Hoffman et al v. Bailey

Filing 78

ORDER denying 43 Motion for Reconsideration. Signed by Judge Nannette Jolivette Brown on 12/22/15. (jrc)

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

CIVIL ACTION

VERSUS

NO. 13-5153

DAVID BAILEY

SECTION: “G”(5)

ORDER
In this case, Plaintiffs Peter and Susan Hoffman (collectively “Hoffmans”) allege that
Defendant David Bailey (“Bailey”) falsely accused them of fraudulent conduct in connection with
their participation in a tax incentive program. Pending before the Court is Bailey’s “Motion of
Defendant David Bailey Pursuant to Rules 59(e) and 60(b) for Reconsideration, Amendment, and
Alteration of this Court’s January 27, 2014 Decision and for Dismissal of the Claims Against Him
in Light of the Newly-Issued Grand Jury Indictment Against Plaintiff Peter Hoffman For Conspiracy
and Wire Fraud Relating to the 807 Esplanade Property” (hereinafter “Motion for
Reconsideration”).1 Having considered the motion, the memoranda in support, the memoranda in
opposition, the record, and the applicable law, the Court will deny the motion.
I. Background
A.

Factual Background
In their complaint, the Hoffmans allege 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”).2 The Hoffmans allege that SAPLA engaged in substantial

1

Rec. Doc. 43.

2

Rec. Doc. 1 at p. 2.

1

rehabilitation of the Property in order to restore and rehabilitate its historic character and to convert
the Property in order to be used as a motion picture post-production facility.3 The Hoffmans allege
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 Interior that the Property, as restored, qualified for United
States historical rehabilitation tax credits.4 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.5
According to the Hoffmans, Seven Arts Pictures plc (“PLC”), an English public limited
company led by Peter Hoffman until November 9, 2011, hired Bailey as its Finance Director in
August 2009.6 Bailey left that position in December 2009.7 Subsequently, in November 2012, Bailey
allegedly sent an e-mail message to the SHPO accusing the Hoffmans of perpetrating a “major
economic fraud” by filing a fraudulent application for rehabilitation tax credits, making false
expense claims, and improperly diverting funds used for renovation.8
The Hoffmans claim that Bailey’s November 2012 e-mail message is “untrue and [was] made
maliciously without any basis in fact and with an intent to damage plaintiffs’ reputations, successes,
and good will,” and was intended “to embarrass plaintiffs and to damage plaintiffs’ business

3

Id. at p. 3.

4

Id.

5

Id.

6

Id. at p. 4.

7

Id.

8

Id.

2

relationships.”9 In support of this assertion, the Hoffmans contend that: (1) Bailey has never seen
the reports summarizing the rehabilitation expenditures, nor the accounting “backup” on which the
reports are based; (2) Bailey had “no knowledge whatsoever” of the items claimed in those reports,
and had no responsibility for “any of these expenses at any time,” including during his tenure as
PLC’s Finance Director; (3) the audit report of the renovation project “was certified by a reputable
Louisiana firm of certified public accountants who fully reviewed every item therein;” (4) all
“related party” payments are disclosed in one of the reports; (5) the property “is now rehabilitated
and restored to its historic character in a model of such renovation,” although Bailey has “never
personally viewed the Property, either before or after its historic rehabilitation.”10 The Hoffmans
claim that Bailey’s conduct constitutes defamation and defamation per se.11
B.

Procedural Background
The Hoffmans filed a complaint in this matter on July 23, 2013.12 On July 24, 2013, the

matter was assigned to Section “A” of this District.13 On August 23, 2013, Bailey filed a motion to
dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), 12(b)(4), 12(b)(5), 12(b)(6),
and 12(f).14
On January 27, 2014, Judge Zainey denied Bailey’s motion to dismiss, holding that Bailey
had been properly served process, that Bailey was subject to specific personal jurisdiction of the

9

Id. at p. 5.

10

Id. at pp. 5–6.

11

Id. at pp. 6–8.

12

Rec. Doc. 1.

13

Rec. Doc. 2.

14

Rec. Doc. 3.

3

Court, that the Eastern District of Louisiana was an appropriate venue for the dispute, and that the
balance of public and private interest factors did not justify dismissal under forum non conveniens.15
Judge Zainey also denied Bailey’s Federal Rule of Civil Procedure 12(f) motion to strike under
Louisiana Code of Civil Procedure article 971.16
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
12(f) motion to strike.17 On that same day, Judge Zainey stayed the matter pending the resolution
of Bailey’s appeal.18
On February 21, 2014, Bailey filed the instant motion for reconsideration “in light of the
newly discovered evidence.”19 On February 25, 2014 Bailey filed a motion to lift the stay.20 Judge
Zainey entered an Order of Recusal on February 25, 2014, citing an indictment recently filed against
one of the plaintiffs in the matter.21 The case was then transferred to this Section, Section “G.”22

15

Rec. Doc. 38 at pp. 3–17.

16

Id. at pp. 21–22. Article 971 is Louisiana’s Anti-SLAPP statute (Strategic Lawsuit Against Public
Participation) which was “enacted by the legislature as a procedural device to be used early in legal proceedings to screen
meritless claims pursued to chill one’s constitutional rights under the First Amendment of the United States Constitution
to freedom of speech and press” and encourage public participation in matters of public significance. Henry v. Lake
Charles Am. Press, L.L.C., 566 F.3d 164, 169 (5th Cir. 2009) (quoting Lee v. Pennington, 2002-0381 (La. App. 4 Cir.
10/16/02); 830 So. 2d 1037, 1041).
17

Rec. Doc. 39. “A district court’s denial of a motion brought under an anti-SLAPP statute such as Article 971
is an immediately-appealable collateral order.” Henry v. Lake Charles Am. Press, L.L.C., 566 F.3d 164, 181 (5th Cir.
2009).
18

Id.

19

Rec. Doc. 43.

20

Rec. Doc. 44.

21

Rec. Doc. 45.

22

Id.

4

The Hoffmans filed memoranda in opposition to Bailey’s motion to lift the stay and motion
for reconsideration on March 25, 2014.23 On April 1, 2014, with leave of Court, Bailey filed reply
memoranda in support of both motions.24 On April 2, 2014, with leave of Court, the Hoffmans filed
a sur-reply in opposition to both of Bailey’s motions.25 On April 11, 2014, with leave of Court,
Bailey filed a supplemental memorandum in further support of his motions, urging the Court to take
judicial notice of a Superseding Indictment against Peter and Susan Hoffman.26 With leave of Court,
on October 20, 2015, Bailey filed another supplemental memorandum in further support of his
motions, urging the Court to take judicial notice of the felony convictions of Peter and Susan
Hoffman.27 On November 5, 2015, Peter Hoffman filed an opposition to Bailey’s request for the
Court to take judicial notice of his felony conviction.28
II. Parties’ Arguments
A.

Bailey’s Arguments in Support of His Motion for Reconsideration
Bailey urges the Court to reconsider the Order denying his motion to dismiss in light of the

federal grand jury indictment of Peter Hoffman for conspiracy and wire fraud relating to the
applications for tax credits for the 807 Esplanade property.29 Bailey argues that his motion to dismiss
should be reconsidered because he is entitled to due process and equal protection rights, and to

23

Rec. Doc. 54; Rec. Doc. 55.

24

Rec. Doc. 60; Rec. Doc. 61.

25

Rec. Doc. 64.

26

Rec. Doc. 67.

27

Rec. Doc. 72.

28

Rec. Doc. 73.

29

Rec. Doc. 43.

5

account for newly discovered evidence, timely presented, showing that Bailey’s communication with
state and federal government officials is protected by the public interest privilege.30
Bailey summarizes the charges filed against Peter Hoffman in connection with Hoffman’s
conduct regarding the 807 Esplanade redevelopment project.31 Bailey notes that although the
Hoffmans attached to their complaint a copy of a report they submitted to the State of Louisiana
seeking tax credits for certain expenses associated with the 807 Esplanade project, he has obtained
tax returns and financial statements showing that the Hoffmans’ report contained false statements.32
Bailey asserts that, upon reporting the Hoffmans to the Louisiana Division of Historic Preservation,
he provided information to investigators with the Federal Bureau of Investigation.33 Bailey also
notes that Peter Hoffman has a “prior adjudicated history of witness intimidation for which he has
been sanctioned,” a history that Hoffman has “elected to continue” in the present case, in an attempt
to “harass, intimidate, and retaliate against yet another witness [] who has provided evidence against
[the Hoffmans].”34
1.

Due Process and Equal Protection

Bailey asserts that because this Court has asserted personal jurisdiction over him based on
his November 12, 2012 e-mail message to Jessica Richardson at the Louisiana Division of Historic
Preservation, he is entitled to the same constitutional rights as any other defendant over whom the

30

Rec. Doc. 43–1 at pp. 10–21.

31

Id. at pp. 3–4.

32

Id. at pp. 4–5.

33

Id. at p. 6.

34

Id. at pp. 7–9.

6

Court has jurisdiction.35 Bailey asserts that since the Hoffmans have sued him for “not less than $3
million” in damages in this Court, and an adverse judgment would “risk . . . his reputation as a
chartered accountant,” he has “property rights at risk in the jurisdiction of this Court.”36 Therefore,
he contends, he is “entitled to the . . . constitutional safeguards of due process and equal protection
rights in these proceedings,” just as “any other defendant to a defamation action” would be, and also
“has the same right to assert the same ‘privilege’ and other pertinent defenses for his
communications with Louisiana state and federal governmental authorities as would any other
defendant.”37
In support, Bailey cites Plyer v. Doe,38 a United States Supreme Court case that he asserts
“affirmed constitutional rights of resident aliens to due process and equal protection” and found that
the due process and equal protection clauses apply “not only to anyone within a state’s boundaries,
but also to anyone ‘upon whom the state would impose the obligations of its laws.’”39 In addition,
Bailey cites 42 U.S.C. § 1981, asserting that the statute ensures to aliens the same rights to “be
parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security
of persons and property as are enjoyed” by citizens.40 Bailey also cites a case from the Southern
District of Florida, Garzon v. United States,41 in which Bailey asserts the court held that a non-

35

Id. at pp. 10–12.

36

Id. at pp. 12–13.

37

Id. at p. 3.

38

457 U.S. 202 (1982).

39

Rec. Doc. 43-1 at pp. 10–11.

40

Id. at p. 11.

41

605 F. Supp. 738 (S.D. Fla. 1985).

7

resident alien was entitled to full Fifth Amendment due process and equal protection rights with
respect to his petition for review of a tax assessment.42
2.

Newly Discovered Evidence

Bailey contends that the order denying his motion to dismiss was premised upon several
grounds—jurisdiction, venue, and the applicability of the Louisiana “anti-SLAPP” statute—but that
the court did not make any findings regarding his defense of privilege.43 Ten days after that order
was issued, Bailey notes, Peter Hoffman was indicted by a federal grand jury.44 Bailey argues that
the indictment is new evidence that is “clearly material to Bailey’s ‘privilege’ defense” against
Hoffman’s claims, since it is “consistent with” the information Bailey provided to the State of
Louisiana in November 2012.45 Bailey asserts that the Court may exercise its inherent authority to
reconsider the order denying his motion to dismiss and, upon reconsideration, should dismiss
Hoffman’s defamation claims in light of the indictment.46
3.

Timeliness

Bailey argues that his motion for reconsideration is timely, because he filed it within 28 days
of the Court’s January 27, 2014 decision “and within several weeks of the February 6, 2014 grand
jury indictment,” and because it does not prejudice the Hoffmans.47

42

Rec. Doc. 43-1 at p. 12.

43

Id. at p. 14.

44

Id.

45

Id. at pp. 14–15.

46

Id. at pp. 15–16.

47

Id. at p. 16.

8

4.

Public Interest Privilege

Bailey contends that the “‘public interest privilege’, adopted in Louisiana, bars a claim for
defamation,” because the public interest privilege protects statements—such as Bailey’s statements
to state and federal authorities about Hoffman—that were “provided to inform state and federal
authorities of . . . misconduct.”48 Bailey maintains that he “cannot be found to have abused that
privilege,” because the indictment and supporting evidence “are consistent with and confirm
Bailey’s disclosure” that “the tax credit applications for the 807 Esplanade property were inflated,
false, and fraudulent.”49
B.

The Hoffmans’ Opposition
1.

Timeliness

In opposition, the Hoffmans contend that Bailey’s motion to reconsider “should be denied
as untimely,” because Bailey filed it during the pendency of a stay imposed until the filing of “a
motion of a party after final action by the U.S. Court of Appeals for the Fifth Circuit related to the
aforementioned appeal.”50
2.

Newly Discovered Evidence

The Hoffmans argue that even if the Court considers Bailey’s motion, it should deny the
motion “because it does not demonstrate evidence in existence at the time of the Court’s order that
would change the outcome.”51 The Hoffmans contend that “actual entry” of Bailey’s motion “can

48

Id. at pp. 16–20.

49

Id. at p. 20.

50

Rec. Doc. 53 at p. 7.

51

Id.

9

only come after the Court lifts the stay in this action,” which will be more than twenty-eight days
after January 27, 2014 order denying his motion to dismiss, thus necessitating the application of
Federal Rule of 60(b) to Bailey’s motion.52 Under Rule 60(b), the Hoffmans argue, a party cannot
seek reconsideration on the basis of “evidence that did not exist before the judgment was entered.”53
Here, the Hoffmans argue, since Peter Hoffman was not indicted until February 6, 2014, the
indictment had not yet occurred when the Court issued its order denying Bailey’s motion to dismiss
on January 27, 2014, and the indictment therefore cannot support reconsideration under Rule 60(b).54
Furthermore, the Hoffmans assert that the evidence of the indictment has no bearing on the Court’s
analysis and therefore would not have changed the January 27, 2014 Order.55
The Hoffmans also contend that the Court would reach the same result if it resolved Bailey’s
motion under Federal Rule of Civil Procedure 59.56 The Hoffmans assert that in order to merit
reconsideration pursuant to Rule 59, evidence must be in existence at the time of the court’s order
but unavailable to the movant with reasonable due diligence and sufficient to “alter the prior
ruling.”57

52

Id. at pp. 7–8.

53

Id. at p. 8 (quoting Card v. Keller, 543 F. App’x 377, 379 (5th Cir. 2013)).

54

Id. at p. 9.

55

Id.

56

Id.

57

Id. at pp. 10–11 (citing Alfaro v. Nat’l R.R. Passenger Corp., No. 10-1912, 2013 WL 470109, at *1 (E.D.
La. Feb. 7, 2013) (Lemmon, J.); In re FEMA Trailer Formaldehyde Prods. Liab. Litig., MDL No. 07-1873, 2011 WL
6130788, at *3 (E.D. La. Dec. 7, 2011) (Engelhardt, J.)).

10

3.

Public Interest Privilege

The Hoffmans assert that Peter Hoffman’s indictment has “no bearing” on the Court’s prior
order, since that order concluded that Bailey, a non-resident alien, could not assert First Amendment
rights based on the communications giving rise to the Hoffmans’ defamation claim.58 The Hoffmans
assert that Peter Hoffman’s indictment “provides no basis for reconsideration of the order,” since
the indictment “does nothing to change the fact that Bailey is not afforded free speech rights under
the United States and Louisiana Constitutions.”59
4.

Relevance of the Indictment

The Hoffmans argue that Peter Hoffman’s indictment arises from his dealings with an
unrelated Louisiana tax credit program for film investments, making Bailey’s statements to the
Louisiana Division of Historic Preservation about the Property “readily distinguishable” from the
charges in the indictment, and rendering the indictment “wholly irrelevant” to the present motion.60
Furthermore, the Hoffmans contend that the “indictment itself is proof of nothing,” and assert
that Bailey already raised the preceding federal investigation in connection with his Motion to
Strike, prompting Section “A” of this Court to “consider[] it and properly [find] it irrelevant to the
motion.”61 The Hoffmans assert that the indictment does not change the “fact . . . that Bailey had
absolutely no basis for his statements[.]”62

58

Id. at 13–14.

59

Id. at p. 15.

60

Id. at pp. 16–17.

61

Id. at p. 18.

62

Id. at p. 18.

11

C.

Bailey’s Reply
In further support of his motion, Bailey contends that Peter Hoffman’s indictment

conclusively shows probable cause that the Hoffmans’ tax credit applications were fraudulent,
providing further confirmation that Bailey’s statements were privileged.63 According to Bailey, the
Hoffmans must prove “an unprivileged publication to a third party” in order to establish a
defamation claim.64 Before the indictment, Bailey avers, the Hoffmans successfully argued against
dismissal on the basis that Bailey’s communication may have been an “abuse of the privilege.”65 The
indictment, Bailey argues, establishes as a matter of law that he did not act recklessly, and therefore
did not abuse the public interest privilege.66 Indeed, Bailey argues, the “recent federal grand jury
indictment and related equitable considerations cry out, on grounds of ‘public interest privilege,’ for
reconsideration . . . and thus removal of the cloud against Bailey testifying and providing evidence
for ongoing proceedings against Hoffman by the FBI, the U.S. Attorney, and the Louisiana state
government.”67
In response to the Hoffmans’ argument that the indictment, which was not issued until
February 6, 2014, cannot serve as the basis of a decision rendered approximately ten days earlier,
Bailey contends that the Court may grant his motion and reconsider the disputed order under Federal
Rule of Civil Procedure 60(b)(6), which “encompasses equitable principles in dealing with, and so
permits relief to be granted on equitable grounds from, a decision not otherwise eligible for
63

Rec. Doc. 60 at pp. 3–5.

64

Id. at p. 5.

65

Id.

66

Id. at pp. 5–6.

67

Id. at p. 8.

12

reconsideration under Rule 60(b) clauses (1) through (5).”68 According to Bailey, courts have
granted reconsideration under Rule 60(b)(6) for “key facts not previously disclosed to the court,”
and when “the grounds for [a] prior decision were undercut by a government entity’s subsequent
action.”69 Bailey further asserts that he timely filed the instant motion on February 21, 2014, two
weeks after the February 6, 2014 grand jury indictment and ten days after the January 27, 2014 order
denying his motion to dismiss.70
Bailey contends that granting his motion will “prevent manifest injustice - by removing from
Bailey the cloud of unjust defamation claims which seek at least $3 million from him; which stain
his professional reputation as a chartered accountant; and which burden his time and require him to
bear continuing legal fees and other costs.”71 Bailey also asserts that “the public interest will be
served” if the Court grants his motion, since the public interest privilege “is intended to encourage
reporting criminal and other misconduct to governmental authorities.”72 Bailey argues that
dismissing the Hoffmans’ claims will “permit [him] to testify freely in proceedings against [the
Hoffmans], without ongoing fear of . . . intimidation and retaliation.”73 Bailey also contends that
“reconsideration and dismissal of the defamation claims will assist judicial economy,” since
Hoffman allegedly has a history of litigation misconduct.74 Additionally, Bailey asserts, dismissing

68

Id. at pp. 6–7 (citing Bros. Inc. v. W. E. Grace Mfg. Co., 320 F.2d 594, 608 (5th Cir. 1963)).

69

Id. at p. 7 (citing Good Luck Nursing Home, Inc. v. Harris, 636 F.2d 572, 577 (D.C. Cir. 1980)).

70

Id. at p. 8.

71

Id.

72

Id. at pp. 8–9.

73

Id. at p. 9.

74

Id.

13

the present action will not prejudice the Hoffmans, since they will “save the time and costs which
they would otherwise incur in litigation of their improvident claims.”75
D.

The Hoffmans’ Sur-Reply
1.

Federal Rule of Civil Procedure 60(b)(6)

In further opposition, the Hoffmans argue that Bailey cannot seek reconsideration under
Federal Rule of Civil Procedure 60(b)(6) because his asserted basis for reconsideration, “new
evidence,” is already covered by Federal Rule of Civil Procedure 60(b)(2).76 The Hoffmans claim
that Federal Rule of Civil Procedure 60(b)(6) only supports reconsideration where no other Federal
Rule of Civil Procedure addresses the asserted basis for relief, and here, Rule 60(b)(2) covers “new
evidence.”77
In any event, the Hoffmans assert, Bailey “must show ‘extraordinary circumstances’” that
make the initial judgment “manifestly unjust” in order to obtain relief under Federal Rule of Civil
Procedure 60(b)(6).78 The Hoffmans maintain that Bailey does not “even suggest [] that
extraordinary circumstances exist here,” and argue that Bailey likewise fails to explain how the
January 27, 2014 Order denying his motion to dismiss was “manifestly unjust” in light of the

75

Id.

76

Rec. Doc. 64 at p. 2 (citing Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 863 n.11 (1988)).

77

Id.

78

Id. at p. 3.

14

February 6, 2014 indictment.79 Indeed, the Hoffmans contend, “[a]ll Bailey seeks is relitigation of
the issues already litigated on his motion to dismiss.”80
2.

Relevance of the Indictment

Addressing Peter Hoffman’s indictment, the Hoffmans reiterate that the indictment dealt with
“different tax credits for different expenses, available under different Louisiana statutes and
regulations, from different governmental entities, for different business entities,” and contend that
Bailey fails to explain why the indictment is relevant to his statements about the tax credit program
at issue in the present case.81 Furthermore, the Hoffmans contend that the indictment of Peter
Hoffman has no relevance to Bailey’s defamatory statements about Susan Hoffman.82 Finally, the
Hoffmans argue that Bailey’s attempt to use the indictment as “evidence” justifying reconsideration
is misplaced, since the indictment is “outside the pleadings and would not be before the Court on
a Motion to Dismiss.”83
E.

Bailey’s Supplemental Memorandum
In further support of his motion, Bailey urges the Court to take judicial notice of Susan

Hoffman’s April 3, 2014 indictment, which, according to Bailey, “negates the Hoffman’s [sic] prior
argument that Susan Hoffman had not been indicted or implicated in the fraudulent tax credit

79

Id. at pp. 3–4 (citing Kennedy Marr Offshore Singapore PTE Ltd. v. Techcrane Intern. Inc., No. 12-1985,
2013 WL 5701664, at *5 (E.D. La. Oct. 18, 2013) (Africk, J.)).
80

Id. at p. 4.

81

Id. at p. 5.

82

Id.

83

Id. at p. 6.

15

applications with respect to the 807 Esplanade property.”84 This indictment, according to Bailey,
demonstrates that, “as a matter of law, Bailey cannot have acted recklessly, and so cannot have
abused the ‘public interest privilege,’ in giving notice to the Louisiana government (and also the FBI
and the U.S. Attorney) of fraudulent tax credit applications by Peter and Susan Hoffman with respect
to the 807 Esplanade Property.”85 Accordingly, Bailey contends that the defamation claims against
him should be dismissed with prejudice.86
F.

Bailey’s Second Supplemental Memorandum
In a second combined supplemental memorandum in further support of Motion to Stay and

Motion for Reconsideration, filed October 20, 2015, Bailey urges the Court to take judicial notice
of the fact that both Peter and Susan Hoffman have been convicted of multiple felonies for their
fraudulent tax credit applications regarding the 807 Esplanade property after a second superseding
indictment was filed against them.87 Bailey also asserts that following the convictions of the
Hoffmans, counsel for Bailey sent a letter to counsel for Peter Hoffman and to Susan Hoffman, who
is now appearing pro se, requesting that they dismiss their defamation suit.88 Bailey asserts,
however, that the Hoffmans have not responded to the letters.89

84

Rec. Doc. 67 at pp. 1–2.

85

Id. at p. 2.

86

Id.

87

Rec. Doc. 72 at pp. 1–2.

88

Id. at p. 3.

89

Id.

16

G.

Peter Hoffman’s Opposition to Bailey’s Request for Judicial Notice
In his opposition, Peter Hoffman asserts that his conviction involved allegations of fraud in

obtaining Louisiana film infrastructure tax credits related to the 807 Esplanade property, not claims
regarding the Louisiana state historic rehabilitation tax credits related to the property.90 Peter
Hoffman asserts that the government did not bring any charges of fraud regarding the obtainment
of historic rehabilitation credits, which were the subject of Bailey’s statements.91 According to Peter
Hoffman, the government’s allegations in the criminal matter were that an actual cash payment of
a qualified infrastructure expenditure was required in order to obtain infrastructure credits; however,
such cash payments are not required to obtain historic rehabilitation credits.92 Hoffman also asserts
that his Motion for Judgment of Acquittal and Motion for a New Trial is under consideration.93
III. Law and Analysis
A.

Legal Standard
Although the Fifth Circuit has noted that the Federal Rules of Civil Procedure “do not

recognize a ‘motion for reconsideration’ in haec verba,”94 it has consistently recognized that such
a motion may challenge a judgment or order under Federal Rules of Civil Procedure 54(b), 59(e),or

90

Rec. Doc. 73 at p. 1.

91

Id.

92

Id. at p. 2.

93

Id.

94

Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990).

17

60(b).95 When a party seeks to revise an order that adjudicates fewer than all the claims among all
of the parties, Federal Rule of Civil Procedure 54(b) controls:
[A]ny order or other decision, however designated, that adjudicates fewer than all the claims
or the rights and liabilities of fewer than all the parties does not end the action as to any of
the claims or parties and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.96
Under Rule 54(b), the district court “possesses the inherent procedural power to reconsider,
rescind, or modify an interlocutory order for cause seen by it to be sufficient”97 However, this broad
discretion must be exercised sparingly in order to forestall the perpetual reexamination of orders and
the resulting burdens and delays.98
The general practice of courts in the Eastern District of Louisiana has been to evaluate Rule
54(b) motions to reconsider interlocutory orders under the same standards that govern Rule 59(e)
motions to alter or amend a final judgment.99 Such a motion “calls into question the correctness of
a judgment,”100 and courts have considerable discretion in deciding whether to grant such a
motion.101 In exercising this discretion, courts must carefully balance the interests of justice with

95
Id. (Rules 59 and 60); Castrillo v. Am. Home Mortg. Servicing, Inc., No. 09-4369, 2010 WL 1424398, at
**3–4 (E.D. La. Apr. 5, 2010) (Vance, C.J.) (Rule 54).
96

Fed. R. Civ. P. 54(b).

97

Melancon v. Texaco, Inc., 659 F.2d 551, 553 (5th Cir. 1981).

98

See Calpetco 1981 v. Marshall Expl., Inc., 989 F.2d 1408, 1414–15 (5th Cir. 1993); 18B Charles A. Wright
& Arthur R. Miller, Federal Practice & Procedure § 4478.1 (2d ed. 2002).
99

See, e.g., Castrillo v. Am. Home Mortg. Servicing, Inc, No. 09-4369, 2010 WL 1424398, at *3 (E.D. La. Apr.
5, 2010) (Vance, C.J.); Rosemond v. AIG Ins., No. 08-1145, 2009 WL 1211020, at *2 (E.D. La. May 4, 2009) (Barbier,
J.); In re Katrina Canal Breaches, No. 05-4182, 2009 WL 1046016, at *1 (E.D. La. Apr. 16, 2009) (Duval, J.).
100

Tex. Comptroller of Pub. Accounts v. Transtexas Gas Corp. (In re Transtexas Gas Corp.), 303 F.3d 571,
581 (5th Cir. 2002).
101

Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 355 (5th Cir. 1993).

18

the need for finality.102 Courts in the Eastern District of Louisiana have generally considered four
factors in deciding motions for reconsideration under the Rule 59(e) standard:
(1)
(2)
(3)
(4)

whether the motion is necessary to correct a manifest error of law or fact upon
which the judgment is based;
whether the movant presents newly discovered or previously unavailable
evidence;
whether the motion is necessary in order to prevent manifest injustice; or
whether the motion is justified by an intervening change in controlling law.103

A motion for reconsideration “‘[is] not the proper vehicle for rehashing evidence, legal
theories, or arguments . . .’”104 Instead, such motions “serve the narrow purpose of allowing a party
to correct manifest errors of law or fact or to present newly discovered evidence.”105 “It is well
settled that motions for reconsideration should not be used . . . to re-urge matters that have already
been advanced by a party.”106
Reconsideration, therefore, is not to be lightly granted, as “[r]econsideration of a judgment
after its entry is an extraordinary remedy that should be used sparingly”107 and the motion must
“clearly establish” that reconsideration is warranted.108 When there exists no independent reason

102

Id. at 355–56.

103

See, e.g., Castrillo, 2010 WL 1424398, at *4 (citations omitted).

104

Id. (quoting Templet v. HydroChem Inc., 367 F.3d 473, 478–79 (5th Cir. 2004)).

105

Waltman v. Int’l Paper Co., 875 F.2d 468, 473 (5th Cir. 1989) (quoting Keene Corp. v. Int’l Fid. Ins. Co.,
561 F. Supp. 656, 665 (N.D. Ill. 1982)).
106

Helena Labs Corp. v. Alpha Scientific Corp., 483 F. Supp. 2d 538, 539 (E.D. Tex. 2007) (citing Browning
v. Navarro, 894 F.2d 99, 100 (5th Cir. 1990)).
107

Templet v. Hydrochem, Inc., 367 F.3d 473, 478–79 (citation omitted).

108

Schiller v. Physicians Res. Group Inc., 342 F.3d 563, 567 (5th Cir. 2003).

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for reconsideration other than mere disagreement with a prior order, reconsideration is a waste of
judicial time and resources and should not be granted.109
B.

Analysis
In his motion, Bailey seeks reconsideration of Judge Zainey’s January 27, 2014 Order

denying his motion to dismiss the defamation claims against him pursuant to Federal Rule of Civil
Procedure 12(b)(6).110 On August 26, 2013, Bailey filed a motion to dismiss pursuant to Federal
Rules of Civil Procedure 12(b)(2), 12(b)(3), 12(b)(4), 12(b)(5), 12(b)(6), and 12(f).111 Bailey now
asserts that he is entitled to dismissal of all claims of defamation in light of the “newly discovered
evidence” of the federal grand jury indictment of Peter Hoffman for conspiracy and wire fraud
regarding applications for tax credits relating to the 807 Esplanade property.112 Bailey contends that
the new evidence is “clearly material to Bailey’s ‘privilege’ defense against Hoffman’s improvident
defamation claims.”113 Bailey also appears to argue that his motion for reconsideration is necessary
to correct a manifest error of law. Bailey contends that, having been found subject to the jurisdiction
of this Court, he has equal protection and due process rights to assert the same defenses as any other

109
Livingston Downs Racing Ass’n v. Jefferson Downs Corp., 259 F. Supp. 2d 471, 481 (M.D. La. 2002); see
also Mata v. Schoch, 337 BR 138, 145 (S.D. Tex. 2005) (refusing reconsideration where the parties simply relied on the
same arguments they had previously made); FDIC v. Cage, 810 F. Supp. 745, 747 (S.D. Miss. 1993) (refusing
reconsideration where the motion merely disagreed with the court and did not demonstrate clear error of law or manifest
injustice).
110

Rec. Doc. 43.

111

Rec. Doc. 3.

112

Rec. Doc. 43 at p. 1. Since the filing of his motion, Bailey has also asked the Court to take judicial notice
of an indictment against Susan Hoffman, Rec. Doc. 67, as well as the convictions of Peter and Susan Hoffman of wire
fraud, mail fraud, and other misconduct relating to fraudulent tax credit applications relating to the 807 Esplanade
property. Rec. Doc. 72.
113

Rec. Doc. 43-1 at p. 15.

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litigant.114 He also asserts that his defense of “public interest privilege” bars a claim for defamation
and therefore the claims against him should be dismissed.115 Finally, Bailey asserts that he is entitled
to reconsideration pursuant to Federal Rule of Civil Procedure 60(b)(6) pursuant to which the court
may relieve a party “from a final judgment, order or proceeding for . . . any other reason that justifies
relief.”
Initially, however, the Court notes that Judge Zainey’s Order addressed Bailey’s motion to
dismiss for insufficient process, insufficient service of process, lack of personal jurisdiction,
improper venue, forum non conveniens, and Bailey’s Federal Rule of Civil Procedure 12(f) motion
to strike under Louisiana Code of Civil Procedure article 971.116 In deciding Bailey’s 12(f) motion,
Judge Zainey did not reach Bailey’s arguments regarding his privilege defense to the Hoffmans’
defamation claims, having found that because Bailey was “not entitled to free speech rights under
either the United States or Louisiana Constitution, [he] [could not] make a prima facie showing that
the alleged communications giving rise to this dispute were in furtherance of those rights.”117
Therefore, Judge Zainey held that “[Bailey’s] cause of action [was] not subject to an Article 971
special motion to strike.”118
Bailey’s motion is styled as a motion for “reconsideration, amendment, and alteration of this
Court’s January 27, 2014 decision and for dismissal of the claims against him.”119 The Court notes

114

Id. at p. 13.

115

Id. at p. 16.

116

Rec. Doc. 38.

117

Id. at p. 21.

118

Id. at pp. 21–22.

119

Rec. Doc. 43.

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that although Bailey asserted in his original motion that he was also moving for dismissal pursuant
to Federal Rule of Civil Procedure 12(b)(6), Bailey did not make any arguments in support of this
motion.
1.

Timeliness of the Motion

The Hoffmans first contend that Bailey’s motion for reconsideration is untimely because he
filed his motion while the case was stayed without seeking leave of Court to do so.120 Bailey
contends that the motion is timely because it was brought within 28 days of the Court’s January 27,
2014 decision and within weeks of the February 6, 2014 grand jury indictment.121 Although Federal
Rules of Civil Procedure 59 and 60 set forth specific time frames during which reconsideration may
be sought,122 Rule 54 sets forth no such limitation.123 The case was stayed at the time Bailey filed
the motion for reconsideration, therefore the filing of the motion was improper. However, the motion
has been fully briefed by both parties and if the Court were to dismiss the motion on grounds of
untimeliness, Bailey could simply re-file his motion. Accordingly, the Court will turn to the merits
of Bailey’s motion.

120

Rec. Doc. 53 at p. 7.

121

Rec. Doc. 43-1 at p. 16.

122

Fed R. Civ. P. 59(e) (“A motion to alter or amend a judgment must be filed no later than 28 days after the
entry of the judgment.”); Fed. R. Civ. P. 60(c) (“A motion under Rule 60(b) must be made within a reasonable time—and
for reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or the date of the proceeding.”).
123

Fed. R. Civ. P. 54(b) (stating that the order “may be revised at any time” before entry of final judgment).
The only limitation imposed on Rule 54(b) reconsideration is if the court issues an order expressly stating that there is
“no just reason for delay,” in which case the order becomes a final, appealable judgment. Zapata Gulf Marine Corp. v.
Puerto Rico Maritime Shipping Auth., 925 F.2d 812, 815 (5th Cir.1991).

22

2.

Reconsideration of Motion to Dismiss Pursuant to Rule 12(b)(6)

Bailey does not move for reconsideration of Judge Zainey’s ruling regarding Bailey’s 12(f)
motion to strike pursuant to Louisiana Code of Civil Procedure article 971; rather, he moves for
reconsideration of the Court’s denial of his motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6).124 Bailey asserts that the Court “implicitly denied Bailey’s motion to dismiss
for failure to state a cognizable claim, although its decision made no express findings or rulings
thereon.”125 Bailey asserts that his “public interest privilege” defense bars a claim of defamation.126
In Bailey’s motion to dismiss, however, he asserted that “solely in the alternative and out of
an abundance [sic], and without waiving his [Federal Rule of Civil Procedure] 12(b)(2), (4), and (5)
motions, asserts 12(b)(6) motion for failure to state a claim upon which relief can be granted solely
out of precaution to preserve the right to more fully argue this motion at a later date.”127 A motion
for reconsideration “cannot be used to raise argument which could, and should, have been made”
before the court renders its decision.128 Bailey did not make any arguments regarding a motion to
dismiss pursuant to Rule 12(b)(6). Rather, Bailey argued that the Hoffmans had failed to establish
a probability of success on their claim for defamation pursuant to Article 971, which “requires more
than that which is necessary to survive a normal motion to dismiss.”129 Therefore, because Bailey

124

Rec. Doc. 60 at p. 3.

125

Rec. Doc. 43-1 at p. 14.

126

Id. at p. 16.

127

Rec. Doc. 3 at p. 3.

128

Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990) (quoting Fed. Deposit Ins. Corp. v. Meyer, 781
F.2d 1260, 1268 (7th Cir. 1986)).
129

Rec. Doc. 3-2 at p. 15; Henry v. Lake Charles Am. Press, L.L.C., 566 F.3d 164, 182 (5th Cir. 2009).

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did not make any arguments regarding his motion to dismiss pursuant to Rule 12(b)(6), and because
a motion for reconsideration cannot be used to raise arguments which could and should have been
made, the Court denies Bailey’s motion for reconsideration of the Court’s denial of his Rule 12(b)(6)
motion to dismiss.
IV. Conclusion
Bailey seeks reconsideration of his Federal Rule of Civil Procedure 12(b)(6) motion to
dismiss.130 It does not appear from the record that Bailey made any arguments regarding a motion
to dismiss for failure to state a claim upon which relief can be granted. Therefore, it does not appear
that Judge Zainey had the opportunity to consider the motion in the first instance. In light of this,
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.

130

Rec. Doc. 60 at p. 3.

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Accordingly;
IT IS HEREBY ORDERED that Bailey’s “Motion of Defendant David Bailey Pursuant
to Rules 59(e) and 60(b) for Reconsideration, Amendment, and Alteration of this Court’s January
27, 2014 Decision and for Dismissal of the Claims Against Him in Light of the Newly-Issued Grand
Jury Indictment Against Plaintiff Peter Hoffman For Conspiracy and Wire Fraud Relating to the 807
Esplanade Property”131 is DENIED because it does not appear from the record that Bailey’s Rule
12(b)(6) motion to dismiss was considered in the first instance before Judge Zainey.

22nd
NEW ORLEANS, LOUISIANA, this ________ day of December, 2015.

_________________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE

131

Rec. Doc. 43.

25