Lokhova v. Halper

• Decision Date: 09 July 2021
• Docket Number: 1:20-cv-1603 (LMB/MSN)
• Court: U.S. District Court — Eastern District of Virginia
• Parties: SVETLANA LOKHOVA, Plaintiff, v. STEFAN A. HALPER, Defendant.

SVETLANA LOKHOVA, Plaintiff, v. STEFAN A. HALPER, Defendant.

1:20-cv-1603 (LMB/MSN)

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division

July 9, 2021

MEMORANDUM OPINION

On May 5, 2021, in an oral ruling, the Court granted defendant Stefan A. Halper¹ ("Halper" or "defendant")'s Motion for Sanctions [Dkt. No. 6], dismissed this civil action, and ordered defendant to file a petition for reasonable attorneys' fees incurred for work done after counsel sent the Rule 11 warning to plaintiff.² The defendant's Petition for Reasonable Attorneys' Fees ("Petition") [Dkt. No. 17], in which he seeks an award of $33,875 in attorneys' fees, is now before the Court. Plaintiff has filed an opposition, and defendant has filed a reply. For the reasons that follow, defendant's Petition will be granted, and Halper will be awarded $33,875 for which plaintiff Svetlana Lokhova ("plaintiff" or "Lokhova") and her attorney Steven Biss ("Biss") will be jointly and severally liable, as a reasonable sanction for their violation of Fed. R. Civ. P. 11 and their continuing to bring frivolous litigation against Halper.

I. BACKGROUND

A. Factual Background

This is the second civil action brought by plaintiff and her attorney Biss against Halper. The first, Lokhova v. Haber, 1:19-cv-632 (LMB/JFA) (E.D. Va. 2019) ("Lokhova I"), which alleged claims for defamation, conspiracy, and tortious interference with contract based upon allegations that Halper was the source for media accusations that Lokhova was a Russian spy and paramour of Lt. General Michael Flynn, was dismissed by this Court as untimely and without merit. Lokhova v. Halper, 441 F. Supp. 3d 238 (E.D. Va. 2020). In that civil action, the Court found that all but two of Lokhova's defamation claims were time-barred by the one-year statute of limitations for defamation, and that the remaining two publications that were within the one-year period were not actionable defamatory statements. Id. Lokhova's tortious interference claim was dismissed as "effectively duplicative" of her defamation claim and because she failed to allege facts supporting the claim. Id. at 265-66. Additionally, Lokhova's common law conspiracy claim was dismissed because it required that an underlying tort be committed and because "her conspiracy allegations [were] too conclusory to survive a motion to dismiss." Id. at 266. Although Halper's Motion for Sanctions was denied, the denial was without prejudice, with the Court acknowledging that:

The record is clear that Biss filed an excessively long complaint and amended complaint on Lokhova's behalf directing unprofessional ad hominem attacks at Halper and others. For example, the complaint calls Halper a "ratf***er," Compl. ¶ 1, and refers to the media defendants as "stooges," Compl. ¶ 21. Such language adds nothing but unnecessary heat to this litigation. Moreover, the complaint exaggerates the nature and content of the allegedly defamatory statements. In addition, Biss and Lokhova had to have known that most of her claims were time-barred, as she had previously filed an unrelated defamation lawsuit in the United Kingdom, which was dismissed as untimely under the one-year statute of limitations applicable in that jurisdiction. See [Dkt. No. 36-2] at 25.

Id. at 267. Observing that imposing sanctions is a "draconian measure," the Court declined to issue sanctions at that time; however, the Court put Biss on notice that should he "file further inappropriate pleadings or pursue frivolous post-judgment litigation against any of these defendants, sanctions might well be justified." Id.

Plaintiff and her counsel appealed the dismissal to the Fourth Circuit, and Halper cross-appealed the denial of his motion for sanctions. Lokhova v. Halper, 2021 WL 1418848 (4th Cir. April 15, 2021). The Fourth Circuit affirmed on all issues. Id. In discussing the decision not to sanction Lokhova and Biss, the Fourth Circuit observed that "this is not the first time attorney Biss's litigation conduct has earned reprimand. His history of unprofessional conduct is long." Id. at *9 (collecting cases). Although the Fourth Circuit "agree[d] with the district court's observations" of Biss's misconduct and "endorse[d] the court's reprimands concerning inappropriate ad hominem attacks," it also "le[ft] to the district court whether it will ultimately join the chorus in sanctioning attorney Biss." Id.

In this second civil action, Lokhova seeks $5,000,000 in compensatory damages and $350,000 in punitive damages for defamation (Count I) and tortious interference with contract (Count II). Specifically, Lokhova alleges that she had written a book titled "THE SPIDER: STEFAN A. HALPER AND THE DARK WEB OF A COUP" and had entered into an author profit participation agreement with Post Hill Press, LLC ("PHP") on December 23, 2019, and that PHP had entered an agreement with Simon & Schuster ("S&S") under which S&S would distribute Lokhova's book. [Dkt. No. 1] ¶¶ 1-2.

In various pre-publication advertisements, PHP represented that the book would be released on August 25, 2020 and solicited preorders from customers on Amazon.com andBarnesandNoble.com, and S&S similarly promoted the book in marketing materials on its website. Id. ¶¶ 2-3. The marketing material posted by PHP and S&S on the internet stated that:

There was a spy, an evil spider at work within and around the Trump presidential campaign. This spy earned a huge payday from a contract signed by James Baker of the Defense Department. Stefan A. Halper began his work in September of 2015, just as Trump's campaign began to roll. He initially targeted the important Trump advisor, Lt. General Michael T. Flynn. During the 2016 Trump campaign, Halper—the spy also known as The Spider—schemed, lied, and ensnared members of the Trump team into his web, including the future president. He fabricated and sustained the fantastical narrative of the Russia hoax. In 2017, he collaborated with the intelligence establishment to take the "kill shot on Flynn," leaking classified information to his associates in the press.

[Dkt. No. 7-3], Def. Ex. 3.

On February 28, 2020, the Order dismissing Lokhova I and denying defendant's motion for sanctions was entered. In letters dated March 13, 2020 to S&S, [Dkt. No. 7-4], Def. Ex. 4, and April 2, 2020 to PHP, [Dkt. No. 7-5], Def. Ex. 5, Halper's counsel objected to false allegations in the marketing material and asked S&S and PHP to cease publication, to enter into settlement negotiations, and to put a litigation hold on relevant documents. Specifically, the March 13, 2020 letter to S&S stated in pertinent part:

I am writing on behalf of my client, Professor Stefan Halper, to give notice to Simon & Shuster that it has defamed the Professor, and to demand that it cease and desist from doing so and issue a public, written retraction of the defamation. Specifically, I refer to the marketing material published on the Simon & Shuster website (www.simonandshuster.com/books/The-Spider/SvetlanaLokhova/9781642935981) for the soon-to-be-published book of Svetlana Lokhova entitled: The Spider: Stefan A. Halper and the Dark Web of a Coup. . . .

. . .

Make no mistake. The marketing materials on your web site have caused, and will continue to cause, Professor Halper personal disgrace, reputational harm, and risk to the personal safety of himself and his family. I trust, however, that upon further review, you will take appropriate steps to mitigate the harm that Simon & Schuster has already caused and limit the damage that would follow from the publication of Ms. Lokhova's book.

. . .

. . . Ms. Lokhova previously made such claims against Professor Halper in a $25 million federal lawsuit in the United States District Court for the Eastern District of Virginia (Lokhova v. Halper, et al. No. 1 :19-cv-632 (LMB/JF A), which was dismissed with prejudice by a federal trial judge on numerous grounds, including the failure of Ms.Lokhova and her counsel to plead facts to support her claims against Professor Halper, and for making baseless claims for defamation. Id. (Docket Entry 90). This federal judgment places you on notice that Ms. Lokhova has previously failed to plead or to prove in a court of law the very same allegations for which she is now using Simon & Shuster to continue to defame Professor Halper.

. . .

Simon & Schuster's publication of such malicious defamation about Professor Halper has and will continue to damage to [sic] his reputation in this country and abroad. These damages are not limited to financial injuries. The false statements of Ms. Lokhova have been used to foment hatred and threats against the Professor and his family, including death threats. Simon & Schuster's distribution, publication, and republication of such inciteful false statements by Ms. Lokhova pose a direct threat to the safety of Professor Halper and his family, for which it will be held responsible.

Because it may be relevant to your liability, versus that of the author, I am hereby asking you to put a litigation hold on:

• All documents, files, or communications, whether digital or paper, relating to the aforementioned marketing material or to the publication of the book it markets;

• All documents, files, or communications, whether digital or paper, relating to the factual allegations made by Svetlana Lokhova made in her Amended Complaint (Docket Entry 52) in Lokhova v. Halper, et al. No. 1:19-cv-632 (LMB/JFA);

• All documents, files, or communications, whether digital or paper, relating to Professor Halper, Svetlana Lokhova, General Michael Flynn, Department of Defense contracts with Professor Halper;

• All documents, files, or communications, whether digital or paper, relating to Steven Biss, Barbara Ledeen, Michael Ledeen, Charles Ross, Devin Nunes, Derek Harvey, or Margot Cleveland;

• All documents, files, or communications, whether digital or paper, relating to any communication with or about an American intelligence representative;

• All

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