Butler v. Hogshead-Makar

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RICK BUTLER; CHERYL BUTLER; and GLV, INC., an Illinois Corporation, Plaintiffs, v. NANCY HOGSHEAD-MAKAR; CHAMPION WOMEN, a Florida Not-For-Profit Corporation; and DEBORAH DIMATTEO, Defendants.

No. 21 C 6854

United States District Court, N.D. Illinois, Eastern Division

July 20, 2023

MEMORANDUM OPINION

Charles P. Kocoras United States District Judge

This matter is before the Court on Defendants Nancy Hogshead-Makar, Champion Women, and Debra DiMatteo's (collectively, “Defendants”) Motion to Dismiss Plaintiffs Rick Butler, Cheryl Butler, and GLV, Inc.'s (“GLV”) (collectively, “Plaintiffs”) First Amended Complaint (“FAC”). For the following reasons, the motion is granted-in-part and denied-in-part.

BACKGROUND

In a sprawling, 52-page, 212-paragraph FAC seeking $250,000,000 Plaintiffs bring claims against Defendants for tortious interference, conspiracy, and violations of Illinois commercial disparagement and consumer fraud statutes. The Court takes the following account from Plaintiffs' FAC accepting the facts asserted as true for present purposes and drawing reasonable inferences in Plaintiffs' favor. See Mashallah, Inc. v. W. Bend Mut. Ins. Co., 20 F.4th 311, 317 (7th Cir. 2021).

Rick Butler is a volleyball coach in the Chicago suburbs. He and his wife Cheryl co-own GLV which does business under the name Sports Performance Volleyball Club (“Sports Performance”) and Great Lakes Center. In the 1990s, Butler was accused of having “inappropriate sexual relationships” with three players he coached in the 1980s. Plaintiffs allege that the players, according to their own statements, were above the legal age of consent^[1]at the time. In 1995, USA Volleyball (“USAV”) found there was probable cause to believe that Butler had sexual intercourse and subsequent physical and emotional relationships with the three former players that began when Butler was their coach. Plaintiffs claim that USAV determined that, even though the relationships were allegedly legal under the laws at the time, it would ban Butler for five years as punishment for causing the organization “public embarrassment” and “ridicule.”

The allegations became common knowledge within the volleyball community. Even in the face of such allegations, however, over the years Sports Performance amassed over 98 National Championship gold medals and had nearly 600 players named as Amateur Athletic Union (“AAU”) All-Americans. Sports Performance is recognized as one of the nation's top facilities for hosting volleyball tournaments, camps, clinics, and other sporting events; GLV is also lauded as a premier event host.

Until 2017, GLV hosted many of the largest, most high-quality tournaments in the Midwest.

Hogshead-Makar founded Champion Women in 2014, as a legal advocacy organization for girls and women in sports. Champion Women is described as “an organization specializing in sports law, governance, and public relations.” Dkt. # 15, ¶ 88. DiMatteo was a member of USAV's Great Lakes Region Board of Directors and assisted in organizing tournaments. She is also a brand representative for Asics. For purposes of diversity jurisdiction, Plaintiffs are citizens of Illinois, Hogshead-Makar and Champion Women are citizens of Florida, and DiMatteo is a citizen of Nevada.

As alleged in the FAC, in June 2017, Champion Women first attempted to remove the Butlers from the sport with a Change.org petition to USAV, the AAU, and the U.S. Center for SafeSport. The petition called for the organizations to ban Butler from coaching, relying on a false and misleading presentation of the 1995 proceedings and subsequent events.

Beginning in 2017, Defendants coordinated a letter writing campaign that circulated false and misleading information about Plaintiffs. Letters were written to USAV, the AAU, volleyball clubs, school athletic departments and officials, parents of Butler's players, and Plaintiffs' volleyball partners and sponsors across the country, pleading they dissociate from Butler, including his teams, facilities, and personnel. The offending letters, published between June 2017 and December 2018, enclosed “original source materials that confirm [Butler's] pedophilia.” Dkt. # 15, ¶¶ 50-51.

In the emails, attached letters, and articles, Champion Women knowingly and maliciously disseminated false and defamatory statements, including that: USAV found that Butler sexually abused four minor girls, Butler was banned for life from USAV for the sexual abuse of minor girls he coached, and Butler is “a bona fide sexual predator.” When the letters were sent, Hogshead-Makar and Champion Women knew these statements were false.

In 2018, USAV again banned Butler pursuant to the “public embarrassment and ridicule” provision, and USAV referenced “interpersonal sexual relationships” with a “non USAV minor” who, according to her own testimony, was above the legal age of consent at the time.

In 2018, as a result of Defendants' concerted efforts through letter writing and social media postings, many volleyball clubs withdrew from GLV tournaments in which their teams previously participated. Plaintiffs accuse Defendants of interfering with existing contracts and prospective business relationships with, among others, Mizuno, several universities, and Legacy Sports.

Based on these alleged facts, Plaintiffs' FAC brings claims against Defendants for tortious interference with contract, tortious interference with prospective economic advantage, conspiracy, violations of the Illinois Uniform Deceptive Trade Practices Act (“IUDTPA”), 815 ILCS 510/1 et seq., and violations of the Illinois Consumer Fraud and Deceptive Trade Practices Act (“ICFA”), 815 ILCS 505/1 et seq.

Defendants move to dismiss Plaintiffs' FAC in its entirety, arguing Plaintiffs' claims are really just a single defamation claim which is time-barred and Defendants' actions are shielded by the Fair Reporting Privilege. Defendants further argue this lawsuit is what is referred to as “Strategic Lawsuit Against Public Participation” (“SLAPP”), and Defendants are shielded by Florida and Nevada anti-SLAPP statutes.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) “tests the sufficiency of the complaint, not the merits of the case.” McReynolds v. Merrill Lynch & Co., 694 F.3d 873, 878 (7th Cir. 2012). The Court accepts as true well pleaded facts in the complaint and draws all reasonable inferences in favor of the plaintiff. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). The allegations in the complaint must set forth a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

A plaintiff need not provide detailed factual allegations, but it must provide enough factual support to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The claim must be described “in sufficient detail to give the defendant ‘fair notice of what the . . . claim is and the grounds upon which it rests.'” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” are insufficient to withstand a Rule 12(b)(6) motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

A claim is facially plausible if the complaint contains sufficient alleged facts that allow the court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

DISCUSSION

Defendants move to dismiss the FAC for failure to state a claim on multiple bases. Defendants argue that each cause of action alleged is based solely on the protected speech of Defendants on matters of public interest. Defendants further argue Plaintiffs' FAC is simply an attempt to evade free speech defenses and the strict, one-year statute of limitations by masquerading their defamation action by another name. Defendants also seek dismissal pursuant to the Florida and Nevada Anti-SLAPP statutes. We first assess whether Plaintiffs have adequately pleaded causes of action for tortious interference, conspiracy, and violations of commercial disparagement and consumer fraud statutes without considering Defendants' assertion that Plaintiffs are merely trying to repackage a defamation claim as other torts. After determining whether Plaintiffs have sufficiently stated claims, we then address Defendants' defamation argument and defenses and how those defenses might affect the viability of Plaintiffs' claims.

I. Plaintiffs' Claims

A. Tortious Interference Claims

Plaintiffs bring claims against all Defendants for tortious interference with contracts and tortious interference with prospective business advantage.

The elements of a tortious interference with contract claim are: (1) the existence of a valid and enforceable contract between the plaintiff and another; (2) the defendant's awareness of this contractual relation; (3) the defendant's intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other, caused by the defendant's wrongful conduct; and (5) damages. HPIHealth Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill.2d 145, 154-55 (1989).

To state a claim for tortious interference with a prospective business advantage under Illinois law, Plaintiffs must allege: “(1) the plaintiff's reasonable expectation of a future business relationship; (2) the defendant's knowledge of that expectation; (3) purposeful interference by the defendant that prevents the plaintiff's legitimate expectations from ripening; and (4) damages.” Ali v. Shaw, 481 F.3d 942, 944 (7th Cir. 2007) (citing Fellhauer v. City of Geneva, 142 Ill.2d 495 (1991)).

Defendants do not argue that Pl...