Partners v. Project Veritas Action Fund, Civil Action No. 17-1047 (ESH)

• Decision Date: 31 March 2020
• Docket Number: Civil Action No. 17-1047 (ESH)
• Parties: DEMOCRACY PARTNERS, et al., Plaintiffs, v. PROJECT VERITAS ACTION FUND, et al., Defendants.
• Court: U.S. District Court — District of Columbia

453 F.Supp.3d 261

DEMOCRACY PARTNERS, et al., Plaintiffs,

v.PROJECT VERITAS ACTION FUND, et al., Defendants.

Civil Action No. 17-1047 (ESH)

United States District Court, District of Columbia.

Signed March 31, 2020

Joseph E. Sandler, Dara Lindenbaum, Sandler Reiff Lamb Rosenstein & Birkenstock, PC, Aderson Bellegarde Francois, Heather Renee Abraham, Georgetown University Law Center, Washington, DC, for Plaintiffs.

Benjamin Barr, Pro Hac Vice, Law Offices of Benjamin Barr, Chicago, IL, Benjamin R. Ogletree, Kerry Brainard Verdi, Verdi & Ogletree PLLC, Pro Hac Vice, Stephen R. Klein, Barr & Klein PLLC, Washington, DC, Charles P. Short, Pro Hac Vice, Paul A. Calli, Pro Hac Vice, Calli Law, LLC, Miami, FL, for Defendants.

MEMORANDUM OPINION

ELLEN S. HUVELLE, United States District Judge

This case arises from an undercover operation conducted in 2016 by Project Veritas to infiltrate the Washington, D.C. office of Democracy Partners, LLC. Project Veritas' goal was to secretly record conversations and gain access to confidential information about work by Democracy Partners related to the 2016 Presidential election. Project Veritas accomplished its goal by having one of its employees, Allison Maass, use a false identity and obtain an unpaid internship with Democracy Partners and then secretly record every minute of her internship. Project Veritas used the recordings, along with other materials, in a four-part series it published on YouTube entitled "Rigging the Election."

In 2017, Democracy Partners; Robert Creamer, its president; and Strategic Consulting Group, NA, Inc. ("Strategic Consulting"), a member of Democracy Partners owned and operated by Creamer, filed this lawsuit against Project Veritas; Project Veritas Action Fund; James O'Keefe, the founder and president of both Project Veritas organizations; and Maass, claiming that defendants had violated the federal and District of Columbia wiretap statutes and committed the common law torts of trespass, breach of fiduciary duty, fraudulent misrepresentation, and civil conspiracy. Before the Court is defendants' motion for summary judgment (ECF No. 63). For the reasons stated herein, the motion is granted in part and denied in part.

BACKGROUND

I. FACTUAL BACKGROUND

Unless otherwise noted, the following facts are either undisputed or established by uncontroverted evidence.

Plaintiff Democracy Partners is a limited liability company to which a number of companies and sole proprietorships belong as members. (Pls.' Statement of Material Facts ¶ 87, ECF No. 68-1 ("Pls.' Facts").) The members include a number of consultants and vendors to progressive organizations and Democratic campaigns and committees. (Compl. ¶ 19.) Democracy Partners itself does not have employees, but it serves as a common marketing vehicle for its members, in which capacity it retains various consultants to serve the members' common interests. (Pls.' Facts ¶¶ 89, 90.) Membership is governed by a formal operating agreement, and members contribute to cover some of the shared costs through modest annual dues or in-kind services. (Defs.' Statement of Material Facts ¶ 88, ECF No. 63-2 ("Defs.' Facts"); Pls.' Facts ¶¶ 87, 88.) Plaintiff Robert Creamer, a political consultant, is the sole owner and operator of plaintiff Strategic Consulting, a corporate member of Democracy Partners. (Defs.' Facts ¶ 2.) Strategic Consulting "provides campaign-related services to progressive organizations and Democratic campaigns and committees." (Compl. ¶ 18.)

In 2016, Democracy Partners and Strategic Consulting both operated out of Suite 250 at 1250 Eye Street, NW, in Washington, D.C. (Defs.' Facts ¶¶ 94, 96.) They shared the suite with Mike Lux Media, American Family Voices, and Aaron Black. (Defs.' Facts ¶ 94.) Mike Lux Media was a member of Democracy Partners; it was solely owned and operated by Mike Lux. (Defs.' Facts ¶ 92.) Aaron Black was an individual member of Democracy Partners. (Pls.' Facts ¶ 85.) He had a desk in Suite 250, and he worked with Strategic Consulting and Creamer. (Pls.' Facts ¶ 85.) American Family Voices was not a member of Democracy Partners, but Mike Lux was on its staff and Lauren Windsor, its Executive Director, also worked out of Suite 250. (Defs.' Facts ¶ 93.) However, the lease for Suite 250 was held by Americans United for Change ("AUFC").¹ (Defs.' Facts ¶ 99.) Democracy Partners did not have a sublease, and it paid no rent in 2016. (Defs.' Facts ¶¶ 105, 108, 110.) Strategic Consulting had a sublease, and it paid rent in 2016. (Defs.' Facts ¶¶ 104, 109.)

In addition to holding the lease for Suite 250, AUFC was client of Strategic Consulting. (Defs.' Facts ¶ 36.) It had an oral contract with Strategic Consulting to pay it $11,000 per month for consulting services, and it paid an additional amount for automated telephone calls and other specific services. (Defs.' Facts ¶ 36; Pls.' Facts ¶ 37.) Brad Woodhouse was the head of AUFC. (Pls.' Facts ¶ 37.)

A second client of Strategic Consulting in 2016 with relevance to this litigation was the American Federation of State, County and Municipal Employees ("AFSCME"). (Defs.' Facts ¶ 21.) Pursuant to its contract with Strategic Consulting, AFSCME paid Strategic Consulting $3,000 per month for consulting services plus an additional amount to provide "automated telephone calls and other specific services." (Defs.' Facts ¶¶ 21, 22; Pls.' Facts ¶ 21.) Lee Saunders was the president of AFSCME, Scott Frey was its director of government affairs. and Bill Lurye was its chief of staff. (Defs.' Facts ¶¶ 23, 24; Pls.' Facts ¶ 23.) AFSCME was AUFC's principal funder. (Defs.' Facts ¶ 38.)

Several other individuals and entities had relationships with plaintiffs in 2016 that are relevant to this litigation. Mobilize, Inc., was a limited liability corporation solely owned by Linda Saucedo. (Pls.' Facts ¶ 13.) Saucedo was also employed by Strategic Consulting. (Pls.' Facts ¶ 7.) Mobilize had a contract with the Democratic National Committee ("DNC") to manage its "bracketing" program, the purpose of which was to present counter-messaging wherever candidate Trump or his running mate held events. (Pls.' Facts ¶ 13; Creamer Decl. ¶ 9.) Mobilize hired Strategic Consulting to provide the core services required under the contract. (Pls.' Facts ¶ 91; Creamer Decl. ¶ 9.) Strategic Consulting hired Scott Foval to serve as one of the consultants for the DNC contract with Mobilize. (Defs.' Facts ¶ 7; Pls.' Facts ¶ 7; Creamer Decl. ¶ 9.) For that job, he reported to Creamer. (Pls.' Facts ¶ 13.) Foval was also hired by AUFC as a field director. (Pls.' Facts ¶ 6.)

Defendant Project Veritas, Inc., is a § 501(c)(3) organization that conducts investigations into a wide range of matters it considers to be of public interest. (Defs.' Facts ¶¶ 1, 55.) Defendant Project Veritas Action Fund is a § 501(c)(4) organization that investigates election issues and political campaigns.² (Defs.' Facts ¶ 1.) Defendant James O'Keefe is the founder and President of both Project Veritas and Project Veritas Action Fund. (Pls.' Facts ¶ 1; O'Keefe Aff. ¶¶ 2-3.) Defendant Allison Maass was, at all relevant times, an employee of Project Veritas. (See Maass Dep. at 22:6-9 (Sandler Decl. Ex. 19).) Two other Project Veritas employees played roles in the undercover investigation that led to the present litigation -- Daniel Sandini³ and Christian Hartsock. (Defs.' Facts ¶¶ 56, 60; Pls.' Facts ¶¶ 3, 56, 58.) Project Veritas, Project Veritas Action Fund, and their employees routinely conduct undercover investigations utilizing secret recordings.⁴ (Defs.' Facts ¶¶ 1, 55.)

A. Events Leading Up to Project Veritas' Undercover Operation⁵

Project Veritas employee Hartsock first heard Creamer's name in the spring of 2016, when he introduced himself (using the fake name of "Steve Packard") to Foval, who was not then working for Strategic Consulting or AUFC. (Defs.' Facts ¶¶ 8, 56, 58; Pls.' Facts ¶¶ 7, 12.) What Hartsock heard about Creamer from Foval led Project Veritas to research Creamer and, ultimately, to target him and Democracy Partners as part of their purported investigation into potential "voter fraud" in the 2016 election.⁶ (Defs.' Facts ¶¶ 11, 12, 58, 59.)

In June 2016, Project Veritas' began investigating Creamer by having Project Veritas employee Sandini (using the fake name of "Charles Roth") use Hartsock/Packard's connection to Foval to arrange a phone call between himself (as "Roth") and Creamer, where Sandini/Roth represented himself as a potential donor to AUFC. (Defs.' Facts ¶¶ 60, 61; Pls.' Facts ¶¶ 3, 58.) After that call, on June 24, 2016,⁷ Creamer and Sandini/Roth met in person, ostensibly to discuss specific projects that Sandini/Roth might be interested in supporting. (Defs.' Facts ¶ 62; Pls.' Facts ¶ 62.) During this meeting, Sandini/Roth told Creamer that he had a niece, "Angela Brandt," who was interested in an internship in political work. (Defs.' Facts ¶ 67; Pls.' Facts ¶¶ 66.) No such person actually existed, but Project Veritas employee Maass was tapped to play the role of "Angela Brandt." (Defs.' Facts ¶ 66.) Creamer then spoke to Maass/Brandt on the phone, which led him to arrange for her to contact an individual who was involved in planning demonstrations at the Republican National Convention. (Defs.' Facts ¶ 68; Pls.' Facts ¶¶ 66.) Maass/Brandt then participated in a demonstration at the Convention in Cleveland. (Pls.' Facts ¶ 68.)

In August 2016, after the end of the Convention, Project Veritas directed Sandini/Roth to call Creamer to tell him that Maass/Brandt had had a good experience and that she would like to become involved in further political work for progressive organizations. (Defs.' Facts ¶ 67; Pls.' Facts ¶ 68.) Sandini/Roth also told Creamer that he would make a $20,000 donation to AUFC. (Defs.' Facts ¶ 65.) Creamer agreed to talk to her again. (Pls.' Facts ¶ 68.) When they next spoke, Creamer offered Maass/Brandt an unpaid internship at Democracy Partners, which Maass/Brandt...