IN RE AMER. CONTINENTAL/LINCOLN SAV. & LOAN
| Decision Date | 24 April 1995 |
| Docket Number | MDL No. 834. No. CV 93-1087 PHX JMR. |
| Citation | 884 F. Supp. 1388 |
| Parties | In re AMERICAN CONTINENTAL/LINCOLN SAVINGS & LOAN SECURITIES LITIGATION. LEXECON, INC. and Daniel R. Fischel, Plaintiffs, v. MILBERG WEISS BERSHAD HYNES & LERACH, a Partnership; Cotchett, Illston & Pitre, a Partnership; and Patrick Coughlin, William S. Lerach, Kevin P. Roddy, Leonard B. Simon, Melvyn I. Weiss, Patricia Hynes, Michael C. Spencer, Stephen Steinberg, Joseph Cotchett, and Susan Illston, Individually, Defendants. |
| Court | U.S. District Court — District of Arizona |
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Alan N. Salpeter, Michele Odorizzi, Mayer, Brown & Platt, Chicago, IL, A. Bates Butler, III, Butler & Stein, P.C., Tucson, AZ, for plaintiffs.
Michael Meehan, Meehan & Associates, Tucson, AZ, Jerold S. Solovy, Ronald L. Marmer, Jenner & Block, Chicago, IL, for defendants Milberg et al.
Gerald Maltz, Miller, Pitt & McAnally, P.C., Tucson, AZ, Joseph W. Cotchett, Cotchett, Illston & Pitre, Burlingame, CA, for defendants Cotchett, Illston & Pitre, Joseph W. Cotchett and Susan Illston.
Pending before the Court are defendants' motions for summary judgment in connection with the remaining claims of plaintiffs and plaintiffs' motion to dismiss the Milberg Weiss defendants' counterclaims. Defendants are the law firm of Milberg, Weiss, Bershad, Hynes and Lerach, and certain individually named firm members ("Milberg Weiss"), and the law firm of Cotchett, Illston and Pitre and partners Joseph Cotchett and Susan Illston ("Cotchett, Illston and Pitre").
The factual background concerning this matter is set forth in a previous Order issued by this Court. In re American Continental Corp./Lincoln S & L Sec. Lit.; Lexecon, Inc. v. Milberg, Weiss, 845 F.Supp. 1377 (D.Ariz. 1993). That Order resulted in the dismissal of malicious prosecution and abuse of process claims of plaintiffs and the dismissal of most defamation claims. Still pending are (1) plaintiffs' defamation claim against all defendants arising from the distribution of the proposed Sixth Amended Complaint; (2) plaintiffs' defamation claim against the Milberg Weiss defendants based upon the Roddy letter to the National Law Journal; (3) plaintiffs' tortious interference and commercial disparagement claims against the Milberg Weiss defendants; and (4) the Milberg Weiss defendants' counterclaims. This Order addresses the defendants' motions for summary judgment as to all of these remaining claims of plaintiffs and plaintiffs' motion to dismiss the Milberg Weiss defendants' counterclaims.
The Court previously denied defendants' motion to dismiss plaintiffs' defamation claim arising from Milberg Weiss' dissemination of the proposed Sixth Amended Complaint.
On March 26, 1990, defendants disseminated to the service list a proposed Fifth Amended Complaint in the Lincoln Savings litigation, adding Lexecon and Daniel Fischel as defendants. The proposed complaint was accompanied by a motion for leave to file. The Hon. Richard M. Bilby, the judge to whom the Lincoln Savings case was assigned, denied without prejudice the motion to file that complaint as it related to Lexecon and Fischel.
Thereafter, the decision was made by class counsel to again attempt to sue Lexecon and/or Daniel Fischel. The task of writing that portion of the proposed Sixth Amended Complaint relating to Lexecon fell to Milberg Weiss partner Kevin Roddy. Soliciting input from Milberg Weiss partners Leonard Simon and William Lerach and co-lead counsel Joseph Cotchett of the law firm of Cotchett, Illston and Pitre, Roddy's complaint named both Lexecon and Fischel as defendants. On Friday, December 14, 1990, Roddy, working alone in Milberg Weiss' Los Angeles office, determined that the complaint was finalized and sent it to all the attorneys appearing on the MDL 834 service list, pursuant to Judge Bilby's management order.1 This complaint totalled 231 pages. Roddy also gave instructions for the Sixth Amended Complaint to be filed with the District Court in Arizona.
When Simon, the class counsel responsible for that portion of the case dealing with Lexecon, learned of Roddy's dissemination of the proposed Sixth Amended Complaint, he notified Arizona counsel not to file the documents. On December 18, 1990, only four days after Roddy had disseminated the proposed complaint, a revised Sixth Amended Complaint which named Lexecon as a defendant but deleted Fischel as a party was filed with the court and disseminated to the service list.2
Plaintiffs maintain that dissemination of the proposed Sixth Amended Complaint by Roddy on December 14, 1990, listing Fischel as a defendant, constitutes an intentional and deliberate defamatory act by defendants in furtherance of a conspiracy to destroy them. Because an attorney from the firm of Cotchett, Illston and Pitre signed the aborted Roddy complaint and that firm was co-lead counsel with Milberg Weiss in Lincoln Savings, Cotchett, Illston and Pitre are also alleged to have been participants in this conspiracy.
In support of their allegations, plaintiffs point to a disturbing history of acrimonious statements made by members of the Milberg Weiss firm concerning Fischel. These statements are set forth in detail in the discussion below concerning plaintiffs' tortious interference and commercial disparagement claims.
The December 14, 1990 proposed Sixth Amended Complaint must be considered in context. Plaintiffs maintain that inclusion of Fischel as a defendant in that complaint was intended to defame. The Fifth Amended Complaint, however, also listed Fischel as a defendant and identified the same alleged conduct by Fischel. Furthermore, the revised Sixth Amended Complaint that was ultimately filed on December 18, 1990, contained virtually all of the allegations against Fischel set forth in the aborted Sixth Amended Complaint. The only significant difference between the proposed Sixth Amended Complaint circulated by Roddy on December 14, 1990, and the Sixth Amended Complaint that was filed December 18, 1990, is that Fischel is not named as a defendant in the latter complaint.3 Roddy and Simon have sworn that the December 14, 1990 dissemination of the Sixth Amended Complaint by Roddy was simply a mistake. No direct evidence controverts this testimony.4
To establish defamation based upon Roddy's dissemination of the proposed Sixth Amended Complaint, plaintiffs must show that the complaint was false and defamatory and that defendant Roddy acted with knowledge of the falsity of the allegations or with reckless disregard for the truth or falsity thereof. New York Times v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 725-26, 11 L.Ed.2d 686 (1964). Furthermore, because Fischel is a "limited-purpose public figure,"5 were this claim to proceed to trial, plaintiffs would have the burden of proving this last element by clear and convincing evidence.6Id., 376 U.S. at 285-86, 84 S.Ct. at 728-29.
Summary judgment is appropriate. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). No reasonable jury could find that defendants intentionally disseminated a complaint and withdrew it four days later in order to harm plaintiff Daniel Fischel.7 Because the evidence against the Cotchett, Illston and Pitre defendants is far less persuasive than that against the Milberg Weiss defendants, their motion for summary judgment must also be granted.
This Court previously denied defendants' motion to dismiss defamation claims based upon the letter submitted by Kevin Roddy to the National Law Journal.
On December 14, 1992, the National Law Journal printed a story concerning the Lincoln Savings litigation. Randall Samborn, Firms Sued in Wake of Lincoln S & L Case, National Law Journal, December 14, 1992 at 2. There is no evidence that Lexecon or Daniel Fischel were responsible for the publication of this article.
In response to that article, Kevin Roddy wrote a letter to the National Law Journal. Kevin P. Roddy, Defendants Tell Their Side of Lexecon Suit, National Law Journal, March 8, 1993 at 16.
Plaintiffs argue that Roddy's letter was false and defamatory because the letter stated: (1) Judge Bilby, in a published opinion, had detailed Lexecon's "wrongful activities on behalf of convicted felon Charles H. Keating, Jr.'s American Continental Corporation and Lincoln Savings and Loan in fraudulent dealings with federal regulators"; (2) Lexecon had "settled" with plaintiffs; and (3) "to date, Lexecon has paid Plaintiffs Litigation Group more than $700,000 as part of that settlement."
Defendants first maintain that the letter is not actionable because it is true. As to the first matter, relating to the characterization of Judge Bilby's published opinion, the Court finds otherwise. In re American Continental Corp./Lincoln S & L Sec. Lit., 794 F.Supp. 1424, 1448-49 (D.Ariz.1992), Judge Bilby detailed the allegations against Lexecon. Judge Bilby held that a rational finder of fact could find that Lexecon possessed reckless scienter in its performance of certain services on behalf of Charles Keating, Jr., and therefore denied Lexecon's motion for summary judgment. Defendants contend that because the readership of the National Law Journal is primarily composed of lawyers and the Roddy letter refers to the order being issued in the context of denial of a motion for summary judgment, readers of the article must have understood that Judge Bilby's order merely stated that sufficient evidence of Lexecon's misconduct existed to preclude summary judgment. The Roddy letter, however, does not accurately report what Judge Bilby's order stated. The letter attempts to enhance Milberg Weiss' allegations by recasting those allegations as the conclusions reached by Judge Bilby. Plaintiffs contend that Roddy's...
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