Henry v. Lake Charles American Press, L.L.C.

Decision Date14 April 2009
Docket NumberNo. 08-30201.,08-30201.
Citation566 F.3d 164
PartiesMark HENRY, Plaintiff-Appellee, v. LAKE CHARLES AMERICAN PRESS, L.L.C.; Lake Charles American Press, Inc.; Shearman Co. L.L.C.; Shearman Corp.; Hector San Miguel, Defendants-Appellants.
CourtU.S. Court of Appeals — Fifth Circuit

David Kent Anderson (argued), Anderson & Cunningham, Houston, TX, Yul D. Lorio, Doucet Lorio, Lake Charles, LA, for Henry.

James B. Doyle (argued), Law Offices of James B. Doyle, Lake Charles, LA, for Defendants-Appellants.

Appeal from the United States District Court for the Western District of Louisiana.

Before SMITH, BARKSDALE and PRADO, Circuit Judges.

PRADO, Circuit Judge:

In the forty-five years since the Supreme Court's decision in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), courts and legislatures have endeavored to strike a balance between individuals' interests in their reputation and the public interest in free and robust debate. The resulting interplay of defamation law and the First Amendment has substantially lessened the chilling effect of abusive tort claims for conduct stemming from the exercise of First Amendment rights. While these efforts have shielded individuals from the chill of liability, they have often failed to protect speakers from the similarly-chilling cost and burden of defending such tort claims. Concerned over the growth of meritless lawsuits that have the purpose or effect of chilling the exercise of First Amendment rights, a number of state legislatures have created a novel method for better striking the balance between interests in individual reputation and freedom of speech.

This appeal addresses one such method, specifically, Article 971 of Louisiana's Code of Civil Procedure. Article 971 provides a mechanism whereby a plaintiff bringing a defamation claim must show a probability of success on the merits before proceeding. Defendants-Appellants consist of four entities—Lake Charles American Press, L.L.C.; Lake Charles American Press, Inc.; Shearman Co. L.L.C.; and Shearman Corp.—as well as the author of the majority of the newspaper articles in question—Hector San Miguel (collectively "American Press"). American Press brought an Article 971 motion in response to Plaintiff-Appellee Mark Henry's ("Henry") defamation suit. Henry, owner of an airport refueling operation, asserts that American Press defamed him by reporting that Henry provided military aircraft with contaminated fuel that caused their engines to fail, or "flame out."

The district court denied American Press's motion, and American Press brought an immediate appeal. As a threshold matter, we hold that we have jurisdiction over this interlocutory appeal. Moreover, as Henry has failed to establish the necessary probability of success, we reverse the district court's order and render judgment dismissing Henry's defamation claim. Further, we remand the case to the district court for a determination of American Press's entitlement to fees and costs.

I. FACTUAL AND PROCEDURAL BACKGROUND

Henry was the owner and president of Chennault Jet Center, Inc. ("CJC") from 1995 to 2005. CJC operated out of the Chennault International Airport in Lake Charles, Louisiana, and had contracted with the Defense Logistics Agency to refuel military aircraft. In February 2005, the government notified CJC that it was initiating an investigation into whether CJC had sold contractually noncompliant fuel for use in military aircraft. In April 2005, the government terminated the Defense Logistics Agency's contract with CJC.

From May 2005 to January 2006, American Press published a series of articles describing the investigation of CJC's fueling practices. Henry asserts that these articles contained several defamatory statements, but focuses primarily on reports that CJC provided "contaminated fuel" to military aircraft that may have caused them to flame out.

On May 10, 2006, Henry sued American Press for defamation in Texas state court. American Press removed the case to the Southern District of Texas on the basis of diversity and later successfully moved to transfer the case to the Western District of Louisiana. On August 20, 2007, the district court determined that Louisiana substantive law governed the dispute and permitted American Press to file a special motion to strike pursuant to Article 971 of the Louisiana Code of Civil Procedure ("Article 971"). As discussed further below, Article 971 provides a mechanism whereby plaintiffs bringing certain tort claims must show a probability of success on their claim before proceeding. The district court initially denied American Press's Article 971 motion, and American Press requested reconsideration. The district court granted reconsideration and again denied American Press's motion in a more detailed opinion. American Press then filed a notice of appeal from the district court's order denying its Article 971 motion.

II. STANDARD OF REVIEW

Louisiana law, including the nominally-procedural Article 971, governs this diversity case. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Welborn v. State Farm Mut. Auto. Ins. Co., 480 F.3d 685, 687 (5th Cir.2007) (per curiam); cf. United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963, 972-73 (9th Cir.1999) (holding that a similar motion to strike under California state law applies in federal court); Thomas v. Fry's Elecs., Inc., 400 F.3d 1206, 1207 (9th Cir.2005) (per curiam) (reaffirming Newsham).

This court has jurisdiction to determine its own jurisdiction. Houston Cmty. Hosp. v. Blue Cross & Blue Shield of Tex., Inc., 481 F.3d 265, 268 (5th Cir.2007). As to the merits, an Article 971 special motion to strike presents a question of law that Louisiana state courts review de novo. See, e.g., Melius v. Keiffer, 980 So.2d 167, 170 (La.App. 4th Cir.2008); Lamz v. Wells, 938 So.2d 792, 795 (La.App. 1st Cir.2006); Aymond v. Dupree, 928 So.2d 721, 726 (La.App. 3d Cir.), writ denied, 938 So.2d 85 (La.2006). Thus, this court reviews de novo a district court's ruling on an Article 971 motion. Cf. Zamani v. Carnes, 491 F.3d 990, 994 (9th Cir.2007) (reviewing de novo a district court's decision on a similar motion to strike under California state law); Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 676 (9th Cir.2005) (same); Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir.2003) (same).

III. DISCUSSION
A. Jurisdiction
1. Louisiana's Article 971

A number of state legislatures have expressed concerns over the use (or abuse) of lawsuits that have the purpose or effect of chilling the exercise of First Amendment rights. These suits are commonly referred to as "strategic lawsuits against public participation," or "SLAPPs." In response to the growth of SLAPPs, some states have provided a procedural method—often called a "special motion to strike" but also known as an "anti-SLAPP motion" or "SLAPPback"—to weed out and dismiss meritless claims early in litigation. Dismissal of these frivolous tort claims saves defendants the cost and burden of trial and minimizes the chilling effect of these lawsuits. At the same time, meritorious claims proceed, vindicating the interests of those who actually suffered from defamation or other torts.

Article 971 of the Louisiana Code of Civil Procedure provides one such method. In the act creating Article 971, the Louisiana legislature set out the reasons behind and purposes of the law:

The legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for redress of grievances. The legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, it is the intention of the legislature that the Article enacted pursuant to this Act shall be construed broadly.

Thomas v. City of Monroe, 833 So.2d 1282, 1286 (La.App. 2d Cir.2002) (quoting 1999 La. Acts 734). Thus, "Article 971 was enacted by the legislature as a procedural device to be used early in legal proceedings to screen meritless claims pursued to chill one's constitutional rights under the First Amendment of the United States Constitution to freedom of speech and press." Lee v. Pennington, 830 So.2d 1037, 1041 (La.App. 4th Cir.2002), writ denied, 836 So.2d 52 (La.2003); see also Lamz, 938 So.2d at 796 ("The intent of Article 971 is to encourage continued participation in matters of public significance and to prevent this participation from being chilled through an abuse of judicial process."); Baxter v. Scott, 847 So.2d 225, 231 (La.App. 2d Cir.) ("Article 971 is a procedural device to be used in the early stages of litigation to screen those claims which lack merit and which would chill public participation in matters of public interest."), vacated as moot, 860 So.2d 535 (La.2003); Stern v. Doe, 806 So.2d 98, 100 (La.App. 4th Cir.2001) ("The purpose of [Article 971] is to review frivolous and meritless claims against the media at a very early stage in the legal proceedings.").

The portion of Article 971 relevant to the present purposes provides as follows:

A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or Louisiana Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established a probability of success on the claim.

LA.CODE CIV. PROC. art. 971(A)(1). Once a defendant files an Article 971 motion, the trial court stays all discovery except that which the court, "on noticed motion and for good cause," orders to be conducted. Id. art. 971(D). The prevailing...

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