MONARCH et al v. GORMAN et al

Filing 115

MEMORANDUM AND ORDER THAT PLAINTIFFS' CLAIM FOR "FALSE LIGHT" INVASION OF PRIVACY IN COUNT II OF THE FIRST AMENDED COMPLAINT IS DISMISSED, WITHOUT LEAVE TO AMEND. PLAINTIFFS' CLAIM FOR "WRONGFUL APPROPRIATION OF PERSONALITY&q uot; IN COUNT III OF THE FIRST AMENDED COMPLAINT IS DISMISSED. PLAINTIFFS' CLAIM FOR "WRONGFUL PUBLICIZING OF PRIVATE AFFAIRS" IN COUNT IV OF THE FIRST AMENDED COMPLAINT IS DISMISSED, WITHOUT LEAVE TO AMEND. PLAINTIFFS' CLAIM FOR "AIDING AND ABETTING" IN COUNT VI OF THE FIRST AMENDED COMPLAINT IS DISMISSED. DEFENDANT GORMAN'S MOTION TO DISMISS PLAINTIFF'S CLAIM FOR "FRAUDULENT TRANSFER" IN COUNT VIII OF THE FIRST AMENDED COMPLAINT IS DENIED. PLAI NTIFFS' CLAIM FOR "ALTER EGO" IN COUNT IX OF THE FIRST AMENDED COMPLAINT IS DISMISSED. PLAINTIFFS' CLAIM FOR PRELIMINARY AND PERMANENT INJUNCTION IN COUNT X OF THE FIRST AMENDED COMPLAINT IS DISMISSED. SIGNED BY HONORABLE GERALD A. MCHUGH ON 9/22/15. 9/22/15 ENTERED & E-MAILED.(fdc)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

JOHN C. MONARCH, et al.,
Plaintiffs,
v.
RICHARD A. GORMAN, et al.,
Defendants.

:
:
:
:
:
:
:

CIVIL ACTION
No. 14-5980

MEMORANDUM ORDER
This 22nd day of September, 2015, upon review of Defendants’ Motions to Dismiss or
Partially Dismiss, docketed as document numbers 34, 35, 36, 39, and 40, and Plaintiffs’
Responses thereto, it is hereby ORDERED as follows:

1) Plaintiffs’ claim for “False Light” Invasion of Privacy in Count II of the First Amended
Complaint is DISMISSED, without leave to amend. South Carolina law governs the
issue and does not recognize a claim for false light invasion of privacy. 1 Accordingly,
1

The parties disagree about which state’s law applies to this claim. Pennsylvania uses a two-step hybrid approach
to conflict of laws problems. In the first step, a court must determine whether a “real conflict” exists, such that the
application of each state's respective substantive law produces a contrary result. Hammersmith v. TIG Ins. Co., 480
F.3d 220, 230 (3d Cir. 2007). Pennsylvania recognizes four different invasion of privacy claims, including
“publicity placing a person in a false light.” Marks v. Bell Tel. Co. of Pa., 331 A.2d 424, 430 (1975). On the other
hand, no South Carolina court has ever recognized a claim for false light invasion of privacy. Brown v. Pearson,
483 S.E.2d 477, 484 (1997). This creates a real conflict since the application of South Carolina law would require
dismissal of this claim, while Pennsylvania law would allow the cause of action. In the second step, if each state has
a cognizable interest in applying its own law, then this conflict is a “true conflict,” and the court must determine
“which state has the greater interest in the application of its law.” Hammersmith, 480 F.3d at 231. Pennsylvania
maintains an interest in safeguarding a person’s reputation from unjust harm caused by materials published within
the state, while South Carolina has an interest in affording a degree of protection for those who publish materials in
the state that may potentially be “false light” communications. The Restatement (Second) of Conflicts provides that,
in the case of an invasion of privacy arising from a matter published in the aggregate, the state with the greatest
interest in the application of its law “will usually be the state where the plaintiff was domiciled at the time if the
matter complained of was published in that state.” Restatement (Second) of Conflict of Laws § 153 (1971). The
statements at issue were published online and accessible in every state. The parties could justifiably expect that
South Carolina law would be applied when Plaintiff Monarch was domiciled there at the time his privacy was
allegedly invaded. I therefore find that South Carolina has the most significant relationship to the claim, and thus
that state’s law will be applied.

1

Plaintiffs are precluded from arguing false light claims as a separate cause of action.
However, as damages rooted in the loss of privacy may still be relevant to a tort of
defamation, Erickson v. Jones St. Publishers, L.L.C., 629 S.E.2d 653, 673 (2006),
Plaintiffs’ allegations under this count are deemed incorporated into Count I alleging
Defamation, which has not been challenged by any of the Defendants. My analysis of the
governing law does not change in light of the additional facts alleged in Plaintiff
Monarch’s supplemental affidavit. Pl.’s Resp. Def. Brand’s Mot. to Dismiss, Ex. A, at ¶
5(a–b). I am therefore convinced that amendment of the First Amended Complaint
would be futile. See Foman v. Davis, 371 U.S. 178, 182 (1962) (naming “futility of
amendment” as a proper reason for denying leave to amend).
2) Plaintiffs’ claim for “Wrongful Appropriation of Personality” in Count III of the First
Amended Complaint is DISMISSED. There are no relevant differences between the
Pennsylvania and South Carolina laws for this cause of action. 2 When application of the
law of either state would produce the same result, then “there is no conflict at all, and a
choice of law analysis is unnecessary.” Hammersmith, 480 F.3d at 230 (3d Cir. 2007);
see also On Air Entm't Corp. v. Nat'l Indem. Co., 210 F.3d 146, 149 (3d Cir. 2000). The
law of the forum state therefore applies. The essence of this tort requires that a
Defendant act with the purpose of taking advantage of the positive value and good will
associated with another’s reputation. See AFL Philadelphia LLC v. Krause, 639 F. Supp.
2

The Pennsylvania Supreme Court has recognized a cause of action for invasion of privacy by “appropriation of
name or likeness.” See Vogel v. W.T. Grant Co., 327 A.2d 133 (1974). Although the law concerning this cause of
action is somewhat unsettled in Pennsylvania, federal district courts generally agree that the analysis of the
Restatement (Second) of Torts applies. See Fanelle v. LoJack Corp., 79 F. Supp. 2d 558, 564 (E.D. Pa. 2000); AFL
Philadelphia LLC v. Krause, 639 F. Supp. 2d 512, 530 (E.D. Pa. 2009). The Restatement provides liability for
appropriation if the defendant “appropriated to his own use or benefit the reputation, prestige, social or commercial
standing, public interest or other values of the plaintiff's name or likeness.” Restatement (Second) of Torts § 652C
(1977). South Carolina recognizes an invasion of privacy tort for “wrongful appropriation of personality,” which
“involves the intentional, unconsented use of the plaintiff's name, likeness, or identity by the defendant for his own
benefit.” Snakenburg v. Hartford Cas. Ins. Co. Inc., 299 S.C. 164, 170 (1989).

2

2d 512, 531 (E.D. Pa. 2009). Plaintiffs make allegations contrary to the essential
elements of the tort, including that Defendants acted “with the apparent intent of causing
harm to the reputation…of Plaintiffs. ” Pl.’s First Am. Compl. at ¶ 154. Plaintiffs have
therefore failed to state a plausible claim to relief under this cause of action.
3) Plaintiffs’ claim for “Wrongful Publicizing of Private Affairs” in Count IV of the First
Amended Complaint is DISMISSED, without leave to amend. There are again no
relevant differences between the Pennsylvania and South Carolina laws for this cause of
action. 3 Since the application of each state’s substantive law produces the same result,
the court may apply the law of the forum state. Hammersmith., 480 F.3d at 230. In order
to state a claim for this tort, the law requires that the facts publicized be private, rather
than facts “which the plaintiff himself leaves open to the public eye.” Harris by Harris v.
Easton Pub. Co., 483 A.2d 1377, 1384 (1984). In addition, there is no liability for
publication of facts that are of public concern, such as facts in official court records or
facts regarding events like weddings, even if intended to be private affairs. Id. at 1384–
85. As Defendant Brand.com notes, if the published facts in question were true, they
would be of legitimate public concern. Mem. Supp. Def. Brand.com’s Mot. to Dismiss at
9. Plaintiffs have therefore failed to state a plausible claim to relief under this cause of
action. My analysis does not change in light of the additional allegations in Plaintiff
Monarch’s supplemental affidavit, Pl.’s Resp. Def. Brand’s Mot. to Dismiss, Ex. A, at ¶
5(d), which include only facts available in public documents and left “open to the public

3

Pennsylvania’s tort for “public disclosure of private facts” is substantively similar to South Carolina’s tort for
“wrongful publication of private affairs.” Both states require the following elements: (1) wrongful publication of
facts that are (2) private, (3) humiliating or offensive to an ordinary person, and (4) not of legitimate concern to the
public. See Harris by Harris v. Easton Pub. Co., 483 A.2d 1377, 1384 (1984); Swinton Creek Nursery v. Edisto
Farm Credit, ACA, 514 S.E.2d 126, 131 (1999).

3

eye.” I am therefore convinced that amendment of the First Amended Complaint would
be futile.
4) Plaintiffs’ claim for “Aiding and Abetting” in Count VI of the First Amended Complaint
is DISMISSED. It is unclear whether Pennsylvania or South Carolina would recognize
“aiding and abetting” as a separate cause of action in the context of Plaintiffs’ claims. 4
However, the allegations of concerted action that Plaintiffs make in support of this claim,
Pl.’s First Am. Compl. at ¶ 178, are repeated again in support of Plaintiffs’ claim for
Conspiracy in Count VII of the First Amended Complaint, Pl.’s First Am. Compl. at ¶
204. I find that these allegations are more appropriately covered by the claim of
conspiracy, which no defendant has moved to dismiss. Accordingly, I dismiss aiding and
abetting as a separate cause of action, but Plaintiffs’ allegations under this count are
deemed incorporated into Count VII alleging Conspiracy.
5) Defendant Gorman’s Motion to dismiss Plaintiff’s Claim for “Fraudulent Transfer” in
Count VIII of the First Amended Complaint is DENIED. Defendant Gorman argues that
since the alleged transfers occurred approximately ten months before Plaintiffs filed suit,
Defendant could not have perceived Plaintiffs as potential creditors. Def. Gorman’s
Partial Mot. to Dismiss at ¶¶ 43-45. However, a transfer may be deemed fraudulent even
if the creditor's claim arose after the transfer was made. 12 P. S. § 5104(a). 5 Whether the
4

Pennsylvania recognizes a claim for “concerted tortious conduct,” which is analogous to civil aiding and abetting.
HRANEC Sheet Metal, Inc. v. Metalico Pittsburgh, Inc., 107 A.3d 114, 120 (2014) (“[A] concerted tortious conduct
claim is a viable cause of action in Pennsylvania…Section 876 of the Restatement (Second) of Torts addresses the
tort of civil aiding and abetting, which is also known as concerted tortious conduct.”). South Carolina has also cited
Section 876 of the Restatement (Second) of Torts with approval. Future Grp., II v. Nationsbank, 478 S.E.2d 45, 50
(1996). However, such claims appear to typically be recognized in the context of claims for negligence or breach of
fiduciary duty, not for the claims that Plaintiffs cite as the torts in which Defendants aided and abetted (defamation,
tortious interference with current and prospective business relationships, infliction of emotional distress, or false
light claims). Pl.’s First Am. Compl. at ¶ 195.
5
The Committee Comment to 12 P. S. § 5104 affirmatively cites Pergrem v. Smith, 255 S.W.2d 42 (Ky. App. 1953),
in which a tortfeasor’s transfer of property within one week of committing the tort was deemed “in anticipation of

4

debtor had been “sued or threatened with suit” at the time of the transfer is one factor
among many to be considered. 12 P. S. § 5104(b)(4). As I must accept Plaintiffs’
allegations as true in assessing a motion to dismiss, Fowler v. UPMC Shadyside, 578
F.3d 203, 210-11 (3d Cir. 2009), I find that Plaintiffs have pled sufficient facts to state a
plausible claim for fraudulent transfer.
6) Plaintiffs’ claim for “Alter Ego” in Count IX of the First Amended Complaint is
DISMISSED. The alter ego doctrine represents a substantive principle of law separate
from a cause of action. Whether the doctrine applies in this case will be a function of the
evidence. This claim is therefore dismissed as a count in the complaint, without
prejudice to Plaintiffs’ ability to raise such a substantive legal argument when
appropriate.
7) Plaintiffs’ claim for Preliminary and Permanent Injunction in Count X of the First
Amended Complaint is DISMISSED. Injunctive relief is a remedy, not a separate cause
of action. Plaintiffs suggest that they intend to file a Motion for Injunctive Relief
pursuant to Fed. R. Civ. P. 65. Pl.’s First Am. Compl. at ¶ 269. This count of the
complaint is dismissed without prejudice to Plaintiffs’ right to take such affirmative steps
to pursue the entry of an injunction when appropriate.

/s/ Gerald Austin McHugh
United States District Court Judge

litigation” and fraudulent, even though he was not sued until about five months after commission of the tort.
Plaintiffs similarly argue that Defendants made transfers immediately after committing tortious conduct because
they knew that they could be sued for the action, even though they had not yet been sued. Pl.’s Resp. Def. Gorman’s
Mot. to Dismiss at 12.

5