MTR GAMING GROUP, INC. v. ARNEAULT
Filing
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MEMORANDUM OPINION & ORDER: for the reasons set forth in the accompanying Memorandum Opinion that Plaintiffs Motion for Judgment on the Pleadings 51 is DENIED. Signed by Magistrate Judge Susan Paradise Baxter on 1/9/2015. (lrw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MTR GAMING GROUP, INC.,
Plaintiff,
v.
EDSON R. ARNEAULT,
Defendant.
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Case No. 1:11-cv-208-SPB
MEMORANDUM OPINION AND ORDER1
M.J. Susan Paradise Baxter
This civil action arises from a long-standing dispute between Plaintiff MTR Gaming
Group, Inc. (“MTR”) and Defendant Edson R. Arneault (“Arneault”), the company’s former
CEO, major shareholder, and consultant, which has engendered a series of lawsuits in both
federal and state court. In this case, MTR alleges that Arneault tortiously interfered with a
particular contractual relationship, and Arneault counters with allegations that MTR has defamed
him and abused the legal process in connection with this lawsuit. As the parties are diverse and
the matter in controversy exceeds $75,000 exclusive of interests and costs, the court has
jurisdiction pursuant to 28 U.S.C. §1332.
Presently pending before the court is MTR’s motion for judgment on the pleadings
relative to the counterclaims asserted by Arneault. For the reasons that follow, the motion will
be denied.
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In accordance with the provisions of 28 U.S.C. §636(c)(1), the parties have voluntarily consented to have a United
States Magistrate Judge conduct proceedings in this case, including the entry of a final judgment.
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I. Procedural and Factual Background
MTR is a Delaware corporation engaged in the gaming business with a satellite office in
Wexford, Pennsylvania. Among the gaming businesses which MTR owns and operates is
Presque Isle Downs & Casino (“PIDI”), a racetrack and casino located in Erie, Pennsylvania.
(Compl. ¶ 1, ECF No. 1; Answer ¶1, ECF No. 24.) Defendant Edson R. Arneault is a resident of
Florida and a shareholder of MTR. (Compl. ¶2; Answer ¶2.) Between 1995 and 2008, Arneault
served as CEO of MTR and Chairman of its Board of Directors; he was also a significant
shareholder of the company. (Compl. ¶ 7; Answer ¶ 7.)
At some point in 2008, Arneault advised MTR’s Board that he did not intend to continue
as CEO upon the expiration of his employment contract at the end of that year. (Compl. ¶ 9;
Answer ¶ 9.) Upon stepping down as CEO, Arneault became a consultant to MTR pursuant to a
consulting agreement dated October 15, 2008 (hereinafter referred to as the “Consulting
Agreement”). (Compl. at ¶ 10; Answer ¶ 10.) Paragraph 8 of the Consulting Agreement
contained a non-compete clause which placed certain restrictions on Arneault’s participation in
the gaming business for a period of thirty months, or until April 30, 2011. (Compl. Ex. 1 ¶8,
ECF No. 1-2.) At some point, Arneault and MTR also entered into a deferred compensation
agreement (the “Deferred Compensation Agreement”). (See Compl. Ex. 2 at p. 1, ECF No. 1-3.)
A. The West Virginia Lawsuit
Disputes later arose between MTR and Arneault concerning the terms of the Deferred
Compensation Agreement. This resulted in Arneault filing a lawsuit against MTR in the Circuit
Court of Hancock County, West Virginia (the “West Virginia Lawsuit”). (Complaint Ex. 2 at p.
1, ECF No. 1-3.) In February 2010, the parties entered into a settlement agreement and release
of claims (hereinafter, referred to as the “Settlement Agreement”), through which MTR and
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Arneault purported to “finally and completely … resolve, compromise and settle and any all
claims related to the West Virginia Lawsuit, the [Deferred Compensation Agreement] and, with
the exceptions contained in this [Settlement] Agreement, all claims under the Consulting
Agreement.” (Id.) Under the terms of the Settlement Agreement, Arneault was paid $1.6
million in full satisfaction of the claims and rights he had against MTR. (Id.at ¶ 2.2.) The
Settlement Agreement also reduced the geographic scope of the non-compete provision set forth
in the Consulting Agreement but otherwise kept that provision in effect until April 30, 2011. (Id.
at ¶ 2.3.)
B. The Federal Civil Rights Lawsuit
On April 15, 2011, Arneault filed in this Court a civil case captioned Arneault, et al. v.
O’Toole, et al., Civil Action No. 1:11-cv-95 (W.D. Pa.) (hereinafter, the “Civil Rights Lawsuit”).
The named defendants included MTR and several of its current and former executives and
directors (collectively, the “MTR defendants”), as well as MTR’s subsidiary PIDI and numerous
public officials associated with the Pennsylvania Gaming Commission. Arneault’s co-plaintiff in
the Civil Rights Lawsuit was Gregory Rubino, a commercial real estate agent and developer who
is also President of Passport Realty, LLC and Passport Development, LLC, located in Erie
County. See generally Arneault, v. O’Toole, supra, Amended Compl. ¶¶ 2, 49-55, EFC No. 50.
In the Civil Rights Lawsuit, Arneault and Rubino asserted federal claims against the MTR
defendants for alleged conspiracy to violate their civil rights and state law claims against the
MTR defendants for unjust enrichment and promissory estoppel. (See id. at ¶¶ 417-50.)
Arneault’s promissory estoppel claim against the MTR defendants was voluntarily
dismissed on January 25, 2010. See Arneault v. O’Toole, Civil Action No. 1:11-cv-95 (W.D. Pa)
(Order Granting Mot. Partial Voluntary Dismissal Pursuant to Rule 41(a)(1), Jan. 25, 2010, ECF
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No. 83). His federal claims were dismissed with prejudice by the District Court in a
Memorandum Opinion and Order entered on March 28, 2012. See id. (Order Granting, in Part,
Def.s’ Mot. to Dismiss Mar. 28, 2012, ECF No. 84). In that same ruling, the District Court
dismissed the unjust enrichment claim without prejudice to Arneault’s right to pursue that claim
in state court. See id. The District Court’s order dismissing these claims was subsequently
affirmed by the Third Circuit Court of Appeals on February 7, 2013. Arneault v. O’Toole, No.
12-1972 (3d Cir. Feb. 7, 2013) (Opinion Affirming Order Granting Mot. Dismiss) (filed at
Arneault v. O’Toole, Civil Action No. 1:11-cv-95 (W.D. Pa.), ECF No. 101-1).
C. The Present Lawsuit
MTR commenced this civil action on September 16, 2011 based on Arneault’s
prosecution of the Civil Rights Lawsuit and his involvement with an entity known as American
Harness Tracks, LLC (“AHT”). The case was originally assigned to United States District Judge
Sean J. McLaughlin.
1. MTR’s Complaint
MTR’s complaint initially asserted six causes of action. Count 1 alleged a claim for
breach of contract premised upon the theory that Arneault’s involvement with AHT constituted a
violation of the aforementioned non-compete clause. Count 2 asserted a claim for breach of
contract based on the theory that Arneault’s prosecution of the Civil Rights Lawsuit constituted a
violation of a covenant not to sue that was set forth in the Settlement Agreement. Count 3
asserted a claim for tortious interference with a contractual relationship based on Arneault’s
alleged involvement in soliciting Rubino to join as a plaintiff in the Civil Rights Lawsuit. Count
4 asserted a claim for breach of contract premised upon Arneault’s alleged violation of nondisclosure and confidentiality clauses in the Settlement Agreement. Count 5 asserted a claim for
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breach of contract premised upon Arneault’s alleged violation of a non-disparagement clause
contained in the Settlement Agreement. Count 6 asserted a violation of Pennsylvania’s Trade
Secrets Act premised upon Arneault’s alleged activities while associated with AHT. (Compl.,
ECF No. 1.)
2. Arneault’s Motion to Dismiss the Complaint
In November 2011 Arneault filed a motion to dismiss the complaint in its entirety (ECF
No. 11). This motion was aggressively briefed by both parties (ECF Nos. 12, 13, 17, 18, 19, 20,
21) and was argued at a motion hearing (ECF No. 22).
On September 27, 2012, Judge McLaughlin entered a memorandum opinion and order
(ECF No. 23) dismissing all of the counts of the complaint with the exception of Count 3.
Counts 1, 2, 4, and 5 were dismissed without prejudice to be litigated in the Circuit Court of
Hancock County, West Virginia pursuant to a forum selection clause contained in the Settlement
Agreement. Count 6 was dismissed with prejudice pursuant to a release provision contained in
the Settlement Agreement. Judge McLaughlin denied Arneault’s motion to dismiss with respect
to Count 3. Consequently, the only claim currently pending against Arneault is MTR’s claim for
alleged tortious interference with a contractual relationship.
3. Arneault’s Counterclaims
On September 28, 2012, Arneault filed his answer to MTR’s remaining claim (ECF No.
24). At the same time, Arneault asserted counterclaims for abuse of legal process (Count I) and
defamation (Count II) (id. at ¶¶89-127).
Arneault’s first counterclaim is premised on the theory that MTR has abused the legal
process by virtue of its conduct in prosecuting this case. In brief, Arneault alleges that MTR’s
abuse of a legal process took three forms, i.e.,: (i) the filing of “an obviously non-meritorious
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Complaint” in this case (Answer and Countercl. ¶122, ECF No. 24); (ii) the continued defense of
certain claims in this litigation even after a West Virginia state court had ruled that those claims
could not be litigated in this forum; and (iii) the manner in which process was served upon
Arneault. (See Answer and Countercl. ¶¶ 122-23.)
Arneault’s second counterclaim alleges defamation in connection with a letter that
MTR’s counsel in this matter, Elliot Greenleaf, Esq., sent to the Ohio Lottery Commission (the
“Commission”) on September 6, 2012. The correspondence in question was sent in response to a
letter that Arneault’s attorney, John F. Mizner, Esq., had previously sent to the Commission on
August 29, 2012.
Mr. Mizner’s August 29, 2012 correspondence was designed to bring to the
Commission’s attention an incident that had occurred earlier that month at Scioto Downs, a
gaming facility owned by MTR and licensed by the Commission. In relevant part, the
correspondence stated as follows:
On August 9, 2012, Mr. Arneault was invited to lunch by a major fellow MTR
shareholder at the dining area of Scioto Downs, which is adjacent to the area of the
facility licensed for video lottery gaming. While Mr. Arneault was talking with the
shareholder, Mr. Arneault was approached by management in the person of Scioto
Downs attorney Thomas Diehl who demanded that Mr. Arneault leave Scioto Downs.
Mr. Arneault was confused by this request, as neither he nor his companion had been
acting in a disruptive fashion, and he therefore asked why he was being required to leave
Scioto Downs. The individual asking Mr. Arneault to leave advised him that he was
being required to leave because Mr. Arneault was engaged in ongoing litigation with
MTR, an Erie, Pennsylvania-based subsidiary of MTR, and several current and former
MTR officials and employees. The litigation in question does not involve Scioto Downs
or MTR’s Ohio operations in any manner.
Needless to say, Mr. Arneault was quite embarrassed and disappointed that he was
removed from Scioto Downs in front of a fellow MTR shareholder when he was doing
nothing more than eating lunch with the shareholder and discussing business. More
important for the purposes of this letter, however, are the ramifications of this incident for
the Ohio Lottery.
Scioto Downs is currently the only video lottery licensee in Ohio. Therefore, unlike
every other game offered by the Ohio Lottery, video lottery games may be played only at
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one place in Ohio: on the premises of Scioto Downs. The exclusion of Mr. Arneault
from Scioto Downs, then, operates to exclude him from playing video lottery games in
Ohio at all.
This flies in the face of the rules promulgated by the Ohio Lottery, which are clear that
lottery games, including video lottery games, should be made as widely available as
possible to the public. Ohio Admin. Code §3770-4-03 provides that lottery licensees are
expected to make their facilities available to the public “twenty-four hours per day, seven
days per week,” §3770:2-6-01(A), and Game Rule Number Sixty strongly suggests that
video lottery games should be available to any person who qualifies as a “video lottery
participant” at any time “during the established hours of operation for video lottery,[”]
§3770:2-10-60(F).
***
Since Mr. Arneault is a video lottery participant with a right under section 3770:2-701(A) to play video lottery games and is not excluded from playing video lottery games
by section 3770:2-7-01(B), Scioto Downs did not have proper cause for ejecting Mr.
Arneault from its grounds and, therefore, preventing him from playing video lottery
games.
Finally, section 3770:1-6-02 provides that “[a] person shall be able to play any game
operated by the state lottery by purchasing a ticket issued by the state lottery.” (emphasis
added). This provision, cast in mandatory terms with the use of the word “shall”, creates
a mandate that members of the public be permitted to play lottery games. …
The import [of the language in §3770:1-6-02] is quite clear: video lottery games are to be
open to the public, except in the limited circumstances described therein. However,
because of the actions of the management at Scioto Downs – currently the only video
lottery licensee in Ohio – Mr. Arneault has been effectively barred from playing video
lottery games in Ohio.
While the common law rule that business owners have the right to exclude those whom
they deem undesirable from their premises still survives under some circumstances today,
Scioto Downs has contracted away those rights by becoming a licensee of the Ohio
Lottery under the video lottery rules and regulations. Scioto Downs is therefore bound to
make its video lottery games available to the general public absent one of the reasons
contained in the lottery regulations.
The sole reason Mr. Arneault was removed from Scioto Downs’ premises is that he
exercised his First Amendment right of access to the courts by filing lawsuits against
MTR and defending a lawsuit brought by MTR against Mr. Arneault. These lawsuits –
none of which have anything to do with Scioto downs or gaming in Ohio – simply cannot
be the basis for banning Mr. Arneault from playing video lottery games at Scioto Downs
and, in effect, in Ohio.
As you are no doubt aware, video lottery games at racetracks are a highly contentious
issue in Ohio at present. The actions of Scioto Downs in removing Mr. Arneault from
their facility for exercising his First Amendment right of access to the courts have the
potential to embarrass the Ohio Lottery and provide additional fodder to opponents of
gaming in Ohio. Such an outcome would not be in the interest of the Ohio Lottery,
Scioto Downs, or Mr. Arneault.
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Be advised that we intend to make similar requests to the gaming authorities in
Pennsylvania and West Virginia asking for declaratory relief in advance preventing MTR
and its subsidiaries from further violating Mr. Arneault’s rights, embarrassing him, and
violating gaming regulations.
Your leadership is necessary to resolve this issue with Scioto Downs and to ensure that
this does not happen to anyone else who is legally permitted to play video lottery games.
Please contact Scioto Downs, advise them of their responsibility under the video lottery
regulations to allow Mr. Arneault to enter their facilities and play video lottery games,
and ask that they cease and desist from engaging in this unlawful conduct.
If I can provide any further assistance to help the Ohio Lottery investigate these claims or
resolve this situation, please do not hesitate to contact me. …
(Answer to Countercl., Ex. 1, ECF No. 43-1.)
As noted, Mr. Greenleaf’s letter response to the Commission, dated September 6, 2012,
serves as the basis for Arneault’s defamation counterclaim. In relevant part, Mr. Greenleaf’s
letter states the following:
We represent MTR Gaming Group, Inc. and its affiliate Scioto Downs, Inc.
(“MTR”), with regard to an August 29, 2012 letter to you from Mr. John F. Mizner,
Esquire, counsel for Mr. Edson Arneault. Mr. Mizner’s letter makes blatantly false and
scurrilous accusations designed to disparage and maliciously harm MTR.
Among other things, Mr. Mizner states that since February 17, 2010 his client,
Mr. Arneault, has not had any contractual relationship with MTR. This is knowingly
false. Enclosed is a copy of the federal court suit against Mr. Arneault for breach of his
continued contractual obligations to MTR, including his theft of trade secrets,
misappropriation of confidential information, and tortious interference with MTR’s
business. Mr. Mizner’s letter itself further demonstrates Mr. Arneault’s ongoing
malicious motives to harm MTR’s business, including by breaching his continued
contractual obligation not to “directly or indirectly, make or cause to be made any
statements to any third parties defaming, slandering, criticizing, or disparaging “MTR
and its affiliates], or otherwise negatively commenting on the character or reputation of
[MTR and its affiliates].”
As for what occurred on August 9, 2012, Mr. Arneault was politely,
professionally and courteously requested to leave the premises, which a premises owner
has every right to do, especially given the allegations of Mr. Arneault’s past misconduct
of stealing trade secrets, assisting competitors in violation of contractual obligations, and
otherwise interfering with MTR’s business. To be clear, requesting Mr. Arneault to leave
MTR’s premises has absolutely nothing whatsoever to do with what Mr. Mizner
disingenuously pretends to be an “exercise [of Mr. Arneault’s] his [sic] First Amendment
right of access to the courts.” Moreover, even if one entertains Mr. Mizner’s frivolous
and tortured misinterpretation of the Ohio law and regulations governing the operation of
Video Lottery Terminal Facilities, to fabricate some alleged “violation”, his argument is
baseless on its face. Conspicuously absent from his letter is any assertion that Mr.
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Arneault purchased or sought to purchase a video lottery ticket, or engaged in any play on
a video lottery terminal. Indeed, even if one is to believe Mr. Mizner’s letter it clearly
states that Mr. Arneault’s purpose for being on the premises was “nothing more than
eating lunch with the shareholder and discussing business.”
We regret that Mr. Mizner is attempting to involve the Ohio Lottery Commission
in some private agenda for a legal strategy he has against MTR. Rest assured, Scioto
Downs is in strict compliance with Ohio’s video lottery regulations and horse racing laws
and will ensure that lawful lottery participants enjoy their experience in its video lottery
facility and race track. …
(Answer to Countercl. Ex. 2, ECF No. 43-2.)
4. MTR’s Motion to Dismiss the Counterclaims
On October 22, 2012, MTR moved to dismiss the counterclaims for failure to state a
claim upon which relief can be granted (ECF No. 25). In support of its motion, MTR argued
that: (A) both of Arneault’s counterclaims are barred by the Noerr-Pennington doctrine; (B)
Arneault failed to plead a viable abuse-of-process claim because he has not alleged any
perversion of process subsequent to the issuance of process; (C) MTR’s allegedly defamatory
statements are conditionally privileged and/or subject to the fair reporting privilege and are,
therefore, not actionable; and (D) Arneault has failed to plead the elements necessary to establish
a plausible defamation claim. (See generally MTR’s Mem. Law Supp. Mot. Dismiss. Def.’s
Countercl., ECF No. 26.) Attached to MTR’s supporting memorandum were copies of the two
letters referenced above that form the basis of Arneault’s defamation claim. (ECF No. 26-1 and
26-2.) Arneault filed his response to MTR’s motion and supporting materials (ECF No. 30) on
November 21, 2012.
Following Judge McLaughlin’s resignation in August 2013, this matter was reassigned to
the Honorable Arthur J. Schwab (ECF No. 33). On August 29, 2013, Judge Schwab entered a
Memorandum Order in which he found it “clear from [the parties’] submissions that discovery
needs to be conducted before this Court can determine whether the legal claims asserted by
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Arneault in his Counterclaims are legally sufficient.” (Mem. Order Denying Mot. Dismiss 2,
Aug. 29, 2013, ECF No. 34.) Accordingly, Judge Schwab denied MTR’s motion “without
prejudice to re-raise the same issues at an [sic] a more appropriate time following discovery on
those issues.” (Id. at 3.)
5. MTR’s Motion for Judgment on the Pleadings
On September 13, 2013, this case was transferred to the undersigned upon the consent of
the parties (ECF No. 42). In accordance with the provisions of 28 U.S.C. §636(c)(1), this Court
is authorized to conduct all proceedings in this case, including trial and entry of a final judgment.
That brings us to the currently pending motion for judgment on the pleadings, which
MTR filed on March 24, 2014 (ECF No. 51). This motion has been fully briefed by both parties
(ECF Nos. 52, 54, 55, 56, 57) and all issues raised in the motion have been adequately joined.
Consequently, the matter is ripe for disposition.
II. Standard of Review
“The standard for deciding a motion for judgment on the pleadings filed pursuant to
Federal Rule of Civil Procedure 12(c) is not materially different from the standard for deciding a
motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6).” Zion v. Nassan,
283 F.R.D. 247, 254 (W.D. Pa. 2012). Either motion may be used to seek the dismissal of a
complaint based on a plaintiff's “failure to state a claim upon which relief can be granted.” Fed.
R. Civ. P. 12(b)(6), (h)(2)(B). The only difference between the two motions is that a Rule 12(b)
motion must be made before a “responsive pleading” is filed, whereas a Rule 12(c) motion can
be made “[a]fter the pleadings are closed.” Fed. R. Civ. P. 12(b), (c). A court presented with a
motion for judgment on the pleadings must consider the plaintiff's complaint, the defendant's
answer, and any written instruments or exhibits attached to the pleadings. Perelman v.
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Perelman, 919 F. Supp. 2d 512, 521 (E.D. Pa. 2013). See also 2 James Wm. Moore et al.,
Moore's Federal Practice–Civil ¶ 12.38 (2010); Pension Benefit Guar. Corp. v. White Consol.
Indus. Inc., 998 F.3d 1192, 1196–97 (3d Cir.1993) (court should consider the allegations in the
pleadings, the attached exhibits, matters of public record, and “undisputedly authentic”
documents if plaintiff's claims are based on such documents).
A complaint must be dismissed pursuant to Rule 12(b)(6) if it does not allege “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007) (rejecting the traditional 12(b)(6) standard set forth in Conley v. Gibson, 355
U.S. 41 (1957)). The Court need not accept inferences drawn by the claimant if they are
unsupported by the facts as set forth in the complaint. See California Pub. Employee Ret. Sys. v.
The Chubb Corp., 394 F.3d 126, 143 (3d Cir.2004) (citing Morse v. Lower Merion School Dist.,
132 F.3d 902, 906 (3d Cir.1997)). Nor must the court accept legal conclusions set forth as
factual allegations. Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286
(1986)). “Factual allegations must be enough to raise a right to relief above the speculative
level.” Id. Although the United States Supreme Court does “not require heightened fact
pleading of specifics, [the Court does require] enough facts to state a claim to relief that is
plausible on its face.” Id. at 570.
In other words, at the motion to dismiss stage, a plaintiff is “required to make a ‘showing’
rather than a blanket assertion of an entitlement to relief.” Smith v. Sullivan, Civil Action No.
07-528-SLR, 2008 WL 482469, at *1 (D. Del. Feb. 19, 2008) (quoting Phillips v. County of
Allegheny, 515 F.3d 224, 231 (3d Cir.2008)). “This ‘does not impose a probability requirement
at the pleading stage,’ but instead ‘simply calls for enough facts to raise a reasonable expectation
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that discovery will reveal evidence of’ the necessary element.” Phillips, 515 F.3d at 234
(quoting Twombly, 550 U.S. at 556 n. 3).
The Third Circuit has broken down the relevant standard of review into the following
three steps:
First, the court must “tak[e] note of the elements a plaintiff must plead to state a
claim.” Second, the court should identify allegations that, “because they are no
more than conclusions, are not entitled to the assumption of truth.” Finally,
“where there are well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise to an entitlement for
relief.”
Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir.2011) (quoting Santiago v.
Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010)).
III. Discussion
A. The Law-of-the-Case Doctrine
In its motion for judgment on the pleadings, MTR asserts virtually all of the same
arguments that were previously raised in its motion to dismiss the counterclaims. As far as this
Court can discern, there are only two substantive differences: first, the pending Rule 12(c)
motion abandons the argument, previously raised in MTR’s Rule 12(b)(6) motion, that Arneault
has failed to plead facts sufficient to satisfy all of the elements of a plausible defamation claim;
second, the pending Rule 12(c) motion adds an argument that absolute judicial privilege bars any
recovery by Arneault for the alleged defamation.
In view of these circumstances, Arneault contends that this Court should deny MTR’s
motion for judgment on the pleadings out of hand based on Judge Schwab’s prior ruling, which
Arneault maintains is the law of the case. MTR disputes that the “law of the case” doctrine
applies here.
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“The law of the case doctrine posits that when a court decides upon a rule of law, that
decision should continue to govern the same issues in subsequent stages in the same case.”
United States v. Hasan, 468 F. App'x 96, 98 (3d Cir. 2012) (quoting Farina v. Nokia, Inc., 625
F.3d 97, 117 n. 21 (3d Cir. 2010)) (internal quotation marks omitted). The doctrine has
developed “to maintain consistency and avoid reconsideration of matters once decided during the
course of a single continuing [case].” Casey v. Planned Parenthood of Southeastern
Pennsylvania, 14 F.3d 848, 856 (3d Cir.1994) (internal quotation marks and citation omitted). It
has been applied not only to judges being asked to reconsider their own rulings but also to
successor judges who are asked to reconsider the rulings of their predecessors. See, e.g.,
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816 (1988) (“[T]he doctrine applies
as much to the decision of a coordinate court in the same case as to a court's own decisions.”);
TCF Film Corp. v. Gourley, 240 F.2d 711, 713 (3d Cir.1957) (“judges of coordinate jurisdiction
sitting in the same court and in the same case should not overrule the decisions of each other.”).
The law-of-the-case doctrine “‘does not restrict a court's power but rather governs its
exercise of discretion.’” Feesers, Inc. v. Michael Foods, Inc., 591 F.3d 191, 207 (3d Cir. 2010)
(quoting Pub. Interest Research Group of N.J., Inc. v. Magnesium Elektron, 123 F.3d 111, 116
(3d Cir.1997)). Although a district court has the power to revisit prior decisions of its own or of
a coordinate court in any circumstance, “‘as a rule [it] should be loathe to do so in the absence of
extraordinary circumstances such as where the initial decision was clearly erroneous and would
make a manifest injustice.’” Id. (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S.
at 816). Such “extraordinary circumstances” also include situations where new evidence has
become available or where a supervening rule of law has been announced. See Schneyder v.
Smith, 653 F.3d 313, 331-32 (3d Cir. 2011) (recognizing that the “law of the case” doctrine does
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not apply where (1) new evidence is available; (2) a supervening new law has been announced;
or (3) the earlier decision was clearly erroneous and would create manifest injustice) (citation
omitted).
MTR argues that the “law of the case” doctrine has no application under the present
circumstances. According to MTR, Judge Schwab did not issue a “rule of law” because he
merely denied MTR’s prior Rule 12(b)(6) motion without prejudice and without ruling on the
merits of the defenses. MTR posits that the denial of a motion to dismiss without prejudice is
not a “rule of law” for purposes of law of the case doctrine because such an order is interlocutory
and the doctrine does not apply to interlocutory orders.
Aside from the one new issue (i.e. absolute judicial privilege) raised in MTR’s Rule 12(c)
motion, the remainder of the pending motion is functionally akin to a motion for reconsideration
of Judge Schwab’s prior ruling. Although fashioned as a motion for judgment on the pleadings,
the motion incorporates virtually all of the same arguments as were raised in the Rule 12(b)(6)
motion and, as discussed below, it is based on essentially the same record. In addition, as our
previous discussion of the relevant standard of review makes clear, the legal principles governing
this Court’s analysis of the pending Rule 12(c) motion are functionally the same as those which
governed Judge Schwab’s analysis of the Rule 12(b)(6) motion. Moreover, because the
affirmative defenses which MTR previously raised could properly be considered pursuant to
Rule 12(b)(6),2 there is no reason to infer (as MTR urges) that Judge Schwab’s ruling did not
encompass those arguments.
2
Under the so-called “Third Circuit Rule,” affirmative defenses may be raised by way of a Rule 12(b)(6) motion if
the applicability of the defense is apparent on the face of the complaint. See Rycoline Prods., Inc. v. C & W
Unlimited, 109 F.3d 883, 886 (3d Cir.1997); U.S. ex rel. Black v. American Society for Engineering Educ., Civil
Action No. 12-1139, 2014 WL 1765337, at *4 (E.D. Pa. May 2, 2014).
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Even though district courts have the inherent power to reconsider interlocutory decisions,
“‘[c]ourts tend to grant motions for reconsideration sparingly and only upon the grounds
traditionally available under Fed. R. Civ. P. 59(e).’” Deeters v. Phelan Hallinan & Schmieg,
LLP, Civil Action No. 3:11-252, 2013 WL 6524625, at *2 (W.D. Pa. Dec. 12, 2013) (quoting
A&H Sportswear Co., Inc. v. Victoria’s Secret Stores, Inc., CIV. A. 94-7408, 2001 WL 881718,
at *1 (E.D. Pa. May 1, 2001)) (alteration in the original). This line of analysis invokes the same
type of considerations outlined above, to wit: (1) whether there has been an intervening change
in the controlling law; (2) whether there is new evidence that was not previously available; and
(3) whether there is a need to correct a clear error of law or prevent manifest injustice. See
Max’s Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999);
Deeters, 2013 WL 6524625, at *2. Because courts have a strong interest in the finality of their
rulings, a motion for reconsideration should not be used as a vehicle for merely expressing
dissatisfaction with a prior ruling. Deeters, supra, at *2; D'Angio v. Borough of Nescopeck, 56
F. Supp. 2d 502, 504 (M.D. Pa. 1999). Nor should a motion for reconsideration be used “as a
means to reargue matters already argued and disposed of or as an attempt to relitigate a point of
disagreement between the Court and the litigant.” Ogden v. Keystone Residence, 226 F. Supp. 2d
588, 606 (M.D. Pa. 2002). See also Deeters, supra, at *2. Accordingly, reconsideration of
MTR’s previously raised arguments is not warranted absent a showing of (1) an intervening
change in the controlling law; (2) the existence of new evidence not previously available, or (3)
the need to correct a clear error of law that would otherwise result in a manifest injustice. See
Max’s Seafood Café, 176 F.3d at 677; Deeters, 2013 WL 6524625, at *2.
MTR has failed to establish that any of these circumstances are present here. First, no
intervening change in the controlling legal principles is alleged and, as discussed, the standard of
15
review for present purposes is functionally the same as the standard that applied at the Rule
12(b)(6) stage.
Second, no new material evidence has been made available in connection with MTR’s
Rule 12(c) motion that was not previously available to the Court. As to this point, MTR argues
that the record is different now because the two letters which form the basis of Arneault’s
defamation claim have been appended to MTR’s answer to the counterclaims and, in addition,
the Court now has the benefit of the averments which MTR set forth in its answer. As Arneault
points out, however, the parties’ respective letters to the Ohio Lottery Commission were
previously appended to MTR’s motion to dismiss, and there was nothing to prevent Judge
Schwab from considering them because, at the Rule 12(b)(6) stage, a district court may consider
any undisputedly authentic document that a defendant attaches as an exhibit to a motion to
dismiss if the plaintiff's claims are based on the document. See Pension Benefit Guar. Corp. v.
White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993). The reason for this rule is that a
plaintiff with a legally deficient claim might otherwise survive a motion to dismiss simply by
failing to attach to the complaint a dispositive document on which it relied. Id. Thus, the fact
that MTR re-appended the letters to its answer does not functionally alter the record as it existed
for Judge Schwab.
As for the averments which MTR has set forth in its answer to Arneault’s counterclaims,
this new information does not materially alter the Court’s analysis in terms of the sufficiency of
the counterclaims since Rule 12(c) – like Rule 12(b)(6) -- requires the Court to accept all of
Arneault’s well-pleaded factual averments as true. See DiCarlo v. St. Mary Hosp., 530 F.3d 255,
262-63 (3d Cir. 2008); Bradford v. Bolles, Civ. No. 13–1910, 2014 WL 6895270, at *2 (D.N.J.
Dec. 5, 2014). MTR contends that its averments in response to the counterclaims establish
16
“important factual context,” including: (1) Arneault’s prior refusal to accept service in this
action that resulted in MTR arranging personal service upon Arneault; and (2) Arneault’s initial
violation of the Settlement Agreement’s forum selection clause, which allegedly occurred when
he filed a state law promissory estoppel claim against the MTR defendants in the Civil Rights
Lawsuit. (MTR’s Reply Br. Supp. Mot. for Judg. on Def.’s Countercl. 6 n.3, ECF No. 55.) Both
pieces of “new information” highlighted by MTR concern the factual issue of whether MTR
improperly used a legal process against Arneault. To the extent this new information renders
reconsideration of MTR’s prior arguments appropriate, however, the Court finds that MTR’s
averments do not alter the record in such a way as to make judgment in favor of MTR
appropriate at this stage of the proceedings. At most, MTR’s averments merely underscore the
reality that certain factual issues bearing on Arneault’s abuse-of-process claim are controverted,
making entry of judgment inappropriate at this procedural juncture.
Finally, MTR has not alleged, and this Court does not find, any clear error in Judge
Schwab’s prior ruling as would result in manifest injustice if left uncorrected. Because Judge
Schwab essentially deferred any final conclusions as to the sufficiency of Arneault’s
counterclaims until after discovery, MTR will have a full opportunity to defend those claims
based on the arguments raised here.
In sum, then, this Court finds no basis to revisit the arguments previously raised in
connection with MTR’s prior Rule 12(b)(6) motion. To the extent MTR’s averments in its
answer to the counterclaims makes reconsideration appropriate, this Court finds no basis in those
averments for altering Judge Schwab’s ruling that further discovery is warranted in order to
resolve these issues. The Court will, however, address MTR’s assertion of the judicial privilege
17
as a defense to Arneault’s defamation claim, as that is the one issue that was not previously
raised by MTR at the Rule 12(b)(6) stage.
B. Judicial Privilege and the Defamation Claim
In Pennsylvania, it is well settled law that “a person is entitled to absolute immunity for
communications which are issued in the regular course of judicial proceedings and which are
pertinent and material to the redress or relief sought.” Bochetto v. Gibson, 860 A.2d 67 (Pa.
2004). See also Lin v. Rohm and Hass Co., No. 2:11–cv–3158–WY, 2014 WL 1414304, at *11
(E.D. Pa. Apr. 14, 2014) (recognizing the rule and citing Bochetto).
Ohio similarly recognizes the absolute judicial privilege.3 See Surace v. Wulinger, 594
N.E. 2d 939 (Ohio 1986) (holding that the doctrine of absolute privilege in a judicial proceeding
bars a cause of action on an allegedly defamatory statement made in a pleading which bears
some reasonable relation to the proceeding in which it appears). In Surace, the court explained
the rationale behind the rule as follows:
The most basic goal of our judicial system is to afford litigants the opportunity
to freely and fully discuss all the various aspects of a case in order to assist the
court in determining the truth, so that the decision it renders is both fair and just.
While the imposition of an absolute privilege in judicial proceedings may prevent
3
As a federal court sitting in Pennsylvania, this Court’s first task is to apply Pennsylvania’s choice-of-law rules to
determine which state’s law governs the issue. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)
(federal district court must apply the forum state’s rules concerning conflicts- of-law); LeJeune v. Bliss–Salem, Inc.,
85 F.3d 1069, 1071 (3d Cir.1996) (same). Initially, we must determine whether a conflict actually exists between
the laws of Ohio and Pennsylvania. Titeflex Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 88 A.3d 970, 979
(Pa. Super. Ct. 2014) (citation omitted). If no conflict exists, then further analysis is unnecessary; however, if a
conflict is found, this Court must determine which state has the greater interest in the application of its law. Id.
Here, both parties have cited to Pennsylvania and Ohio cases interchangeably in support of their respective
positions concerning the applicability (or non-applicability) of the absolute judicial privilege. This Court does not
perceive any significant conflict in terms how Ohio and Pennsylvania respectively apply this rule of law, and neither
Arneault nor MTR have argued that such a conflict exists. Notably, the courts of both states have cited and applied
the rule as set forth in § 586 of the Second Restatement of Torts. See, e.g., Post v. Mendel, 507 A.2d 351, 356-57
(Pa. 1986); Simmons v. Climaco, 507 N.E. 2d 465, 227-28 (Ohio Ct. App. 1986). In addition, at least one Ohio court
has interpreted the rule by citing to a Pennsylvania ruling. See Krakora v. Gold, 98 CA 141, 1999 WL 782758, at *3
(Ohio App. 7 Dist. Sept. 28, 1999) (discussing the policy reasons for the privilege and citing to Buschel v.
Metrocorp, 957 F. Supp. 595, 598 (E.D. Pa. 1996)). Accordingly, for present purposes, this Court finds no conflict
between the laws of Pennsylvania and Ohio insofar as they relate to the absolute judicial privilege. Decisions from
both jurisdictions will therefore be relied on by the Court without further conflict-of-laws analysis.
18
redress of particular scurrilous and defamatory allegations that tend to harm the
reputation of the person defamed, a contrary rule, in our view, would unduly stifle
attorneys from zealously advancing the interests of their clients in possible
violation of the Code of Professional Responsibility, and would clog court
dockets with a multitude of lawsuits based upon alleged defamatory statements
made in other judicial proceedings. The proper balance that must be made is that
which we have set forth today. We believe that the standard requiring that the
alleged defamatory statement bear some reasonable relation to the judicial
proceeding in which it appears is the proper restraint which should be made in
order to insure the free and open discussion of competing interests that is a
necessary part of our adversarial system of justice.
495 N.E. 2d at 944.
The absolute judicial privilege extends to statements made in connection with “quasijudicial” proceedings. See Doe v. Mount Vernon City Sch. Dist. Bd. of Educ., Case No. 2:08-cv575, 2010 U.S. Dist. LEXIS 34590, at *16 (S.D. Ohio Apr. 6, 2010). See also Doe v. Wyoming
Valley Health Care Sys., Inc., 987 A.2d 758, 766 (Pa. Super. Ct. 2009) (citing Milliner v. Enck,
709 A.2d 417 (Pa. Super. Ct.1998)). Thus, the privilege applies to “any hearing before a
tribunal which performs a judicial function, including many administrative officers, boards and
commissions, so far as they have the powers of discretion in applying the law to the facts which
are regarded as judicial or ‘quasi-judicial’ in character.” Milliner v. Enck, 709 A.2d at 419 n.1
(Pa. Super. Ct. 1998). Cf. Beachland Ents., Inc. v. Cleveland Bd. of Rev., No. 99770, 2013 WL
6730921, at *2 (Ohio Ct. App. Dec. 19, 2013) (the proceedings of administrative officers and
agencies are “quasi-judicial” where there is a requirement of notice, hearing, and the opportunity
to introduce evidence through witnesses; there is no requirement of subpoena power) (citing M.J.
Kelley Co. v. City of Cleveland, 290 N.E. 2d 562, 564-65 (Ohio 1972)).
In this case, MTR contends that the absolute judicial privilege bars any defamation claim
based on Mr. Greenleaf’s September 6, 2012 letter to the Ohio Lottery Commission. According
to MTR, the Commission has “quasi-judicial” authority relative to licensing issues in the gaming
19
industry and MTR, through Mr. Greenleaf, was merely responding to Mr. Mizner’s previous
letter to the Commission asking that the Commission address allegedly unlawful conduct on the
part of MTR’s subsidiary, Scioto Downs.
In his reply, Arneault does not dispute the Commission’s status as an agency with quasijudicial powers.4 Nevertheless, Arneault maintains that the privilege does not apply here
because there is nothing in the record to suggest that his counsel’s letter to the Commission ever
resulted in an investigation or a proceeding of any kind. This argument is unpersuasive.
Court have recognized that, “[t]o permit an attorney to best serve a client, the privilege
must be broad enough to include occasions when a client's cause is being advocated under less
formal circumstances.” Smith v. Griffiths, 476 A.2d 22, (Pa. Super. Ct. 1984). “Thus, the
privilege extends to and includes preliminary demands, as well as informal conferences and
negotiations conducted after litigation has been commenced or when litigation is seriously
contemplated.” Id. (applying the absolute privilege to letters written by an attorney to a quasijudicial officer appointed to hear issues that were part of a pending divorce proceeding involving
the attorney’s client). See also Simmons v. Climaco, 507 N.E. 2d 465 (Ohio Ct. App. 1986)
(holding that the absolute judicial privilege applied to pre-indictment communications made by
an attorney that were critical of law enforcement agents’ conduct in connection with an ongoing
4
The Ohio Revised Code and Ohio Administrative Code afford the Executive Director of the Oho Lottery
Commission broad authority in matters of licensing. See generally OHIO REV. CODE ANN. §§3770.02 (E),
3770.05(B)-(E); OHIO ADMIN. CODE 3770-3-01(A) (granting the Director authority to suspend or revoke the license
of a licensee “who does not comply with the Lottery Act and all rules, conditions, regulations, standards and orders
adopted, promulgated or issued thereunder by the commission or the director”); id. at 3770:2-1-01(D) (giving the
lottery exclusive jurisdiction over all matters within the scope of its authority); id. at 3770:2-3-05(A)(1) (giving the
Director the general authority to suspend or revoke a video lottery license of a licensee “who does not comply with
the Lottery act, all rules, terms and conditions, policies, orders and directives adopted, promulgated or issued by the
commission or the director…”). When making licensing suspension or revocation decisions, the Commission is
generally required to act in accordance with Ohio’s Administrative Procedures Act, OHIO REV. CODE ANN. §§
119.01, et. seq. See OHIO ADMIN. CODE 3770-1-02 (C) (decisions and order of the Director in conducting the
licensing function “shall be made or adopted in compliance with the Administrative Procedure Act.”); id.at 3770:12-02 (licensing function of the Commission and Director “shall be in accordance with the Administrative Procedure
Act,” except in limited situations where the Director is authorized to suspend a license without a prior hearing).
20
grand jury investigation that was focused on the client); Krakora v. Gold, No. 98 CA 141, 1999
WL 782758, at *4 (Ohio Ct. App. Sept. 28, 1999) (applying the privilege to pre-litigation
communications made by insured’s legal counsel which involved allegedly defamatory
statements about insurance company’s proposed polygraph expert); Restatement (Second) of
Torts §§ 586, 587 (1977) (recognizing that attorneys and parties, respectively, are absolutely
privileged to publish defamatory matter concerning another “in communications preliminary to a
proposed judicial proceeding, or in the institution of, or during the course and as a part of, a
judicial proceeding” if the defamatory matter “some relation to the proceeding.”) (emphasis
supplied).
Notably, courts have applied the absolute judicial privilege to allegedly defamatory
statements made in connection with complaints to prosecutorial authorities. Instructive in this
regard is the decision in Pawlowski v. Smorto, 588 A.2d 36 (Pa. Super. Ct.1991). In that case,
the court held that the absolute privilege applied to statements which certain parties had made to
the district attorney and state police accusing an attorney of perjury in an unrelated civil
proceeding. The court cited with approval Section 587 of the Restatement (Second) of Torts5
and comment b thereto, which states (in relevant part) that the absolute judicial privilege applies
to “information given and informal complaints made to a prosecuting attorney or other proper
officer preliminary to a proposed criminal prosecution whether or not the information is
followed by a formal complaint or affidavit.” 588 A.2d at 42 (quoting Restatement (Second)
Torts §587, comment b (1977)) (emphasis in the original). In expressing its concurrence with
this rule, the court explained that:
5
Section 587 provides that: “A party to a private litigation or a private prosecutor or defendant in a criminal
prosecution is absolutely privileged to publish defamatory matter concerning another in communications
preliminary to a proposed judicial proceeding, or in the institution of or during the course and as a part of, a judicial
proceeding in which he participates, if the matter has some relation to the proceeding.” Restatement (Second) Torts,
§587 (1977).
21
according absolute privilege to statements made in or preliminary to judicial
proceedings aims at ensuring free and uninhibited access to the judicial system.
This policy is obviously served by application of the privilege to statements made
solely to law enforcement officials for the purpose of initiating criminal charges.
Although such statements may ultimately prove to be false or maliciously
motivated, the same may be said of statements made by a party who consults with
his or her attorney preliminary to instituting a civil action, or of statements made
by counsel in preliminary conferences or negotiations on their client's behalf.
Nevertheless, such statements are deemed to be absolutely privileged because the
policy concerns stated above outweigh the right of the defamation plaintiff to seek
redress for harm caused by the statements.
Id. (citing cases).
The Ohio Supreme Court reached a similar result in M.J. DiCorpo, Inc. v. Sweeney, 634
N.E.2d 203 (Ohio 1994). Like the Pennsylvania Superior Court in Pawlowski, the court in M.J.
DiCorpo applied the absolute judicial privilege to statements in an affidavit submitted to a
prosecutor for purposes of reporting the alleged commission of a crime. 634 N.E. 2d at 209.
The court explained that, “[a]s a matter of public policy, extension of an absolute privilege under
such circumstances will encourage the reporting of criminal activity by removing any threat of
reprisal in the form of civil liability,” and “[t]his, in turn, will aid in the proper investigation of
criminal activity and the prosecution of those responsible for the crime.” Id. Recalling its recent
holding in Hecht v. Levin, 613 N.E.2d 585 (Ohio 1993) -- that a complaint filed with the
grievance committee of a local bar association is part of a judicial proceeding and therefore
absolutely privileged, the court likened “the filing of an affidavit, information or other statement
with a prosecuting attorney” to the type of communication at issue in Hecht:
The filing of a grievance with the local bar association sets the process in motion
for the investigation of the grievance and the possible initiation of a formal
complaint. Similarly, the filing of an affidavit, information or other statement
with a prosecuting attorney may potentially set the process in motion for the
investigation of a crime and the possible prosecution of those suspected of
criminal activity.
22
634 N.E. 2d at 209. The court concluded it would be “anomalous to recognize an absolute
privilege against civil liability for statements made in a complaint filed with a local bar
association, while denying the protections of that privilege to one who files an affidavit with the
prosecutor's office reporting that a crime has been committed.” Id. Thus, the court viewed the
allegedly defamatory affidavit as the “initial step” in a judicial proceeding as to which absolute
immunity would apply. Id. at 209-10.
Consistent with the above-cited cases, the Court finds it likely that Mr. Mizner’s initial
letter to the Ohio Lottery Commission, if challenged by MTR, would be covered by the absolute
judicial privilege. Through this communication, Arneault and his attorney requested that the
Commission use the authority endowed to it under Ohio law to redress a perceived violation of
the state’s gaming rules – a matter clearly within the Commission’s jurisdiction. Although
Arneault and Mizner could not know, as of the time their letter was sent, whether or how the
Commission would act on their request, it was clearly the expressed hope of Arneault and
Mizner that some form of action favorable to Arneault and adverse to MTR would be taken.
The possibility that the Commission would commence some type of inquiry or investigation was
at least within the realm of reasonable contemplation and, indeed, Mr. Mizner offered his
assistance in this regard. Under these circumstances, the Court believes it likely that Mizner’s
letter to the Commission is the type of communication that would likely fall within the scope of
the absolute judicial privilege.
That being the case, the only sensible conclusion is that MTR’s letter in response is
similarly privileged. Having been copied on a letter accusing MTR’s subsidiary of “unlawful
conduct,” Mr. Greenleaf sent the September 6, 2012 correspondence in his role as legal counsel
setting forth MTR’s version of events, presumably to pre-empt any possible legal problems that
23
might arise as a result of Mr. Mizner’s prior correspondence. Accordingly, this Court views Mr.
Greenleaf’s letter as akin to the type of communications that traditionally receive absolute
protection – i.e., communications that are issued in the “normal course” of quasi-judicial
proceedings and “pertinent and material” to such proceedings. See, e.g., Post v. Mendel, 507
A.2d 351, 355 (Pa. 1986) (“[T]he protected realm has traditionally been regarded as composed
only of those communications which are issued in the regular course of judicial proceedings and
which are pertinent and material to the redress or relief sought.”); Michaels v. Berliner, 694 N.E.
2d 519, 522 (Ohio Ct. App. 1997) (under absolute privilege for judicial proceedings, “witnesses,
parties, attorneys, and judges are protected while functioning as such in the usual and regular
course of judicial proceedings” with regard to statements having “some reasonable relation to
the judicial proceeding in which it appears”) (citing authority).
This result is in keeping with one of the primary policy considerations underlying the
privilege – namely, to ensure zealous and effective representation by attorneys on behalf of their
clients and thereby assist the adversarial process. Accordingly, based on the facts currently of
record, this Court is unwilling to conclude that MTR cannot avail itself of the absolute judicial
privilege insofar as Arneault seeks to pursue his defamation claim on the basis of Mr.
Greenleaf’s correspondence to the Ohio Lottery Commission.
Nevertheless, the Court will defer a definitive ruling on this issue at this juncture. Under
either Ohio or Pennsylvania law, the judicial privilege may be forfeited where the
communication in question has been shared with parties not having a direct interest in the subject
matter of the communication. See, e.g., Pawlowski, 588 A.2d at 41 n.3 (noting that the absolute
judicial privilege may be lost through publication of defamatory material to unauthorized
persons); State v. Baumgartner, No. OT-02-029, 2004 WL 1662206, at *5 (Ohio Ct. App. 2004)
24
(to come within the privilege, an extrajudicial communication must, among other things, be
“published only to persons who are directly interested in the proceeding”) (citation omitted).
In this case, the recipients of Mr. Greenleaf’s September 6, 2012 letter include “C. David
Paragas, Esquire.” Although MTR represents that Mr. Paragas is one of MTR’s and Scioto
Downs’s legal counsel, Arneault points out that this information and the scope of Mr. Paragas’s
agency is not of record, and it is yet unknown whether Mr. Greenleaf’s letter may have been
shared with other individuals not designated as intended recipients. The Court will therefore
permit Arneault an opportunity to explore these issues during discovery. MTR’s motion to
dismiss on the basis of absolute judicial privilege will be denied without prejudice such that
MTR can reassert this argument, to the extent appropriate, on a more fully-developed record.
IV. Conclusion
Based upon the foregoing reasons, MTR’s motion for judgment on the pleadings will be
denied. The denial will be without prejudice to MTR’s right to reassert the arguments in its
motion on a more fully developed record consistent with Rule 56 of the Federal Rules of Civil
Procedure.
An appropriate order follows.
25
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MTR GAMING GROUP, INC.,
Plaintiff,
v.
EDSON R. ARNEAULT,
Defendant.
)
)
)
)
)
)
)
)
)
Case No. 1:11-cv-208-SPB
ORDER
AND NOW, this 9th day of January, 2015;
IT IS HEREBY ORDERED for the reasons set forth in the accompanying Memorandum
Opinion that Plaintiff’s Motion for Judgment on the Pleadings [ECF No. 51] is DENIED.
/s/ Susan Paradise Baxter
SUSAN PARADISE BAXTER
United States Magistrate Judge
26
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