Carroll v. Trump

590 F.Supp.3d 575

E. Jean CARROLL, Plaintiff,

v.Donald J. TRUMP, in his personal capacity, Defendant.

20-CV-7311 (LAK)

United States District Court, S.D. New York.

Signed March 10, 2022

Filed March 11, 2022

Roberta Kaplan, Joshua Matz, Kaplan Hecker & Fink LLP, Attorneys for Plaintiff.

Alina Habba, Habba Madaio & Associates LLP, Attorneys for Defendant.

MEMORANDUM OPINION

Lewis A. Kaplan, District Judge This is a defamation action against Donald J. Trump. Mr. Trump, purely in his individual capacity and represented by private counsel,¹ has moved for leave to amend his answer to assert an affirmative defense and counterclaim alleging that plaintiff's claim is baseless and interposed for harassment and other improper purposes. He proposes to seek damages and other relief under New York's so-called anti-SLAPP law. Plaintiff contends that the motion should be denied because (1) defendant has delayed unduly in seeking leave, (2) he seeks leave for dilatory purposes, (3) granting leave would be unduly prejudicial to her and, in any case, (4) leave would be futile because defendant's proposed affirmative defense and counterclaim would be subject to dismissal on motion. The Court assumes familiarity with its prior opinion, which describes the underlying factual dispute.

Legal Standard

The standards governing this motion are clear.

First , as defendant concedes, futility of amendment warrants denial of leave to amend.² In other words, a court may deny leave to assert a counterclaim or defense that would not withstand a motion to dismiss or to strike.

Second , futility of amendment is not the only basis for denying leave to amend. While "leave to amend ‘shall be freely given when justice so requires,’ ... a district court has discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party."³

So we turn to these considerations.

Futility of Amendment

The Availability of a Futility Argument

As noted, defendant conceded, both in motion papers and at argument, that futility of amendment is a ground upon which leave to amend properly may be denied. Indeed, he went well beyond that. His motion papers assert, correctly, that:

"it is undisputed that ‘[a]n amendment is futile if the proposed amended claim would not withstand a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.’ "⁴

Yet he argues that "it would be a fool's errand, and not to mention a waste of judicial time and resources, to defend the substantive merits of every potential use of the anti-SLAPP law that Defendant may have in this case."⁵

These two assertions – made on consecutive pages of defendant's memorandum – are inconsistent. In order to grant leave to amend, the Court may insist that the proposed amendment would not be futile, which requires the conclusion that the amended claim would be sufficient to withstand a motion to dismiss.⁶ And in order to determine whether it would withstand a motion to dismiss, the Court must determine whether it pleads facts which, if proven, "plausibly give rise to an entitlement to relief."⁷ It follows, therefore, that one cannot decide whether a proposed amendment would be futile without deciding its legal sufficiency.

But rejection of defendant's position is not warranted only by logic. His position simply is wrong. Federal courts – including courts in this circuit – regularly decide the legal sufficiency of proposed amended pleadings in order to decide whether leave to amend would be futile. And "the standard for denying leave to amend based on futility is the same as the standard for granting a motion to dismiss."⁸ It routinely is applied to deny motions for leave to amend.

For example, in IBEW Local Union No. 58 Pension Trust Fund and Annuity Fund v. Royal Bank of Scotland Group, PLC ,⁹ the Second Circuit reviewed the district court's denial of leave to amend de novo¹⁰ – because the district court's ruling was based on futility, an issue of law – and affirmed. In so doing, it necessarily determined that the plaintiffs’ proposed amended complaint, which had been before the district court,¹¹ did not state a legally sufficient claim under Section 10(b) of the Securities Exchange Act of 1934.

The Second Circuit similarly affirmed the district court's denial of leave to amend on grounds of futility in Thea v. Kleinhandler.¹² Following dismissal of their first amended complaint, plaintiffs moved for leave to file a proposed second amended complaint.¹³ The district court denied the motion, concluding that amendment would be futile because "the claims alleged in the proposed second amended complaint would not withstand a motion to dismiss."¹⁴ And the Court of Appeals reviewed that determination de novo and affirmed.

These are not outlier cases. In fact, it is unexceptional for federal courts to deny leave to amend on the basis of futility where the proposed amended pleading would not withstand a motion to dismiss.¹⁵

The defendant nevertheless argues that it would be unfair to consider the legal sufficiency of his proposed amended pleading on this motion for leave "because we [i.e. , his counsel] haven't delved into it and it is not ripe at this point ...."¹⁶ But that contention is entirely without merit. If defendant has not "delved into" the sufficiency of his proposed amended pleading, it is only because he ignored his own statements that "[a] court may only deny leave ‘for good reason, including futility ’ "¹⁷ and that courts "freely grant leave to amend ... absent a showing of ... futility ...,"¹⁸ not to mention the decades of authority and practice that support those statements. In fact, he has had a full opportunity to address these issues.

In consequence, we turn to the question of whether defendant's proposed amendment would be futile.

The anti-SLAPP Law

"SLAPP" is an acronym for "strategic lawsuits against public participation." Anti-SLAPP laws are intended to deter actions filed to punish or harass a defendant for participating in public life. New York long has had such a statute, which at the outset permitted a defendant in a covered claim to "maintain an action, claim, cross claim or counterclaim" against the plaintiff and to recover if the plaintiff's action lacked sufficient basis.¹⁹ As originally enacted, however, the coverage of the statute was narrow.

That changed in 2020 when the Legislature amended Sections 70-a and 76-a of the Civil Rights Law and Rules 3211 and 3212 of the Civil Practice Law and Rules to broaden the applicable standards and to provide additional procedural rights to make those standards more effective.²⁰ . The key points are that the law as amended

• Extends coverage to "any communication in a place open to the public or a public forum in connection with an issue of public interest" or based upon "any other lawful conduct in furtherance of the exercise of the constitutional right of free speech in connection with an issue of public interest ...."²¹

• Requires the plaintiff in any covered action to establish by clear and convincing evidence that "any communication which gives rise to the action was made with knowledge of its falsity or with reckless disregard of whether it was false, where the truth or falsity of such communication is material to the cause of action at issue,"²²i.e. , that the defendant acted with actual malice in the First Amendment sense of that term.²³

• Requires courts, in considering motions to dismiss complaints and other pleadings in actions within the coverage of the statute, to consider supporting and opposing factual affidavits rather than limiting their consideration to the pleadings.²⁴

• Requires courts to stay all discovery, pending healings, and motions from the filing until the determination of any motion to dismiss pursuant to the statute.²⁵

• Shifts the burden of proof from the defendant to the plaintiff and heightens the standard a plaintiff must meet to avoid dismissal on motion. Whereas an ordinary complaint or counterclaim typically withstands a motion to dismiss for failure to state a cause of action if it states "a claim to relief that is plausible on its face,"²⁶ the amended anti-SLAPP law requires dismissal of a covered complaint or counterclaim unless the plaintiff establishes that the proposed pleading "has a substantial basis in law or is supported by a substantial argument for extension, modification or reversal of existing law."²⁷

• Requires a court to award costs and attorney's fees in any covered action in which the defendant demonstrates that such a substantial basis in law and fact was lacking.²⁸

• Provides for the recovery of compensatory damages by the defendant upon an additional demonstration that the suit was "commenced or continued for the purpose of harassing, intimidating, punishing or otherwise maliciously inhibiting the free exercise of speech, petition or association rights," and punitive damages upon a demonstration that the action was commenced or continued solely for that purpose.²⁹

The Proposed Affirmative Defense

Defendant proposes first to amend his answer to assert a new purported affirmative defense: viz., a defense that alleges, in its entirety, that "[p]laintiff's claim is barred by New York's anti-SLAPP laws, NY Civil Rights Law §§ 70-a and 76-a."³⁰ But that is not a legally sufficient affirmative defense.

As the Second Circuit has written:

"An affirmative defense is defined as’ [a] defendant's assertion raising new facts and arguments that, if true, will defeat the plaintiff's or prosecution's claim, even if all allegations in the complaint are true: Black's Law Dictionary 430 (7th ed.1999); see also Wolf [v. Reliance Standard Life Ins. Co. , 71 F.3d 444, 448-49 (1st Cir.l995) ]."³¹

But defendant's proposed additional defense raises no new facts. And while it does assert the new argument that the amended anti-SLAPP law bars plaintiff's claim, that argument is without merit. The amendments to Sections 70-a and 76-a of the Civil Rights Law...