Andersen v. Atlantic Recording Corporation et al

Filing 14

Andersen v. Atlantic Recording Corporation et al

Doc. 14 Att. 3

Kenneth R. Davis, II, OSB No. 97113 davisk(1lanepowell.com WUliam T. :patton, OSB No. 97364 pattonw(1lanepowell.com LANE POWELL PC 601 SW Second Avenue, Suite 2100
Portand, Oregon 97204-3158

. Telephone: [phone]
Facsimle: [phone]

Timothy M. Reynolds, Admitted Pro Hac Vice timothy.reyno Ids(1o.com

HOLME, ROBERTS lk OWEN LLP
1700 Lincoln Street, Ste. 4100 Denver, CO 80203
Telephone: [phone]
. Facsimle: [phone]

Attorneys for Plaintiffs

UNITED STATES DISTRCT COURT

DISTRCT OF OREGON

ATLANIC RECORDING CORPORATION,
RECORDS LLC, a California lilnted liabilty . company; CAPITOL RECORDS, INC., a
Delaware corporation; UMG RECORDINGS,

a Delaware corporation; PRIORI

CV No. 05-933 AS

INC., a Delaware corporation; and BMG MUSIC, a New York general partnership,

MOTION TO DISMISS

Platiffs' MEMORAUM IN SUPPORT OF

COUNERCLAS

Plaitiffs,
v.

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

TANA ANERSEN,
Defendant.

MEMORADUM IN SUPPORT OF MOTION TO DISMISS COUNERCLAIMS

. LAPOWELL PC

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TABLE OF CONTENTS
Page
INTRODUCTION ..................................................................................................................... I

BACKGROUN........................................................................................................................ 2

LEGAL STANDARS .............................................................................................................5
ARGUMEN ............................................................................................................................ 6
1. Defendat's Claim For Electronic Trespass (Count I) Should Be

Dismissed Because Defendant Has Not Adequately Pleaded The Essential
Elements Of

The Cla. .................................................................................... 6

II. Defendant's Claim That Plaintiffs Have Vio lated The Compute Fraud and

Abuse Act, 18 U.S.C. § 1030 (Count II), Should Be Dismissed Because Defendant Has Not Properly Pled The Elements Of A Civil Claim Under That Act. ............... ......... ............ ........................... ......... ..... ............... ................. 8
II. Defendant's Claim For Invasion Of

Privacy (Count II) Should Be Dismissed Because She Has Not And Canot Plead The Elements Of Such A Claim And Because The Actions Of Which Defendant Complais Are
privacy though intrsion upon seclusion. ........................................................................ 10

Privileged. ....................................................................................................... 10
A. Defendant has not stated a claim for invasion of

B. Defendant has not stated a clai for invasion of privacy though

false light. .............................................................................................. i i

C. Defendat bas not stated a claim for invasion of privacy though
public disclosure of

private facts. ...........................................................14
Legal Prcess (Count IV) Should IJe

IV. Defendant's Clai For Abuse Of

Dismissed Because Defendant Has Failed To Plead The Essential
Elements Of

The Claim. ....................................................................................15

V. Defendant's Claim For Fraud And Negligent Misrepresentation (Count V)

Should Be Dismissed Because Defendat Has Not Pled The Requisite Elements, and any claim based on purported settlement discussions is bared by the Noerr - Pennington doctrne ........................................................ 16

A. Defendant has failed the plead the requisite elements for a fraud or
negligent misrepresentation claim. ........................................................16

PAGE i-MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
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B. Any claim based on purorted statements during settlement
discussions is bared by the Noerr-Pennington doctrine ......................... 18
VI. Defendant's Claim For Outrge (Count VI Should Be Dismissed Because
She Ha Failed To State A Necessary Element Of

Her Claim. ........................... 19

A. Defendat has failed to plead the elements of

this claim......................... 19

B. Any claim based on purportd statements durng settlement
discussions is bared by the Noerr-Pennington doctrine. ........................ 21
VII. Defendant's Claim For Deceptive Business Practices (Count VII Should

Be Dismissed Because She Never Relied On Any Misrepresentation By
Plantiffs............................................................................................................ 2 i
VII. Defendant's Claim Under The Oregon Racketeer Influenced and Corrpt
Organization Act, ORS 166.175 et seq. (Count VIII), Should Be Dismissed Because She Fails To State The Requisite Elements For The Claim. ............................................... .................... ..... ............................. .......... 22

A. Defendant has not alleged the existence of an "enterprise," much
less that one has been

conducted or partcipated in by Plaintiffs. ........,... 24

B. Defendant has not "pattem of

alleged that Plaitiffs have engaged in any racketeering activity.".......................................................... 24

C. Defendant's RICO clai is bard by the Noerr-Pennington

doctine.................................................................................................. 26
IX. Defendat's Clai for attmey fees and costs should be dismissed

because it is procedurally deficient .................................................................... 26

CONCLUSION ...... .............................,............................. ....................................................... 27

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TABLE OF AUTHORITIS
Page
Cases
Abbott v. Good Shepherd Medical Center,
2004 WL 2847903 (D. Or. Dec. 9, 2004) ............................................................................. 24

Acro-Tech, Inc. v. Robert Jackson Family Trt,
2001 WL 1471753 (D. Or. Sep. 6, 2001)...................................................................15, 16,23 Advocacy Org. for Patients & Providers v. Aulo Club Ins. Ass 'n, 176 F.3d 315 (6th Cir. 1999).................................................................................................25

Altamont Summit Apartments LLC v. Wolf Props.
Am. Mfg. Servs., Inc. v. Offcial Comm. of Unsecured Creditors of

LLC, 2002 WL 926264 (D. Or. Feb. 13,2002)..................................................................... 12 the Match Elecs. Group, Inc.,

2006 U.S. Dist. LEXIS 22987 (N.D.N.Y. 2006).................................................................... 26 Arista Records LLC et al. v. Tschirhart, 05-CV-372-0LG (W.D. Tex. May 24, 2006) ........................................................ I, 7, 8, 9, I I Ault v. Hustler Magazine, Inc.,
1986 WL 20896 (D. Or. Oct. 20, 1986)................................................................................19 California Motor Transport Co. v. Trucking Unlimited,

404 U.S. 508 (I 972)........... .................................................... ............ ............. ..................... 13 Campbell v. Safeway, Inc., 332 F. Supp. 2d 1367, 1376 (D. Or. 2004) ........................................................................... 20 Charles Schwab & Co., Inc. v. Carter,
2005 WL 351929 (N.D. IlL. Feb. I 1,2005) ............................................................................8

Chemicor Drugs, Lid v. Ethyl Corp., 168 F.3d 119 (3d. Cir. 1999)......................................................................................... 13,26 Coastal States Mkg., Inc. v. Hunt,
694 F.2d 1358 (5th Cir. 1983)..............................................................................................19

Columbia Pictures Indus., Inc. v. Professional Real Estate Investors, Inc.,
944 F.2d 1525 (9th Cir. 1991), aff'd, 508 U.S. 49 (1993) ..........................................13, 19,21

Conwayv. Pacifc Univ.,

324 Or. 231, 924 P.2d 818 (1996)....................................................................................... 18
Crosswhite v. Cole,

2003 WL 23537962 ............................................................... ................ ............................. 13 Delaney v. Clifon,
180 Or. App. 119, 130,41 P.3d 1099, 1106-07 (2002).................................................,......20

Elektra Entertainment Group, Inc., v. Perez,
2006 U.S.Dist. LEXIS 78229..............................................................................................27 Elekta Entm 'i Group, Inc. v. Does 1-9, 2004 WL 2095581 (S,D.N.Y. Sep. 8,2004).................................................................... 9, I I Feiter v, Animation Celection. Inc., 170 Or. App. 702, 708,13 P.3d 1044 (2000)........................................................................ 22

Ford Motor Co. v. Money Makers Automotive Surplus, Inc.,
2005 WL 2464715 (D. Neb. Sep. 14,2005) ........................................................................13 GRK Fasteners, Ltd v. Bennett, 2004 WL 2260600 (D. Or. Oct. 5, 2004).............................................................................. 15

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LA POWELL PC
601 SWSENDAVE,

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Havoco Am., Ltd v. Hollobow, 702 F.2d 643 (7th Cir. 1983)......................................................................................:........ 13 Huffan & Wright Logging Co. v. Wade, 317 Or. 445, 857 P.2d 101 (1993)......................................................................................... 6 In re Aimster Copyright Litigation,
334 F.3d 643 (7th Gr. 2003).................................................................................................. 3

In re Verizon Internet Servs., Inc., 257 F. Supp. 2d 244 (D.D.C. 2003), rev'd on other grounds, 351 F.3d 1229 (D.C. Cir. 2003), cert. denied, 125 S. Ct. 309 (2004) ............................7,9, I I International Ass 'n of Machinists & Aerospace Workers v. Werner, 390 F. Supp. 2d 479 (D. Md. 2005).......................................................................................9
Interscope Records v. Duty,

2:05-cv-03744-FJM (D. Ar. April 14,2006)............................................................1, II, 13 Kebodeaux v. Schwegmann Giant Super Markets, Inc., 33 U.S.P.Q.2d 1223 (E.D. La. 1994)...................................................................................... I Kelly v. McBarron,
258 Or. 149, 154,482 P.2d 187 (1971) ................................................................................16

Kilminster v. Day Mgmt. Corp.,
133 Or. App. 159,890 P.2d 1004 (1995)............................................................................ 24 King v. Deutsche Bank AG,
2005 WL 61 1954, at *31-32 (D. Or. Mar. 8, 2005) ............................................................. 18

Knevelbaard Dairies v. Kraft Foods, Inc.,
232 F.3d 979 (9th eir. 2000)..................................................................................................5
L&D of

Or., Inc. v. American States Ins. Co.,

17 Or. App. 17,21,14 P.3d 617 (2000)..............................................................................14
Lee v. Mitchell, 152 Or. App. 159, 179,953 P.2d414 (1998)....................................................................... 16
Lee v. Nash,

65 Or. App. 538, 671 P.2d 703 (1983) (D. Or.Sep. 19,2003)..............................................13

Mantia v. Hanson,
190 Or. App. 412, 417, 79 P.3d 404 (2003)......................................................................... 13

Mauri v. Smith, 324 Or. 476,929 P.2d 307 (1996)....................................................................................... 10 McGlinchy v. Shell Chemical Co., 845 F.2d 802 (9th Cir. 1988)..................................................................................................5 Metro-Goldwyn-MayerStudios, Inc. v. Grokster, Ltd,

125 S. Ct. 2764 (2005)...........................................................................................................2 Metro-Goldwn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029 (C.D. Cal. 2003), aj'd, 380 F.3d 1154 (9th Cir. 2004),
rev'd, 125 S. Ct. 2764, 2005 WL 1499402 (June 27, 2005).................................................... 3

Northwest Airlines, Inc. v. Camacho,
Oneida Tribe of

296 F.3d 787 (9th Cir. 2002)..................................................................................................5 Indians of Wis. v. Harm,

2005 WL 2758038, at *3 (E.n. Wis. Oct. 24, 2005)....................................................... 13, 19

PAGE Iv - MEMORADUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
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Oregon Pub. Employees' Ret. Bd. ex rei. Oregon Pub. Employees' Ret. Fund v. Simat, Hellesen
& Eichner, 191 Or. App. 408, 424,83 P.3d 350 (2004).......................................................................... 17

Pearl, LLC v. Standard 1/0, Inc.,
257 F. Supp. 2d 326 (D. Me. 2003) ......................................................................................6
Pisciotta v. Teledyne Indus., Inc.,

91 F.3d 1326 (9th Cir. 1996)...............................................................;..................................5
Riddle v. Eugene Lodge No. 357 of Benevolent & Protective Order of Elks of

the United States,

95 Or. App. 206, 213, 768 P.2d 917, 920 n.7 (1989) ........................................................... 23 Roberts v. Jefferson County, 1999 WL 1442334 (D. Or. Oct. 5, 1999)..............................................................................16 Roskowski v. Corvalls Police Offcers' Ass 'n, 2005 WL 555398 (D. Or. Mar. 9, 2005)............................................................................... 12

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 105 S. Ct. 3275 (1985).................................................................................. 23 Shilo v. City of Portland,
2005 WL 2083014 (D. Or. July 25, 2005)............................................................................ 10

Sony Music Entertainment Inc. v. Scimeca, No. 2:03-cv-05757 (WJM) (D.N.J. Sep. 30, 2004) ............................................................... 25
Sosa v. DIRECTV, Inc..
437 F.3d 923, 2006

U.S. App. LEXIS 3541 (9th Cir. Feb. 15,2006).................. 19, 21, 22, 26

Swank v. Elwert, 55 Or. 48, 105 P. 901 (1910).................................................................................................. 6 T.F.T.F. Capital Corp. v. Marcus Dairy, Inc.,
312 F.3d 90 (2d Cir. 2002)................................................................................................... 26 Theofel v. Farey-Jones, 359 F.3d 1066 (9th Cir. 2004)................................................................................................9

Trout v. Umatilla County School Dist. UH3-Milton-Freewater (McLoughlin Union High School), 77 Or. App. 95, 100,712 P.2d 814 (1985)........................................................................... 14 United Mine Workers v. Illnois State Bar Ass 'n, 389 U.S. 217 (1967)...........................................................................................................12
United States v. Kennedy,

81 F. Supp. 2d 1103 (D. Ka. 2000)............................................................................ 4, 9, I I Video Intl Prod., Inc. v. Wamer-Amex Cable Comm.,
858 F.2d 1075 (5th Cir. 1988)...................................................................................13, 18,26
Vigilante.

com, Inc. v. Args Test.com, Inc.,

2005 WL 2218405 (D. Or. Sep. 6, 2005).....................................................................5, 17, 18

Statutes
17 U.S.C. § 101 et seq. ......................................................................................................... 2, 27 18 U.S.C. § 1030(a)(5)(B)(i)...................................................................................................... 8 18 U.S.C. § 1030(a)(5)(B)(ii)..................................................................................................... 8
18 U.S.C. § 1030(a)(5)(B)(iv) & (v) .......................................................................................... 8 18 U.S.C. § 1962(c).................................................................................................................23

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FED. R. CIV. 54( d)(2)(A) ................... ..... ..... ................ ........................ ...................................... 27

Fed. R. Civ. P. 12(b)(6) ...................................................................................................... I, 5

Fed. R. Civ. P. 8 ..............................................................................................................1, 12, 15
ORS 166.715(4) ........ ............................................................. .................. ........ .......................24 ORS 166.720(1) ........... ................. ............ ......... ......... ....................... ........ ..... .......... ...............23

ORS 166.720(2)....................................................................................................................... 23
ORS 166.720(3) ....................................................................................................................... 23

ORS 166.720(6) .... .... ...... ........................................................... .......... .................. ....... .......... 24
ORS 166. 720( 6)( I)................................................................................................................... 25 ORS 166. 720( 6)(b) ................................................................................................................... 25 ORS 166.720(6)( c) ............. ................... ................. ..................... ............. ..... .......... ................. 25

Other Authorities
RESTATEMEN 2D TORTS § 218 ................................................................................................... 6

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INTRODUCTION
Pursuant to Fed. R. Civ. P. 12(b)(6), Plaintiffs respectfully move to dismiss each of the
nie counterclaims assertd by Defendant Tanya Anderson because those counterclaims fail to
state clas upon which relief can be granted. Defendant has asserted with her Answer a variety

of common law and statutory counterclaims, albeit the precise factual and legal grunds are often
diffcult to discem, The underlying basis for all of Defendants' claims, however, is that

Platiffs sbould somehow be held liable for their legitiate efforts to enforce their copyrights.

That, of course, is not only improper, but is contrar to the public policy of encouragig
copyright owners to enforce their rights. See Kebodeaux v. Schwegmann Giant Super Markets,
Inc., 33 U.S.P.Q.2d 1223, 1224 (E.D. La. 1994) (holding that it would be inconsistent with the

puroses of the Copyright Act to "deter plaintiffs . . . from bringing suits when they have a
reason to believe, in good faith, that their copyrights have been infringed. ").
As set fort below, each of Defendant's counterclaims are subject to dismissaL. A

number of the claims fail to satisfy Fed. R. Civ. P. 8, and all of the claims founder because
Defendant has not pleaded and canot plead one or more necessar elements. of the claim.
Fuer, several of the claims should be dismissed because the alleged conduct is protected by

the Noerr-Pennington doctre and/or Oregon's litigation privilege. At least one of the claims is

procedurally deficient. In short, the legitimate conduct of which Defendant complains is not
actionable, and her counterclaims should be dismissed in their entirety. Courts considering

vially identical counterclaims on similar alleged facts have appropriately dismissed them.

See, e.g., Arista Records LLC et 01. v. Tschirhart, 05-CV-372-0LG (W.D. Tex. May 24, 2006)
(attched hereto as Exhbit A); Interscope Records v. Duty, 2:05-cv-03744-FJM (D. Ariz. April

14,2006) (attched hereto as Exhbit B).

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601 SWSEC

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BACKGROUN
This action seeks redress for the infrigement of Plaitiffs' copyrigbted sound recordings

pursuant to the Copyright Act, 17 U.S.C. § 101 et seq. Plaintiffs are recording companes that
own or control exclusive rights to copyrights in sound recordings. Since the early I

990s,

Platiffs and other copyright holders have faced a massive and exponentially expanding
problem of digital piracy over the Internet. Today, copyright infrgers use a varety of peer-

to-

peer networks to downoad (reproduce) and unlawfully disseminte (distribute) to others bilions

of perfect digital copies of Plaintiffs' copyrighted sound recordings each month. Indeed, the
U.S. Supreme Cour has characterized online piracy as "infrngement on a gigantic scale."

Metro-Goldwn-Mayer Studios, Inc. v. Grokster, Ltd, 125 S. Ct. 2764, 2782 (2005).
Peer-to-peer networks are designed so that users can easily and anonymously connect

with like-minded infrgers. A new user first downloads the necessar softare for one of the
peer-to-peer networks. Once the software is installed and launched, the user is connected to
other users of the network - typically millons of people at a tie - to search for, copy and

distribute copyrighted works stored on other users' computers. The softare creates a "share"

folder on each user's computer in which to store the fies that the user downloaded from the
service, which are then fuher distributed to other users. Moreover, to enable users to searh the
computers of complete strgers, the softare oftn scans the "sbare" folders of

those connected

to the network, extracts information from each user's fies, and automatically creates indices of
the sound recordings and other works to faciltate their furter distrbution.
To download a copyrighted work to a user's computer, the user searches for a paricular

artt or work, then clicks on an entr frm the list of search results. The service then
automatically makes a perfect digital copy of the desired sound recording from the computer of

one or more other users. The copying user has a new and permanent audio copy that he or she
can listen to or transfer to a digita device such as an Apple iPod as oftn as desired. Each time a

PAGE 2 . MEMORAUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
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user makes an unuthorized copy, that copy immediately becomes subject to furter distribution
to others - resulting in an exponentially multiplying (or "viral") creation and redistrbution of
perfect digital copies. i

In a recently issued report, the Deparment of Justice concluded that online media
distrbution systems ar "one of

the greatest emerging theats to intellectual propert ownership,"

estimated that "millons of users access P2P networks," and determned that "the vast majority"
of those users "ilegally distribute copyrighted materials though the networks." Report of the

Departent of Justice's Task Force on Intellectual Propert (October 2004), available at
http://ww.cvbercrime,gov/IPTaskForceRellort.lldf. at 39. As a result of the rise of online

media distribution systems, Plaintiffs have sustained and contiue to sustain devastating financial
losses. Plaintiffs' losses from this copyright infringement have also resulted in layoffs of

thousands of employees in the music industr. Unfortnately, infrging users of peer-to-peer
system are often "disdainl of copyrigt and in any event discount the likelihood of being sued

or prosecuted for copyright infingement," renderig this serious problem even more diffcult for
copyright owners to combat. In re Aimster Copyright Litigation, 334 F.3d at 645.

On May 20, 2004, Plaitiffs' investigators detected an individual with the username
"gotenkitol1Kazaa" using the Kazaa online media distrbution system over a peer-to-peer fie-

sharing network. This individual had i ,288 music fies on her computer and was distrbuting

them to the millons of people who use peer-to-peer networks. Plaintiffs' third-party
investigators, MediaSentr, Inc., detenned that the individual used Internet Protocol ("IP")

address 4.41.209.23 to connect to the Internet. MediaSentr was able to detect the infringement
and identify the IP address because the Kazaa P2P softare had its fie-shaing featue enabled,

i For fuer information about how online media distrbution systems are utilzed to commit

copyright infrngement, see In re Aimster Copyright Litigation, 334 F .3d 643, 646-47 (7th Cir. 2003) ,and Metro-Goldwn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029, 103233 (C.D. CaL. 2003), afJ'd, 380 F.3d 1154 (9th Cir. 2004), rev'd, 125 S. Ct. 2764, 2005 WL
1499402 (June 27,2005).

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just as any other user on the same P2P network could do? In gathering evidence of

infrgement, MediaSentr uses the same functionalities tbat are built into P2P programs that any
user of the softar can utilize on the network. Therefore, MediaSentr does not do anything

that any other user of a P2P network canot do; 'it does not obtain any inormation that is not

available to anyone who togs onto a P2P network.
In this case, aftr filing a "Doe" lawsuit against the individual using the IP address

detected by MediaSentr, Plaintiffs served a cour-ordered third-par subpoena on the Intemet
Service Provider ("ISP") to deterne the identity of the individual to whom the IP address was

assigned. The ISP, Verizon Intemet Services, Inc., identified Tanya Andersen as the individual
in question. After learng her identity, Plaintiffs' counsel sent Ms. Andersen a letter advising

that copyright infringement had been detected and provided a telephone number and e-mail
address she could contact to discuss ths matter and possibly resolve it before the commencement

of litigation. Plaitiffs' settlement representatives thereafer contacted Ms. Andersen in the hope

of engaging in settlement negotiations, but the ensuing discussions failed.3 Accordingly, on
June 2 i, 2005, Plaintiffs fied their Complaint against Defendant for copyright infringement.
On March 27, 2007, Defendant fied her Second Amended Answer, Affrmative
Defenses, and Counterclais (doc. #112) ("Anwer"). In her Answer, Defendant accuses
Plantiffs of a laundr list of misbehavior, including "abusing the federal cour judicial system"

(Answer at 3), waging a "public theat campaign" (Answer at 3), "invad(ingj private home

computers" (Answer at 3), and making various and sundry "false representations" to Defendant

(Answer at 5). Defendant then asserts nine separate counterclaims, including claims for
electronic trespass; violations of

the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030;

2 See United States v. Kennedy, 81 F. Supp. 2d 1103, 1106 n.4 (D. Ka. 2000) (explaining

detection though fie-sharing program). 3 Although Plaintiffs dispute Defendant's characterization of these discussions, that factual disagreement is irelevant to this Motion.
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invasion of privacy; abuse of legal process; fraud and negligent misrepresentation; outrage;

deceptive business practices; vio lations of the Oregon Racketeer Influenced and Corrpt
Organization Act, ORS 166.175 et seq; and a claim for Attorneys Fees and Costs. For the
reasons set fort below, each of these nine counterclaims should be dismissed under Rule

12(b)(6).4

LEGAL STANARS
The Federal Rules of Civil Procedure provide for dismissal for "failure to state a claim
upon which relief

can be granted." FED. R. CN. P. 12(b)(6). In considering a motion pursuant to

Rule 12(b)(6), the Court must accept all of the claimant's material allegations as tre an must
constre all doubts in the ligbt most favorable to the claimt. See Vigilante.

com, Inc. v. Argus

Test.

com, Inc., 2005 WL 2218405, at *1 (D. Or. Sep. 6, 2005). However, "conclusory

allegations without more are insuffcient to defeat a motion to dismiss for failure to state a

claim." McGlinchy v. Shell Chemical Co., 845 F.2d 802, 810 (9th Cir. 1988). A motion to
dismiss should be granted where "it appears beyond doubt that the plaintiff can prove no set of

facts in support of his claim which would entitle him to relief." Knevelbaard Dairies v. Kraft
Foods, Inc., 232 F.3d 979, 984 (9th Cir. 2000) (citation omitted).

Cour in the Ninth Circuit routinely dismiss complaints for failure to state a claim upon
which relief can be granted where, as here, an affinative defense appear on the face of the

pleading. See, e.g., Northwest Airlines, Inc. v. Camacho, 296 F.3d 787, 791 (9th Cir. 2002)
(affrming distrct court's dismissal of clais based on expiration of

the statute of limitations);

Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1331-32 (9th Cir. 1996) (same).

4 Defendant aver in her answer that no "downloading or distribution actvity . . . ever

occurd." (Answer at 6.) If that were tre, at least thee of Defendat's counterclaims electronic trspass, CF AA violations, and invasion of privacy - canot succeed because they ar
counter-factual to her denials that downloadig and distribution did

Internet account. These claims ar premised entirely upon the manner by wbich Plaintiffs'

not take place though her

investigators gathered evidence of the fies being distrbuted from the shared folder on Defendat's computer.

PAGE 5 - MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
LAN POWEL PC
601 SWSBCND

PORTI,ORl 91204 i 58

AVE,SU

2100

PH [phone] PAX: (S03) 778-2200

707507,00101622267,1

:~J~DF_:¿L(

ARGUMENT

I. DEFENDANT'S CLAIM FOR ELECTRONIC TRESPASS (COUNT I) SHOULD BE DISMISSED BECAUSE DEFENDANT HAS NOT ADEQUATELY PLEADED THE ESSENTIAL ELEMENTS OF THE CLAIM.
Defendat's firt counterclai, "electronic trespass," fails because Oregon does not
recognize a separate clai called "electronic trespass." Indeed, Plaitiffs have been unable to

locate any Oregon authority discussing, much less recognizing, a claim for "electronic trespass."
In the event that ths claim was intended to be a claim for trespass to chattels, the clai stil fails.

Plaintiffs have commtted no such trespass, and it is therefore not surprising that Defendant has
failed to adequately plead such a claim.
'''In actions for trespass to personal proper the gist of the action is the disturbance of

the plaintiffs possession.' . . . Tht is, the tort of trspass to chattls focuses on the effect - the
distobance of

the owner's possession." Huffan & Wright Logging Co. v. Wade, 317 Or. 445,

456,857 P.2d 101 (1993) (quotig Swank v. Elwert, 55 Or. 48, 105 P. 901 (1910)); see also
RESTATEMET 2D TORTS § 218 ("One who commts a trespass to a chattel is subject to liabilty to
the possessor of the chattel if, but only if, (a) he dispossesses the other of

the chattel, or (b) the

chattl is impai as to its condition, quality, or value, or (c) the possessor is deprived 0 f the use

of the chattel for a substantial time, or (d) bodily har is caused to the possessor, or har is

caused to some person or thing in which the possessor has a legally protected interest."); Pearl,
LLC v. Standard I/O, Inc., 257 F. Supp. 2d 326, 354 (D. Me. 2003) (granting summar judgment

on trspass claim where there was no evidence that allegedly unauthorized access to computer

network "impaired its condition, quality or value").

None of the elements of trespass to chattels appear on the face of Defendant's
counterclai, nor can they be implied or derived from her pleading. In particular, Defendant has

made no allegation that Plaitiffs' actions have distobed her possession as required under
Oregon law. Indeed, Defendant has not identified any personal propert of hers that has been

PAGE 6 - MEMORAUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIS
PC LA POWELL 601 SWSBCNDAVE SUIiloo PORTI. OREN 971I8
PHNE: [phone] FAX: [phone]

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dispossessed. To the contrary, the very heart of this action is Plaitiffs' allegation that it was

Defendant who misused Plaintiffs' propert when she downloaded and distributed their
copyrighted sound recordigs over the Intemet.

Defendant does not and canot claim that MediaSentr deprived her of the right to
possess or use her computer fies when it detected the infrngement by using the same Kazaa
softare fuctionalities used by individuals engaged in file swapping. Likewise, there is no

suggestion that Defendat's computer fies were impaied, altered, or otherwse damged by

MediaSentr.5 As explained above, Plaitiffs' investigators did not thst themselves into
Defendant's computer at all, and did not act without invitation, permssion, or welcome. On the
contrar, the shaed folder for Defendant's Kazaa program was open for the world to see.

Plaintiffs canot have commtted any trespass in looking at the contents of DefendaÍt's Kazaa
share folder because Defendant invited the entire internet-using public to see those fies. See,

e.g., Tschirhart, 05-CV-372-0LG, slip op. at 7 (holding that "there was no 'wrngful
interfernce' because plaitiffs' investigators did not enter the private porton of her computer,
but only accessed all publicly shared fies.") (Exhibit A); In re Verizon Internet Servs., Inc., 257
F. Supp. 2d 244, 267 (D.

D.C. 2003) (Wen an ISP subscriber "opens his computer to permit

others, through peer-to-peer fie sharg, to downoad materials from that computer, it is had to
understad just what privacy expectation he or she has after essentially opening the computer to
the world.'').

Defendant also does not allege that Plaintiffs' actions have caused bodily or competitive

har to her or anything else in which she owns some legally protected interest. Instead,

Defendant simply alleges that she has suffered "damages, including har to Ms. Andersen's
health." (Answer at 6-7.) This allegation is insuffcient to suggest that Defendat's possession
S In fact, Defendat is apparently not even cert that her computer was accessed: "If

MediaSentr accessed her private computer, . .." (Answer at 6.)
PAGE 7 - MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COUNRCLAIMS
LAN POWELL PC

601 SWSI!CONDAVESU21011 PORTI,ORJON 972043IS8
PHONE(SDJ)77s.iioo PAX:(SO)118-2200

707501.0010/62227.1
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of her computer fies was ever distobed or hared, much less to plead a causal connection
between the alleged trspass and the "har" she claims to have suffered. See Tschirhart, 05-

CV-372-0LG24, slip op. at 7 (holding that defendant could not maintain cause of action for
electronic trespass where there was no allegation that plaintiffs daaged the computer or denied

defendant access to it). As a matter of law, therefore, no claim for trespass can lie against
Plantiffs in this action.

II. DEFENDAN'S CLAIM THAT PLAITIFS HAVE VIOLATED THE
COMPUTER FRUD AN ABUSE ACT, 18 U.S.C. § 1030 (COUNT II), SHOULD BE DISMISSED BECAUSE DEFENDAN HAS NOT PROPERLY PLED THE
ELEMENTS OF A CIVI CLAIM UNER THAT ACT.

Defendant's second claim alleges violations of the Computer Fraud and Abuse Act

("CF AA"). The CF AA "is primarly a crial statute, but it also creates a private cause of
action in Section 1030(g)." Charles Schwab & Co., Inc. v. Carter, 2005 WL 351929, at

"2 (N.D.

Il. Feb. I I, 2005). Section 1030(g) authorizes a civil cause of action only in limited
circumstaces. 18 U.S.C. § 1030(g).6

The CF AA prohibits a number of very specific computer activities, from hackig into
governent computers with classified inormation to accessing credit report information or the

computers of financial institutions. But it is impossible to tell from the face of Defendant's
counterclaim which provision she contends Plaitiffs have violated. Nonetheless, all of the

activities prohibited by the CFAA require the access of another's computer without

6 Defendant fails to specify the prong under which her CF AA claim is brought. The only damges pleaded by Defendant in this counterclaim are "direct and consequential damages and harm to (Defendant) in excess of $5,000." (Answer at 7.) Therefore, she presumbly intends to
assert that Plaitiffs' alleged actions involve a loss to Defendant "in excess of $5,000" - thereby subsection (a)(5)(B)." See 18 U.S.C. § 1030(a)(5)(B)(i) ("loss to falling under "clause (i) ... of

(one) or more persons. . . aggegating at least $5,000 in value") She certly has not pleaded
any of the other factors. Defendant does not plead damage to her computer system or to a

computer system compromising national secty. See 18 U.S.C. § 1030(a)(5)(B)(i) & (ii).
Defendant also does not plead the compromise or impaient of an individua's medical

tratment or any physical injury caused by Plaintiffs' alleged actions. See 18 U.S.C. §
1030(a)(5)(B)(iv) & (v).

PAGE 8 - MEMORAUM IN SUPPORT OF MOTION TO DISMISS COUNRCLAIMS
LANPoWELLPC 601 SWSfNDAVE2,8UIT2100
POR.TL,OREON 97Q43ISB
PHONB:(503)77I.:Z100 fAX:(SOJ)776-00

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3'1

authorization. See, e.g., Theofel v. Farey-Jones, 359 F.3d 1066, 1078 (9th Cir. 2004). Here, as a
matter of law, Defendant canot show that Plaintiffs and/or their investigator acted without
authorization.

As previously discussed, Plaintiffs' investigators were able to access Defendant's shared
folder because the Kazaa peer-to-peer softar utilized by Defendant to swap fies over the
Internet has a fie-sharing featue tht was enabled at the time the infringement was detected.

This featue gives anyone else on the Intemet access to any files in the "shaed foldet' that the
user distrbutes over the peer-to-peer networks. See Kennedy, 81 F.Supp.2d at 1106 nA
(explainig detection though fie-sharing program). Defendant's action in enabling the

fie-sharing featue authorized the whole world to access her music fies - maing them as

publicly accessible as any other web site on the Internet. By makng the "shared folder"
available to the public, Defendant has granted exactly the tye of authorition contemplated by

the CFAA. See, e.g., Tschirhart, 05-CV-372-0LG, slip op. at 9 (Exhibit A) (rejecting similar

CFAA claim); International Ass'n of Machinists & Aerospace Workers v. Werner, 390
F.Supp.2d 479 (D. Md. 2005) (dismissing clai uoder CFAA where defendant had authorization

to access computer at issue); see also In re Verion Internet Servs., Inc., 257 F.Supp.2d at 267;
Elektra Entm't Group, Inc. v. Does 1-9, 2004 WL 2095581, at "5 (S.D.N.Y. Sep. 8,2004)

(holding Defendant has "minimal 'expectation of privacy in downloading and distributing
copyrighted songs without permission"').
In short, Defendant's own actions effectively provided a blanket authoriation for others
to access the contents of her shaed folder. As a result, no claim under the CF AA for

unauthorized access to Defendant's computer is available to her and it should be dismissed.

PAGE 9 - MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
LAN PO\WLL PC

601 SWSBCONDAVE,SU:iIOO

PORllAN,ORE 972031S8

PHONE (SO) nS-2100 FAX: [phone]

707507.00 10/622267. i

ii

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il. DEFENDANT'S CLAI FOR INASION OF PRIVACY (COUNT il) SHOULD

BE DISMISSED BECAUSE SHE HAS NOT AN CANOT PLEAD THE
ELEMENTS OF SUCH A CLAIM AN BECAUSE THE ACTIONS OF WHICH DEFENDANT COMPLAIS AR PRIVILEGED.
Defendat's third counterclaim, for invasion of privacy (Count Ill), fails as a matter of

law because Defendant has no reasonable expectation to the privacy of her computer's "shared
folder." The contents of

her shared folder were being distrbute over the Internet as openly and

widely as if they were on the front page of USA Today.
Oregon recognizes several forms of invasion of privacy, including: "( i) intrsion upon
seclusion; (2) appropriation of

another's name or likeness; (3) false light; and (4) publication of

private facts." Mauri v. Smith, 324 Or. 476, 482, 929 P.2d 307, 310 (1996). Defendant's
counterclai fails to ariculate which invasion of privacy theory upon which she is relying to

support her claim. Notwithstanding, even read in the most generous light, there are absolutely no
allegations to the effect that Plaintiffs misappropriated Defendant's name or likeness.

Accordingly, Plaitiffs only addrss intrsion upon seclusion, false light, and publication of
private facts.

A. Defendant has not stated a claim for Invasion of privacy through Intrusion
upon seclusion.

To plead a claim for invasion of privacy by intrsion upon seclusion, Defendant must
show "(I) an intentional intrsion, physical or otherwise, (2) upon the (claimant's) solitude or

seclusion or private affairs or concerns, (3) which would be highly offensive to a reasonable
person." Mauri, 324 Or. at 483, 929 P.2d at 483; Shilo v. City of

Portland, 2005 WL 2083014, at

*13 (D. Or. July 25, 2005). "A person intrdes by thsting hiself in without invitation,
permssion or welcome." Shilo, 2005 WL 2083014, at *13.

Here, Defendant canot show that Plaintiffs have intrded upon her "so litude or seclusion
or private affais or concerns" because, by defition, the fies she was publicly distributing over

the Intemet were not maintained in a private maner. As a mattr of law, no user of a peer-to-

PAGE 10 - MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
LAN PoWELL PC
601 SW SEA'V,SUIS

2100

POnAN, ORN 972(131511
t- "

PHONE (:SOl) 71.2100 PAX: (S03) 778-220

707507.0010/622267.1

/1

3'-

peer fie-sharng program such as Kazaa can have a reasonable expectation of privacy for
computer fies distrbuted over the Internet. See, e.g., Tschirhart, 05-CV-372-0LG, slip op. at 6

("A user of a P2P fie-sharg network has little or no expectation of privacy in the fies he or she

offers to others for downloading.") (Exhibit A); Duty, 2:05-cv-03744-FJM, slip op. at 6 ("(I)t is
undisputed that the share fie is publicly available, and therefore (defendant) canot show that

the Recording Companes intrded upon her private affai.'') (Exhibit B); In re Verizon Internet

Servs., Inc., 257 F.Supp.2d at 267; Kennedy, 81 F.Supp.2d at 1110 (activation of fie-sharing
mechanism shows no expectation of privacy); Elekta Enlm 't Group, Inc., 2004 WL 209558 i, at

* 5 (holding Defendant has "minal . expectation 0 f privacy in downloading and distrbuting
copyrighted songs without permission"').
Plaitiffs' investigators did not thst themselves into Defendant's computer without

invitation, permission, or welcome. On the contrar, fies distrbuted from Defendant's shared
folder were open for the world to see. Plaitiffs cannot have committed any invasion of

privacy

in accessing those files; there was no seclusion or privacy to invade. Therefore, to the extent

Defendant seeks to bring a claim for invasion of privacy though intrsion upon seclusion, her
claim must faiL.

B. Defendant has not stated a claim for Invasion of privacy through false
light.
In Oregon, to recover for "false light" invasion of

privacy, a claimat must show:

One who gives publicity to a mattr concerning another that places the other before the public in a false light is subject to Iiabílty to the other for invasion of his privacy, if
(a) the false light in which the other was placed would be

highly offensive to a reasonable person, and
(b) the actor has knowledge of or acted in reckless disregard as

to the falsity of the publicized matter and the false light in which the other would be placed.

PAGE i i - MEMORANuUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAMS
601 SWSBCAVE,SUiioo
PORTI,ORl 9720431SB
PHOND(S03177I.zioo Pi\:(~)778.22
LAN POWELL

PC

707507.00101622267.1

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Roskowski v. Corvallis Police Offcers' Ass 'n, 2005 WL 555398, at "6 (D. Or. Mar. 9, 2005).
The clait must also show "actual malice," as in a "public figue" defamation claim. See id.

Here, Defendant's clai tht Plaintiffs placed her information in an allegedly false light is
inadequate under Fed. R. Civ. P. 8, and Plaitiffs' conduct is privileged by the Noerr-Pennington

doctre.
As a preliminar matter, Defendant's counterclaim is silent as to

!be publication allegedly

made by Plaintiffs that placed her in a false light. She does not explai the maner by which she

claims Plaitiffs made such a publication; nor does she allege to whom or where the publication

was made. Defendant simply alleges she "has been subjected to public derision and

embarassment associated with (p)laintiffs' clais and public relations program" and that
Plaintiffs have "shamefully publicly accuse(d Defendant) of ilegal activities." (Answer at 8.)

Defendant's failure to explain the natue of any such alleged publication violates the federal
notice pleading standard. See FED. R. Civ. P. 8(a); Altamont Summit Apartments LLC v. Wolf

Props. LLC, 2002 WL 926264, at "i i (D. Or. Feb. 13, 2002) ("(T)he general notice pleading
requirement of Rule 8(a) requires

!be pleader to provide eacb defendant, at a minimum, with 'fair

notice' of

the clai againt it.'').
In any event, the only act by Plaintiffs that could conceivably be alleged to have placed

Defendant before the public in a false ligbt is the fiing of this lawsuit in federal cour. That act-

the petitioning of courts for redress of a grevance - is protected by the First Amendment under
the Noerr-Pennington doctrne and canot form the basis for Defendant's counterclaim.

The First Amendment guarantees "the right of the people. . . to petition the Governent
for redress of grievances." U.S. CONST. amend. 1. The Supreme Court has declared the right to
petition to be "among the most precious rigbts of

the liberties safeguarded by the Bil of Rights."

United Mine Workers v. Illnois State Bar Ass 'n, 389 U.S. 217, 222 (1967). This right to petition

- often referred to as Noerr-Pennington immunty - has been extended to afford a par the right

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LANE PoWELL PC

601 SWSBCONDAVB SU 2100

PORlL,ORN 912043\58

PHNE: [phone] FAX: ($03) 778.2200
707507,00 10/622267.1

EXHiLkf

"'31

to access the cours. See California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508
(1972). Consistent with ths right, numerous cours have shielded litigants from claims relating
to the fiing of

litigation. See, e.g., Chemicor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 128-129

(3d. Cir. 1999); Video Intl Prod, Inc. v. Warner-Amex Cable Comm., 858 F.2d 1075, 1082-83
(5th Cir. 1988); Havoco Am., Ltd. v. Hollobow, 702 F.2d 643, 649 (7th Cir. 1983); Duty, 2:05cv-03744-FJM, slip op. at 6.7

The fiing of a lawsuit is not the only conduct that is protected by the Noerr-Pennington

doctrie. An offer to settle a lawsuit also constitutes "conduct incidental to the prosecution of
the suit" that is protected under the Noerr-Pennington doctrine. Columbia Pictures Indus., Inc.
v. Professional

Real Estate Investors, Inc., 944 F.2d 1525, 1528 (9th Cir. 1991), ajJ'd, 508 U.S.

49 (1993). Even the mere threat of a lawsuit is protected by the Noerr-Pennington doctrine. See
Oneida Tribe of Indians of Wis. v. Harms, 2005 WL 2758038, at "3 (B.D. Wis. Oct. 24, 2005).

And counterclaims are certinly subject to dismissal under this doctrine. See id (dismissing

counterclaim based on filing oflawsuit on Noerr-Pennington grounds).
Even if the Noerr-Pennington doctrine did not bar a counterclaim for false light invasion

of privacy, "Oregon cours have long recognized, and enforced, ai absolute privilege for
statements in the course of or incident to judicial and quasi-judicial proceedings. That privilege
applies equally to parties to such proceedings and to their attomeys." Mantia v. Hanson, 190 Or.
App. 412, 417, 79 P.3d 404, 407 (2003). Fuer, the privilege applies not just to defamation

claims but to all tort actions, including "false light" claims for invasion of privacy. See
Crosswhite v. Cole, 2003 WL 23537962, at "4 (citing, inter alia, Lee v. Nash, 65 Or. App. 538,

542, 671 P.2d 703 (1983) (D. Or. Sep. 19, 2003). Here, to the extent Defendant attempts to
7 See also Ford Motor Co. v. Money Makers Automotive Surplus, Inc., 2005 WL 2464715, at

the Noerr-Pennington doctre, which provides absolute imunty frm any liabilty arising out
ofa par's fiing and maintainig a civil

"4 (D. Neb. Sep. 14, 2005) ("(Plaintiffs) statements are privileged under the First Amendment via
lawsuit.'').

PAGE 13 - MEMORAUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
LAN Po'\LL PC 601 SWSBNDAVB,SlJ2lDO PORTL,ORB 972043158
PHONE (S03) 778-2100 PAX: (.503) 77S.2200

707507.00101622267.1

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claim damages based upon statements made durg the course of this litigation - includig the
allegations made in Plaintiffs' complait - those statements are absolutely privileged and canot
form the basis for any counterclai. See Id.

C. Defendant has not stated a claim for Invasion of privacy through public disclosure of private facts.
To establish a clai for invasion of privacy for public disclosur of private facts under

Oregon law, Defendant must show:
(I) that the plaintiff had private information which would

otherwise have remained private;
(2) tht the defendant made that private information known to

the public or to a large number of people; and
(3) that the publication of that information would have been

offensive to a reasonable person.
L&D of

Or., Inc. v. American States Ins. Co., 171 Or. App. 17,21, 14 P.3d 617, 619-20 (2000).

Here, Defendant's clai fails as a matter of law because she canot show that Plaintiffs had any
private information or made any private information known to the public.

"In a claim for invasion of privacy by publication of facts, the facts disclosed must be
private, not public." Trout v. Umatila County School Dist. UH3-Milton-Freewater (McLoughlin
Union High School), 77 Or. App. 95,100,712 P.2d 814, 817 (1985). As noted above, Defendat canot, as a matter oflaw, have any reasonable expectation of privacy in the fies she distrbuted

over the Intemet though the Kazaa fie-sharing program. There was no privacy associated with

those files, and Defendant canot maintain a claim for invasion ofprivacy where the inormtion
allegedly dissemiated was not private.

In any event, Defendant does not allege that Plaintiffs made any of her allegedly private

informtion available to the public. The closest that Defendant comes to alleging this element of
a cla for invasion of privacy are her statements that she "has been subjected to public derision

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LA

PoWE PC

601 SWSECNDAVEB, SUI2100

POTL,oiN !n2Q3IS8

PHONE(S03)778.:Z100 FAX;(SO)77s.200

707507.00101622267.1

e "T:~LOF 3l(

and embarrassment associated with (P)laintiffs' claims and public relations program" and the

allegation that Plaintiffs have "shamefully publicly accuse(d Defendant) of ilegal activities."
(Answer at 8.) Defendant does not allege to whom Plaintiffs disseminated her allegedly private
informtion nor does she set fort the means by which the alleged dissemination took place. Her
failure to do so are enough to justify the dismissal of

this action under Fed. R. Civ. P. 8.

Moreover, the only possible dissemination or "public accusation" of which Defendant
could complai is this lawsuit. She may not counterclaim for it. As noted above, statements

made in a lawsuit ar protected and canot give rise to any claim, whether for invasion of privacy or otherwise, under both the Noerr-Pennington doctrine and Oregon's litigation
privilege.

IV. DEFENDANT'S CLAIM FOR ABUSE OF LEGAL PROCESS (COUNT IV) SHOULD BE DISMISSED BECAUSE DEFENDANT HAS FAILED TO PLEAD THE ESSENTIAL ELEMENTS OF THE CLAIM.
Defendant's counterclaim for abuse of legal process (Count IV) fares no better. "Abuse
'of (l)egal (p)rocess . . . is the malicious perversion of a regulaly issued process whereby a result

not lawfully or properly attinable under it is secured." GRK Fasteners, Lid v. Bennett, 2004

WL 2260600, at .5 (D. Or. Oct. 5, 2004). In Oregon, a properly pleaded claim for abuse of
process reqnis the claimant to allege:
(i) an ulterior purpose;
(2) a wilful act in the use of process not proper in the regular
conduct of

the proceeding;

(3) injuries beyond those which are a common burden on

paries to litigation;, and
(4) an actual arest or a seize of proert.

Acro-Tech. Inc. v. Robert Jackson Family Trut, 2001 WL 1471753, at .8 (D. Or. Sep. 6,2001)
(fuer defining abuse of process as "perversion of legal procedure to accomplish an ulterior

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LA 601 SWS6C

POWELL PC
AVE,SU

PORTI,ORBON 97-)158

2100

PHONl(503)771.2100 FAX;(S03)718-:iio

707507.00101622267.1

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purpose when the procedure is commenced in proper form and with probable cause") (quoting
Kelly v. McBarron, 258 Or. 149, 154,482 P.2d 187 (1971)).

Here, even if Defendant could satisfy the first thee elements, her counterclaim clearly
fails the four element set fort above. In Oregon, Defendant must state a special injur such as

her arest or the seizre of her business. See, e.g., Acro-Tech, Inc., 2001 WL 1471753, at *8
(explaing tht the damages alleged for abuse of process must involve "special injur"
involving "arest or seizure of

proper"); Lee v. Mitchell, 152 Or. App. 159, 179,953 P.2d 414,

427 (1998) (noting that to state a claim for abuse of

process, "it is necessar to allege either an

actual arest or a seiz of

propert); Roberts v. Jefferson County, 1999 WL 1442334, at *6 (D.

Or. Oct. 5, i 999) ("A recent case affrmed the abuse of process requirement of actul arrest or
propert seizue.") (citing Lee). Defendant bas not and canot allege that she has been arested

or that her propert has been seized by Plaitiffs' alleged abuse of process. This failure to plead
any "special injur" is fatal to her claim for abuse of process.

V. DEFENDANT'S CLAI FOR FRUD AND NEGLIGENT
DEFENDANT HAS NOT PLED THE REQUISITE ELEMENTS, AN AN
CLAIM BASED ON PURPORTED SETTLEMENT DISCUSSIONS IS BARD BY THE NOERR - PENNINGTON DOCTRIE
misrepresentation claim.
Defendant's fift counterclaim seeks recovery for fraud and negligent misrepresentation.

MISREPRESENTATION (COUNT V) SHOULD BE DISMISSED BECAUSE

A. Defendant has faDed the plead the requisite elements for a fraud or negligent

As a thhold mattr, Plaintiffs dispute Defendant's allegation that they made any
misrepresentation to her. Settg aside that factual dispute, this clai should be dismissed

because Defendant has not pled the necessar elements of either fraud or negligent

misreresentation.
In Oregon, the elements of a fraud clai are: "(i) a representation; (2) its falsity; (3) its
materility; (4) the speaker's knowledge of its falsity or ignorance of its trth; (5) his intent that

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PHO: [phone] FAX: (S03) 778-2200

707507.00101622267.l

¡:Xli!ßIT_~"i'GE,)3 OF_ 3l-

it should be acted on by the person and in the maner reasonably contemplated; (6), the hearer's

ignorance of its falsity; (7) his reliance on its trth; (8) his right to rely thereon; and (9) his
consequent and proximate injury." Vigilante.

com, Inc., 2005 WL 2218405, at *7; see also

Oregon Pub. Employees' Ret. Bd ex rei. Oregon Pub. Employees' Ret. Fund v. Simat, Hellesen

& Eichner, 191 Or. App. 408, 424, 83 P.3d 350, 359 (2004). The elements of negligent
misrepresentation in Oregon are: "(1) a special relationship between plaintiff

and defendants; (2)

that defendants failed to exercise reasonable care by negligently makg false representations or

omittg material facts; (3) plaintiffs reasonable reliance on those false representations or
omissions; and (4) damages sustained by plaintiff." Vigilante.

com, Inc., 2005 WL 2218405, at

*16.
Among other deficiencies, the most glarig element missing

from Defendant's

counterclaim for fraud and negligent misrepresentation is Defendant's failure to allege ber
reliance on any misrepresentation, whether negligent or intentional, or the reasonable natue of
any such reliance. Indee, nothing in her Anwer suggests she relied in any way on any

statement made by Plaintiffs or their representatives. To the contra, if Ms. Andersen were to

be believed, she has known all along that the supposed false representations were not tre.
Without reasonable reliance, Defendant has not stated a claim under either theory of liabilty.
See id. at *17; see also Oregon Pub. Employees' Ret. Bd, 191 Or. App. at 428,83 P.3d at 362

("(TJhe 'right to rely' element of a fraud claim under Oregon law requires proof of the
reasonableness of

the reliance.").

This counterclaim is subject to dismissal for other reasons as well. Defendant does not

contend that she relied upon the allegedly false representations. Likewise, she does not allege
those reresentations were materiaL. Both elements are necessar to establish a fraud claim
under Oregon law. See Vigilante,com, Inc., 2005 WL 2218405, at *7.

PAGE 17 - MEMORANDUM IN SUPPORT OF MOTION TO DISMISS COUNTERCLAIMS
LAN POWE PC
601 SWSBCONDAVE

PORTI, ORE 97203ISB

SUI

2100

PHON (S03) 778-100 FAX: (S03) 718-22

707507.0010/622267.1

r,-''/1f/! h.~~Ii i "r';q'.".C . : '~ ~

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Similarly, for negligent misrepresentation, Defendant has failed to allege the existence of
any special relationship between Plaintiffs and Defendant. This is a necessar element under

Oregon law. Oregon's cours wil find the existence of a "special relationship" where:
the par who is owed the duty effectively has authorized the pary

who owes the duty to exercise independent judgment in the former

par's behalf and in the former par's interests. In doing so, the
par who is owed the duty is placed in a position of reliance upon the part wbo owes the duty; that is, because the former has given
responsibility and control over the situation at issue to the latter,

the former has a right to rely on the latter to achieve a desired
outcome or resolution.

Kingv. Deutsche BankAG, 2005 WL 611954, at *31-32 (D. Or. Mar. 8,2005) (quoting Conway

v. Pacifc Univ., 324 Or. 231, 924 P.2d 818 (1996)). Defendant has not, and canot, allege that
Defendant has authorized Plaintiffs to exercise any independent judgment on her behalf.
Defendant's failur to plead this element meas her counterclaim for negligent misrepresentation
should be dismissed. See Vigilante.

com. Inc., 2005 WL 2218405, at .16; King, 2005 WL

611954, at *31-32.

B. Any claim based on purported statements during settlement discussions Is
barred by the Noerr-Pennington doctrine

In addition to the foregoing, any frud or negligent misrepresentation claim based on the
alleged statements of

Plaintiffs' representatives at the Settlement Support Center is barrd by the

Noerr-Pennington doctre. As discussed above, Noerr-Pennington imunty extends to all
aspects of the First Amendment right to petition. White, 227 F 3d at i 23 i ("While the Noerr-

Pennington doctrine oriinally arose in the antitrust context, it is based on and implements the
First Amendment right to petition and therefore. . . applies equally in all contexts."); Video Int/
Prod, 858 F.2d at 1084 (''Tere is simply no reason that a common-law tort doctrne ca any
more pennssibly abridge or chill the constitutional right of petition than can a statutory claim
such as antitrst.").

PAGE 18 - MEMORAUM IN SUPPORT OF MOTION TO DISMISS COUNERCLAIMS
601 SWSECND..VE.SUl210Q PORTL. ORBOH 9'13i~8
PHONB; [phone] FAX; (S03) TI.12OD

LA PO\\LL PC

707507,0010/622267. i

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c.

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Offers to settle. a lawsuit constitute "conduct incidental to the prosecution of the suit" that

are also protected under the Noerr-Pennington doctrine. Columbia Pictures Indus., Inc., 944
F.2d at 1528; see also Sosa v. DIRECTV Inc., 437 F.3d 923,942,2006 U.S. App. LEXIS 3541,

at *29-*35, *46-47 (9th Cir. Feb. 15, 2006) (holdin that settlement communications between
private pares prior to litigation are prote.cted activity, and that such protection extends to legal

representations made during the course of such settlement communcations). Even the mere
theat of a lawsuit is protected by the Noerr-Pennington doctrine. Coastal States Mkg.. Inc. v.

Hunt, 694 F.2d 1358, 1367-68 (5th Cir. 1983) (extendig Noerr-Pennington imunty to
generalized threats to litigate); Oneida Tribe o/Indians o/Wisconsin, 2005 WL 2758038, at *3.
Here, as demonstrated from the face of Defendant's Answer (Answer ii ii 41, 42), the

alleged statements of Plaintiffs' settement representatives were made during the course of
settlement discussions. Thus, any clai based on such statements is barred by the Noerr-

Pennington doctre and should be dismissed.

VI. DEFENDANT'S CLAIM FOR OUTRGE (COUNT VI SHOULD BE
DISMISSED BECAUSE SHE HAS FAILED TO STATE A NECESSARY
ELEMENT OF HER CLAIM.
Defendant also attempts to assert a clai for "outrage." This clai fails for two reasons.

First, Defendant can not show the elements necessar to sustain such a clai. Second, the clai

is barred by the Noerr-Pennington Doctrine.

A. Defendant has faDed to plead the essential elements of this claim.
While there is no such claim as outrage, Plaintiffs interpret Defendant's claim as one for

intentional inflction of emotional distress (or lIED). See Ault v. Hustler Magazine. Inc., 1986

WL 20896, at *8 (D. Or. Oct. 20, i 986) ("Defendants contend that the cause of action for
outrage is but another name for the intentional iniction of emotional distress and that this claim

PAGE 19 - MEMORAUM IN SUPPORT OF MOTION TO DISMISS COUNERCLAIMS
601 SWSECNDA'lsuriioD
POTL,OREN 972043158
PHON [phone] FAX: [phone]

LAN PoWELL PC

707507.0010/622267.1

,_)._ftC.1pj3i' L _ _ c __

should be stricken as redundant. The cour agrees."). To prevail on such a claim, Defendat
must show:
(I) the (actor) intended to inflct severe mental or emotional

distress;
(2) the (actor's) acts, in fact, caused (the defendant) to suffer

severe mental or emotional distress; and
(3) the (actor's) acts constituted an extraordiar trgression

ofthe bounds of socially tolerable conduct.
Campbellv. Safeway, Inc., 332 F. Supp. 2d 1367, 1376 (D. Or. 2004).

At this stage, Plaitiffs do not challenge whether Defendat has pled the first two
elements of intentional inflction of emotional distress. The third element of Defendant's claim,
however, is another matter. Under Oregon law, liED claims invariably involve sitoations where
the partes possess a "special relationship," such as a "physician-patient, counselor-client, or

common carier passenger." The existence of such a special relationship and conduct that is

violative of it are the kinds of sitoations that tyically qualifY as an "extraordinar transgression
of

the bounds of socially tolerable conduct." See Delaney v. Clifon, 180 Or. App. 119, 130,41

P.3d 1099, 1106-07 (2002) ("(a) 'special relationship' between the parties has played a role in
every case in this state involving (a successful claim of lIED)."). "In fact, the lack of such a

relationship generally defeats a conclusion that the conduct is actionable though an lID claim."
Id.

Defendant's counterclaim does not allege that there was a special relationship between

her and