222
Moreover, as stated supra, even if the plaintiff can make a prima facie showing of all essential
elements of his defamation claim, “recovery may be precluded if the defendant shows either that
the statement was true, or that it was protected by a privilege, absolute or qualified.”223
C.

Analysis
In his motion, Hoffman moves for entry of partial summary judgment on seven issues

pursuant to Federal Rule of Civil Procedure 56.224 In particular, Hoffman argues that there are no
disputed issues of material fact with regard to the following: (1) Bailey’s email constitutes
defamation per se; (2) Bailey’s email was published on November 24, 2012, to Jessica Richardson,
an employee of SHPO; (3) Bailey made the defamatory statements without any reasonable grounds
for believing the statement was true; (4) the statements in Bailey’s email are false; (5) Bailey is
not entitled to any conditional privilege; (6) because Bailey’s email constitutes defamation per se,
the Hoffmans “suffered presumed injury to reputation and pain, humiliation and suffering;” and

220

Kennedy, 935 So. 2d at 675 (citations omitted); see Costello, 864 So. 2d at 140.

221

Id.

222

Costello, 864 So.2d at 140.

223

Id. at 141 (citing Doe v. Grant, 01-0175 (La. App. 4 Cir. 1/29/03), 839 So. 2d 408, 416; Arledge v.
Hendricks, 30,588 (La. App. 2 Cir. 6/26/98), 715 So. 2d 135, 139).
224

Rec. Doc. 139-2 at 5.

34

(7) the Hoffmans are entitled to recover punitive or exemplary damages pursuant to Louisiana
Civil Code article 3546.225
As a preliminary matter, the Court notes that both parties agree that the allegedly
defamatory comments by Bailey were written in one email to SHPO, and neither party disputes
the content of Bailey’s communication.226 However, in Hoffman’s motion for partial summary
judgment,227 his complaint,228 his sworn affidavit,229 and throughout his filings to this Court,230
Hoffman mischaracterizes the allegedly defamatory statements made by Bailey and the entire basis
for this defamation action. For example, in the instant motion, Hoffman implies that Bailey directly
stated that “Peter and Susan Hoffman are the architects not of a building, but of a major economic
fraud,” and that this was the “false statement[] of fact” that constitutes defamation.231 Hoffman
also regularly breaks apart one sentence of Bailey’s email and treats each fragment as separate and
distinct allegations against the Hoffmans, such as Bailey’s supposedly direct statement that “[t]he

225

Id. at 5–7.

See Rec. Doc. 1-3 at 30 (the Hoffmans attaching exhibit “G” to their complaint of Bailey’s email to
SHPO); Rec. Doc. 3-2 at 15 (Bailey pointing to the same exhibit in his motion to dismiss).
226

Rec. Doc. 139-2 at 6 (stating that Bailey’s statements include “Peter and Susan Hoffman are the architects
not of a building, but of a major economic fraud.”).
227

See Rec. Doc. 1 at 4 (implying that Bailey stated that the “application made by the Hoffmans are
fraudulent . . .”).
228

229
See Rec. Doc. 11-1 at 3 (Hoffman asserting that Bailey stated “among other things that ‘Peter and Susan
Hoffman are the architects . . . of a major economic fraud’ and that the ‘application made by the Hoffmans are
fraudulent . . .”).
230
See, e.g., Rec. Doc. 11 at 18 (the Hoffmans stating in their opposition to Bailey’s motion to dismiss that
the “charges” that the Hoffmans “are the architects . . . of a major economic fraud” are defamation per se); Rec. Doc.
53 at 2 (the Hoffmans contending that Bailey made the “malicious defamatory statements, without any reasonable
basis, that ‘Peter and Susan are the architects . . . of a major economic fraud,’ and that the ‘applications [for
rehabilitation credits] made by the Hoffmans are fraudulent’”); Rec. Doc. 81 at 4 (same).
231

Rec. Doc. 139-2 at 6, 22.

35

amounts claimed [in the application] were probably not spent” and that “ . . . some or all of the
funds used to renovate the property were improperly diverted . . . .”232
However, it appears that Hoffman is relying on incomplete quotations of Bailey’s
statements to SHPO. In fact, based on the undisputed evidence of the email that both parties have
relied on, Bailey actually said that he had read that the Hoffmans “have applied for rehabilitation
tax credits on 807 Esplanade” and “included them as revenue in accounts filed with the SEC,” and
that “[t]his 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. . . .” 233 Bailey
then provides a link for further information, and the remainder of the email asks: “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?”234

232

Id. at 22–23.

233

Rec. Doc. 1-3 at 30 (emphasis added).

234

Id. (emphasis added). The email states in full:

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.
http://stock-bb.com/seven-arts-pictures-plc-pink-sapx/ has several discussions on this matter.
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 Bailey

36

Hoffman has pointed to no authority, nor has the Court found any, that supports his implicit
argument in his motion for partial summary judgment that a defamation action may be asserted
based on incomplete and partial quotations of the allegedly defamatory statements at issue. In fact,
Louisiana courts have made clear that, in deciding whether a statement was defamatory, “the
publication must be read as a whole.”235 Therefore, the Court will consider Bailey’s complete
statements in the only email to SHPO pointed to by the Hoffmans or Bailey when deciding each
of Hoffman’s arguments in support of his motion for summary judgment.236
Hoffman’s objections to Bailey’s Declaration

1.

First, the Court notes that in Hoffman’s reply memorandum, he makes a number of
evidentiary objections to Bailey’s opposition and attached exhibits to Bailey’s Statement of
Contested Material Facts.237 Hoffman argues that all of Bailey’s “unverified and unauthenticated
Exhibits [attached] to his Statement of Contested Material Facts” should be excluded.238 Hoffman
also objects to Bailey’s Declaration “in its entirety as it is unexecuted and not sworn before a taker
of oaths.”239 Accordingly, Hoffman lists over 150 paragraphs in Bailey’s Declaration to which
Hoffman objects by listing one word objections of foundation, relevancy, lack of personal
knowledge, improper opinion, hearsay, authentication, and/or best evidence grounds.240

235

Weatherall v. Dep't of Health & Human Res., 432 So. 2d 988, 993 (La. App. 1 Cir. 1983) (citing Kihneman
v. Humble Oil & Refining Company, 312 F.Supp. 34 (E.D.La.1970); Otero v. Ewing, 162 La. 453, 110 So. 648
(1926); Tate v. Nicholson Publishing Company, 122 La. 472, 47 So. 774 (1908)).
236

Rec. Doc. 1-3 at 30.

237

Rec. Doc. 178 at 10.

238

Id.

239

Id.

240

Id. at 10–12.

37

Pursuant to Federal Rule of Civil Procedure 56(c)(1), a party asserting that a fact is
genuinely disputed must support this assertion by, in relevant part, “citing to particular parts of
materials in the record, including depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials.” Rule 56(c)(2) further provides that a party
“may object that the material cited to support or dispute a fact cannot be presented in a form that
would be admissible in evidence.”241 Moreover, Rule 56(c)(4) requires that an affidavit or
declaration used to support or oppose a motion must be: (1) made on personal knowledge; (2) set
out facts that would be admissible in evidence; and (3) show that the affiant or declarant is
competent to testify on the matters stated.242
Here, in one sentence, Hoffman appears to first object to all 21 of Bailey’s exhibits attached
to his opposition memorandum as “unverified” and “unauthenticated.”243 However, Hoffman
offers no explanation or argument as to why his objections have merit, and he fails to cite to any
case law or Federal Rule of Evidence that demonstrates that this evidence “cannot be presented in
a form that would be admissible in evidence,” i.e. that these exhibits cannot be verified and
authenticated at trial.244 It is not the Court’s responsibility to comb through the record to determine
the basis for Hoffman’s cursory objections or to make arguments on his behalf. Accordingly, the
Court denies Hoffman’s objections to all of Bailey’s exhibits at this time.

241

Fed. R. Civ. P. 56(c)(2) (emphasis added).

242

Fed. R. Civ. P. 56(c)(4) (emphasis added).

243

Rec. Doc. 178 at 10.

244

Fed. R. Civ. P. 56(c)(2) (emphasis added).

38

Second, Hoffman objects to the “entirety” of Bailey’s Declaration, as Hoffman argues it is
“unexecuted” and “not sworn before a taker of oaths.”245 Hoffman further argues that Bailey “is
not subject to Louisiana law regarding statements made under penalty of perjury and his statements
can be evidence only if sworn.”246 However, Hoffman offers no authority and fails to point to any
Federal Rule of Evidence to support this contention, nor does Hoffman provide any reason as to
why the evidence of a defendant’s declaration “cannot be presented in a form that would be
admissible in evidence,” such as by Bailey testifying.247 Hoffman also does not cite to any
authority to support his argument that Bailey, who is a defendant facing Hoffman’s civil action in
this Court under Louisiana law, is “not subject to Louisiana law” for statements made in court
filings, or that Bailey’s declaration, made “under penalty of perjury” and filed in a federal court,248
can only be evidence if sworn. As the Fifth Circuit noted in Stewart v. Guzman, unsworn
declarations made in writing and “under the penalty of perjury” may be admissible evidence.249
Additionally, Rule 56(c)(4) only requires that a declaration used to oppose a motion must be: (1)
made on personal knowledge; (2) set out facts that would be admissible in evidence; and (3) show
that the affiant or declarant is competent to testify on the matters stated.250 Here, Hoffman offers
no sound argument as to why Bailey’s Declaration fails to meet these requirements or would

245

Rec. Doc. 178 at 10.

246

Id.

247

Fed. R. Civ. P. 56(c)(2) (emphasis added).

248

Rec. Doc. 164-9 at 43.

249
555 F. App’x 425, 432 (5th Cir. 2014); see Simmons v. Kolodzik, 159 F.3d 1357 (5th Cir. 1998)
(. . . Simmons submitted an unsworn declaration made under penalty of perjury. Simmons’ unsworn declaration was
competent summary-judgment evidence.”); Johnson v. Certain Underwriters at Lloyd's London, No. 09-2495, 2009
WL 3232006, at *4 (E.D. La. Oct. 2, 2009) (Berrigan, J.) (rejecting argument that an unsworn declaration should not
be considered because it was not notarized).
250

Fed. R. Civ. P. 56(c)(4) (emphasis added).

39

otherwise be inadmissible. Accordingly, the Court denies Hoffman’s objection to Bailey’s
Declaration in its entirety.
Third, Hoffman asserts one-word objections to over 150 paragraphs in Bailey’s
Declaration, such as “relevance,” “best evidence,” “improper opinion,” “not authenticated,”
“hearsay,” and “no foundation.”251 However, Hoffman again offers no explanation or argument as
to why his objections have merit, and he fails to cite to any case law or Federal Rule of Evidence
that demonstrates that this evidence “cannot be presented in a form that would be admissible in
evidence.”252 Indeed, most of Hoffman’s one-word objections apply to a large range of paragraphs
and assertions in Bailey’s Declaration without specifying which particular statements Hoffman is
objecting to.253 For example Hoffman objects wholesale to Paragraphs 117 through 130, in which
Bailey discusses his personal knowledge of potential “theft” by Hoffman of money the company
owed in taxes to the United Kingdom, on “relevance,” “hearsay,” “best evidence,” and “not
authenticated” grounds without specifying which statements in the three-pages worth of
paragraphs they apply to.254 As stated supra, it is not the Court’s responsibility to comb through
the record to determine the basis for Hoffman’s cursory objections, identify which paragraphs
Hoffman might be objecting to, or make arguments on his behalf. Accordingly, without more
information, the Court denies Hoffman’s broad objections to 150 paragraphs of Bailey’s
Declaration.

251

Rec. Doc. 178 at 11–12.

252

Fed. R. Civ. P. 56(c)(2); see Silver Dream, L.L.C. v. 3MC, Inc., No. 10-3658, 2011 WL 4007385, at *4
(E.D. La. Sept. 8, 2011) (Feldman, J.) (noting that while the defendants’ objections of hearsay to the plaintiff’s
particular evidence opposing summary judgment may have merit, it could become admissible at trial through alternate
testimony).
253

Rec. Doc. 178 at 11.

254

See id.; Rec. Doc. 164-9 at 23–25.

40

2.

Defamatory per se

In his motion, Hoffman first argues that Bailey’s statements in his email to SHPO were
defamatory per se as a matter of law such that granting summary judgment on the issue in
Hoffman’s favor is proper.255 Hoffman contends that Bailey’s statements are defamatory per se
because “the words, in accusing the Hoffmans of committing fraud, by their very nature implicate
criminal conduct and tend to injure a person’s personal and professional reputation.”256 Hoffman
also appears to rely on the fact that this Court, in denying Bailey’s motion to dismiss pursuant to
Rule 12(b)(6), determined that Bailey’s statements were defamatory per se after accepting all
allegations in the Hoffmans’ complaint as true.257 In Hoffman’s reply brief, Hoffman further
contends that Bailey did not address Hoffman’s argument that Bailey’s words were defamatory
per se, and therefore Hoffman presumes that the issue was “stipulated and conceded” by Bailey.258
In response, Bailey asserts that he did not concede that Bailey’s communication is defamatory per
se.259 Bailey avers that he has always argued that his email to SHPO was not defamation, “because
it was true and because Bailey had a conditional privilege to make the statements in the email.”260
Bailey also points out that this Court concluded in its Order denying Bailey’s motion to dismiss
that Bailey’s statements were defamatory per se, and thus Bailey contends that the burden shifts
to Bailey to establish “the truth of the statements.”261

255

Rec. Doc. 139-2 at 5.

256

Id.

257

Id. at 13 (citing Rec. Doc. 87).

258

Rec. Doc. 178 at 3.

259

Rec. Doc. 193 at 1.

260

Id. at 2.

261

Id.

41

As a preliminary matter, the Court notes that both parties misinterpret the effect of the
Court’s Order denying a motion to dismiss on the Court’s analysis here on a motion for summary
judgment. 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.’”262 On a motion to dismiss,
asserted claims are liberally construed in favor of the claimant, and all facts pleaded are taken as
true.263 As the Court noted in its Order on the motion to dismiss,264 the Hoffmans’ complaint
directly alleges that Bailey’s email to SHPO constitutes defamation per se, and the Hoffmans
further allege that Bailey directly accused the Hoffmans of being “architects . . . of a major
economic fraud” and that the “application made by the Hoffmans are fraudulent . . . .”265 Liberally
construing the complaint in favor of the Hoffmans and accepting their well-pleaded allegations as
true as required on a Rule 12(b)(6) motion, the Court found for the purposes of analyzing the
motion to dismiss that “[s]uch an allegation is considered defamatory per se as the words, in
accusing the Hoffmans of committing a fraud, by their very nature implicate criminal conduct and
tend to injure a person’s personal or professional reputation.”266 Thus, under the motion to dismiss
standard, the Court determined that the elements of falsity and malice (or fault) are presumed and
that Bailey bore the burden of rebutting that adverse presumption.267

262

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

(2008)).
263

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).
264

See Rec. Doc. 87.

265

See Rec. Doc. 1 at 4, 6.

266

Rec. Doc. 87 at 20 (citations omitted).

267

Id.

42

Here, however, Hoffman is moving for summary judgment, and thus, unlike on a motion
to dismiss brought by the defendant, Hoffman bears the initial burden of showing that there is a
genuine absence of disputed fact on the issues for which he requests summary judgment.268
Likewise, in considering Hoffman’s motion for summary judgment, the Court does not liberally
construe the facts in Hoffman’s favor, such as the words in Bailey’s email, or utilize the forgiving
standard of whether Hoffman’s allegations “state a claim for relief that is plausible on its face.”269
Accordingly, to the extent that Hoffman argues that the issue of whether Bailey’s words were
defamatory per se was conclusively decided in the Court’s Order denying Bailey’s motion to
dismiss pursuant to Rule 12(b)(6), the Court finds such an argument inaccurate and therefore
unpersuasive.
As stated supra, the five elements of defamation under Louisiana law are: “(1) defamatory
words; (2) publication to a person other than the one defamed; (3) falsity; (4) malice; and (5)
resulting injury.”270 With regard to the first element, under Louisiana law, “defamatory words have
traditionally been divided into two categories: those that are defamatory per se and those that are
susceptible of a defamatory meaning.”271 Words which “expressly or implicitly accuse another of

268

Celotex, 477 U.S. at 323.

269

Ashcroft, 556 U.S. at 678.

270
Bell v. Rogers, 29,757 (La. App. 2 Cir. 8/20/97), 698 So. 2d 749, 753 (citing Brannan v. Wyeth
Laboratories, Inc., 526 So. 2d 1101, 1105 (La. 1988); Kosmitis v. Bailey, 28,585 (La. App. 2 Cir. 12/20/96); 685 So.
2d 1177, 1179); See Cangelosi v. Schwegmann Bros. Giant Super Markets, 390 So. 2d 196, 198 (La. 1980) (“To
maintain an action in defamation, the following elements must be shown: (1) defamatory words; (2) publication; (3)
falsity; (4) malice, actual or implied; and (5) resulting injury.”); Wyatt v. Elcom of Louisiana, Inc., 34,786 (La. App.
2 Cir. 6/22/01), 792 So. 2d 832, 835 (“The five essential elements of defamation are defamatory words, publication,
falsity, malice, and resulting injury.”). As stated supra, several Louisiana courts consider only four elements for the
tort of defamation, although the four element approach is substantively the same as the five element articulation for
defamation. See Kennedy v. Sheriff of E. Baton Rouge, No. 05-1418 (La. 7/10/06); 935 So. 2d 669, 674 (considering
only four elements for defamation: “(1) a false and defamatory statement concerning another; (2) an unprivileged
publication to a third party; (3) fault (negligence or greater) on the part of the publisher; and (4) resulting injury.”);
Wood v. Del Giorno, 2006-1612 (La. App. 4 Cir. 12/19/07), 974 So. 2d 95, 98 (same).
271

Kennedy, 935 So. 2d at 674–75.

43

criminal conduct, or which by their very nature tend to injure one’s personal or professional
reputation,” without considering extrinsic facts or circumstances, are considered defamatory per
se.272 Typically, Louisiana courts first consider the “threshold issue” of whether words published
to a third party were either “defamatory” or “defamatory per se” in order to determine which party
bears the burden of proving or rebutting the remaining three elements.273
In his reply brief in opposition to Hoffman’s motion, Bailey states that he “has admitted
that he sent the email to the SHPO and he has admitted that the email says what it says.”274 Thus,
it is undisputed that Bailey’s email to SHPO states that the Hoffmans’ application for rehabilitation
tax credits and its inclusion of those tax credits as “revenue in accounts filed with the
SEC . . . 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.”275 Bailey also
asked in the email: “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?”276

272

Id. (citing Cangelosi v. Schwegmann Brothers Giant Super Markets, 390 So.2d 196, 198 (La. 1980));
Costello, 864 So. 2d at 140.
273
Costello, 864 So. 2d at 141–42 (“Having established these initial elements-publication of words that are
defamatory but not defamatory per se-it remained the burden of plaintiffs-in-reconvention to prove the elements of
falsity, malice (or fault) and injury.”).
274

Rec. Doc. 193 at 2.

275

Rec. Doc. 1-3 at 30 (emphasis added).

276

Id. (emphasis added).

44

Based on the evidence presented by Hoffman, the Court cannot conclude as a matter of law
that Bailey’s statements in his email to SHPO were defamatory per se, i.e. that Bailey expressly
or implicitly accused Hoffman of criminal conduct or that the statements by their very nature tend
to injure Hoffman’s personal or professional reputation.277 The Court notes that Hoffman has not
pointed to any statements in Bailey’s email that reference any criminal statute or directly accuses
the Hoffmans of committing criminal activity or violating criminal law. Rather, the Court notes
that Bailey’s email is written using circumspect language such as “appears to contradict,” and is
limited only to informing SHPO that Bailey had “evidence” which he believed “indicates” or
“strongly indicates” a number of things about the Hoffmans’ applications for tax credits, and
asking to whom he should send such evidence.278 Although Bailey’s email does inform the
recipient that Bailey believes the evidence indicates that the Hoffmans are the architects of a
“major economic fraud” and that their applications were “fraudulent,” Hoffman has not shown that
this establishes that Bailey implicitly or explicitly accused the Hoffmans of criminal conduct as a
matter of law, as opposed to possible civil or administrative concerns Bailey could be raising, or
that these words “by their very nature” tend to injure Hoffman’s personal or professional
reputation, as opposed to merely constituting traditional defamatory words under the
circumstances, an issue which Hoffman has not requested summary judgment on.
Thus, this case is distinguishable from such cases as Kennedy v. Sheriff of East Baton
Rouge, where the Louisiana Supreme Court found that restaurant employees who directly called
law enforcement to accuse a patron of using a counterfeit one-hundred dollar bill was considered

277

Kennedy, 935 So. 2d at 674–75.

278

See Rec. Doc. 135 at 30.

45

defamatory per se.279 Here, Hoffman himself argues that SHPO, Bailey’s intended recipient of his
email, does not enforce criminal laws or have a law enforcement function, and Hoffman has not
shown that Bailey directly or implicitly accused the Hoffmans of conducting criminal activity. By
contrast, this case is more analogous to Wood v. Del Giorno.280 There, the Louisiana Fourth Circuit
Court of Appeal upheld a Louisiana trial court’s granting of a defendant’s motion for summary
judgment, in which the court found that the defendant’s allegations that plaintiff was “an absolute
fraud” and “a liar” made while they were on-air guests of a radio show could not be considered
defamatory or defamatory per se.281 The Louisiana Fourth Circuit noted that the words, which did
not refer to any criminal offense, did not necessarily imply that the plaintiff was engaged in
criminal activity in the minds of an ordinary listener and thus were not defamatory per se, and that
while the remarks were “rude and insulting,” they did not have a defamatory meaning. 282 Here,
while Bailey’s statements that he had “evidence” that “indicates” that Hoffman was the architect
of a “major economic fraud” could be considered “rude and insulting” or constitute defamatory
words generally, it cannot be said that, as a matter of law, they accused Hoffman of criminal
conduct such that they were defamatory per se.
Accordingly, the Court finds that Hoffman has not presented sufficient evidence to
establish that the statements in Bailey’s email were defamatory per se as a matter of law. Hoffman
has not shown that Bailey’s email was either explicitly or implicitly accusing Hoffman of criminal
conduct, or that Bailey’s statements to a state agency that he had “evidence” which “indicates”

279

Kennedy, 935 So. 2d at 675.

280

2006-1612 (La. App. 4 Cir. 12/19/07); 974 So. 2d 95, 99.

281

Id.

282

Id. at 99–100.

46

certain things about the Hoffmans “by their very nature tend to injure one’s personal or
professional reputation” such that Hoffman is entitled to summary judgment that the words used
in Bailey’s email were defamatory per se.283
Moreover, the Court notes that Hoffman has also failed to point to any authority that
granting summary judgment on the threshold question of whether Bailey’s email was defamatory
per se, which only establishes which party bears the burden to prove or rebut the elements of falsity
and malice, is proper on a motion for summary judgment. Therefore, at this time, the Court denies
Hoffman’s motion to the extent that Hoffman argues Bailey’s statements were defamatory per se
as a matter of law.
Nonetheless, the Court notes that, even if it were to find that Bailey’s statements were
defamatory per se as a matter of law, the effect of such a finding would be simply to shift the
burden to Bailey to rebut the presumed elements of falsity and malice (or fault). As the Court
determines infra, even if the burden shifts to Bailey on this motion for summary judgment, Bailey
has presented sufficient evidence to rebut both the presumed elements of falsity and malice.
Moreover, the Court finds infra that Bailey has presented sufficient evidence in this motion that
his statements were true, an absolute defense to a defamation claim under Louisiana law, 284 and
that he was entitled to a conditional privileged when making those statements, either of which
would be sufficient to defeat Hoffman’s ultimate defamation claim.
3.

Publication

Next, Hoffman argues that there are no genuine issues of material fact with regard to the
fact that Bailey published his email to Jessica Richardson, an employee of SHPO, on November
283

See Kennedy, 935 So. 2d at 674–75.

284
Wyatt v. Elcom of Louisiana, Inc., 34,786 (La. App. 2 Cir. 6/22/01); 792 So. 2d 832, 835 (“Truth is an
absolute defense to the action for defamation.”).

47

24, 2012. In response, Bailey states that he “has admitted that he sent the email to the SHPO and
he has admitted that the email says what it says.”285 As stated supra, one element of a defamation
claim under Louisiana law is the “unprivileged publication to a third party.” 286 Accordingly, the
Court finds that there are no genuine issues of material fact with respect to the fact Bailey’s email
was published to a third party. Therefore, the Court grants Hoffman’s motion to the extent he
request summary judgment on the fact that Bailey published his email to a third party containing
the allegedly defamatory statements. However, the Court notes that it finds infra that Hoffman has
not established that the publication was “unprivileged” as a matter of law.
4.

Fault

Next, Hoffman argues that it is undisputed that Bailey made his allegedly defamatory
statements “without any reasonable grounds for believing the statement was true,” i.e. the “fault”
element of Hoffman’s defamation claim.287 The Louisiana Supreme Court has held that the third
element of a defamation action is “fault (negligence or greater) on the part of the publisher.”288
Courts also refer to the fault requirement as “malice, actual or implied.” That is, “[m]alice (or
fault), for purposes of the tort of defamation, is a lack of reasonable belief in the truth of the
statement giving rise to the defamation,” i.e. negligence.289 As stated supra, in defamation per se
cases, fault is presumed, but may be rebutted by the defendant.290

285

Rec. Doc. 193 at 2.

286

See Kennedy, 935 So. 2d at 674–75.

287

Rec. Doc. 139-2 at 6.

288

See Kennedy, 935 So. 2d at 674.

289

Costello, 864 So.2d at 143.

290

Id. at 139.

48

First, the Court notes that Hoffman argues that, as a result of the fact that Hoffman’s
Request for Admissions have been deemed admitted by Bailey for his failure to timely respond,
Bailey has conceded the issue of fault.291 In particular, Hoffman points to Request for Admission
Number 3, which states: “Please admit that the qualified historic rehabilitation expenses by
SAPLA in connection with the rehabilitation of the Project are set forth in the Audit Report of
Silva, Gurtner and Abnez (‘Silva Firm’) dated June 30, 2012 (‘Audit Report’) attached as Exhibit
‘D’ to the Complaint.”292 However, as this Court determined in its Order affirming the Magistrate
Judge’s Order denying Bailey’s motion to withdraw his admissions, Hoffman’s assertion in the
instant motion that Bailey’s deemed admission on Request for Admission number 3 means Bailey
has admitted fault is a “blatant misrepresentation of the admission.”293 As the Court noted, Request
for Admission Number 3 is vague, and only asks Bailey to admit that the Audit Report sets forth
“qualified historic rehabilitation expenses;” it does not ask, as Hoffman seems to imply, that Bailey
admit that the expenditures were “legitimate.”294 The Audit Report provides a list of what it
represents are “qualified expenditures,” but it does not prove that the expenses were in fact
legitimate or that these expenses were actually incurred by the Hoffmans.295 Thus, Bailey’s
admission that the document states a particular thing does not in and of itself concede the inference
that Hoffman seeks to establish.296 The Court also noted that there was no evidence presented that
Bailey prepared the Audit Report, and neither party has argued that Bailey had any personal

291

Rec. Doc. 201 at 1.

292

Rec. Doc. 157-4 at 2.

293

Rec. Doc. 219 at 14.

294

Id.

295

Id.

296

Id.

49

knowledge to admit or deny that the report is accurate.297 Accordingly, the Court finds that
Admission Number 3 does not prove Bailey’s “fault” as a matter of law or preclude Bailey from
contesting the “fault” element with contradicting evidence.298
Second, the Court also notes that Hoffman asserts that satisfying the negligence standard
is not a necessary element in this case.299 Hoffman points out that the case law establishing
negligence as a minimum requirement for fault in defamation cases is rooted in constitutional
protections under the First and Fourteenth Amendments.300 However, Hoffman argues that Judge
Zainey previously determined that Bailey, as a citizen of the United Kingdom, is not entitled to
First Amendment rights.301 Thus, according to Hoffman, he does not need to prove negligence,
although he notes that it is presumed in a defamation per se case.302
The Court finds Hoffman’s argument that the negligence standard does not apply here
unavailing. First, defamation is a quasi-offense actionable under Louisiana Civil Code article
2315.303 Article 2315 provides that “[e]very act whatever of man that causes damage to another
obliges him by whose fault it happened to repair it.”304 Indeed, Louisiana courts have recognized

297

Id. at 15.

298

Id.

299

Rec. Doc. 139-2 at 14.

300

Id.

301

Id.

302

Id.

303

See Costello, 864 So. 2d at 140 n.10 (Frito-Lay, Inc. v. WAPCO Constructors, Inc., 520 F. Supp. 186, 189
(M.D. La. 1981) (citing Vicknair v. Daily States Pub. Co., 153 La. 677, 96 So. 529 (1923); Wilson v. Capital City
Press, 315 So.2d 393 (La.App. 3 Cir. 1975)).
304

La. Civ. Code art. 2315 (emphasis added).

50

defamations actions under article 2315 since at least 1840,305 and they have consistently held that
a “necessary” element of establishing a defamation cause of action is fault, “negligence or greater,”
or “malice.”306 By contrast, Hoffman has not pointed to any authority that Louisiana courts omit
the “fault” requirement for defamation actions against non-citizen defendants.
Second, the case cited by Hoffman, Kennedy v. Sheriff of East Baton Rouge, considered
more than just the First Amendment in coming to its decision that the negligence standard should
apply to all cases involving private figure plaintiffs, including those in matters of public concern,
such as reporting suspected criminal activity.307 There, the Louisiana Supreme Court noted that
the United States Supreme Court previously determined that the First and Fourteenth Amendments
require at least a minimum liability standard of negligence for defamation actions against media
defendants, and found that this rationale would apply to non-media defendants as well.308
However, in addition, the Louisiana Supreme Court also determined that the “adoption of
a negligence standard promotes simplicity and consistency in the law of defamation, at least insofar
as private individuals are concerned.”309 The court went on to note that it adopted the negligence
standard for actions by private individuals involving matters of private concern, and that
“[a]dopting the same standard of liability for private individuals respecting matters of public

See Costello, 864 So. 2d at 140 n.10 (noting that since “at least 1840,” defamation has been recognized in
Louisiana as a quasi-offense under article 2315).
305

306

See, e.g., Trentecosta v. Beck, 96-2388 (La. 10/21/97), 703 So. 2d 552, 559 (holding that the four elements
“necessary” to establish a defamation claim include “fault (negligence or greater) on the part of the publisher”);
Cangelosi v. Schwegmann Bros. Giant Super Markets, 390 So. 2d 196, 198 (La. 1980) (holding that, in relevant part,
the element of “malice, actual or implied,” “must be shown” to maintain a defamation action”); Vicknair v. Daily
States Pub. Co., 153 La. 677, 681, 96 So. 529, 530 (1923) (stating that it is “necessary” to show “‘a fault’ on the part
of a defendant” to bring a libel suit); Covington v. Roberson, 111 La. 326, 335, 35 So. 586, 590 (1903) (determining
that in a slander action, “malice is the essence, and it must be proved, in order that plaintiff may recover”).
307

Kennedy, 935 So. 2d at 680.

308

Id. at 679.

309

Id. at 680.

51

concern simplifies the law in what has, admittedly, become a complex area.”310 Moreover, the
court cited to the Restatement (Second) of Torts § 580B, which also provides for a standard of
negligence for defamation actions involving private persons.311 While Hoffman argues that the
First Amendment considerations in Kennedy would not apply here, he does not address the
Louisiana Supreme Court’s other considerations in Kennedy regarding simplicity and uniformity
in the law of defamation for private individuals or the guidance of the Restatement (Second) of
Torts, both of which would weigh in favor of applying the negligence standard here. Therefore, in
sum, the Court’s finds that Hoffman’s argument that the necessary element of “fault” should not
apply here is unpersuasive. Accordingly, the Court will consider whether summary judgment on
this element is proper.
In his motion, Hoffman argues that, because he contends this is a defamation per se case,
negligence is presumed.312 Moreover, Hoffman avers that negligence is established by, among
other pieces of evidence: (1) his own testimony that Bailey had “personal animus” towards
Hoffman; (2) that Bailey accused Susan Hoffman in his allegedly defamatory statements despite
having never met or spoken with her; (3) that Bailey is deemed to have admitted that the
rehabilitation of the 807 Esplanade Property occurred, that the “before” and “after” photos are
accurate, that the Compilation Report “set[s] forth” the expenses incurred by SAP Plc in
connection with the renovation, and that the 807 Esplanade Property was certified as having met
the historic rehabilitation standards; and (4) that Bailey did not have access to the documents relied
on by the auditors who produced the Compilation Report in 2012, well after Bailey left SAP Plc

310

Id.

311

Id. at 681 (Restatement (Second) Of Torts § 580B).

312

Rec. Doc. 139-2 at 14.

52

in 2009.313 In sum, Hoffman argues that this evidence shows that “Bailey’s negligence is not a fact
subject to material dispute.”314
In response, Bailey points to numerous pieces of evidence that he had when making the
allegedly defamatory statements, which he asserts proves his statements that he had “evidence”
which “indicates” certain things about the Hoffmans were true, and therefore that the statements
were not negligently made.315 Among other things, Bailey points out that he was a “qualified” and
“highly experienced forensic accountant” with significant experience investigating fraud.316 Bailey
points out that he “knew from documents in his possession” that the Hoffmans claimed that
amounts spent on the 807 Esplanade Property prior to December 2009 were not actually spent and
that funds were diverted or moved in a “fraudulent ‘circular transfer.’”317 For example, Bailey
points to a series of memos on tax credits for the 807 Esplanade Property that he contends he
helped prepare that he avers demonstrates he had knowledge of these issues,318 as well as memos
that he allegedly drafted each time he discovered Hoffman’s allegedly false expenditure records
and “circular transactions.”319 Bailey asserts that he consulted with legal counsel and public
authorities in the United Kingdom before sending his email to SHPO.320 Bailey also stated in his
Declaration that he worked at SAP Plc in 2009 and continued to track Hoffman’s public activity

313

Id. at 14–15.

314

Id. at 18.

315

Rec. Doc. 193 at 1–2.

316

Id. at 3.

317

Rec. Doc. 164-9 at 2.

318

Id. at 14.

319

Id. at 18–19.

320

See Rec. Doc. 193 at 3–4.

53

through 2012, and that he had knowledge that the amounts allegedly spent on the rehabilitation
prior to December 2009 were “substantially the same amounts” that the Hoffmans claim were
spent in 2012.321 For example, Bailey points to public statements in 2012 by Hoffman regarding
the costs of the rehabilitation of the 807 Esplanade Property and to multiple memos drafted on the
tax credits in 2009 that he claims conflicted with the numbers publicly stated by Hoffman.322
Based on the foregoing, the Court finds that there are genuine issues of material fact on the
issue of fault that precludes summary judgment on the element of fault. Even assuming that
Bailey’s words were defamatory per se and that the burden shifts to Bailey to rebut the presumed
element of fault, Bailey has pointed to significant evidence to show that he acted on reasonable
grounds for believing the statement was true.323 In addition to finding that Bailey has presented
sufficient evidence to create a disputed issue of material fact on the element of fault, the Court also
finds that Bailey has presented sufficient evidence on this motion that his statements were true, an
absolute defense to a defamation claim under Louisiana law.324 Accordingly, the Court denies
Hoffman’s motion to the extent that it requests summary judgment on the element of fault in his
defamation claim.
5.

Falsity

Hoffman also argues that there are no genuine issues of material fact disputing that the
statements in Bailey’s email are “false statements of fact.”325 Hoffman contends that the element

321

Rec. Doc. 164-9 at 2–3.

322

Id. at 33–34; rec. Doc. 165-15 at 35–42.

323

Costello, 864 So.2d at 143.

324

Wyatt, 792 So. 2d at 835.

325

Rec. Doc. 139-2 at 22.

54

of falsity is presumed in defamation per se cases.326 Nonetheless, Hoffman asserts that the
evidence he has presented, particularly the issuance of the Certifications and the Compilation
Report, prove the falsity of Bailey’s statements.327
In response, Bailey argues that his statements were true, and he points to the same evidence
discussed supra.328 Based on the same analysis, the Court finds that there are genuine issues of
material fact on the issue of falsity that precludes summary judgment. Even assuming that the
burden shifts to Bailey to rebut the falsity element, Bailey has pointed to significant evidence to
do so. Moreover, the Court again notes that, under Louisiana law, truth is an absolute defense to a
defamation claim, and Bailey has presented sufficient evidence to create a disputed issue of
material fact that it was true that he had “evidence” which he believed “indicates” a number of
things about the Hoffmans’ tax credit applications. Accordingly, the Court denies Hoffman’s
motion to the extent that it requests summary judgment on the essential element of falsity in his
defamation claim.

5.

Conditional Privilege

Next, Hoffman argues that summary judgment is proper on the issue of conditional
privilege.329 In particular, Hoffman contends that there are no disputed issues of material fact that
Bailey is not entitled to either: (1) the common interest privilege; or (2) the public interest
privilege.330 Hoffman also asserts that Bailey’s affirmative pleading in his Answer that he is

326

Id.

327

Id. at 22–23.

328

Rec. Doc. 193 at 1–4.

329

Rec. Doc. 139-2 at 6.

330

Id.

55

“entitled to the benefit of the doctrine of privilege/conditional privilege with respect to his notice
to government officials of the State of Louisiana as to fraudulent tax credit filings which are the
subject of federal grand jury indictments against Peter and Susan Hoffman in the Hoffman Felony
Action” is insufficient to raise the defense of conditional privilege.331 However, Hoffman fails to
point to any authority that the affirmative defense of conditional privilege must be pleaded with
even more specificity than what Bailey has offered.332 Nor does Hoffman address how Bailey’s
detailed pleading of “privilege/conditional privilege” otherwise violates Federal Rule of Civil
Procedure 8’s requirement that a party must “affirmatively state any avoidance or affirmative
defense.”333 Accordingly, the Court finds Hoffman’s argument that the Court should not consider
Bailey’s affirmative defense of privilege unpersuasive. Therefore, the Court will proceed to
address the parties’ arguments regarding both privileges in turn.

i.

Common interest privilege

Hoffman contends that Bailey is not entitled to the “common interest” or “duty to speak”
conditional privilege.334 According to Hoffman, this privilege only arises in cases “in which the
person communicating has an interest or in respect to which he had a duty.” 335 Hoffman asserts
that this privilege applies only to communications with “appropriate persons within the employer’s
331
Rec. Doc. 139-2 at 19. The Court notes that in this motion Hoffman points out that there was a pending
motion before the Magistrate Judge filed by Hoffman to, inter alia, strike Bailey’s Answer and the affirmative defenses
listed therein. However, that motion was denied by the Magistrate Judge to the extent that it requested striking Bailey’s
Answer. See Rec. Docs. 131, 138.
332

Id.

333

Fed. R. Civ. P. 8(c).

334

Rec. Doc. 139-2 at 19.

335

Id. (citing Bradford v. Judson, 44,092 (La. App. 2 Cir. 5/6/09), 12 So. 3d 974, 977; Roux v. Pflueger,
2009-0009 (La. App. 4 Cir. 7/8/09), 16 So. 3d 590, 593; Ruffin v. Wal-Mart Stores, Inc., 2001-0613 (La. App. 1 Cir.
5/10/02), 818 So. 2d 965, 967).

56

walls, concerning allegations of conduct by an employee that bears on the employee’s interest.”336
Here, Hoffman argues that Bailey is not entitled to the common interest privilege because Bailey
had no “duty” to report the alleged fraud that occurred long after Bailey stopped working at SAP
Plc in 2009.337 Rather, Hoffman avers that Bailey had a duty in his Employment Agreement to not
disclose confidential information that he learned in the course of his employment. 338 Moreover,
Hoffman alleges that Bailey had no interest in the filing for historic tax credits, as they were filed
by a different legal entity than SAP Plc and had no effect on Bailey’s former duties at SAP Plc.339
In opposition, Bailey asserts in his Declaration that as a qualified chartered accountant and
former employee of Sap Plc, he had a duty to report “what he knew to be fraudulent activity by
the [Hoffmans].”340 Bailey avers that he consulted with legal counsel in the United Kingdom and
was advised that the “defects, discrepancies, reporting issues, diversions, and thefts that he
discovered during his employment with the company and after he was employed, were considered
to be sufficiently serious, and sufficiently well documented by reference to the company‘s own
books and records, or by information available in the public domain, for Mr. Bailey to have a
professional obligation, and a legal duty, to report his suspicions to the tax authorities, company
regulators, and criminal authorities in the United Kingdom.”341 Moreover, Bailey alleges that
“because of the international nature of the matters discovered,” Bailey had a professional and

336

Id. (citing Kelly v. W. Cash & Carry Bldg. Materials Store, 99-0102 (La. App. 4 Cir. 10/20/99), 745 So.
2d 743, 748).
337

Id. at 20.

338

Id.

339

Id.

340

Rec. Doc. 193 at 3.

341

Id. at 3–4.

57

personal duty to report such suspicions to authorities in the United States as well. 342 Bailey
contends that he was under this same duty when he learned of the allegedly fraudulent activity of
the Hoffmans with respect to the historic tax credits in 2012.343 Therefore, Bailey argues that
because he had a duty to report the fraudulent activity relating to the 807 Esplanade Property to
the government agency to whom the Hoffmans were applying for tax credits, he had a conditional
privilege to make such a report.344 Bailey asserts that any question of abuse of a conditional
privilege is a question of fact for the factfinder.345
Early Louisiana courts have held that an otherwise defamatory publication is protected by
a qualified conditional privilege if: (1) made in good faith; (2) on “any subject matter in which the
person communicating has an interest or in reference to which he has a duty”; and (3) “to a person
having a corresponding interest or duty.”346 A statement is made in good faith when “when it is
made with reasonable grounds for believing it to be true.”347 “This privilege arises from the social
necessity of permitting full and unrestricted communication concerning a matter in which the
parties have an interest or duty, without inhibiting free communication in such instances by the
fear that the communicating party will be held liable in damages if the good faith communication
later turns out to be inaccurate.”348 The Louisiana Supreme Court subsequently adopted a

342

Id. at 4.

343

Id.

344

Id. at 5.

345

Id.

346

Ruffin, 818 So. 2d at 967 (citing Smith v. Our Lady of the Lake Hosp., Inc., 93-2512 (La.7/5/94), 639

So.2d 730)
347

Id. (citing Harrison v. Uniroyal, Inc., 366 So.2d 983 (La. App. 1 Cir. 1978)).

348
Harrison v. Uniroyal, Inc., 366 So. 2d 983, 985–86 (La. Ct. App. 1978) (citing Toomer v. Breaux, 146
So.2d 723, 725 (La. App. 3rd Cir. 1962)).

58

simplified two-step approach to the analysis of conditional privilege. First, courts must look to the
“attending circumstances of a communication” to determine if a qualified privilege arises.349 The
second step is to determine whether the privilege has been abused, which “requires that the grounds
for abuse-malice or lack of good faith-be examined.”350 “While the first step is generally
determined by the court as a matter of law, the second step of determining abuse of a conditional
privilege or malice is generally a fact question for the jury ‘[u]nless only one conclusion can be
drawn from the evidence.’”351
Based on the foregoing, the Court finds that there are genuine issues of material fact
precluding summary judgment on the issue of Bailey’s “common interest” conditional privilege.
Bailey has pointed to sufficient evidence to demonstrate that: (1) his communications were made
in good faith; (2) that he had an interest or duty to communicate his concerns regarding the
Hoffman’s fraudulent tax activity to the proper authorities; and (3) that he made his
communications to the appropriate governmental authorities with a corresponding interest or duty
in the allegedly fraudulent historic tax credits. That is, Bailey has presented sufficient evidence to
demonstrate that the “attending circumstances” of Bailey’s communication gives rise to a qualified
privilege. Moreover, the Court determined supra that there are disputed issues of fact regarding
the element of “fault” and “negligence,” as Bailey has pointed to sufficient evidence to support his
contention that he acted on reasonable grounds when making these statements. Likewise, the Court
finds that Bailey has presented sufficient evidence to create a genuine dispute of material fact with

349

Kennedy, 935 So. 2d at 682.

350

Id.

351

Id. (citations omitted).

59

regard to whether the privilege was abused by Bailey, i.e. the second prong of the qualified
privilege analysis.
The Court notes that Hoffman contends that there is no duty for former employees to report
allegedly fraudulent activity of their former employers.352 However, Hoffman fails to cite to any
relevant authority to support his proposition. While Hoffman cites to a Louisiana Fourth Circuit
decision, Kelly v. West Cash & Carry Building Materials Store, that case is inapplicable here.353
In Kelly, the Louisiana Fourth Circuit only held that an employer who indiscriminately publishes
defamatory information to every employee, including those “who had not even the remotest claim
to a qualified privilege,” could not claim qualified privilege.354 Here, Bailey has pointed to
sufficient evidence that SHPO had a relevant duty or interest with respect to the allegedly
fraudulent tax activity by the Hoffmans. Moreover, the Court notes that the conditional privilege
extends to subject matters to which the speaker has either a duty or an interest in; here, Bailey has
pointed to sufficient evidence that, as a qualified chartered accountant and a former employee of
SAP Plc, he had both a duty and interest in reporting this information to the appropriate authorities.
Accordingly, the Court denies Hoffman’s motion to the extent it requests summary judgment on
Bailey’s claim of a “common interest” qualified privilege.
ii.

Public interest privilege

Hoffman also contends that Bailey is not entitled to a “public interest” conditional
privilege.355 Hoffman asserts that this privilege only applies to communications “to law

352

Rec. Doc. 139-2 at 19.

353

Kelly, 745 So. 2d at 748.

354

Id.

355

Rec. Doc. 139-2 at 20.

60

enforcement officers of expected criminal authorities” in support of “prevention of crimes and
apprehension of criminals.”356 Hoffman further points out that the Restatement (Second) of Torts
§ 598 states that this privilege is applicable when a recognized interest of the public is “in danger,”
such as in apprehending criminals, while the Louisiana Supreme Court has emphasized it is to
prevent criminals from being able to “escape detention” or further endanger others. 357 According
to Hoffman, this is inapplicable here, as Bailey knew the Hoffmans were already under
investigation.358 Moreover, Hoffman points to his Declaration where he confirmed that SHPO has
no “law enforcement officers.”359 Hoffman also argues that the public interest privilege should
only apply to a “victim” or “percipient witness,” and not “volunteers.”360
In response, Bailey argues that the deposition of a SHPO employee shows that the Inspector
General of the State of Louisiana, Tom Boulton, was in contact with SHPO and investigating the
Hoffman’s historic tax credit application prior to Bailey’s email.361 Bailey also points out that his
email was forwarded from SHPO to the Inspector General, and that the Inspector General
contacted Bailey in response to his email.362 Moreover, Bailey argues that the Kennedy decision,
the case cited by Hoffman regarding privileges for reports to law enforcement officers, defined the
elements of conditional privilege as: (1) good faith; (2) an interest to be upheld; and (3) “a

356

Id. (citing Kennedy, 935 So. 2d at 683).

357

Id.at 21.

358

Id.

359

Id.

360

Id.

361

Rec. Doc. 193 at 2.

362

Id.

61

statement limited in scope to this purpose, a proper occasion, and publication in the proper manner
and to proper parties only.”363
In Kennedy v. Sheriff of East Baton Rouge, the Louisiana Supreme Court opined that it is
“impossible to reduce the scope of a conditional or qualified privilege to any precise formula.”364
“Nevertheless, the elements of the conditional privilege have been described as ‘good faith, an
interest to be upheld and a statement limited in scope to this purpose, a proper occasion, and
publication in the proper manner and to proper parties only.’”365 The Kennedy court went on to
cite to the Restatement (Second) of Torts §598’s to determine that the public interest privilege
arises “if the circumstances induce a correct or reasonable belief that: (a) there is information that
affects a sufficiently important public interest, and (b) the public interest requires the
communication of the defamatory matter to a public officer or a private citizen who is authorized
or privileged to take action if the defamatory matter is true.”366 The Kennedy court opined that
Louisiana courts have “recognized that the public has an interest in possible criminal activity being
brought to the attention of the proper authorities, and have extended a qualified privilege to
remarks made in good faith.”367 Indeed, the court noted that “[i]t would be self-defeating for
society to impose civil liability on a citizen for inaccurately reporting criminal conduct with no

363

Id.

364

Kennedy, 935 So. 2d at 681.

365

Id.

366

Id. at 682

367

Id.at 683 (citing Simon v. Variety Wholesalers, Inc., 2000-0452 (La. App. 1 Cir. 5/11/01), 788 So.2d 544,
writ denied, 01-2371 (La.11/16/01), 802 So.2d 617; Jones v. Wesley, 424 So.2d 1109(La. App. 1 Cir.1982); Crump v.
Crump, 393 So.2d 337 (La. App. 1 Cir.1980)).

62

intent to mislead. If the risks to the citizen are too high, a fertile field for criminal suppression will
have disappeared.”368
Based on the foregoing, the Court finds that there are genuine issues of material fact
precluding summary judgment on the issue of Bailey’s “public interest” conditional privilege.
Bailey has pointed to sufficient evidence to demonstrate that: (1) his communications were made
in good faith; (2) that the information regarding the Hoffmans’ allegedly fraudulent tax activity
involved a sufficiently important public interest; and (3) that he communicated the information to
a “a public officer or a private citizen who is authorized or privileged to take action if the
defamatory matter is true.”369 That is, Bailey has presented sufficient evidence to demonstrate that
the “attending circumstances” of Bailey’s communication regarding fraudulent tax credits to the
government entity tasked with administering those tax credits gives rise to a qualified privilege.
Moreover, as the Court noted supra, the Court finds that Bailey has presented sufficient evidence
to create a disputed issue of material fact regarding whether the privilege was abused in making
these statements. Accordingly, the Court denies Hoffman’s motion to the extent it requests
summary judgment on Bailey’s claim of a “public interest” qualified privilege.

7.

Presumed Damages

Next, Hoffman asserts that, because he argues this is a defamation per se case, injury to
reputation as well as humiliation and suffering are presumed.370 Hoffman states that the amount

368

Id.

369

Kennedy, 935 So. 2d at 681–82.

370

Rec. Doc. 139-2 at 23.

63

will be determined by this Court during a bench trial.371 However, Hoffman claims that he suffered
presumed damages to his reputation and pain and suffering of $250,000, as he is “widely known
in the motion picture business and the Bailey Defamation was a painful humiliation with state
officials . . . [that] dramatically affected his business in Los Angeles and with his principal
lender.”372
In response, Bailey asserts that he has “not conceded the issue that the Hoffmans suffered
presumed injury (i.e. general damages) to reputation and pain, humiliation and suffering.”373
Bailey argues that any damage to Hoffman’s reputation “was caused by [his] own acts of being
convicted of felony charges.”374 Moreover, Bailey points out that his email was not circulated in
the public, and that it was only forwarded to the Inspector General who was already investigating
the Hoffmans for their alleged criminal activity.375 Thus, Bailey argues that Hoffman has not
shown that Bailey’s single email to SHPO caused any damage to the Hoffmans “over and above
being convicted felons, which was not caused by Bailey, but by themselves.”376
First, the Court notes that, even assuming this is a defamation per se case as Hoffman
repeatedly argues, damages “must be proved by competent evidence, [although] there is no need
to establish the actual pecuniary value of the injury suffered.”377 Additionally, a plaintiff must

371

Id.

372

Id.

373

Rec. Doc. 193 at 5.

374

Id.

375

Id.

376

Id. at 5–6.

377

Cluse v. H & E Equip. Servs., Inc., 2009-574 (La. App. 3 Cir. 3/31/10), 34 So. 3d 959, 971; see also
Arnaud v. Dies, 2016-642 (La. App. 3 Cir. 12/7/16), 208 So. 3d 1017, 1026 (citing Lege v. White, 619 So. 2d 190, 191
(La. App. 3 Cir. 1993)); Trahan v. Ritterman, 368 So. 2d 181, 185 (La. App. 1 Cir. 1979)

64

show that the defamatory statements were a “substantial factor in cause the harm.”378 Here, both
parties point to conflicting evidence with regard to the extent of the damages Hoffman is alleged
to have suffered due to Bailey’s allegedly defamatory statements. Accordingly, the Court finds
that genuine issues of material fact exist precluding summary judgment on the issue of damages.
Therefore, to the extent that Hoffman requests summary judgment on his request for $250,000 in
damages, the Court denies the motion.
8.

Punitive Damages

Finally, Hoffman moves for summary judgment on the issue of whether the Hoffmans are
entitled to recover punitive or exemplary damages pursuant to Louisiana Civil Code article
3546.379 Louisiana Civil Code article 3546 provides that punitive damages may not be awarded
unless authorized by: (1) “the law of the state where the injurious conduct occurred and by either
the law of the state where the resulting injury occurred or the law of the place where the person
whose conduct caused the injury was domiciled;” or (2) “the law of the state in which the injury
occurred and by the law of the state where the person whose conduct caused the injury was
domiciled.”
Hoffman argues that he is entitled to punitive damages under Article 3546 because the
injury to him occurred in California, where he is domiciled and a resident, and the injurious
conduct occurred in England, where Bailey is domiciled and a resident. 380 Hoffman asserts that
punitive damages for defamation are permitted by California law if the defamation is made with

378

Costello, 864 So. 2d at 141(citing Kosmitis, 685 So.2d at 1180; Taylor v. Town of Arcadia, 519 So.2d
303, 306 (La. App. 2 Cir. 1988)).
379

Rec. Doc. 139-2 at 7.

380

Id. at 24.

65

malice.381 Likewise, Hoffman avers that punitive damages for defamation are permitted by English
law, at the discretion of the court, if the decision to publish “was made knowing it to be wrong or
reckless as to whether it was wrong.”382
In opposition, Bailey argues that Hoffman is not entitled to punitive damages under Article
3546.383 In particular, Bailey asserts that both the alleged injury and the allegedly injurious conduct
occurred in Louisiana, which does not authorize punitive damages.384 According to Bailey, the
domiciles of Hoffman and Bailey are not sufficient to authorize punitive damages in Louisiana,
which has a general public policy against the award of punitive damages.385 Furthermore, Bailey
argues that the Hoffmans did not plead for punitive damages in their complaint, and it is too late
to request punitive damages for the first time.386
As a preliminary matter, the Court notes that the Hoffmans’ complaint included a request
for “any and all damages sustained by plaintiffs as proved by trial.” 387 Bailey has pointed to no
authority that Hoffman’s complaint insufficiently pleaded a request for punitive damages, and
Bailey has not filed an appropriate motion to dismiss or strike such a request. However, based on
the foregoing, the Court finds that there are genuine issues of material fact precluding summary
judgment on the issue of punitive damages. Both parties have pointed to conflicting evidence as
to where the injurious conduct and the injury allegedly took place. Therefore, to the extent that

381

Id. (citing Cal. Civ. Code § 48(c)).

382

Id. at 24–25 (citing Broome v. Cassell, [1972] AC 1027, 1079 C-E, 1088 G-1089A, 1094 C-E, 1101 DG, 1121 , 1130 D-F; John v. Mirror Group Newspaper Ltd., [1997] QB 586, 618 G-619A).
383

Rec. Doc. 193 at 6.

384

Id.

385

Id.

386

Id. at 7.

387

Rec. Doc. 1 at 8.

66

Hoffman requests summary judgment on his request for punitive damages, the Court denies the
motion.
IV. Conclusion
Based on the foregoing, the Court determines that summary judgment in Hoffman’s favor
is proper on the issue of publication to a third party, as Bailey has admitted to publishing his
allegedly defamatory statements to SHPO. However, based on the foregoing, the Court finds that
both parties have pointed to conflicting evidence such that there are genuine issues of material fact
precluding summary judgment on the remaining issues raised by Hoffman, including: (1) if
Bailey’s words were defamatory per se; (2) fault; (3) falsity; (4) conditional privilege; (5)
presumed damages; and (6) punitive damages. Accordingly,
IT IS HEREBY ORDERED that Hoffman’s “Motion for Partial Summary Judgment
(FRCP 56)” is GRANTED IN PART and DENIED IN PART. The motion is granted in part to
the extent that the element of publication to a third party is admitted. The motion is denied in part
as to the remaining issues raised by Hoffman, including: (1) if Bailey’s words were defamatory
per se; (2) fault; (3) falsity; (4) conditional privilege; (5) presumed damages; and (6) punitive
damages.

20th
NEW ORLEANS, LOUISIANA, this _____ day of June, 2017.

_________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE

67