SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Civil Division

PETER GORDON, et al., Plaintiffs, Case No. 2016 CA 006397 B Judge Steven M. Wellner Next Date: Dec. 9, 2016 v. ISC FOREST HILLS NEIGHBORHOOD ALLIANCE, INC., et al., Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS' OPPOSITION TO DEFENDANTS' SPECIAL MOTION TO DISMISS AND TO DEFENDANTS' RULE 12(b)(6) MOTION TO DISMISS

The Defendants' motions to dismiss should be denied for the reasons set forth

below.

FACTUAL AND PROCEDURAL BACKGROUND

The allegations relied upon by the Gordons as the basis for denial of Defendants'

motion to dismiss for failure to state a claim (Super. Ct. Civ. R. 12(b)(6)) are laid out in

the Gordons' Amended Complaint ("Amend. Compl.") or, alternatively, in the Gordons'

Second Amended Complaint ("2d Amend. Compl.").1 The Gordons will not burden the

Court with repetition here.

As to Defendants' anti-SLAPP motions, the Gordons rely, in part, on the

following documents attached hereto as Exhibits.

The petition signed by Ms. Solomon purportedly on behalf of the Alliance is 1 The Gordons moved the Court for leave to amend their Complaint on November 17, 2016. Defendants do not consent to the relief sought by the Gordons.

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attached as Exhibit 1.

Attached as Exhibit 2 are Two-Year Reports filed by the Alliance between 2002

and 2016 (except 2012) obtained by the Gordons through a FOIA request to the

Department of Consumer and Regulatory Affairs.2 Corporations filing the reports are

required to list their officers, directors and similar persons with control over the

corporation. Ex. 2. The Alliance's reports demonstrate that the Alliance had no officers,

directors or others with the authority to control the corporation since at least 2011. Id.

The Alliance, in other words, was and is a zombie corporation or empty shell and is

unable to act in its own name. Id. More pointedly, Ms. Solomon was not the Alliance's

vice-president on May 10, 2015 when she submitted a petition nominating the Gordon

home as a historic landmark. Ex. 2; compare Ex. 1 (petition signed by Ms. Solomon

purportedly as the vice-president of the Alliance). To be blunt, Ms. Solomon lied about

her role in the Alliance when she submitted the nomination petition. Ex. 2.

Exhibit 3 is the contract entered into between the Gordons and Long & Foster

Real Estate, Inc.

Exhibit 4 is the Declaration of John Gordon. Mr. Gordon makes it clear that he

and his brother had a contract with Long & Foster as well as other business expectations

related to the sale of their house located at 3020 Albemarle Street NW, Washington, DC

20008 ("Gordon home"). Ex. 4. Mr. Gordon received a copy of the petition submitted by

Ms. Solomon to the Historic Preservation Review Board ("HPRB"). Id. The Gordons

relied on Ms. Solomon's statements in her petition to their detriment. Id.

2 The Gordons, through undersigned counsel, also submitted a FOIA request to the IRS. The IRS produced records related to the Alliance's successful 2001 application for tax-exempt status under 26 U.S.C. § 501 as a non-profit corporation without members. The IRS did not produce any tax returns or other filings and no documents created after 2002. If the Alliance is a functioning corporation, it will be news to the IRS.

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STANDARD OF REVIEW

A. D.C. Code § 16-552 (Anti-SLAPP Statute)

Evaluation of an anti-SLAPP motion involves a two-step process. D.C. Code §

16-5502(b); see also Doe v. Burke, 133 A.3d 569, 571 (D.C. 2016). First, the defendant

must make "a prima facie showing that the claim at issue arises from an act in

furtherance of the right of advocacy on issues of public interest." Id. Second, if the

defendant makes the required showing, the burden shifts to the plaintiff to "demonstrate[

] that the claim is likely to succeed on the merits." Id.; see also Doe, 133 A.3d at 571.

An "act in furtherance of the right of advocacy on issues of public interest" means:

(A) Any written or oral statement made:

(i) In connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; or (ii) In a place open to the public or a public forum in connection with an issue of public interest; or

(B) Any other expression or expressive conduct that involves petitioning the government or communicating views to members of the public in connection with an issue of public interest.

D.C. Code § 16-5501(1).

B. Super Ct. Civ. R. 12(B)(6) (Motion to Dismiss for Failure to State a Claim)

To survive a Rule 12(b)(6) motion, “a complaint must contain sufficient factual

matter, accepted as true, to state a claim to relief that is plausible on its face.” Potomac

Dev. Corp. v. District of Columbia, 28 A.3d 531, 544 (D.C.2011) (internal quotation

marks omitted). “When there are well-pleaded factual allegations, a court should assume

their veracity and then determine whether they plausibly give rise to an entitlement to

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relief.” Id. But, pleadings that “are no more than conclusions ... are not entitled to the

assumption of truth,” and are insufficient to sustain a complaint. Id. The Court, in other

words, must “accept the allegations of the complaint as true, and construe all facts and

inferences in favor of the plaintiff.” Washkoviak v. Student Loan Mktg. Ass'n, 900 A.2d

168, 182 (D.C. 2006) (internal quotation marks, citation and alteration marks omitted).

Accordingly, “[a]ny uncertainties or ambiguities involving the sufficiency of the

complaint must be resolved in favor of the pleader, and generally, the complaint must not

be dismissed because the court doubts that plaintiff will prevail.” Washkovia, 900 A.2d

at 177 (internal quotation marks and citations omitted); see also Francis v. Rehman, 110

A.3d 615, 625 (D.C. 2015).

“'[A] defendant raising a 12(b)(6) defense cannot assert any facts which do not

appear on the face of the complaint itself.'” Id. (quoting Carey v. Edgewood Mgmt. Corp.,

754 A.2d 951, 954 (D.C.2000)) (alteration in original). If a trial court does consider

material outside the complaint when deciding a Rule 12(b)(6) motion, it must convert the

motion into one for summary judgment (Super. Ct. Civ. R. 56) and give the parties

"adequate opportunity to present affidavits or other matters appropriate to a ruling on" a

motion for summary judgment. Id. (citations omitted); see also Francis, 110 A.3d at 620.

ARGUMENT

A. Defendants' anti-SLAPP motions should be denied because D.C. Code § 16-5502 violates the Seventh Amendment right to a jury trial and the First Amendment right to petition.

1. Seventh Amendment Right to a Civil Jury

The Gordons have a constitutional right to a jury; to having the evidence weighed

by that jury; and to have all disputed facts decided by that jury. U.S. Const. Amend VII.;

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see also Curtis v. Loether, 415 U.S. 189, 193 (1974). The right is not absolute, but

subject to exceptions and caveats. See, e.g. Curtis, 415 U.S. at 193 (right to jury applies

when legal questions are resolved, but not when case is one in equity); see also

BiotechPharma, LLC v. Ludwig & Robinson, PLLC, 98 A.3d 986, 995 (D.C.2014)

(acknowledging that the Seventh Amendment right to jury trial applies to District of

Columbia).

Other jurisdictions have noted the unconstitutionality of anti-SLAPP laws. See,

e.g. Davis v. Cox, 351 P.3d 862, 871-73 (Wash. 2015) (striking down as unconstitutional

the state's anti-SLAPP statute because the statute required the judge to assume the jury's

role and to weigh evidence and resolve factual disputes); Leiendecker v. Asian Women

United of Minnesota, 848 N.W.2d 224, 231-33 (Minn. 2014) (noting that state's anti-

SLAPP statute potentially violated right to jury trial, but avoided ruling because plaintiff

had not properly addressed the issue); Unity Healthcare Inc. v Cty of Hennepin, 308

F.R.D. 537, 549 (D.Minn. 2015) (finding that Minn. Anti-SLAPP statute violated right to

jury trial because would result in "a bench trial based on affidavits and exhibits, rather

than a jury trial") (appeal filed 8th Cir. July 10, 2015).

The anti-SLAPP statute violates the Seventh Amendment because it requires the

judge to consider matters outside the pleadings (D.C. Code § 16-5502(c)(2) & (d)

(allowing limited discovery and requiring a hearing); compare Super. Ct. Civ. R. 12(b));

weigh the evidence; make credibility determinations; and grant the motion even in the

face of disputed material facts (D.C. Code § 16-5502(b) (plaintiff has burden to show

"likely to succeed on the merits"); compare Super. Ct. Civ. R. 56).3 The statute abolishes

3 The language that renders the statute unconstitutional is the requirement that the court must grant an anti-SLAPP motion unless the plaintiffs show that they are likely to succeed on the merits. D.C. Code § 16-

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the jury and replaces it with a judge. This is unconstitutional. Unity Health, 308 F.R.D.

at 549; Davis, 351 P.3d 871-73 (relying on state constitution right to jury trial).

Plaintiffs agree with Defendants that D.C. Code § 16-5502 requires a court to

hold plaintiffs to a standard higher than that used in Super. Ct. Civ. R. 12 and 56. Def.

MTD Mem. at 4 (citing Center for Advance Defense Studies v. Kaalbe Shipping Int’l, et

al., 143 Daily Wash. L. Rptr. 1425, 1427 (D.C. Super. Ct. April 7, 2015)) (hereafter

"CADS").

Some courts have avoided the unconstitutionality of the statute's likely to prevail

language by interpreting that language to be synonymous with the probability of success

language used in California's anti-SLAPP statute (Cal.Civ.Proc.Code § 425.16). See

CADS at 1427 (citing Boley v. Atl. Monthly Group, 950 F. Supp. 2d 249, 257 (D.D.C.

2013); Abbas v. Foreign Policy Group, LLC, 975 F. Supp. 2d 1, 13 (D.D.C. 2013)). The

CADS court examined these cases and disagreed. Id. The CADS court held that the non-

moving party's burden was greater than under Super. Ct. Civ. R. 12 or 56 and was akin to

the burden for a preliminary injunction: the non-moving party had to show a "substantial

likelihood [to] prevail on the merits". Id. at 1427 (citations omitted, emphasis added).

The Gordons agree with the reasoning used by the CADS court: interpreting the

"likely to succeed" language used in D.C. Code § 16-5502(b) as synonymous with

California's "probability to succeed" language is foreclosed by basic rules of statutory

construction. CADS, at 1427, n.8. The CADS court reasoned that the D.C. Council

intentionally used language different from that used in California precisely because the

D. C. Council wanted to impose on plaintiffs a standard that is more difficult to carry

5502(b). No court can make such a determination without weighing the evidence and resolving factual disputes. To add injury to injury, plaintiffs must meet their burden without discovery or, at best, with limited discovery. D.C. Code § 16-5502(d).

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than is California's "minimal merits" test. Id. at n.8; see also e.g. Mindys Cosmetics, Inc.

v. Dakar, 611 F.3d 590, 598-99 (9th Cir.2010) (describing California's minimal merit

test); Mann v. Quality Old Time Serv., Inc., 120 Cal.App.4th 90, 105 (2004) (“A plaintiff

is not required to prove the specified claim to the trial court; rather, so as to not deprive

the plaintiff of a jury trial, the appropriate inquiry is whether the plaintiff has stated and

substantiated a legally sufficient claim”) (internal quotation marks omitted).

The CADS court's conclusion is inferentially supported by the Court of Appeals

decision in Doe No. 1 v. Burke, 91 A.3d 1031 (D.C. 2014). In that case, the court

reversed the denial of an anti-SLAPP motion because the plaintiffs had produced

insufficient evidence to persuade the court that they would prevail. Id. at 1045 (weighing

evidence).

D.C. Code § 16-5501 et seq. violates the Seventh Amendment because it requires

a judge to fill the role of a jury and weigh evidence. The statute does not require just the

dismissal of a meritless claim such as would be dismissed under Super. Ct. Civ. R. 12,

but requires the dismissal of a difficult claim that the plaintiffs could win, but might lose.

What is more, the anti-SLAPP statute punishes the plaintiff: the dismissal is with

prejudice and an award of costs and fees against the plaintiffs is presumptive. D.C. Code

§ 16-5502(d) and 16-5504(b).

Defendants' motion should be denied because they rely on a correct, but

unconstitutional, interpretation of D.C. Code § 16-5502(b).

2. First Amendment Right to Petition the Government for Redress of

Grievances The Gordons have a right to petition the government for redress of their

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grievances. U.S. Const. Amend I. The Supreme Court long ago acknowledged that the

right to petition emphatically includes the right to sue: "The Right to sue and defend in

the courts is the alternative of force. In an organized society, it is the right conservative

of all other rights and lies at the foundation of orderly government." Chambers v.

Baltimore & Ohio R.R., 207 U.S. 142, 148 (1907)4; see also Calif. Trans. v. Trucking

Unlimited, 404 U.S. 508, 510 (1972) (access to courts is a fundamental right). The right

to sue, however, is, like other fundamental rights, not absolute, but is subject to the same

sort of restrictions as is the right to speech. See McDonald v. Smith, 472 U.S. 479, 479-

80 (1985) (right to petition does not create absolute immunity for defamatory statements

made in a petition); but see Dixon v. Superior Court, 30 Cal. App. 4th 733, 745 (1994)

(distinguishing McDonald in SLAPP case and finding an absolute immunity as to motive

for comments made in a liquor license proceeding).

Because the right to petition is fundamental, any non-incidental restriction of the

right must survive strict scrutiny. See, e.g. Fair Political Practices Com'n v. Superior

Court, 599 P.2d 46 (Cal. 1979) (applying rational basis test to restrictions on lobbying

because such restrictions impose only an incidental burden, but noting that strict scrutiny

would be the applicable test if non-incidental restrictions were imposed). To pass strict

scrutiny, a law must be narrowly tailored to further a compelling government interest

using the least restrictive means available. See, e.g. Reed v. Town of Gilbert, Ariz., __

U.S. __, 135 S. Ct. 2218, 2222, 192 L. Ed. 2d 236 (2015) (free speech case).

Here, the situation is more than a little ironic. The purpose of anti-SLAPP

statutes is to protect defendants from lawsuits that the plaintiff does not intend to win,

4 Opponents occasionally criticize undersigned counsel for relying on old Supreme Court opinions, even when those opinions are still good law. There is a reason for undersigned counsel's approach: plaintiffs can rely on old, well-settled law rather than novel legal theories.

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but, instead, intends to use to "punish or prevent the expression of opposing points of

view" in a "public policy debate." Doe No. 1, 91 A.3d at 1034 (citations omitted). Ms.

Solomon and the Alliance turn the statute's purpose on its head by punishing the Gordons

for petitioning this Court for the redress of a clear grievance: the designation of their

home as a historic landmark against their will and through fraud.

Assuming without conceding that discouraging meritless lawsuits is a compelling

governmental interest not already adequately addressed by Super. Ct. Civ. R. 12 and 56,

D.C. Code § 16-5501 et seq. is not narrowly tailored and does not use the least restrictive

means to further that end.

D.C. Code § 16-5501 et seq. requires a defendant to clear a minimal threshold and

places the full burden of proof on the plaintiff; a burden the plaintiff must carry without

discovery. D.C. Code § 16-5502(b). If the plaintiff fails to carry his burden, he is handed

a bill for costs and fees. D.C. Code § 16-5504(b); Doe v. Burke, 133 A.3d 569, 576-77

(D.C. 2016) (award of costs and fees to defendants is presumptive and not discretionary).

D.C. Code § 16-5501 et seq. does not discourage meritless claims, but, instead,

discourages and punishes plaintiffs with meritorious claims that cannot be proved early in

the litigation without discovery. The statute is, in other words, not narrowly tailored to

further a compelling governmental interest and, therefore, is unconstitutional.

B. Jane Solomon has not made a prima facie case that she engaged in protected conduct within the ambit of D.C. Code § 16-5502. Ms. Solomon insinuates that she filed a nominating petition on behalf of the

Alliance. Def. MTD Mem. at 6; Ex. 1 (petition) (petition signed by Ms. Solomon as

purported vice president of the Alliance). Filing such a petition on behalf of a

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corporation by a corporate agent would normally satisfy a defendant's burden of making a

prima facie case sufficient to invoke the anti-SLAPP statute, but that is not what

happened here.

Here, Ms. Solomon offers no evidence to make out such a prima facie case. Ms.

Solomon offers no evidence that she is an agent of the Alliance. See, generally Def.

MTD Mem.; see also Smith v. Jenkins, 452 A.2d 333, 335 (D.C.1982) (person asserting

an agency relationship has the burden to prove the relationship). Ms. Solomon offers no

evidence that the Alliance authorized her to file a nominating petition or even knew that

she intended to do so. Id. Indeed, Ms. Solomon effectively concedes that she acted

without the authorization or knowledge of the Alliance when she submitted the petition.

Id. at 19 (excusing Ms. Solomon's actions ebcuse no officer or director from the Allaince

has objected).

In sum, Ms. Solomon has not made even a prima facie case supporting her

contention that either she engaged in conduct on behalf of the Alliance or that the

Alliance engaged in conduct through her. To be sure, Ms. Solomon could probably clear

the anti-SLAPP statutes' minimal threshold if she contended that the filing of the petition

represented her own conduct (even if deceitful), but that is not the contention advanced

by Ms. Solomon.

Ms. Solomon's anti-SLAPP motion should be denied because she has not made

out a case that she either filed a petition as an agent of the Alliance or on her own behalf.

C. The Gordons are likely to succeed on the merits on their claims of tortious interference and fraud against Ms. Solomon. Anti-SLAPP motions must be denied if the plaintiffs can show a likelihood of

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success on the merits. D.C. Code § 16-5502(b). If the Court interprets the "likelihood of

success" language as imposing a burden similar to that used in Super. Ct. Civ. R. 12(b) or

56, then the Gordons' complaint easily clears that hurdle. See, infra, Section H. Even if

the Court interprets the language as imposing a higher bar, the Gordons clear that hurdle

as well.

1. Tortious Interference

"To assert a tortious interference with a contract claim, a plaintiff must allege: (1)

the existence of a contract; (2) knowledge of the contract; (3) intentional procurement of

a breach of the contract; and (4) damages resulting from the breach." Intelsat USA Sales

Corp. v. Juch-Tech. Inc., 935 F.Supp. 2d 101, 115 (D.D.C.2013) (citing Casco Marina

Dev., LLC. v. D.C. Redev. Land Agency, 834 A.2d 77, 83 (D.C.2003) (quoting Paul v.

Howard Univ., 754 A.2d 297, 309 (D.C.2000)). Despite the language of the third

element, an actual breach is not a necessary element of the prima facie case. Id. (citing

Casco Marina, 834 A.2d at 84 (“[W]hile we have articulated the third element of tortious

interference as procurement of breach, ... a ‘breach’ as such is not required, but merely a

failure of performance, whether by the terms of the contract in question or not.”); see

Sorrells v. Garfinckel's, Brooks Bros., Miller & Rhoads, Inc., 565 A.2d 285, 289-90

(D.C.1989)).

The Intelsat court acknowledged that in a "later case, a different panel of [the

Court of Appeals] concluded that '[u]nlike in some jurisdictions, courts in the District of

Columbia have held that a breach of contract is an essential element of the tort.” Id.

(quoting Murray v. Wells Fargo, 953 A.2d 308, 325-26 (D.C.2008) (citing Edmondson &

Gallagher v. Alban Towers Tenants Ass'n, 48 F.3d 1260, 1266 (1995))) (some internal

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quotation marks omitted). The Intelsat court declined to follow the Murray court

because: (1) the Murray court's reliance on Edmondson & Gallagher was misplaced

("Edmondson drew no such conclusion" that breach is an essential element); and (2) the

"weight of authority" does not require allegation of an actual breach as part of a prima

facie case. Id. at 115-16 (denying defendant's Rule 12(b)(6) motion)(citations omitted).5

Any confusion about the exact nature of the elements of a tortious interference

was resolved by a 2008 decision in which the Court of Appeals merged a claim of

tortious interference with contract with claims for tortious interference with business

relationships and adopted the Casco Marina approach to the elements. NCRIX, Inc. v.

Columbia Hosp., 957 A.2d 890, 900, n.16 (D.C. 2008).6 The NCRIX approach was

confirmed in Newmyer v. Sidwell Friends School, which held that, to establish a prima

facie case of tortious interference, a plaintiff must show: (1) "existence of a valid

contractual or other business relationship;" (2) "[defendant's] knowledge of the

relationship;" (3) "intentional interference with that relationship by [the defendant];" and

(4) "resulting damages." 128 A.3d 1023, 1038 (D.C.2015) (alterations added, other

alteration marks, internal quotation marks and citations omitted). "Interference is

actionable where it induces or otherwise causes the third person not to perform and it

need not cause an actual breach of the business relationship, but instead may cause

merely a failure of performance by one of the parties." Id. (alterations, internal quotation

marks and citation omitted).

Thus, Defendants' insistence that the Gordons must plead and show a breach of

5 The most recent decision to deal with the meaning of the third element is Alemayehu v. Abere, ___ F.Supp.2d ___ (D.D.C. 2016). Although not yet published, the decision is instructive because that court also did not require an actual breach, but only interference with a contract leading, in that case, to termination of the contract. Id. at 8. 6 NCRIX was decided about three months after Murray by a separate panel of the Court of Appeals.

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contract is incorrect. Def. MTD Mem. at 14.

Here, the Gordons have alleged the existence of a contract; Ms. Solomon's

knowledge of that contract; Ms. Solomon's intentional interference with the contract and

resulting damages. See Amend. Compl. ¶¶68-74; Ex. 3; Ex. 4 (J. Gordon Decl.) ¶¶ 4-5.

The Gordons have shown that they are likely to succeed on the merits of their

tortious interference claim against Ms. Solomon and, accordingly, Ms. Solomon's anti-

SLAPP motion should be denied.

2. Fraudulent Misrepresentation

"Under the common law of the District of Columbia, a plaintiff alleging fraud

must establish five elements: (1) a false representation, (2) made in reference to a

material fact, (3) with knowledge of its falsity, (4) with intent to deceive, and (5) an

action that is taken in reliance upon the representation." Sununu v. Phillippine Airlines

Inc., 792 F.Supp. 2d 39, 49 (D.D.C.2011) (citation omitted); accord Sundberg v. TTR

Realty, LLC, 109 A.3d 1123, 1130 (D.C. 2015) (using slightly different language to

describe the elements).

The foregoing elements are consistent with a claim based on indirect fraud (i.e. a

misrepresentation to a party other than the plaintiff). Moreover, nothing in the foregoing

elements requires reliance by the plaintiff on the misrepresentation, so long as a third

person takes action in reliance on the misrepresentation and that action causes harm to the

plaintiff.

The Gordons' theory of indirect fraud is based on two lines of cases springing

from: (1) Restatement 2nd of Torts § 533 and (2) New York. As discussed below, the

two lines differ in how reliance is treated: under § 533 the plaintiff must rely on a

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misrepresentation made to a third person that is communicated to the plaintiff while,

under the New York cases, the misrepresentation does not need to be relied upon by the

plaintiff if the third person relied on the misrepresentation to the detriment of the

plaintiff. The Gordons are likely to prevail under either approach.

a. Restatement (Second) of Torts § 533

Restatement (Second) of Torts provides, in part:

[T]he maker of a fraudulent misrepresentation is subject to liability ... to another who acts in justifiable reliance upon it if the misrepresentation, although not made directly to the other, is made to a third person and the maker intends or has reason to expect that its terms will be repeated or its substance communicated to the other, and that it will influence his conduct ...

Id. § 533; Geernaert v. Mitchell, 31 Cal. App. 4th 601 (1995) (quoting the Restatement

2nd); Shapiro v. Sutherland, 64 Cal. App. 4th 1534 (1998); Varwig v. Anderson-Behel,

74 Cal. App. 3d 578 (1977); Barnhouse v. Pinole, 133 Cal. App. 3d 171 (1982); but see

Mirkin v. Wasserman, 5 Cal. 4th 1082 (1993) (holding that although indirect fraud claims

are recognized in California, reliance by plaintiff cannot be presumed).

Here, Ms. Solomon knew, or should have known, that her petition would be

shared with the Gordons and that, therefore, her fraudulent statements would be

communicated to the Gordons. The Gordons reasonably relied upon Ms. Solomon's

representations and did not challenge the status or standing of the Alliance or Ms.

Solomon's authority to act on behalf of the Alliance. J. Gordon Decl. ¶¶ 9-11.

The other elements are also easily met. Ms. Solomon falsely stated that the

Alliance was a functioning corporation that was able to act and had acted by deciding to

nominate the Gordon home as a historic landmark and authorizing Ms. Solomon to

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submit the petition. Ex. 1; see also Ex. 2 (Alliance two-year reports showing that the

Alliance lacked any officers or directors through which the corporation could act). The

status and standing of the Alliance are material facts: the petition never would have been

accepted or acted on if HPRB knew that the Alliance was non-functional and lacked

members. Ms. Solomon knew that the Alliance was non-functioning and lacked

members. Ms. Solomon intended to deceive HPRB and the Gordons; she knew that she

could not submit a petition in her own name and expropriated the Alliance's identity.

The Gordons are likely to prevail on the merits of their fraud claim against Ms.

Solomon based on Restatement (Second) of Torts § 533.

b. The New York Cases

Under the NY line of cases, a plaintiff does not need to show that he reasonably

relied upon a fraudulent misrepresentation made to a third person; it is enough that the

third person relied on the misrepresentation and that this reliance led to harm suffered by

plaintiff. See, e.g. Ruffing v. Union Carbide Corp., 308 A.D.2d 526, 764 N.Y.S.2d 462

(2003); Buxton Mfg. Co., Inc. v. Valiant Moving & Stor., Inc., 239 A.D.2d 452, 657

N.Y.S.2d 450 (1997).

The NY line of cases was recently abrogated by Pasternack v. Laboratory Corp.

of America Holdings, N.Y., 27 N.Y.3d 817, 827, 829 (2016); but see Id. at 835-39 (Fahey,

J. dissenting).7 The Pasternack court was concerned that recognition of a cause of

action for third party fraud would destroy the reliance element. Id. at 827, 829. The

7 The Pasternak decision was handed down after undersigned counsel completed the research for the Gordons' complaint. The Gordons are prepared to argue that the Pasternak court erred and that the District of Columbia should follow the earlier court decision and recognize a cause of action for fraud where, as here, a party makes a fraudulent misrepresentation to the government that not only harms a plaintiff, but that was intended to harm that plaintiff.

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Gordons contend that Judge Fahey, in his dissent, has the more persuasive argument

based, in part, on Prosser and on practical considerations. Id. 838-39 ("[T]o reject th

third-party reliance doctrine is to facilitate the commission of fraud by straw man and t

ease the practice of deceit"). Put simply, a cause of action for fraud should lay w

defendant, as here, makes a fraudulent representation to the government that is intended

to harm the plaintiff. Such a conclusion is entirely consistent with the elements of fraud

described by our Court of Appeals. Sundberg, 109 A.3d at 1130 (D.C. 2015).

e

o

hen the

Here, Ms. Solomon fraudulently expropriated the identity of the Alliance,

intending that HPRB would rely on her misrepresentations and that the Gordons would

be harmed by that reliance. Amend. Compl. ¶¶62-67. That is, Ms. Solomon expropriated

the Alliance's identity to induce HPRB to help her stop the Gordons from lawfully selling

the Gordon home. Id. Ms. Solomon was successful: potential buyers of the Gordon

home dropped their interest once they were informed of the pending nomination. J.

Gordon Decl. ¶¶ 7-8, 12.

The Gordons are likely to prevail on the merits of their fraud claim against Ms.

Solomon based on the theory developed by New York courts.

D. The Forest Hills Neighborhood Alliance, Inc. has not made a prima facie case that it engaged in protected conduct within the ambit of D.C. Code § 16-5502.

If Jane Doe files an application with the government purportedly on behalf of

Acme, Inc. without the knowledge, consent or authority of Acme, then it cannot be said

that Acme has engaged in any conduct at all – let alone conduct protected by the First

Amendment. All that can be said is that Ms. Doe expropriated Acme's identity for her

own purposes. So too here.

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The Alliance offers no evidence that it even engaged in conduct. It offers no

evidence that it decided to nominate the Gordon home as a historic landmark or that it

authorized the filing of a nominating petition by Ms. Solomon. See, generally Def. MTD

Mem. The Alliance does not even offer any evidence that it is a functioning corporation

that is able to act. Id. The Alliance, for example, offers no meeting minutes, corporate

resolutions or similar documents showing that the Alliance decided to nominate the

Gordon home as a landmark, nor does the Alliance offer any affidavits or declarations

that show that the Alliance was a functioning corporation with officers, directors or

others who could direct the Alliance's actions and implement its decisions. Indeed, the

Alliance and Ms. Solomon effectively concede that Ms. Solomon acted without the

knowledge or consent of the Alliance. Def. MTD Mem. at 19.

The Gordons, by contrast, offer evidence that the Alliance is not a functioning

corporation that is even able to act. Ex. 2.

The Alliance's anti-SLAPP motion should be denied because it has not even

cleared the minimal threshold of making a prima facie case that it engaged in any

conduct covered by the statute. D.C. Code § 16-5502(b).

E. The Gordons are likely to succeed on the merits of their claims of tortious interference and fraud against the Forest Hills Neighborhood Alliance, Inc.

The Gordons assume arguendo that the Alliance is a functioning corporation that

is able to act through officers, directors or others with the authority to act on behalf of the

corporation. The Gordons also assume arguendo that the Alliance actually decided to

nominate the Gordon home as a historic landmark and authorized Ms. Solomon to submit

a nominating petition on its behalf. Even in the unlikely event that the foregoing

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assumptions were true, the Gordons are likely to succeed on their claims for the reasons

set forth below.

1. Tortious Interference

The elements of tortious interference are set out, supra, in section C(1). See,

NCRIX, Inc., 957 A.2d at 900, n.16 (describing elements).

The Alliance, like Ms. Solomon, does not deny that it knew about the relationship

between the Gordons and Long & Foster or that it interfered with that relationship by

nominating the Gordon home as a historic landmark. See, generally Def. MTD Mem.

Instead, the Alliance's sole contention is that it is not liable for tortious interference

because there was no breach of contract. Id. at 14. As noted, supra, an actual breach is

not an element of a tortious interference claim. NCRIX, Inc., 957 A.2d at 900, n.16.

The Alliance, in other words, offers nothing to undermine the Gordons'

allegations that the Alliance interfered with their relationship with Long & Foster. J.

Gordon Decl. ¶¶ 7-8, 12 (Gordons forced to remove Gordon home from market as a

result of pending nomination).

2. Fraudulent Misrepresentation

The elements of fraudulent misrepresentation are set out, supra, in section C(2).

See, Sundberg, 109 A.3d at 1130.

Only "historic preservation organizations" have standing to submit petitions

nominating homes as historic landmarks. 10C DCMR § 203. One requirement is that the

organization have "members." 10C DCMR § 9901. The term "members" is not defined

in 10C DCMR §§ 203 or 9901. The Gordons argue that the term "members" means those

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who elect the officers and directors of an organization and thereby control the direction

and actions of the organization.8

Here, the Alliance claimed, through its petition, that it is a historic preservation

organization with standing to submit a nomination petition to HPRB. Ex. 1. The

Alliance's statement is false because it does not have members. All that the Alliance now

asserts is that its original Articles of Incorporation allow for something called "nonvoting

members." Def. MTD Mem. at 17. The Alliance does not even offer evidence that it has

or had "nonvoting members" in 2015 when it nominated the Gordon home as a historic

landmark. Id.

In short, the Alliance acted fraudulently when it knowingly and intentionally

pretended to have standing to submit nominating petitions. The Gordons and HPRB

reasonably relied upon the Alliance's false statement to the detriment of the Gordons.

The Alliance has not contradicted any of the foregoing facts (but has contradicted

the Gordons' view of what "members" means) and, hence, the Gordons are likely to

succeed on the merits of their fraud claim against the Alliance.

G. In the alternative, the Court should not rule on Defendants' anti-SLAPP motions until the Gordons have completed targeted discovery on Defendants pursuant to D.C. Code § 16-5502(c)(2) and this Court has held an evidentiary hearing pursuant to D.C. Code § 16-5502(d). The anti-SLAPP statute provides for targeted discovery at the discretion of the

trial court. D.C. Code § 16-5502(d). If the Court does not agree that the Gordons have

demonstrated that they are likely to succeed on the merits of their claims against both Ms.

Solomon and the Alliance, then the Court should allow the Gordons to complete targeted

8 A local example is the D.C. Preservation League. National examples include the Sierra Club and the NAACP.

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discovery before ruling on Defendants' motions. Copies of the proposed targeted

discovery are attached.

The proposed targeted discovery will not be overly burdensome on Defendants

because the Gordons seek documents that ought to be readily available if they exist or

seek answers to interrogatories that ought to require no research if the Alliance is, in fact,

a functioning corporation and Ms. Solomon is an officer of that corporation.

Answers to the targeted discovery will confirm that Ms. Solomon filed the

petition without the authority, knowledge or consent of the Alliance. The answers will

also show that the Alliance is not a functioning corporation. The answers will show that

the Alliance did not decide to nominate the Gordon home as a historic landmark and did

not authorize Ms. Solomon to file a nominating petition. The answers will show that the

Alliance lacks standing to file nominating petitions because it lacks members as required

by 10C DCMR § 9901.

H. The Gordons allege sufficient facts to state claims for tortious interference and fraud against both Ms. Solomon and the Forest Hills Neighborhood Alliance.9

1. Tortious Interference

The Gordons allege facts matching each element in a claim for tortious

interference against both Ms. Solomon and the Alliance. Amend. Compl. ¶¶68-74, 85-

92; 2d Amend. Compl. ¶¶70-78, 88-97; see also NCRIX, Inc., 957 A.2d at 900, n.16

(setting out elements of tortious interference). The Gordons had a valid contract and

business expectancy, which Ms. Solomon and the Alliance knew about and interfered

with. Amend. Compl. ¶¶68-74, 85-92; 2d Amend. Compl. ¶¶70-78, 88-97. Defendants'

9 The Gordons do not rely on matters outside the pleadings as the basis for denial of Defendants' Super. Ct. Civ. R. 12(b)(6) motion. Such materials are cited elsewhere in this opposition to support the Gordons' argument that Defendants' anti-SLAPP motion should be denied.

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intentional interference resulted in harm to the Gordons. Amend. Compl. ¶73, 91; 2d

Amend. Compl. ¶75, 94.

Neither Ms. Solomon nor the Alliance dispute any of the Gordons' allegations,

but, instead, argue that the claims must be dismissed because the Gordons do not plead a

breach of contract. Def. MTD Mem. at 14. Defendants are incorrect on the law: breach

of contract is not a necessary element of a claim of tortious interference. NCRIX, Inc.,

957 A.2d at 900, n.16.

Ms. Solomon's and the Alliance's Rule 12(b)(6) motions regarding tortious

interference should be denied.

2. Fraudulent Misrepresentation

The Gordons allege facts matching each element in a claim for fraudulent

misrepresentation against both Ms. Solomon and the Alliance. Amend Compl. ¶¶62-67,

75-84; 2d Amend. Compl. ¶¶63-69, 79-87; see also Sundberg, 109 A.3d at 1130 (setting

out elements of fraudulent misrepresentation).

Ms. Solomon and the Alliance knowingly made false statements in the petition

nominating the Gordon home as a historic landmark. Id. The Alliance is not a

functioning corporation able to act and it did not act: it did not decide to nominate the

Gordon home and it did not authorize Ms. Solomon to submit a petition on its behalf. Id.

The Alliance lacks standing to submit any nominating petitions because it is not a historic

preservation organization as defined in 10C DCMR § 9901. Id.

Ms. Solomon and the Alliance intended HPRB to rely on the false statements in

the petition. Id. HPRB did rely on the false statements in the petition and accepted the

petition and designated the Gordon home as a historic landmark. Id.

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Ms. Solomon and the Alliance knew that the petition would be forwarded to the

Gordons as the owners of the Gordon home. 2d Amend. Compl. ¶¶67, 85. The petition

was forwarded to the Gordons and the Gordons reasonably relied on the false statements

in that petition. Id.

The Gordons were harmed as a result of the reliance placed on the statements of

Ms. Solomon and the Alliance by both HPRB and the Gordons. Id.

Whether the underlying legal theory is based on the Restatement or on indirect

reliance, the Gordons have stated a claim for fraud and the Rule 12(b)(6) motions of Ms.

Solomon and the Alliance should be denied.

I. Ms. Solomon's and the Alliance's reliance on the Noerr-Pennington doctrine is without merit.

The Noerr-Pennington doctrine arises out of anti-trust law and, in its original

form, provided that "if . . . conduct constitutes valid petitioning, the petitioner is immune

from antitrust liability whether or not the injuries are caused by the act of petitioning or

are caused by government action which results from the petitioning." A.D. Bedell

Wholesale Company v. Philip Morris Inc., 263 F.3d 239, 251 (3d Cir.2001) (emphasis

added, citations omitted). Courts subsequently extended the doctrine beyond anti-trust

law. See, e.g. Sosa v. DirectTV, Inc., 437 F.3d 923, 931-32 (9th Cir. 2006) (citing cases).

However, the subject conduct must "fairly fall within the scope of the Petition Clause."

Id. at 932.

Courts have held that there is an exception to the doctrine's immunity when the

petition is a sham. See, e.g. Kottle v. Northwest Kidney Centers, 146 F.3d 1056, 1060-62

(9th Cir.1998). Fraudulent misrepresentations to an adjudicative or administrative body

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(as opposed to a legislative body) are shams that can destroy Noerr-Pennington

immunity. See, e.g. Mercatus Group, LLC v. Lake Forest Hosp., 641 F.3d 834, 842 (7th

Cir. 2011) ("[T]here is little doubt that fraudulent misrepresentations may render

purported petitioning activity a sham") (citing cases). The Mercatus court explained

when the fraud exception to immunity applies:

[N]either inadvertent misrepresentations, nor misrepresentations lacking any ascertainable effect on the proceedings in which they were made, are within the fraud exception's ambit. For this reason, a misrepresentation renders an adjudicative proceeding a sham only if the misrepresentation (1) was intentionally made, with knowledge of its falsity; and (2) was material, in the sense that it actually altered the outcome of the proceeding

Id. (citing cases).

Here, Ms. Solomon and the Alliance seek to wrap themselves in the Noerr-

Pennington doctrine. Def. MTD Mem. at 9-11. The Defendants' argument fails for at

least two reasons.

First, neither Ms. Solomon nor the Alliance show that they engaged in conduct

"fairly" within the protections of the First Amendment and, hence, fail to make even a

prima facie case that the doctrine applies to them. Sosa, 437 F.3d at 932.

As noted above, Ms. Solomon offers no evidence that she acted with the

knowledge, consent or authority of the Alliance. Def. MTD Mem. at 9-11. Indeed, Ms.

Solomon essentially concedes that she submitted the petition without the knowledge or

authority of the Alliance. Def. MTD Mem. at 19 (asserting that none of the Alliance's

officers or directors have disavowed Ms. Solomon's conduct). Neither Ms Solomon nor

the Alliance claim that Ms. Solomon had actual authority, but only imply that Ms.

Solomon had apparent authority from the Alliance. Def. MTD Mem. at 19. The

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assertion fails because apparent authority cannot arise from the actions of the purported

agent, but must stem from the conduct of the principal. See Insurance Mgmt., Inc. v. Eno

& Howard Plumbing Corp., 348 A.2d 310, 312 (D.C. 1975). Neither Ms. Solomon nor

the Alliance have pointed to any action by the Alliance that would confer apparent

authority on Ms. Solomon. Ms. Solomon, in other words, cannot claim to have been

engaged in conduct fairly within the First Amendment when she cannot show that a

petition allegedly submitted on behalf of another entity was actually submitted on behalf

of that entity. See, Smith, 452 A.2d at 335 (person asserting an agency relationship has

the burden to prove the relationship).

Similarly, the Alliance offers no evidence that it is a functioning corporation even

able to engage in conduct protected by the First Amendment. Def. MTD Mem. at 9-11.

Indeed, the Alliance essentially concedes that it is not a functioning corporation. Def.

MTD Mem. at 12-13 (characterizing its failure to adhere to even basic corporate

formalities as "benign"); Id. at 19 (waving away its failure to properly elect officers or

directors as merely a failure to comply with "internal" requirements of the bylaws).

Even if the Alliance had the ability to act, it offers no evidence that it acted in this

case. The Alliance offers no minutes, resolutions or other documents showing that it

decided to nominate the Gordon home as a historic landmark or that it authorized Ms.

Solomon to act as its agent. Def. MTD Mem. at 9-11; see also Smith at 335.

A corporation cannot fairly be said to engage in protected First Amendment

conduct when the corporation is incapable of engaging in conduct or has not authorized

the conduct in question.10

10 To reprise a previous example, Acme, Inc. has not engaged in protected First Amendment conduct when Jane Doe claims to act on behalf of Acme without the consent, knowledge or authority of Acme.

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Neither Ms. Solomon nor the Alliance have come close to showing that they

engaged in conduct "fairly within the ambit" of the First Amendment. Sosa at 932.

Second, Ms. Solomon's and the Alliance's misrepresentations were intentionally

made with knowledge of their falsity and affected the outcome of HPRB's decision.

Mercatus, 641 F.3d at 842. Ms. Solomon knew that she lacked standing to submit a

petition as an individual and she knew that the Alliance lacked standing to submit a

petition because it is a non-functioning corporation without officers or others who can act

on behalf of the corporation. Ms. Solomon knew that the Alliance did not decide to

nominate the Gordon home as a historic landmark and did not authorize her to submit a

nominating petition. Despite all of this knowledge, Ms. Solomon intentionally submitted

a false petition.

The Alliance knew that it did not decide to nominate the Gordon home as a

historic landmark and knew that it lacked members and was not a functioning

corporation. Despite this knowledge, the Alliance – to the extent that it even acted –

intentionally submitted a false petition to HPRB.

Ms. Solomon's and the Alliance's misrepresentations materially affected

proceedings before HPRB. There would have been no proceedings but for the petition

filed by Ms. Solomon because HPRB would not have accepted a petition from an

individual and would not have accepted a petition from the Alliance if it knew that the

Alliance lacked members and was a non-functioning corporation.

The assertion of Noerr-Pennington immunity by both Ms. Solomon and the

Alliance should be denied.

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CONCLUSION

Defendants' motions to dismiss should be denied. In the alternative, the Court

should not rule on Defendants' anti-SLAPP motions until Plaintiffs have conducted

targeted discovery and this Court has held an evidentiary hearing.

Respectfully submitted,

/s/ Don Padou___ Date: November 18, 2016 DON PADOU D.C. Bar No. 1005434 186 Fieldstone Drive Murphys, CA. 95247 202-664-4395 Padou@PadouLaw.com

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