Davric Maine Racing, LLC v. Lipman & Katz, P.A.

DAVRIC MAINE RACING, LLC, DENISE TERRY, Individually and as Trustee of the Joseph Ricci Trust of 2000 and the Sharon Terry Trust, and STEPHEN COBBETT Plaintiffs, v. LIPMAN & KATZ, P.A., CALEB GANNON, and KARL BUTTERFIELD, Defendants.

No. CV-19-418

Superior Court of Maine, Cumberland

June 16, 2020

For Plaintiffs: Edward MacColl, Esq.

For Defendant Karl Butterfield: Elliott Teel, Esq.

ORDER ON DEFENDANTS LIPMAN & KATZ, P.A., and CALEB GANNONS' SPECIAL MOTION TO DISMISS

MaryGay Kennedy, Justice

Before the court is Defendants Lipman &e Katz, PA and Caleb Gannon's special motion to dismiss Plaintiffs' Complaint pursuant to 14 M.RS. § 566 (2019), Maines anti-SLAPP (strategic lawsuit against public participation) statute.

For the following reasons. Defendants' Motion may not be granted at this time.

I. Background

Davric Maine Racing, LLC, ("Scarborough Downs") owns and operates a harness racetrack and entertainment business in Scarborough, Maine. (Pl.s' Compl. ¶ 1.) Plaintiff Denise Terry ("Ms, Terry") is the current treasurer and by 2018, she had taken over day-to-day operations. (Pl.s' Compl. ¶ 3.)

Plaintiffs allege that as a result of certain misconduct, the Maine State Harness Racing Commission (hereinafter the "Commission") banned Defendant Karl Butterfield ("Mr. Butterfield") from participating as an owner or trainer of harness race horses in Maine.^[1] (Pl.s' Compl. ¶¶ 7, 9.)

Around April 2018, Mr. Butterfield appeared before the Commission and had his license reinstated. (Pl.s' Compl. ¶ 9.) At that same time - presumably at the hearing -Stephen Cobbett ("Mr. Cobbett")/ also an employee of Scarborough Downs, informed him that "given the misconduct he had been found to have committed, Scarborough Downs would not allow his participating in racing at the Downs." (Pl.s' Compl. ¶¶ 2, 9.)

On July 24, 2018 on behalf of their client Mr. Butterfield Defendants Lipman & Katz and Attorney Caleb Gannon sent Ms. Terry a letter claiming that Mr. Cobbett had made certain anti-Semitic remarks, and that he banned Mr. Butterfield because of his religious and ethnic background. (Pl.s' Compl. ¶ 10.) The letter, of which the Complaint is based upon, provides, in relevant part:

Dear Ms. Terry:

Karl Butterfield appeared before the Maine Harness Racing Commission on April 12, 2018 in response to the denial of his license application. After a hearing his license was granted. Mr. Butterfield has a provisional license allowing him to race horses in the State of Maine.

A person attending the hearing was Stephen Cobbett who is the Operations Director of Scarborough Downs. Evidently, Stephen Cobbett doesn't like Karl Butterfield and has had a history with both Mr. Butterfield and Mr. Butterfield's wife concerning his participation in harness racing in the State of Maine. Mr. Cobbett was upset about Karl Butterfield being granted a license and stated to Karl Butterfield "even though you were granted a license today, you will never be allowed at Scarborough Downs as a patron or licensee. My opinion of you has not changed. You are no good and never will be good. You don't pay your bills, and as far as I am concerned you an arrogant cocky Jew who should go back to New York where you belong. You are never going to race anywhere in Maine after I call other tracks."

. . . Since Scarborough Downs employs Stephen Cobbett and Stephen Cobbett is the Operations Director, the license of Scarborough Downs should be suspended. A licensee that discriminates against Jews and New Yorkers should not be allowed to operate.

In writing this letter to Sharon Terry, we have also written to the Maine Harness Racing Commission to ask for an immediate hearing. Should Scarborough Downs race track be suspended for the actions of the operations director discriminating against New Yorkers and Jews?

(Pl.s' Compl. Ex. A_ƒ at 1-2.) Plaintiffs continue to deny these accusations, and allege that Defendants knew or should have known them to be false. (Pl.s' Am. Compl. ¶ 13.) Plaintiffs allege that Defendants knew that neither Mr. Cobbett nor anyone associated with Scarborough Downs based any part of their decision to ban Mr. Butterfield based on his actual or perceived ethnic or religious background. (Pl.s' Compl. ¶ 11.)

Plaintiffs maintain that the letter was merely an attempt to intimidate plaintiffs, damage their reputations, and cause them "great emotional and financial distress." (Pl.s' Compl. ¶¶ 10-11, 12.) Defendants also sent copies to Mr. Cobbett, the Maine State Harness Racing Commission, the Sports Editor at the Portland Press Herald, and Scarborough Downs' principal competitor. (Pl.s' Compl. ¶ 14.)

After Defendants refused Plaintiffs' request for an apology and a retraction, Defendants shared an affidavit, executed by a Donna Scanlon ("Ms. Scanlon"), a resident of New York, claiming that she attended the meeting at the Maine Harness Racing Commission in which Mr. Cobbett allegedly made these discriminatory comments. (Pl.s' Compl. ¶ 17; See Def's Ex. B.) Plaintiffs claim that Defendants knew or should have known that Ms. Scanlon never attended the hearing or heard any such statements. (Pl.s' Compl. ¶ 18.)

On October 18, 2019, Plaintiffs filed a four count complaint alleging: (Count I) Defamation; (Count II) Negligent Infliction of Emotional Distress; (Count EEI) Intentional Infliction of Emotional Distress; and (Count IV) Punitive Damages. On January 10, 2020, Defendants Lipman & Katz and Caleb Gannon (hereinafter "Defendants") filed this Special Motion to Dismiss Plaintiffs' Complaint pursuant to 14 M.R.S. § 556.

II. Discussion

A. Maine's Anti-SLAPP Statute

Defendants filed this special motion to dismiss pursuant to Maine's anti-SLAPP statute on the grounds that the July 28, 2018 letter and the statements contained therein is protected "petitioning activity."^[2] (Mot. Dismiss 4.)

The statute "purports to provide a means for the swift dismissal of such lawsuits early in the litigation as a safeguard on the defendant's First Amendment right to petition." Hamilton v. Woodsum, 2020 ME 8, ¶ 15, 223 A.3d 904 (citation omitted). "The purpose of the anti-SLAPP statute is to protect against meritless claims brought to delay, distract, and punish activists for speaking." Hearts with Haiti, Inc. v. Kendrick, 2019 ME 26, ¶ 14, 202 A.3d 1189.

The Law Court adopted a three step process that courts must follow when deciding a special motion to dismiss. Guadette v. Davis, 2017 ME 86, ¶¶ 16-18, 160 A.3d 1190. In making its determination, the court considers the pleadings and supporting and opposing affidavits. 14 M.R.S. § 556.

The court must first determine whether, as a matter of law, the moving party established that "the anti-SLAPP statute applies to the conduct that is the subject of the plaintiff's complaint by establishing that the suit was based on some activity that would qualify as an exercise of the defendant's First Amendment right to petition the government."^[3] Hearts with Haiti, 2019 ME 26, ¶ 11, 202 A.3d 1189 (citation omitted). If the moving party does not meet that burden, "then the special motion to dismiss must be denied." Id. (citation omitted.)

If the moving party establishes that the subject of the litigation constitutes petitioning activity, then the burden shifts to the nonmoving party to establish "[1] prima facie evidence that defendant's petitioning was devoid of any reasonable factual support or any arguable basis in law and [2] that the defendant's petition activity caused actual injury to the plaintiff." Guadette, 2017 ME 86, ¶ 17, 160 A.3d 1190 (citations omitted) (quotation marks omitted).

If the plaintiff satisfies their prima facie burden,, the special motion to dismiss is not automatically denied. Id. ¶ 18. Rather, upon a motion by either party, the court may permit a limited period for discovery followed by an evidentiary hearing in which the plaintiff must establish "by a preponderance of the evidence, each of the elements for opposing the dismissal on anti-SLAPP grounds for which he successfully made out his prima facie case-that the defendant's petitioning activity was devoid of factual support or an arguable legal basis and that the petitioning activity caused the plaintiff actual injury."^[4] Id.

If neither party files a motion, the court will decide "whether plaintiff has met this burden by a preponderance of the evidence based only on the parties' submissions in seeking and opposing the special motion to dismiss. Id.

B. Analysis

Defendants' argue that the July 24, 2018 letter qualifies as a statement made to "encourage Commission review" or a statement "reasonably likely to encourage consideration or review of an issue by an executive body." (Mot. Dismiss 7.)

Indeed, Defendants' represented in their letter that they "have also written to the Maine Harness Racing Commission to ask for an immediate hearing" regarding the Scarborough Downs' license in relation to Mr. Cobbetf s alleged statements. (Pl.s' Ex. A, at 2.) The Affidavit of Defendant Caleb Gannon confirms that copies of the letters were sent to a Sports Reporter at the Press Herald and the Maine Harness Racing Commission. (Gannon Aff. ¶¶ 5-6.)

Accordingly, at this stage, Defendants have satisfied their burden of establishing that the statute applies to their conduct that is the subject of the Complaint.^[5] See 14 M.R.S. § 556 (a party's exercise of its right to petition includes any statement reasonably likely to encourage consideration or review of an issue by an executive body).

Nonetheless Plaintiffs satisfied their burden establishing prima facie evidence that Defendants' petitioning activity does not fall within the protection of the ant-SLAPP statute. Prima facie evidence is a "low standard that does not depend on the reliability or the credibility...