Egiazaryan v. Zalmayev
MEMORANDUM AND ORDER ADOPTING IN PART AND MODIFYING REPORT AND RECOMMENDATION for 249 Report and Recommendations, 221 Motion for Summary Judgment filed by Ashot Egiazaryan, 229 Motion for Summary Judgment filed by Peter Zalmayev: The Court has considered each of Zalmayev's objections to the R & R. Because no reasonable factfinder could find that Egiazaryan's claims lacked a substantial basis in law and fact or a substantial argument for the extension, modification or reversal of existing law, the Court adopts the conclusion of the R & R that Egiazaryan's motion for summary judgment should be and hereby is GRANTED, and that Zalmayev's motion for summary judgment should be and hereby is DENIED. The reasoning of the R & R is modified and expanded only insofar as inconsistent with this Memorandum and Order. The Clerk shall enter final judgment dismissing all claims of all parties. The case is closed. All motions are terminated. (Signed by Judge P. Kevin Castel on 3/19/2014) (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DOC #: - - - - " , - - - : - = 7 DATE FILED: :2 -I
AS HOT EGIAZARYAN,
II Civ. 2670 (PKC) (GWG)
ORDER ADOPTING IN
PART AND MODIFYING
PETER ZALMA YEV,
The Court has reviewed the thorough Report and Recommendation ("R & R") of
Magistrate Judge Gabriel W. Gorenstein recommending the grant of the motion for summary
judgment of plaintiff Ashot Egiazaryan dismissing the counterclaim of defendant Peter
Zahnayev and the denial of Zalmayev's cross motion for summary judgment. (Docket No. 249,
2013 WL 6486258, at *1-6.) The Court has considered Zalmayev's objections and reviewed the
matter de novo.
The Court adopts the conclusion ofthe R & R, and modifies the reasoning of the
R & R only insofar as the following: (1) supplying an additional ground for the disposition of the
motions, which is that the plaintiffs claims had a substantial basis in fact and law; and (2)
declining to reach altemative grounds presented in sections III.B and III.C of the R & R, that this
Comt should exercise its discretion to decline to award attomey's fees, costs, and damages. The
Comt assumes familiarity with the R & R and this Comt's two prior opinions. Egiazaryan v.
Zalmayev, II Civ. 2670 (PKC), 2011 WL 6097136 (S.D.N.Y. Dec. 7,2011) ("Egiazaryan I"),
Egiazaryan v. Zalmayev, 880 F. Supp. 2d 494 (S.D.N.Y. 2012) ("Egiazaryan II").
STANDARD OF REVIEW
In reviewing a Report and Recommendation, a district court "may accept, reject,
or modify, in whole or in patt, the findings or recommendations made by the magistrate judge."
28 U.S.C. § 636(b)(1)(C). In the event that a party files objections to the magistrate judge's
recommendations, district courts conduct a de novo review of those matters to which a patty
filed an objection. 28 U.S.C. § 636(b)(\)(C).
THE REPORT AND RECOMMENDATION
The R & R assumes, arguendo, that Zalmayev could demonstrate that
Egiazatyan's action lacked a substantial basis in fact and law, and analyzes whether Egiazaryan's
complaint could be supported by a substantial argument for the extension, modification or
reversal of existing law. The R & R concludes that Egiazaryan's action could be supported by a
substantial argument for the extension, modification or reversal of existing law. The R & R also
recommends that Zalmayev should not be entitled to compensatory or punitive datnages, and,
that, even if Zalmayev demonstrated that Egiazaryan's action lacked both a substantial basis in
law and fact and a substantial argument for the extension, modification or reversal of existing
law, that this Court should exercise its discretion not to awat'd attomey's fees and costs to
OBJECTIONS TO THE R & R
Zalmayev identifies and objects to thirteen distinct conclusions of the R & R. In
sum, he objects to the R & R's conclusions that the complaint could be suppOited by a
substantial argument for the extension, modification or reversal of existing law, that Egiazat'yan
has no burden on this motion to demonstrate that the complaint is supported by a substantial
basis in fact and law or a substantial argument for the extension, modification or reversal of
existing law, and that the Court should exercise its discretion to not award attomey's fees.
Egiazaryan's Lawsuit Falls within the Definition of a SLAPP Suit under
New York Law
As this Court found in Egiazaryan I, Egiazaryan is a "public applicant or
permittee" within the meaning of Civ. Rights Law § 76-a(l )(b) and the complaint is materially
related to Zalmayev's alleged effO\is to "comment on, ... challenge or oppose" Egiazaryan's
asylum application. Egiazaryan I, 2011 WL 6097136, at *11-12. Accordingly, this action falls
within the definition of a SLAPP suit.
II. Application ofN.Y. C.P.L.R. § 3211(g) to the Motion to Dismiss
Motions to dismiss SLAPP claims brought in New York state courts are decided
under N.Y. C.P.L.R. § 3211(g), which provides that:
A motion to dismiss based on [N.Y. C.P.L.R. § 3211(a)(7)], in
which the moving patty has demonstrated that the action, claim,
cross claim or counterclaim subject to the motion is an action
involving public petition and participation as defined in [N.Y. Civ.
Rights Law § 76-a(l)(a)] shall be granted unless the patty
responding to the motion demonstrates that the cause of action has
a substantial basis in law or is supported by a substantial argument
for an extension, modification or reversal of existing law.
N.Y. C.P.L.R. § 3211(g). Zalmayev argues that because this Court previously dismissed this
case, to find in favor of Egiazaryan would be to reverse the Court's decision on the motion to
dismiss. The Couti considered both motions to dismiss under Rule 12(b)(6), the rule invoked by
Zalmayev in bringing on the motions to dismiss. (Docket Nos. 15, 117.) Based upon the Court's
review, N.Y. C.P.L.R. § 3211(g) was not mentioned in any briefs on either ofZalmayev's
motions to dismiss or Egiazaryan's motion to dismiss Zalmayev's counterclaims. (Docket Nos.
16,25,28,33,36,37, 118, 131, 137). Zalmayev forfeited the right to have the motions decided
under N.Y. c.P.L.R. § 3211(g) by not assetting it in a timely fashion. See NCDR, L.L.C. v.
Mauze & Bagby P.L.L.C., No. 12-41243, slip op. at 7 (5th Cir. Mar. 11,2014) (plaintiffs
argument that anti-SLAPP statute did not apply in federal court was not meaningfully raised at
district COUIt level and therefore waived on appeal). The Court properly decided the motions to
dismiss under Rule l2(b)( 6).1
To survive a motion to dismiss under Rule l2(b)(6), "a complaint must contain
sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'"
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Com. v. Twombly, 550 U.S. 544,
570 (2007». A plaintiff must plead "factual content that allows the COUIt to draw the reasonable
inference that the defendant is liable for the misconduct alleged." Id. The COUIt evaluated the
motions under that standard, and has not previously evaluated Egiazaryan's claims under the
"substantial basis in fact and law" standard of N.Y. C.P.L.R. § 321 I (g) or N.Y. Civ. Rights Law
" Substantial Basis in Fact and Law"
The R & R assumes, arguendo, that the complaint lacks a substantial basis in fact
and law. The COUIt concludes that the issue was never reached in any prior ruling in this case.
Thus, it is an open question. This Court will consider whether the action lacked a "substantial
I Federal courts in New York have applied Rule 12(b)(6) and not N.Y. C.P.L.R. § 321 I (g) to motions to dismiss
SLAPP claims brought in federal court. Douglas v. New York State Adirondack Park Agency, 895 F. Supp. 2d 321,
384-85 (N.D.N.Y. 2012) (applying Fed. R. Civ. P. 12(b)(6) and not N.Y. C.P.L.R. § 321!(g) to state law claims in
an action where jurisdiction was based on a federal question), Yeshiva Chofetz Chaim Radin. Inc. v. Village of New
Hemostead, 98 F. Supp. 2d 347, 360 (S.D.N.Y. 2000) (Memorandum Decision of Magistrate Judge Lisa M. Smith)
(applying Rule 56, Fed. R. Civ. P., and not N.Y. C.P.L.R. §§ 321 I (g) or its summary judgment equivalent, 3212(b)
to state law claims in an action where jurisdiction was based on a federal question). The First, Fifth, and Ninth
Circuits have held that state anti-SLAPP procedures apply in federal courts. Godin v. Schencks, 629 F.3d 79, 88
(1st Cir. 2010), Henrv v. Lake Charles American Press, L.L.C., 566 F.3d 164, 168-69 (5th Cir. 2009), Batzel v.
Smith, 333 F.3d 1018, 1025-26 (9th Cir. 2003). The Second Circuit has held that the California anti-SLAPP statute
applied when a New York district court, sitting in diversity, applied California choice oflaw rules. Liberty
Synergistics Inc. v. Microflo Ltd., 718 F.3d 138, 156 (2d Cir. 2013). District courts in illinois, the District of
Columbia, and Massachusetts have adjudicated dispositive motions in anti-SLAPP cases in federal cou11s based on
Rules 12 and 56, not state anti-SLAPP statutes. Intercon Solutions, Inc. v. Basel Action Network, _ F. Supp. 2d
----' 12 Civ. 6814,2013 WL 4552782, at *23 (N.D.Ill. Aug. 28, 2013), 3M Co. v. Boulter, 842 F. Supp. 2d 85,108
(D.D.C. 2012), South Middlesex Opportunitv Council. Inc. v. Framingham, 07 Civ. 12018 (DPW), 2008 WL
4595369, at *11 (D.Mass Sept. 30,2008).
basis in fact and law." Sections 70-a and section 76-a do not define "substantial basis in fact and
law." Zalmayev contends that the dismissal of Egiazaryan' s complaint demonstrates an absence
of substantial basis in fact and law, contending that a "substantial basis in fact and law" would
require more than failUl'e to state a claim. This Comt finds that in this case, Zalmayev has not
demonstrated that Egiazal'yan's complaint lacked a substantial basis in fact and law, despite
prevailing on the motion to dismiss under Rule 12(b)(6).
a. New York Anti-SLAPP Law
Zalmayev Ul'ges that the "substantial basis in fact and law" standard requires a
greater demonstration from the plaintiff than a "claim for relief that is plausible on its face." The
Court finds that a claim may be dismissed for failure to state a claim but nonetheless have a
substantial basis in fact and law. Both federal and state courts in New York have detelmined that
complaints identified as SLAPP suits under New York law which do not survive a motion to
dismiss or a motion for summary judgment may still have a "substantial basis in fact and law."
In In re West Branch Conservation Assoc., Inc. v. Planning Board, 222 AD.2d 513, 515 (2d
Dep't 1995), the Second Department noted that:
Although the Supreme Court granted the branch of the petitioners'
motion which was to dismiss Hi-Tor's counterclaim, it denied the
branch ofthe motion which was for costs and attorneys' fees ....
[T]he Civil Rights Law does not mandate the imposition of costs
and attorneys' fees in every situation in which such a claim is
interposed. Indeed, to the contrary, Civil Rights Law § 70-a(1)(a)
provides, in peltinent part, only that "costs and attorney's fees may
be recovered" upon a demonstration that a frivolous claim has been
interposed against a party in an action involving "public petition
and pmticipation." Accordingly, while it is clear that "New York
State public policy strongly disfavors SLAPP suits designed to
chill the exercise of a citizen's right to petition the government or
appropriate administrative agency for redress of a perceived
wrong," it is also clear that the unambiguous use of the term "may"
in the statute makes the decision to award attorneys' fees and costs
discretionary rather than mandatory. We discern no improvident
exercise ofthe court's discretion in declining to award costs and
attorneys' fees under the circumstances of this case.
(emphasis in original) (citations omitted). The West Branch Court indicated that it is within the
trial court's discretion to determine whether a defendant established that a plaintiffs claims
lacked a substantial basis in fact and law such that an award offees would be appropriate. It
found that under the circumstances of the case, the trial court properly exercised its discretion to
notaward attorney's fees.
Courts have declined to award fees under N.Y. Civil Rights Law § 70-a even
when the complaint upon which the anti-SLAPP motion is based is dismissed for failure to state
a claim. In Friends of Rockland Shelter Animals, Inc. v. Mullen, 313 F. Supp. 2d 339, 344-45
(S.D.N.Y. 2004), the late Judge Conner held that, "[E]ven if [plaintiffs] action is a SLAPP suit
within the meaning of the statute, defendants are not entitled to damages. [Plaintiff s] suit was
commenced under a cognizable legal theory and it presented facts that tended to show some of
[defendant's] statements were misleading. [T]he arguments presented by the defendants in their
twenty-five page Memorandum of Law convinced the court that their activities were protected ..
. . Although we found [Plaintiffs] argument unpersuasive, it is not frivolous." He dismissed the
defendants' anti-SLAPP counterclaim at the same time it dismissed the plaintiffs claim, finding
that plaintiffs claim, while not stating a claim for relief under Fed. R. Civ. P. 12(b)(6), was
commenced and continued with a substantial basis in fact and law. See also Clemente v.
Impastato, 290 A.D.2d 864, 865 (3d Dep't 2002) ("[W]e conclude that plaintiffs defamation
action, although now dismissed, was commenced with a substantial basis in fact and law.").
b. Similarly Worded Statutes Require More than a Mere Failure to State
Utilizing similar language to New York Civil Rights Law § 70-a(1)(a), New York
State Finance Law § 137(4)(C) provides for attorney's fees in actions arising from payment
bonds related to public contracts when "upon reviewing the entire record, it appears that either
the original claim or the defense interposed to such claim is without substantial basis in fact or
law." N.Y. State Fin. Law § 137(4)(C).
Section 137(4)(C) imposes a greater burden on the movant than the demonstration
required to prevail on a motion to dismiss. EXpOlt Dev. Canada v. Elec. Apparatus & Power
L.L.c., 03 Civ. 2063 (HBP), 2008 WL 4900557, at *19, (S.D.N.Y. Nov. 14,2008) (Opinion and
Order of Magistrate Judge Henry B. Pitman) ("Although I fmd [Plaintiff's] claims to be
unavailing, I carmot conclude that they lack any plausible basis .... Accordingly, I decline to
award attorney's fees to [defendant] pursuant to Section 137."); see also Conesco Indus. Ltd. v.
St. Paul Fire and Marine Ins. Co., 210 AD.2d 596,599 (3rd Dep't 1994) (determining attorney's
fees were inappropriate because "we cannot say that the defenses asselted by defendant, although
ultimately unsuccessful, were without a substantial basis in law or fact."), Cleveland Wrecking
Co. v. Nova Casualty Co., 00 Civ. 1003 (SC), 2001 WL 1823604, at * 4 (W.D.N.Y. Nov. 21,
2001) ("Although this COUlt has rejected defendant's defenses, the undersigned opines that
plaintiff has not put forth sufficient proof to raise a genuine issue of material fact that
defendant's acts in contesting the payments rose to either of these standards.").
In affirming the trial court's award offees under section 137(4)(C), the Third
Department held that, "the fact that Colonial's defense to the underlying claim was unsuccessful
is not enough to warrant an award of counsel fees pursuant to State Finance Law § 137(4)(C)."
Erie Materials, Inc. v. Universal Group of New York, Inc., 101 AD.3d 1529, 1531 (3rd Dep't
2012). The court held that the defendant had aggressively defended the plaintiff's entire claim,
although only a small portion of the claim was in dispute and conceded legal arguments on
appeal that it had pursued in the Supreme Comt. Under these circumstances, the Third
Deprutrnent found no en-or in the award of fees to the plaintiff.
The Second Circuit had occasion to constlUe a similarly worded Connecticut
statute. It held that claims have a substantial basis in fact and law when they are "tenable."
Elgard Corp. v. Brennan Const. Co., 388 F.3d 30, 38 (2d Cir. 2004). Connecticut General
Statute § 49-42(a), like New York State Finance Law § \37(4)(C), provides for attorney's fees in
disputes arising from bonded public work contracts when, "upon reviewing the entire record, it
appears that either the original claim, the surety's denial of liability, or the defense interposed to
the claim is without substantial basis in fact or law." Conn. Gen. Stat. § 49-42(a). In Elgard, the
Second Circuit found that "[t]he original claim and American's denial of it were both tenable ...
. There was, however, no substantial basis in fact or law for the estoppels defense interposed by
[defendants] .... " Elgard Corp., 388 F.3d at 38. Reviewing the facts, the Second Circuit
detennined that "it is hru'd to find any factual basis for defendants' assertions .... Defendants'
estoppels defense therefore had no substantial basis in fact, and the district comt's denial of
attorney's fees rests on untenable grounds." Id. (internal quotation marks omitted). The Second
Circuit indicated that claims had a "substantial basis in fact and law" if they were "tenable," but
lacked a substantial basis in fact and law if there was no "factual basis for [the] assertions."
In the context of its version of an anti-SLAPP statute, a Delaware comt has found
that a complaint may have "a substantial basis in fact and law" even if it does not withstand a
motion for summary judgment. In Nichols v. Lewis, 08 Civ. 1758 (VCS), 2008 WL 2253192, at
*6 (Del. Ch. May 29, 2008) (Strine, V.C.) affd, 956 A.2d 31 (Del. Super. ct. 2008), Vice
Chancellor Strine denied an award of attorney's fees in an anti-SLAPP case, noting that the fact
that a complaint implicated the anti-SLAPP statute did not suggest that the complaint necessarily
lacked a substantial basis. "What [the anti-SLAPP statute] does is select a broad category of
potentially vexatious lawsuits and provide the defendants in those actions with certain procedural
advantages, to ensure that citizens who exercise their right to oppose certain development
activities are not subjected to frivolous lawsuits designed to penalize them from speaking out and
to deter them from continuing to do so." Id. "The anti-SLAPP statute does not require fee
shifting simply because a plaintiff who files a suit implicating the statute ultimately fails to prove
its claim. Rather, the fee shifting provision is triggered by a showing that the plaintiff has
exacted an unjustified toll on a citizen's right to oppose a development plan, by pressing claims
that have no substantial basis in fact or law." Id. at 8.
In contrast, courts in Utah and Nebraska have intelpreted the "substantial basis in
fact and law" standard in a SLAPP claim as a greater burden on the plaintiff than the standard on
a motion to dismiss or a motion for summary judgment, and accordingly, have granted SLAPP
defendants' claims for attorney's fees. The Utah Supreme COUIt has held that a refusal to
dismiss a lawsuit at the summaty judgment stage was insufficient to demonstrate that the
complaint had a substantial basis in fact and law. Anderson Development Co. v. Tobias, 116
P.3d 323, 337 (Utah 2005). The COUIt held that "Because dismissal of a claim based on either a
motion to dismiss or a motion for summary judgment denies the nonmoving patty of the right to
litigate his claim on the merits, the threshold for surviving such a motion is relatively low.
Meeting this threshold does not equate to a demonstration that the claims are suppOited by a
substantial basis in fact and law." Id. (internal citations omitted). The COUIt of Appeals of
Nebraska endorsed the Utah Supreme Court's view in Sand Livestock Sys. v. Svoboda, 756
N.W.2d 299,316 (Neb. App. 2008). "[W]e conclude that meeting the summary judgment
tlll"eshoid in this case was not the equivalent of demonstrating that the defamation suit was
supp0l1ed by a substantial basis in fact and law. In ruling on the motions for summary judgment,
the district court simply found genuine issues of material fact as to both the defamation suit and
the counterclaim." Id. at 316.
This COUIt adopts a view consistent with that taken by the Second Department in
West Branch, the Second Circuit in Elgard, and the Delaware Chancery COUIt in Nichols. A
dismissal for failure to state a claim does not necessarily detelmine that a claim lacks a
substantial basis in fact and law. The "substantial basis in fact and law" standard is distinct from
the standard to grant dismissal for failure to state a claim under Rule 12(b)(6), which requires a
plaintiff to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While the
defendant need not demonstrate that the plaintiff s claim was frivolous as defined by New York
law ("completely without merit in law and cannot be supported by a reasonable argument for an
extension, modification or reversal of existing law," N.Y. Compo Codes R. & Regs. 22 § 130l(c)(I)), the defendant needs to demonstrate that the claims were not tenable, or lacked
considerable factual or legal basis. Although Zalmayev established that Egiazaryan failed to
state a claim under Rule 12(b)(6), this conclusion alone does not demonstrate that Egiazmyan's
claim lacks a substantial basis in fact and law.
IV. The Action was Commenced and Continued with a Substantial Basis in Fact
This Court may award Zalmayev attorney's fees and costs if he demonstrates that
the action was commenced or continued without a substantial basis in law and fact and could not
be suppOlted by a substantial argument for the extension, modification, or reversal of existing
law. Although the Court adheres to its ruling in Egiazaryan II that Zalmayev's statements were
matters of opinion, Egiazaryan's complaint did not lack a substantial basis in fact and law.
a. Initial Complaint
The Court's analysis of the statements in Counts II, III, and IV, which were
evaluated in both motions to dismiss, reflects that Egiazaryan had a substantial basis in fact and
law for bringing the action. Zalmayev at no time denied making the statements which
Egiazaryan attributed to him in the complaint.
The Court's analysis in Egiazaryan I focused on whether Egiazaryan, an "elected
public servant representing the Russian people as a member of the Russian Duma" and an
individual who could "secure more than one billion dollars in funding for his hotel project,
including arranging one of the largest loans ever made for a real estate project in Russia .... with
his own interest in the Hotel project and another project," was a public figure. Egiazaryan I,
2011 WL 6097136, at *4 (internal quotations omitted). The law regarding whether a former
foreign public official is considered a public official or public figure such that he must allege
actual malice and falsity to state a claim for defamation is not well settled. Egiazaryan I, at *4.
The COUIt determined that Egiazaryan was a public figure, and, accordingly, analyzed his claims
for defamation under the defamation standard applicable to public figures, requiring allegations
of actual malice and falsity.
In Egiazaryan I, the Court also considered whether the action was a SLAPP suit.
New York Civil Rights Law § 76-a(2) provides that in order to recover damages, a plaintiff in a
SLAPP action must establish actual malice by clear and convincing evidence. No New York
court had previously addressed whether an asylum petitioner was considered a "public applicant
or permittee" under N.Y. Civ. Rights Law § 76-a(1)(b). This COUlt determined that Egiazaryan
was a public applicant because "[a] grant of asylum entails privileges that might be deemed
permissions or entitlements of the same nature as the ones listed, including the right to remain
and to work in the United States." Egiazaryan I, 2011 WL 6097136 at 11.
- 11 -
The Court dismissed Counts III and IV on the basis that Egiazaryan did not
sufficiently allege actual malice - a demonstration that would have been unnecessary had the
Court determined that Egiazaryan was not a public figure and that the action was not considered
a SLAPP action under New York law.
b. Amended Complaint
Egiazaryan's amended complaint alleged that Zalmayev made statements which
at first blush appeared to be factual statements, but, upon a close reading of New York law
regarding statements of fact and opinion, were actually statements of opinion. The determination
that these statements were opinion required a close examination of the words in their context.
The COUlt determined that Counts I and II did not state a claim because the atticles appeared in
the "opinion" section of the newspapers in which they were published and the overall tone of the
article indicated that the author was voicing a highly partisan point of view. Egiazaryan II, 880
F. Supp. 2d at 507-09. The COUlt concluded that Count III did not state a claim because it
alleged that Zalmayev made false factual statements which were not specifically about
Egiazaryan or were not provable enough to be considered factual statements, and that the
statements in the letters which directly referred to Egiazaryan were "allegations to be
investigated." Egiazaryan II, 880 F. Supp. 2d at 511. The Court found that Count IV did not
state a claim because the allegedly false statements that Egiazaryan was anti-Semitic or antiAmerican were statements of opinion. EgiazaryanII, 880 F. Supp. 2d at 512-13. A statement
that an individual is an anti-Semite can, in some contexts, constitute a defamatory statement of
fact. R & R, 2013 WL 6486258, at *9. On this basis, it was reasonable for the plaintiff to argue
that defendant's statement could have been understood as a factual statement. But, based on the
nature and context of Zalmayev' s statements, this Court found that the statements alleged in the
complaint were opinion.
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Although this COUlt found that the statements were statements of opinion,
Egiazaryan's claims were not without a substantial basis in fact and law. In Egiazaryan I, the
Court expressed the view that certain of Egiazaryan' s allegations asserted false statements of
fact. But in Egiazaryan II, upon a closer analysis of the surrounding context, the Court
concluded that these smne statements were actually statements of opinion. Compare Egiazaryan
1,2011 WL 6097136, at *7 (letters "imply as fact that Egiazaryan was complicit in the
mismanagement or misappropriation of humanitarian funds.") with Egiazarvan II, 880 F. Supp.
2d at 511 ("The author is asserting an opinion about Egiazaryan's shared supervisory
responsibility, not asserting facts about Egiazaryan's personal actions. "). This evolution in the
COUlt's own thinking and the detailed analysis of the claim required to dispose ofthe second
motion to dismiss SUPPOltS the conclusion that Egiazaryan's failed claims had a substantial basis
The Court adheres to its prior decisions granting motions to dismiss, but
concludes that Egiazaryan's claims were tenable and had a substantial factual basis. Although
the statements were determined to be non-defamatory, the detailed analysis necessary to dispose
ofthe claims supports the conclusion that the action was commenced and continued with a
substantial basis in fact and law. See Friends of Rockland Shelter Animals, Inc. v. Mullen, 313
F. SUpp. 2d at 344-45 and n.3.
V. The Action was Commenced and Continued with a Substantial Argument for
the Extension, Modification or Reversal of Existing Law
The line between claims that have a substantial basis in fact and law and claims
that make a substantial argument for the extension, modification or reversal of existing law is far
from clear in this case. Nevertheless, as an alternate ground for the grant of the motion, this
Court adopts Section III.A of the R & R.
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VI. Alternate Discretionary Grounds
Because the Court has concluded that no reasonable factfinder could fmd that
Egiazaryan's action lacked a substantial basis in fact and law or was continued without a
substantial argument for the extension, modification or reversal of existing law, the COUlt need
not reach the alternative basis set forth in Section III. C of the R & R.
Because the Court has detelmined that Egiazaryan's action was commenced and
continued with a substantial basis in law and fact, Zalmayev's application for compensatory and
punitive damages under N.Y. Civil Rights Law § 70-a(1)(b) and (c) must be dismissed. Section
70-a(1 )(b) provides the COUlt discretion to award compensatory damages upon an "additional
demonstration that the action involving public petition and patticipation was commenced or
continued for the purpose of harassing, intimidating, punishing or otherwise maliciously
inhibiting the free exercise of speech, petition or association rights." (emphasis added). Section
70-a(1 )(c) provides the Court discretion to award punitive damages upon "an additional
demonstration that the action involving public petition and palticipation was commenced or
continued for the sole purpose of harassing, intimidating, punishing or othelwise maliciously
inhibiting the free exercise of speech, petition or association rights." (emphasis added).
Because Zahnayev has not established that Egiazaryan's claims lacked a substantial basis in fact
and law, he is unable to demonstrate that an award of compensatory or punitive damages would
be appropriate. Accordingly, the Court need not reach the alternative basis set forth in Section
III.B of the R & R.
The COUlt has considered each of Zalmayev's objections to the R & R. Because
no reasonable factfinder could find that Egiazaryan's claims lacked a substantial basis in law and
- 14 -
fact or a substantial argument for the extension, modification or reversal of existing law, the
COUlt adopts the conclusion of the R & R that Egiazaryan' s motion for summary judgment
should be and hereby is GRANTED, and that Zalmayev's motion for summary judgment should
be and hereby is DENIED. The reasoning of the R & Ris modified and expanded only insofar
as inconsistent with this Memorandum and Order. The Clerk shall enter final judgment
dismissing all claims of all parties. The case is closed. All motions are terminated.
Dated: New York, New York
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P. Kevin Castel
United States District Judge
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