Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 1 of 37 PageID 16534
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
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`SUPER FUTURE EQUITIES, INC.,
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`Plaintiff,
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`V.
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`WELLS FARGO BANK MINNESOTA,
`N.A., as Trustee of the Certificate Holders ' CIVIL ACTION NO. 3: 06-CV-0271-B
`of Merrill Lynch Mortgage Investors
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`CMBS Pass Through Certificates Series
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`1999-C1, ORIX CAPITAL MARKETS,
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`LLC, ORIX CAPITAL MARKETS
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`PARTNERSHIP, JOHN DINAN,
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`MICHAEL WURST, CLIFFORD
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`WEINER, and JAMES R. THOMPSON,
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`Defendants.
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`MEMORANDUM ORDER
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`Super Future Equities, Inc. (individually referred to as “Super Future Equities”) filed this
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`action against Wells Fargo Bank Minnesota, N.A. (AWells Fargo@); ORIX Capital Markets, LLC
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`(AOrix@ or AOrix Capital@); ORIX USA Corporation (AOrix USA@); John Dinan; Michael F. Wurst;
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`Clifford Weiner; James R. Thompson; and ORIX Capital Markets Partnership (AOrix Partnership@)1,
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`claiming breach of fiduciary duty, negligence, gross negligence, breach of contract, and civil
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`violations of Racketeer Influenced and Corrupt Organizations Act (ARICO@). Orix Capital filed a
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`counterclaim against Super Future Equities, Schumann Rafizadeh, Cyrus Rafizadeh, D.R.2, Houman
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`1On August 2, 2007, the Court dismissed Orix Capital Markets Partnership from the case
`pursuant to Federal Rule of Civil Procedure 4(m) (doc. 309).
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`2 Counter-Defendant D.R. is a minor child. According to this Court=s Privacy Notice, available at
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`1
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 2 of 37 PageID 16535
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`Thomas Arjmandi, and Keon Michael Arjmandi (collectively referred to as “SFE” or “Counter-
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`Defendants” unless otherwise denoted) alleging libel per se, business disparagement, tortious
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`interference with contractual relationships, common law conspiracy, and copyright infringement. On
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`December 14, 2007, this Court granted the Defendants’ Motion for Summary Judgment on all of
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`Super Future Equities’ claims (doc. 498). Presently before the Court is Counter-Defendants’ Motion
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`for Summary Judgment (doc. 311) on Orix’s counterclaims and Orix Capital Markets, LLC’s
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`Objections and Motion to Strike Counter-Defendant’s Summary Judgment Evidence (doc. 393). For
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`the reasons that follow, the Court GRANTS the Counter-Defendants’ Motion for Summary
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`Judgment (doc. 311) as to Orix’s counterclaims for business disparagement, tortious interference
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`with contractual relationships, and copyright infringement. The Court GRANTS SFE’s Motion for
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`Summary Judgment as to Orix’s counterclaims for libel per se and conspiracy against D.R. but
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`DENIES the Motion as to libel per se and conspiracy with respect to all other Counter-Defendants.
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`The Court DENIES as Moot Orix’s Motion to Strike Counter-Defendant’s Summary Judgment
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`Evidence (doc. 393).
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`I. Background
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`As an initial matter, this lawsuit involves two Commercial Mortgage Backed Securities
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`Trusts: (1) the Trust for the Certificate holders of the Merrill Lynch Mortgage Investors, Inc.
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`Mortgage Pass-Through Certificates, Series 1999-C1 (AMLMI Trust@) and (2) the Trust for the
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`Certificate holders of the First Union-Lehman Brothers Bank of America Commercial Mortgage
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`Pass-Through Certificate Series 1998-C2 (AFULBBA Trust@) (collectively Athe Trusts@). Super
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`http://www.txnd.uscourts.gov/pdf/TXNprivnot.pdf, minors should be designated by their initials.
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`2
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 3 of 37 PageID 16536
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`Future Equities is a certificate holder of the Trusts; Orix is the Master and Special Servicer of the
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`Trusts; and Wells Fargo is the Trustee for the Trusts. 3
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`By way of background, the parties= dispute began in 2001 when Cyrus II Partnership - an
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`entity in which Schumann (“Schumann”) and his wife Mondona Rafizadeh have an ownership
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`interest -executed a promissory note on a property called AArlington Apartments.@ (Orix Capital
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`Markets, LLC=s Am. Countercl. (AAm. Countercl.@) at 3). ORIX, the master and special servicer of
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`the MLMI Trust that held the loan, brought suit in Louisiana to foreclose on the Arlington
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`Apartments. (Id. at 3-4). In December 2004, Orix obtained a fraud judgment in excess of $10
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`million against Cyrus II, Mondona Rafizadeh, and Bahar Development, Inc. (Id. at 4; Orix’s Br. in
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`Supp. of its Mot. for Summ. J. (“Orix’s Br.”) 5). On December 1, 2004, Schumann created Super
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`Future Equities, naming himself as President and sole member of the Board of Directors. (Orix’s Br.
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`6). Eventually, Schumann=s nephew, Thomas Arjmandi (“Thomas”), became Super Future Equities’
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`President, and Schumann=s son, Cyrus Rafizadeh (“Cyrus”) became the Secretary and Treasurer.
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`(Id.). Thomas and Cyrus as well as Schumann=s son, D.R., and Schumann’s nephew, Keon Arjmandi
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`(“Keon”), were the four shareholders of Super Future Equities. (Id. at 7).4 Super Future Equities
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`acquired funds from Schumann and other entities he controlled. (Id.). Super Future Equities
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`obtained certificates in the FULBBA Trust in April 2005 and in the MLMI Trust in July 2005. (Id.
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`at 9).
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`3For more detailed background information on Commercial Mortgage Backed Securities and
`Super Future Equities’ claims, see the Court’s Order of December 14, 2007 (doc. 498).
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`4Schumann=s sons were minors at the time, and his nephews were both younger than twenty.
`(Orix’s Br. 6-7).
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`3
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 4 of 37 PageID 16537
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`On February 13, 2006, Super Future Equities filed this lawsuit as a purported class action5
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`against Orix, Wells Fargo, Orix USA, John Dinan, Michael F. Wurst, Clifford Weiner, James R.
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`Thompson, and Orix Partnership relating to their duties as Servicer, Special Servicer, and Trustee of
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`the Trusts6. In its most recent complaint, filed September 11, 2006, Super Future Equities asserted
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`causes of action against the Defendants for breach of fiduciary duty, breach of contract, RICO
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`violations, negligence, and gross negligence.
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`On February 13, 2006, the same day that Super Future Equities filed this lawsuit, Cyrus
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`created the website at www.predatorix.com (“Predatorix”). (Orix’s Br. 9). On April 24, 2006, Orix
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`counterclaimed against Super Future Equities, Schumann Rafizadeh, Cyrus Rafizadeh, D.R.,
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`Houman Thomas Arjmandi, and Keon Michael Arjmandi asserting claims of libel per se, business
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`disparagement, tortious interference with contractual relationships, and common law conspiracy.
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`Thereafter, Orix filed an amended counterclaim asserting claims for libel per se, business
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`disparagement, tortious interference with contractual relationships, common law conspiracy, and
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`copyright infringement. Orix alleges that SFE conspired to create Super Future Equities and to
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`create Predatorix. (Am. Countercl. at 42, 122). Orix claims that Predatorix is used to bolster Super
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`Future Equities’ claims, make defamatory and disparaging statements, interfere with Orix=s contracts,
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`and infringe on Orix=s copyright. (Id.).
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`On December 14, 2007, this Court granted the Defendants= Motions for Summary Judgment
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`on all of Super Future Equities’ claims (doc. 498). SFE filed a Motion for Summary Judgment on
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`5The Court has since struck Super Future Equities’ class allegations.
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`6Orix claims that SFE filed this lawsuit against Orix and Wells Fargo in retaliation for the
`Louisiana fraud judgment against Mondona Rafizadeh. (Orix’s Br. 5).
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`4
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 5 of 37 PageID 16538
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`Orix=s counterclaims on August 3, 2007 (doc. 311). Orix responded on August 23, 2007 (doc. 389)
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`and also filed Objections and Motion to Strike SFE’s Summary Judgment Evidence (doc. 393). SFE
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`replied on September 7, 2007 (doc. 441). SFE=s motion, being fully briefed, is now ripe for
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`adjudication.
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`A.
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`Summary Judgment Legal Standard
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`II. Analysis
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`Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate
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`when the pleadings and record evidence show that no genuine issue of material fact exists and that
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`the movant is entitled to judgment as a matter of law. Little v. Liquid Air Corp., 37 F.3d 1069, 1075
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`(5th Cir. 1994). A[T]he substantive law will identify which facts are material.@ Anderson v. Liberty
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`Lobby, Inc., 477 U.S. 242, 248 (1986). Only disputes about material facts will preclude the granting
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`of summary judgment. Id.
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`The burden is on the summary judgment movant to prove that no genuine issue of material
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`fact exists. Latimer v. Smithkline & French Lab., 919 F.2d 301, 303 (5th Cir. 1990). If the non-
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`movant bears the burden of proof at trial, the summary judgment movant need not support its
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`motion with evidence negating the non-movant=s case. Rather, the movant may satisfy its burden by
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`pointing to the absence of evidence to support the non-movant=s case. Id.; Little, 37 F.3d at 1075.
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`Once the movant has met its burden, the non-movant must show that summary judgment is
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`not appropriate. Little, 37 F.3d at 1075 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
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`AThis burden is not satisfied with >some metaphysical doubt as to material facts,= . . . by >conclusory
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`allegations,= . . . by >unsubstantiated assertions,= or by only a >scintilla= of evidence.@ Id. (quoting
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`Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). The non-moving party
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 6 of 37 PageID 16539
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`must Acome forward with >specific facts showing that there is a genuine issue for trial.=@ Matsushita,
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`475 U.S. at 587 (emphasis in original) (quoting FED. R. CIV. P. 56(e)). To determine whether a
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`genuine issue exists for trial, the court must view all of the evidence in the light most favorable to
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`the non-movant, and the evidence must be sufficient such that a reasonable jury could return a
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`verdict for the non-movant. Munoz v. Orr, 200 F.3d 291, 302 (5th Cir. 2000); Anderson, 477 U.S. at
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`248. The Court now turns to SFE’s Motion for Summary Judgment on Orix’s counterclaim for libel
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`per se.
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`B.
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`Libel Per Se
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`In its amended counterclaim, Orix contends that the following statements on Predatorix
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`constitute libel per se:
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`Statement # 1: AORIX is determined to recover. So determined in fact, that they are willing
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`to spend more in the pursuit of recovery, than the recovery itself . . .ORIX spent over $22M
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`to recover $19.4M, smooth. Very smooth.@ (March 14, 2006)
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`Statement #2: AThis magic tricks [sic] works [sic] by taking REMIC Trusts [sic] money by
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`cooking up books to make it look like the Trusts [sic] owes >P&I Advances= to Servicers and
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`Trustee@; AIn effect, every time Orix [sic] takes money out of one pocket of Orix [sic] and
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`puts it in the other pocket of Orix [sic] for Orix [sic], the Trust is obligated to refill the
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`empty pocket plus interests [sic] for Orix [sic]. With this tricks [sic] Orix [sic] can
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`indefinitely siphon all the money it wants from the Trust. Orix [sic] pays out once, collects
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`twice, thus doubling its money. It is like smoke and mirrors trick!@; ANow, the application of
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`special effects can significantly improve and multiply the disappeared funds. For example,
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`taking the litigation expenses from one lawsuit and applying it again in another lawsuit! This
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`$
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 7 of 37 PageID 16540
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`improvement to this trick can actually make a lot of funds disappear from Trusts and
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`Borrower/Guarantor=s equity, tax-free, compliments of REMIC regulations diversions! This
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`is another smoke and mirror trick for complex disappearing act@; and AThese magic tricks
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`works [sic] by manipulating the distribution reports and 1066 Tax return form and the SEC
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`disclosure violations. (Disabling codes and regulations intended to prevent such illegal
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`activities.)@ (March 21, 2006)
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`Statement #3: A video clip that Orix claims Aappears to show Mr. Dinan explaining how
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`ORIX Capital is able to recover certain advances twice, when in reality, Mr. Dinan is
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`explaining how ORIX Capital receives funds from the trusts when ORIX Capital is acting as
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`Special or Master Servicer when it also is first-loss certificateholder.@ (March 23, 2006)
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`Statement #4: AThis website is dedicated to all the victims of Wells Fargo & ORIX=s
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`predatory lending and discriminatory practices including;
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`1) All borrowers and guarantors who lost assets, were stripped of equity, incurred physical
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`and emotional injuries, or lost their lives upon loss of their life-time earnings.
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`2) All investors who have lost their pension funds and retirement investments in CMBS
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`bonds (certificateholders).
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`3) All tenants of the seized commercial and residential properties who suffered neglect and
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`mismanagement at the hands of Receiver/Keepers of the seized properties due to health and
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`safety violations, fires, shootings, theft or drowning.
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`Especially David Pena of Empire Center Dallas, who died of a heart attack after his property
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`was seized and Justin & Daren Ruffin, twin brothers that drowned in a seized apartment’s
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`pool.@ (March 30, 2006)
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`7
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`$
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`$
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 8 of 37 PageID 16541
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`$
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`$
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`$
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`Statement #5: AToday I have added a new Pick-of-the-Week as well as a new Lie by ORIX,
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`both are very interesting.@ This commentary is linked to another page, with the heading
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`AORIX flat out lied,@that includes excerpts from documents that are allegedly out of context.
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` (May 30, 2006)
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`Statement #6: AI have also added an [sic] scan of a USA Today article where Fannie Mae
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`was fined $400M for similar practices of Wells Fargo and Orix [sic].@ (June 19, 2006)
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`Statement #7: On a page entitled AORIX v. LaSalle and Nomura Securities,@ there are
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`documents posted under the heading, ABelow are documents relating to the suit which was
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`won by Nomura Securities.@ (June 19, 2006).
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`(Am. Countercl. 13-23).
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`SFE moves for summary judgment on Orix=s libel per se claim arguing (1) there is no evidence
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`that any SFE Counter-Defendant other than Cyrus Rafizadeh actually published any statements of
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`fact on Predatorix; (2) the statements by their very nature are not actionable; (3) there is no
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`evidence that the statements were false; and (4) there is no evidence that SFE acted with actual
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`malice. (Counter-Defendants’ Br. in Supp. of their Mot. for Summ. J. (“SFE’s Br.”) 7-11).
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`A plaintiff must establish the following elements to maintain a defamation action: (1) the
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`defendant published a statement; (2) that was defamatory concerning the plaintiff; (3) while acting
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`with either actual malice if the plaintiff was a public official or public figure, or negligence, if the
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`plaintiff was a private individual, regarding the truth of the statement. WFAA TV, Inc. v.
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`McLemore, 978 S.W.2d 568, 571 (Tex. 1998) (citations omitted).
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`1.
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` SFE Counter-Defendants other than Cyrus Rafizadeh
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`SFE argues that there is no evidence that any of the Counter-Defendants other than Cyrus
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 9 of 37 PageID 16542
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`Rafizadeh published any statements on Predatorix and that the libel per se claim should be dismissed
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`against these other SFE Counter-Defendants. (SFE’s Br. 7-8). In response, ORIX presented
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`evidence that Thomas Arjmandi registered the Predatorix website; selected the user name and
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`password; listed his e-mail address, telephone number, and work address; and is still listed as the
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`registrant, administrator, technical contact, and billing contact for the website. (Orix’s Br. 9-10).
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`ORIX also presented evidence that Keon Arjmandi was billed and paid for the website and
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`Schumann Rafizadeh provided his MasterCard number to pay for an upgrade to the website. (Id. at
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`10). Finally, Orix presented evidence from its expert forensic computer specialist that Schumann,
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`Thomas, and Keon helped create the documents that were published on the website. (Id. at 12).
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`Orix, however, has not presented any evidence to show that D.R. has participated in the creation or
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`the publication of information on Predatorix. The Court concludes that Orix has not created a
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`genuine issue of material fact as to whether D.R. has published information on Predatorix. On the
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`other hand, Orix’s evidence is sufficient to raise a genuine issue of material fact as to whether the
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`other Counter-Defendants published information on Predatorix. Accordingly, the Court GRANTS
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`SFE’s Motion for Summary Judgment with regard to its libel per se claim against D.R. and will now
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`consider SFE’s other arguments regarding libel per se with respect to the remaining SFE Counter-
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`Defendants.
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`2.
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`Objectively Verifiable Facts
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`SFE claims that the statements were non-actionable satire, parody, or opinion. 7 (SFE’s Br. 9).
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`7 The Court notes and SFE points out that Orix did not respond to SFE’s argument that the postings
`on Predatorix are opinion, satire, or parody. (SFE’s Reply 6-7). However, the Court has enough evidence
`before it – printouts from the website – to determine whether the postings are opinion, satire, or parody.
`Because each party only submitted a few pages of the Predatorix website in their appendices, the Court has
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 10 of 37 PageID 16543
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` The Court will first address the contention that the statements are opinion and then turn to
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`whether they are satire or parody.
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`a.
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`Opinion
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`SFE contends that the statements on Predatorix constitute protected opinion. AAn essential
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`element of defamation is that the alleged defamatory statement be a statement of fact rather than
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`opinion. Expressions of opinion may be derogatory and disparaging; nevertheless they are protected
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`by the First Amendment of the United States Constitution and by article I, section 8 of the Texas
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`Constitution. The question of whether a statement is an assertion of fact or opinion is a question of
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`law.@ Shaw v. Palmer, 197 S.W.3d 854, 857 (Tex. App.-Dallas 2006, pet denied) (citations omitted).
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`Whether statements are fact or opinion depends on A‘their verifiability and the context in which they
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`were made.’@ Bentley v. Bunton, 94 S.W.3d 561, 583 (Tex. 2003). The analysis depends on a
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`Areasonable person=s perception of the entirety of the publication and not merely on individual
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`statements.@ Id. at 579 (quoting Turner v. KTRK Television, Inc., 38 S.W.3d 103, 115 (Tex. 2000)).
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`In Bentley v. Bunton, the Supreme Court of Texas held that statements on a call-in television
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`talk show that accused a judge of being corrupt were statements of fact as opposed to protected
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`opinions. Id. at 566-67. The Court found it significant that the talk show host stated that his
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`accusations were based on fact, that he claimed to have investigated the alleged incidents
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`demonstrating corruption, that he cited specific cases, and that he pointed to court records and
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`public documents. Id. at 583. While the host often stated that it was his opinion that the judge was
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`examined the Predatorix webpage printouts submitted in the Exhibits to Orix’s Application for Prelim. Inj.
`(doc. 43) in order to more fully understand the contents and context of the Predatorix website. See Zenith
`Radio Corp. v. Matsushita Elec. Indus. Co., 494 F. Supp. 1161, 1168 (E.D. Pa. 1980) (“[T]he choice of materials
`to be considered in conjunction with a summary judgment motion is within the discretion of the trial judge.”).
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 11 of 37 PageID 16544
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`corrupt, the Court found that this was not determinative:
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`Simply couching such statements in terms of opinion does not dispel these implications; and
`the statement, AIn my opinion Jones is a liar,@ can cause as much damage to reputation as the
`statement, AJones is a liar.@ As Judge Friendly aptly stated: A[It] would be destructive of the
`law of libel if a writer could escape liability for accusations of [defamatory conduct] simply by
`using, explicitly or implicitly, the words >I think.=@ See Cianci [v. New Times Publ’g Co., 639
`F.2d 54, 64 (2d Cir., 1980)]. It is worthy of note that at common law, even the privilege of
`fair comment did not extend to Afalse statement of fact, whether it was expressly stated or
`implied from an expression of opinion.@ Restatement (Second) of Torts, ' 566, Comment a
`(1977).
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`Id. at 584 (quoting Milkovich v. Lorain Journal Co., 497 U.S. 1, 18-19 (1990)).
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` couple of factually similar cases from other jurisdictions provide further guidance. Ballard
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` A
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`involved a website subtitled AWhen telling the truth hurts[:] Dedicated to Exposing Lies at Naval
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`Air Station, Brunswick.@ Ballard v Wagner, 877 A.2d 1083, 1086 (Me. 2005). The first link entitled
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`ALie #1[:] LT Ballard=s Little Fib@ was to a subsequent page discussing Ballard=s negotiation of a
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`contract with non-union workers. Id. The page contained a quote with the word “lie” handwritten
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`in the margin. Id. The second link on the web-site entitled ALie # 2[:] It=s Safe Now@ linked the
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`viewer to another page with a quote and the word “lie” written in the margin. Id. at 1087. This quote
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`stated that the representative had been informed that all deficiencies had been abated. Id. The
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`deficiencies had likely not been repaired but the representative had received a notice indicating that
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`there were no deficiencies. Id. The web page did not include this notice. Id. The Court held that
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`these statements were not opinions. Id.
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`In Varian, two former employees posted derogatory messages about their former employer and
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`its executive employees on Internet bulletin boards. Varian Med. Sys., Inc. v. Delfino, 6 Cal. Rptr. 3d
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`325, 334 (Cal. Ct. App. 2003), rev’d on other grounds, 106 P.3d 958 (Cal. 2005). The statements
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`lies, hallucinations, mental
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`illness,
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`incompetence, harassment,
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`included accusations of
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 12 of 37 PageID 16545
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`discrimination, and stalking. Id. The employees also made sexual references implying that one of
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`the employees had sex with her supervisor to obtain her job. Id. After the lawsuit was filed, the
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`former employees published a website which provided a narrative of the case. Id. The employees
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`also took statements involving the lawsuit out of context. Id. For example, in a motion to the court,
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`the plaintiffs= attorney stated, AFor example, Defendants often posted messages implying, if not
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`outright stating, that Plaintiff Felch is a female executive who acquired semen stains on her clothes
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`from oral sex with a supervisor, which was supposedly the reason she still had a job, etc.@ Id. at 334-
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`35. Defendants took a portion of this quote and posted a message stating A>Felch is a female
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`executive who acquired semen stains on her clothes from oral sex with a supervisor . . .= was stated by
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`Megan Gray the famous LA lawyer.@ Id. at 335. The Court rejected the Defendants’ argument that
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`no one would take an anonymous outrageous posting on an Internet message board as a true
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`statement of fact. Id. at 337.
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`Applying the Bentley analysis, which requires the Court to consider verifiability and context,
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`the Court finds that the statements made on Predatorix are verifiable statements of fact as opposed
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`to protected opinions. Regarding statement #1, the amount of money that ORIX spent and the
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`amount of recovery are statements of fact. Statement #2 accuses Orix of engaging in specific
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`behavior. Statement # 3 takes statements made by Dinan out of context to imply a different
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`meaning to them analogous to the out of context quote in Varian. Statement # 5, which accuses
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`ORIX of lying and takes statements out of context, is similar to the statements in Ballard that were
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`not found to be an opinion. Statement #6 accuses Orix of engaging in behavior similar to Fannie
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`Mae. Finally, regarding statement #7, whether Nomura Securities won or lost the case is an
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`objectively verifiable fact.
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 13 of 37 PageID 16546
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`The Court also considers the context in which these statements were made. The disclaimer
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`that AThis is my private information and opinion@ does not transform the statements into opinions.
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`See Bentley, 94 S.W.3d at 584; (Ex. O to Application for Prelim. Inj. and Br. in Supp.). Like the
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`plaintiff in Bentley, Predatorix accuses Orix of wrongdoings and purports to give factual information
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`about Orix=s behavior. The website provides links to court documents, deposition videos, news
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`articles, and court cases. Cyrus also claims to verify the accuracy of the information he posts. (Ex.A
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`to Application for Prelim. Inj. and Br. in Supp. 3( AI am verifying the accuracy and intend to post it
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`within a few weeks.@)). Accordingly, these statements are not protected opinions.
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`b.
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`Satire or Parody
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`The Court now considers whether the statements on Predatorix are satire or parody. When
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`analyzing cases of satire or parody, the test is Awhether the publication could be reasonably
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`understood as describing actual facts.@ New Times, Inc. v. Isaacks, 146 S.W. 3d 144, 157 (Tex. 2004)
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`(citing Pring v. Penthouse Int=l Ltd., 695 F.2d 438, 442 (10th Cir. 1982)). AThe appropriate inquiry is
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`objective. Thus, the question is not whether some actual readers were misled, as they inevitably will
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`be, but whether the hypothetical reasonable reader could be.@ Id. at 157 (citations omitted).
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`The Court finds that a reasonable person would find that the Predatorix website describes
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`actual facts. It refers to actual court cases and cites several documents for support. As discussed
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`above, it purports to gather factual information to document ORIX=s alleged misconduct.
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`Accordingly, it is not satire or parody.
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`
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`3.
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`Public vs. Private Figure
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`Before considering SFE’s arguments based on falsity and actual malice, the Court must first
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`determine whether Orix is a public or private figure. Whether Orix is a public figure is a question of
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`Case 3:06-cv-00271-B Document 561 Filed 03/17/08 Page 14 of 37 PageID 16547
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`constitutional law for the Court to decide, with SFE having the burden of persuasion on the issue.
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`WFAA TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998) (citations omitted); ROBERT D.
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`SACK, SACK ON DEFAMATION: LIBEL, SLANDER, AND RELATED PROBLEMS ' 5.4.1
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`(citing Reliance Ins. Co. v. Barron=s, 442 F. Supp. 1341, 1346 (S.D.N.Y. 1977)). Determining
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`whether a corporation is a public or private figure requires a case by case analysis. Snead v. Redland
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`Aggregates Ltd., 998 F.2d 1325, 1329 (5th Cir. 1993). The Fifth Circuit has established a three non-
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`exclusive factor test for determining whether a corporation is a public figure. Id. The first factor,
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`Athe notoriety of the corporation to the average individual in the relevant geographical area@, takes
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`into account the corporation=s size and nationality. Id. The second factor, the nature of the
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`corporation=s business, considers whether the corporation makes or markets consumer goods. Id.
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`Finally, the third factor is the frequency and intensity of media scrutiny. Id.
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`In Snead, a railroad company filed a lawsuit against Redland and Standard, two English
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`corporations, alleging misappropriation of trade secrets and breach of a confidential relationship. Id.
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`at 1328. A few days after filing suit, the railroad company issued a press release accusing Standard
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`and Redland of “international theft,” “industrial espionage,” and “international piracy.” Id. Redland
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`and Standard counterclaimed for libel based on this press release. Id. The Court concluded that
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`Redland and Standard were not public figures. Id. at 1329. Applying the first factor, the Court
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`determined that although these corporations were not small, most Americans would not have heard
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`of them because they were alien corporations. Id. As for the second factor, the Court explained that
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`corporations that mine stone and build railroad cars would not ordinarily become household names.
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`Id. Finally, applying the third factor, the Court found no evidence that Redland or Standard had
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`received significant past publicity. Id. at 1329-30. The Court noted that the press release had been
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`published in several industry publications but found this insufficient to attain public figure status:
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`The record does reveal that the press release that is the subject of this suit was
`reprinted in several industry publications. Although some individuals may be
`considered public figures in a small geographical community, we decline to extend
`such reasoning to an industry. After all, almost every individual or corporation is well
`known among some small group of people.
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`Id. at 1330 n.7.
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`
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`Next the Court considered whether the speech involved a matter of public or private
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`concern, which required analysis of the form, content, and context of the speech. Id. at 1330.
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`Considering form, the Court found that the press release was unsolicited and not in response to
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`previous media coverage and that a party cannot turn speech into a matter of public concern by
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`issuing a press release. Id. As for content, the railroad company argued that (1) the speech involved
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`a lawsuit and lawsuits are a matter of public concern; (2)international competition and industrial
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`espionage are matters of public concern; and (3)the speech involved matters of special interest to the
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`railroad and construction industry. Id. The Court rejected these arguments. Id. First, the Court
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`found that the lawsuit did not become a matter of public concern by virtue of Redland and Standard
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`being drawn into litigation. Id. Second, the Court determined that while the public may be
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`interested in international competition and industrial espionage, the speech did not concern an
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`ongoing public debate and was not aimed at enlightening the general public. Id. Instead, it “‘was
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`speech solely in the individual interest of the speaker and its specific business audience.’” Id.
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`(quoting Dun & Bradstreet, 472 U.S. 749, 762 (1985)). Third, the Court rejected the argument that
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`the speech involved a matter of public concern to the industry:
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`Even if the record proves that this dispute was of particular interest to the railroad
`and construction industries, it does not mean it was a matter of interest to the
`general public. The fact that the press release was reported primarily in industry
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`publications indicates that the speech was not a matter of public concern but rather a
`matter of private concern of interest only to a particular industry.
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`Id. Finally, considering the context of the speech, the Court determined that the press release “was
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`an unsolicited comment on a lawsuit between private parties” and concluded that the speech
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`involved a private concern. Id.
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`Applying the first Snead factor for a public figure, the corporation’s notoriety to the average
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`individual in the relevant geographical area, the Court notes that Orix has admitted that it is a
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`Aleading provider of loan servicing and asset management/loan workout services@ and that its
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`customers include Asome of the nation=s largest institutional investors, portfolio owners, and loan
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`originators.@ (Am. Countercl. 8). It also admits that i