UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

AMERICAN PETROLEUM ) INSTITUTE, ) ) Plaintiff/Counterclaim ) Defendant, ) ) v. ) Civil Case No. 09-529 (RJL) ) TECHNOMEDIA INTERNATIONAL, ) INC., ) ) Defendant/Counterclaim ) Plaintiff. )

~ MEMORANDUM OPINION (March 30,2010) [#23 and 39]

This breach of contract lawsuit arises from a business deal gone haywire. The

American Petroleum Institute ("API") claims that TechnoMedia International, Inc.

("TechnoMedia")-a Texas company that provides computer-based training courses for oil

and gas industry workers-breached its contract to develop, market, and sell e-Iearning

materials under the API trademark. API seeks declaratory relief, unpaid royalties, and

money damages for the breach. Not long after API commenced this suit, the parties filed a

flurry of motions. TechnoMedia moved first to dismiss the complaint [#14], and then it

filed an answer raising scattershot counterclaims against API [#18], which have since been

amended [#32]. API, in turn, filed a motion to dismiss the counterclaims and a motion to

strike what it believes to be scandalous allegations made by TechnoMedia [#20], both of

which have been renewed in light of TechnoMedia's amendments [#39]. API also moved

for partial summary judgment on the merits [#22]. Shortly thereafter, TechnoMedia filed a motion for preliminary injunction [#23], asking the Court to enjoin API from using or

retaining confidential trade secret information that TechnoMedia disclosed to API during

the course of their contractual relationship. The Court has since denied TechnoMedia's

Motion to Dismiss and API's Motion for Partial Summary Judgment. (See Minute Orders

dated Mar. 9,2010). All that remain are (1) API's Motion to Dismiss Counts 1-3 and 5-6 of

TechnoMedia's Amended Counterclaim and to Strike Allegations of the Amended

Counterclaim [#39] and (2) TechnoMedia's Application for Preliminary Injunction [#23].

For the following reasons, API's motion, in large part, is GRANTED, and TechnoMedia's is

DENIED.

BACKGROUND]

API and TechnoMedia commenced discussions in 2004 to explore the possibility of

forming a business relationship. (Def.'s App. for Prelim. Inj. [#23] at 4). Before

formalizing their relationship, API requested confidential information from TechnoMedia to

assist it in evaluating TechnoMedia's products and services. (Id.; Ex. 1 [#23-2] at 5). As a

result, the parties entered into a non-disclosure agreement in August 2004 whereby API

agreed to protect any confidential information disclosed by TechnoMedia at API's request.

(Am. Countercl. [#32] ~ 14(b); Ex. 1 [#23-2] at 5). In March the following year, the parties

executed a contract entitled "Agreement to Develop and Market API-Branded Products and

Services in Electronic Media Formats" (the "API-TechnoMedia Agreement"), under which

API granted TechnoMedia an exclusive license to use API's trademark for the purpose of

I Because this case is before the Court on API's Motion to Dismiss, the Court recounts the facts below, unless otherwise noted, as they are depicted by TechnoMedia.

2 developing, marketing, and selling TechnoMedia's computer-based training courses for

workers in the petroleum industry. (Compl., Ex. A [#1_1]).2

Almost two years later, in January 2007, TechnoMediajoined with another company

named TWL Knowledge Group, Inc. ("TWL") to form a joint venture known as TWL Skill

Ventures, LLC ("Skill Ventures"). (Am. Countercl. [#32] ~~ 11, 12, 17). The purpose of

the joint venture was to enhance the marketing and sales of API-branded e-Ieaming products

distributed by TechnoMedia. (Jd. ~ 17). But good will between TechnoMedia and TWL

was, to say the least, fleeting. By the end of the year, TWL's principals, Dennis Cagan and

Patrick Quinn, allegedly launched a concerted effort to "usurp" the API-TechnoMedia

Agreement. (Jd. ~~ 20-21). According to the Amended Complaint, Cagan and Quinn

conspired with API to deprive TechnoMedia of opportunities to which it was entitled under

the Agreement. (Jd. ~ 20). In addition, Cagan and Quinn allegedly commenced a campaign

to smear TechnoMedia and its owner. (Jd. ~ 22). Specifically, TechnoMedia claims that

Cagan and Quinn made statements to "senior staff personnel of API" alleging "dishonesty,

financial misdealing and other criminality" by TechnoMedia. (Jd. ~ 22(a)). TechnoMedia

also claims that Cagan and Quinn told senior API officials that TechnoMedia's offices "had

been 'searched' by the 'financial crimes unit' of the local police department." (Jd. ~ 22(b)).

The API officials then republished these defamatory statements "throughout the API

organization." (Id. ~ 23). This campaign of disparagement allegedly "caused distrust,

2 Because TechnoMedia specifically references and relies upon the API- TechnoMedia Agreement in its Amended Counterclaim, the Court may consider the document in deciding API's Motion to Dismiss. See Randolph v. ING Life Ins. & Annuity Co.,

(D.D.C. 2007) ("The court is limited to considering facts alleged in the complaint, any documents attached to or incorporated in the complaint, matters of which the court may take judicial notice, and matters of public record. ").

3 animosity and hostility" that ultimately prompted API to wrongfully terminate its

contractual relationship with TechnoMedia. (/d.,-r,-r 23, 23( c), 26). Besides republishing Cagan and Quinn's defamatory accusations, TechnoMedia

claims that API made defamatory statements of its own by repeatedly warning

TechnoMedia that it was in breach of contract. (/d.,-r 23( c». TechnoMedia points

specifically to API's June 2008 letter to TechnoMedia in which API made allegedly false

representations that TechnoMedia and its owner had committed "misrepresentation,"

"concealment," "fraud," and "theft." (/d. ,-r 23(d». TechnoMedia alleges that this letter was published to a number of third parties, including API employees, API's in-house and outside

counsel, members of API's General Committee on Law, API's president and chairman, as

well as employees of Techno Media. (Id.,-r 23(d), (f). As further support for its defamation

allegations, TechnoMedia also points to API's January 2009 letter formally terminating the

API-TechnoMedia Agreement. (/d.,-r 23(h)-(i».

In addition to these charges of defamation and disparagement, TechnoMedia alleges

that API engaged in a bad faith course of conduct aimed at replacing TechnoMedia with

TWL as the distributor of API-branded e-Iearning products. TechnoMedia claims, for

instance, that TWL, in conspiracy with API, filed a fraudulent lawsuit against TechnoMedia

in Texas court to disrupt TechnoMedia's e-Iearning business. (/d.,-r 24). TechnoMedia also

claims that API falsely represented to TWL that "TWL Skill Ventures" was the "exclusive

distributor" of API-branded products. (/d. ,-r 29). Furthermore, TechnoMedia alleges that API, not TechnoMedia, breached their contract by refusing to deal with TechnoMedia in

good faith. (/d. ~ 28). Among the more provocative allegations raised by TechnoMedia is

4 its claim that API acquiesced in the distribution of TechnoMedia's API-branded materials to

a foreign company called Ecoman, which "API knew or should have know[ n] ... was

providing the content to Iran." (Id. ~~ 30-35). This allegation prompted API to file its

pending motion to strike.

Not only did API allegedly breach its obligations under the API-TechnoMedia

Agreement, TechnoMedia alleges that API breached the parties' 2004 non-disclosure

agreement as well. Specifically, TechnoMedia claims that "API misappropriated and

divulged trade secrets of TechnoMedia to Cagan, Quinn, TWL or other third parties,

including TechnoMedia's competitors and former agents." (Id. ~ 39). TechnoMedia also

claims that API continues to use and to disclose TechnoMedia's trade secrets without

authorization and that API refuses to return the trade secrets as requested. (Id. ~ 40(e)).

In light of this myriad of allegations, TechnoMedia filed a six-count amended

counterclaim in response to API's breach of contract complaint. Count 1 asserts that API's

alleged use, disclosure, and retention of TechnoMedia's confidential information in

violation of the parties' non-disclosure agreement constitutes tortious misappropriation and

conversion of trade secrets. (See

~~ 36-47). In addition to seeking actual and punitive

damages, as well as attorneys' fees, TechnoMedia seeks an injunction barring API from

further use or disclosure of TechnoMedia's trade secrets and ordering it to return all

confidential information to TechnoMedia. (Id. ~~ 44,45,47). Claiming irreparable harm,

TechnoMedia has also moved for a preliminary injunction. (Def.'s App. for Prelim. Inj.

[#23]). Count 2 of the Amended Counterclaim asserts that API never intended to abide by

the non-disclosure agreement and that, as a result of API's misrepresentation that the non-

5 disclosure agreement would survive "in perpetuity," it fraudulently induced TechnoMedia to

enter into the API-TechnoMedia Agreement. (See Am. Countercl. [#32] ~~ 48-53). Count 3

asserts that API made defamatory and disparaging statements about T echnoMedia and its

owner that "included claims of criminality, fraud, and financial improprieties." (See

~~

54-70). Count 4 asserts that API breached the API-TechnoMedia Agreement and violated

its duty of good faith and fair dealing. (See

~~ 71-81). Count 5 asserts that API

intentionally interfered with TechnoMedia's third-party contracts and other anticipated

business deals. (See

~~ 82-84). Count 6 asserts that API and TechnoMedia formed a

joint venture partnership and that, as a result, API owed TechnoMedia fiduciary duties,

which API breached by allowing Ecoman to use TechnoMedia's products and by

misappropriating TechnoMedia's confidential information. (See

~~ 85-88). With the

exception of the breach of contract claim set forth in Count 4, API has moved to dismiss

TechnoMedia's counterclaims, all of which sound in tort, for failure to state a claim under

Federal Rule of Civil Procedure 12(b)(6).

LEGAL STANDARD

Dismissal under Rule 12(b)(6) is proper if the plaintiff has "failed to state plausible

grounds for relief." Winder v. Erste,

(D.C. Cir. 2009). In evaluating a

Rule 12(b)(6) motion to dismiss, the Court must construe the complaint or counterclaim "in

favor of the plaintiff, who must be granted the benefit of all inferences that can be derived

from the facts alleged." Schuler v. United States,

(D.C. Cir. 1979)

(internal quotation marks omitted). This is not to say that the plaintiff is entitled to the

benefit of any conceivable inference. To the contrary, the Court "need not accept inferences

6 drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint."

Kowal v. MCI Commc'ns Corp.,

(D.C. Cir. 1994). "Nor must the court

accept legal conclusions cast in the form of factual allegations." ld. Although the factual

allegations need not be detailed, "a plaintiffs obligation to provide the grounds of his

entitlement to relief requires more than labels and conclusions, and a formulaic recitation of

the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly,

(2007) (internal quotation marks and alterations omitted). Factual allegations,

even though assumed to be true, must still be "enough to raise a right to relief above the

speculative level." ld.

DISCUSSION 3

I. Misappropriation Of Trade Secrets And Conversion (Count One)

TechnoMedia alleges that API wrongfully disclosed TechnoMedia's trade secrets "to

Cagan, Quinn, TWL or other third parties, including TechnoMedia's competitors and former

3 The first wrinkle in this case involves choice of law. The parties disagree about

whether Texas or District of Columbia law applies to TechnoMedia's tort claims, yet neither party explains how the choice of law might affect the outcome of the case. TechnoMedia contends that Texas law applies, but it concedes that its claims would survive under District of Columbia law as well. Conversely, API contends that District of Columbia law applies, but it concedes that its motion to dismiss would also prevail under Texas law. Before embarking on any choice of law analysis, the Court "must first determine if there is a conflict between the laws of the relevant jurisdictions." Young Women's Christian Ass 'n of the Nat 'I Capital Area, Inc. v. Allstate Ins. Co.,

(D.C. Cir. 2002). "Only if such a conflict exists must the court then determine, pursuant to District of Columbia choice of law rules, which jurisdiction has the 'more substantial interest' in the resolution of the issues." ld. Other than the legal rules pertaining to self-publication as a basis for establishing a defamation claim, which the Court will address later, the parties point to no conflict between Texas and District of Columbia law that would require the Court to apply the District's choice of law rules. Accordingly, with the exception of the law regarding self-publication, the Court will apply District of Columbia law to TechnoMedia's tort claims.

7 agents." (Am. Countercl. [#32] ,-r 39). API moves to dismiss this claim on the ground that

TechnoMedia implicitly authorized the disclosure of its trade secrets to TWL and its

principals. Under District of Columbia law, there can be no misappropriation unless the

disclosure or use of a trade secret is "without express or implied consent."

-

401(2)(B). In its original counterclaim, TechnoMedia admitted that it "shared various trade

secrets with API and with TWL." (Countercl. [#18],-r 14). This admission suggests that

TechnoMedia had authorized the disclosure of its trade secrets to TWL, which makes sense

considering that TechnoMedia had partnered with TWL to carry out the API-TechnoMedia

Agreement. TechnoMedia attempted to cure this pleading deficiency in its amended

counterclaim by alleging that the trade secrets it shared with API were "not necessarily the

same" as the trade secrets it shared with TWL. (Am. Countercl. [#32] ,-r 19). Even if! were

to accept as true, however, that the trade secrets were not necessarily the same, this

allegation is a far cry from asserting that the trade secrets were not in fact the same.

Because TechnoMedia failed to plead that the trade secrets it disclosed to TWL were

actually different from the trade secrets it disclosed to API, its factual allegations are not

"enough to raise a right to relief above the speculative level.,,4 Twombly,

.

4 The plaintiffs duty is to plead the facts that it believes, in good faith, to be true. If a plaintiff is permitted to plead facts that it believes might be true, then the commencement of a lawsuit would be nothing more than a speculative enterprise that, if unchecked, would lead to an unjustified fishing expedition. A defendant ought not to be exposed to the burdens of litigation and scarce judicial resources ought not to be expended merely because the plaintiff believes that the defendant might have caused harm to the plaintiff. It is for this reason that the Supreme Court requires plaintiffs to plead facts that rise above mere speculation. TechnoMedia's allegation that the trade secrets supplied to TWL are not "necessarily" the same as those supplied to API is tantamount to a speculative allegation that the trade secrets might be different. TechnoMedia attempted to cure this defect by asserting in its opposition brief that the "[t]rade secrets are in fact not the same." (Def.'s Opp'n [#45-1] at 21). But

8 This deficiency is compounded by the fact that TechnoMedia makes no effort to plead what

trade secrets have been misappropriated. 5 Based on the face of TechnoMedia's pleading,

there is no way to know what TechnoMedia's trade secrets are and which trade secrets have

been disclosed to API but not TWL. In the absence of factual allegations showing that the

trade secrets supplied to API were in fact different from the trade secrets supplied to TWL

and that API disclosed trade secrets to TWL that had not already been disclosed to TWL,

TechnoMedia's right to relief remains entirely speculative. To survive dismissal, it is not

enough to plead a statement of facts '''that merely creates a suspicion [of] a legally

cognizable right of action.'" Twombly,

(quoting 5 C. Wright & A. Miller,

Federal Practice and Procedure § 1216, at 235-36 (3d ed. 2004)). Accordingly, the claim

that API wrongfully disclosed TechnoMedia's trade secrets to TWL and its principals must

fail.

Nor is TechnoMedia's misappropriation and conversion claim salvaged by alleging

that API "misappropriated and divulged" its trade secrets to "other third parties, including

TechnoMedia's competitors and former agents," (Am. Countercl. [#32] ~ 39), or that API

this post hoc attempt to remedy a deficiency in the pleading is not acceptable: "It is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss." Jung v. Ass 'n ofAm. Med. Colis.,

(D.D.C. 2004) (internal quotation marks omitted). Notwithstanding the wide latitude given to litigants at the pleading stage, a pleading is not to be used as a constantly moving target that the pleader can reformulate every time the pleading is challenged. Sooner or later, it "must stand or fall on its own." TV Commc 'ns Network, Inc. v. Turner Network Television, Inc.,

, 1025 (lOth Cir. 1992). 5 All that TechnoMedia says is that it "possessed valuable trade secrets" and that

these "trade secrets consisted of information, including compilations, programs, methods, techniques, and processes." (Am. Countercl. [#32] ~ 37). But this depiction of TechnoMedia's trade secrets is nearly identical to the D.C. Code, which defines a "trade secret" generically as "information, including a formula, pattern, compilation, program, device, method, technique, or process."

(4).

9 continues "to make unauthorized uses and disclosures of TechnoMedia's trade secrets [by

requesting proposals from] former agents of TechnoMedia and/or competitors of

TechnoMedia for the development of TechnoMedia's trade secrets," (id. ~ 40(e)). I agree

with API that these are the sort of "naked assertions devoid of further factual enhancement"

that fall woefully short of the already liberal pleading standard. See Ashcroft v. Iqbal, 129

s. Ct. 1937, 1949 (2009) (internal quotation marks and alteration omitted).

The only claim that I believe survives dismissal is TechnoMedia's allegation that

"API has refused to return the trade secrets to TechnoMedia as requested." (Am. Countercl.

[#32] ~ 40(e)). In its Motion to Dismiss, API does not challenge the legal sufficiency of this

claim. As a consequence, I must address whether TechnoMedia is entitled to a preliminary

injunction requiring API to return immediately any trade secrets wrongfully withheld from

TechnoMedia.

TechnoMedia's Application for Preliminary Injunction seeks, among other things, an

order requiring API to return all of TechnoMedia's trade secrets and an order enjoining

further unauthorized use or disclosure of those trade secrets. Because TechnoMedia has

failed to state a claim that API has wrongfully used or disclosed TechnoMedia's

confidential information, there is no basis for a preliminary injunction on that ground. That

leaves the question of whether TechnoMedia is entitled to a preliminary injunction ordering

API to return whatever trade secrets it is alleged to be wrongfully withholding. The factors

that a court must weigh in deciding whether to grant a preliminary injunction are: (1)

whether "the plaintiff has a substantial likelihood of success on the merits"; (2) whether "the

plaintiff would suffer irreparable injury were an injunction not granted"; (3) whether "an

10 injunction would substantially injure other interested parties"; and (4) whether "the grant of

an injunction would further the public interest." Ark. Dairy Co-op Ass 'n, Inc. v. Us. Dep '(

ofAgric.,

(D.C. Cir. 2009). Although "these factors interrelate on a

sliding scale, the movant must, at a minimum, demonstrate that irreparable injury is likely in

the absence of an injunction." Bill Barrett Corp. v. Us. Dep '( of Interior,

(D.D.C. 2009) (Leon, J.) (internal quotation marks and citations omitted).

"[B]ecause the basis of injunctive relief in the federal courts has always been irreparable

harm, a movant's failure to establish irreparable harm is grounds for denying a motion for

preliminary injunction without considering the other factors."

(internal quotation

marks omitted).

Here, TechnoMedia has utterly failed to meet its burden to show that it will suffer

immediate and irreparable harm if its trade secrets are not returned until the conclusion of

this litigation. Because TechnoMedia has failed to even plead that API has wrongfully used

or disclosed TechnoMedia's trade secrets, there is no reason to believe that API is unwilling

or unable to protect whatever secrets it still has until this case is decided. Accordingly, I

find no basis to grant the extraordinary remedy of a preliminary injunction at this time. 6

6 Nor does the Court see any basis to grant TechnoMedia' s request for a preliminary injunction ordering API to issue API-branded Certificates of Completion to qualifying e- learning students. (See Def.'s App. for Prelim. Inj. [#23] at 1). TechnoMedia claims that API's refusal to issue these certificates is a breach of their contract that "endanger[s] TechnoMedia with the loss of customers and business opportunities, and the very real possibility of permanently damaged relationships with its customers." (Jd. at 15). Because TechnoMedia's asserted injury is speculative (not immediate) and is economic in nature, it does not constitute the sort of irreparable harm that justifies preliminary injunctive relief. See, e.g., Wis. Gas Co. v. FERC,

,674 (D.C. Cir. 1985) ("Injunctive relief will not be granted against something merely feared as liable to occur at some indefinite time ...

11 II. Fraud And Fraud In The Inducement (Count Two)

TechnoMedia's second counterclaim asserts that API fraudulently induced

TechnoMedia to enter into the API-TechnoMedia Agreement when an API official made

certain oral assurances and promises that the parties' non-disclosure agreement would

continue in effect after the API-TechnoMedia Agreement was executed. (Am. Countercl.

[#32] ~ 50). TechnoMedia claims that API's representations about the validity of the non-

disclosure agreement were fraudulent because API knew at the time "that it had no intention

of honoring the covenants of confidentiality and non-disclosure" contained in the

agreement. (Jd. ~ 49). As support for this otherwise naked assertion of fraud, TechnoMedia

cites only two pieces of evidence: (1) the API official's insistence that TechnoMedia sign

the contract without the assistance oflegal counsel, (id. ~ 50); and (2) API's current

litigation position that the non-disclosure agreement is no longer operative because the API-

TechnoMedia Agreement superseded it, (id. ~ 49). Had API not misrepresented its intention

to abide by the non-disclosure agreement, TechnoMedia says that it would not have

consented to the API-TechnoMedia Agreement. (Jd. ~ 52). As a matter of law, this claim is

baseless.

Putting aside the legal question of whether the non-disclosure agreement is still

binding, it is clear that TechnoMedia has no basis for a fraudulent inducement claim

premised on API's prior representation that the non-disclosure agreement would remain in

effect. By its plain terms, the API-TechnoMedia Agreement forecloses any reliance on

representations preceding formation of the contract: "This Agreement sets forth the entire

." (internal quotation marks omitted»; id. (noting that it is "well settled that economic loss does not, in and of itself, constitute irreparable harm").

12 agreement between the parties. This Agreement supersedes all prior proposals,

understandings or agreements, oral or written, relating thereto .... " (CompI., Ex. A [#1-1]

~ 42). Where a contract expressly supersedes all previous understandings and agreements, a

prior representation cannot serve as the basis for a claim of fraud or fraud in the inducement.

Were I to permit the use of such prior representations to defeat the clear words of the

contract, "'contracts would not be worth the paper on which they are written. '" One-O-One

Enters., Inc. v. Caruso,

(D.C. Cir. 1988) (quoting Tonn v. Phi/co

Corp.,

(D.C. 1968)). TechnoMedia is a sophisticated company whose

owner had "the capacity and opportunity to read [the] written contract" and whose assent

was "not obtained by trick or artifice" or "under any emergency."

(internal quotation

marks omitted). As such, it cannot now claim fraud or fraud in the inducement.

III. Disparagement And Defamation (Count Three)

TechnoMedia's third count alleges that API and its agents engaged in a "smear

campaign" against TechnoMedia and its owner. (Am. Counterci. [#32] ~ 55). Four discrete

allegations of disparagement and defamation emerge from TechnoMedia's Amended

Counterclaim. First, TechnoMedia claims that API personnel republished "throughout the

API organization" accusations of "dishonesty, financial misdealing and other criminality"

originally made by TWL principals, Cagan and Quinn. (ld. ~~ 23, 22(a)). Second,

TechnoMedia claims that an officer of API addressed a letter to TechnoMedia's owner in

June 2008, warning TechnoMedia that it was in breach of the API-TechnoMedia Agreement

and accusing TechnoMedia and its owner of "misrepresentation," "concealment," "fraud,"

and "theft." (ld. ~ 23(c)-(f)). Third, TechnoMedia claims that API addressed another

13 defamatory letter to TechnoMedia in January 2009 in which API terminated the API-

TechnoMedia Agreement. (Id. ~ 23(c), (h)-(i)). Finally, TechnoMedia claims that API's

outside legal counsel made defamatory statements about TechnoMedia and its owner to the

local police in Carrollton, Texas. (Id. ~ 62). Unfortunately for Technomedia, none of these 7 allegations of disparagement and defamation withstand the slightest scrutiny.

TechnoMedia's first allegation-that specific API personnel republished "throughout

the API organization," (id. ~ 23), Cagan's and Quinn's accusations of "dishonesty, financial

misdealing and other criminality," (id. ~ 22(a))-lacks sufficient specificity to state a claim

for defamation. Fundamental to any defamation claim is that the plaintiff must prove that

"the defendant published the statement without privilege to a third party." Oparaugo v.

Watts,

(D.C. 2005). Although there is no heightened pleading standard in

the District of Columbia, the allegations must be specific enough to permit the defendant to

respond.

. To satisfy federal pleading standards in light of Twombly, that means

that the plaintiff must "adequately identifly] third parties, or 'listeners,' with sufficient

specificity to enable the defendant to answer the complaint." Vreven v. Am. Ass 'n of Retired

Pers.,

(D.D.C. 2009). TechnoMedia's allegation that certain API

7 TechnoMedia's disparagement (or injurious falsehood) claims fail for the same reasons as its defamation claims. "Although distinctions exist at common law between actions for injurious falsehood and defamation, the torts have always been very closely related." Art Metal-USA, Inc. v. United States,

(D.C. Cir. 1985). The primary difference, which has no bearing on the Court's reasons for dismissal, is "the requirement in an injurious falsehood action of pecuniary harm," but even that distinction is negligible when a corporation like TechnoMedia is suing for defamation, because it "may only recover actual damages in the form oflost profits."

. Furthermore, the privileges applicable to defamation claims also apply to injurious falsehood claims. See Restatement (Second) of Torts § 635, cmt. a (1977) ("The circumstances under which there is an absolute privilege to publish an injurious falsehood are in all respects the same as those under which there is an absolute privilege to publish matter that is personally defamatory.").

14 officers republished Cagan's and Quinn's allegedly defamatory statements "throughout the

API organization" does not meet that standard. See id. at 16 (holding that the complaint,

which alleged that the defamer "has told [unnamed] others at AARP," "does not give

defendant 'fair notice' of the nature of the claims and the 'grounds' on which the claim

rests, both of which are necessary in order for defendant to respond properly").

TechnoMedia's next two allegations-(l) that an API official sent a defamatory

letter to TechnoMedia's owner in June 2008 warning about a breach of contract and (2) that

API sent another defamatory letter to TechnoMedia in January 2009 terminating the API-

TechnoMedia Agreement-also fail. Even if I were to accept that the allegations of

"misrepresentation," "concealment," "fraud," and "theft" in the June 2008 letter were

defamatory in nature, (id. ~ 23(c)-(f)), no claim based on that letter can possibly survive

dismissal because publication of the letter is privileged. The District of Columbia, "like the

majority of other jurisdictions, has long recognized an absolute privilege for statements

made preliminary to, or in the course of, a judicial proceeding, so long as the statements

bear some relationship to the proceeding." Oparaugo,

(internal quotation

marks omitted). The privilege applies, not only to attorneys, but to parties as well.

. The Court is mindful that this privilege is "not lightly conferred" and that "caution is

warranted" where no judicial proceeding has begun. Finkelstein, Thompson & Loughran v.

Hemispherx Biopharma, Inc.,

(D.C. 2001). Courts must pay

"particularly close attention to the factual circumstances,"

(internal quotation marks

omitted), to determine whether there is a "reasonable nexus between the publication in

question and the litigation under consideration,"

. It is obvious from the face of the

15 letter, as well as the surrounding facts and circumstances of this case, that a reasonable

nexus exists between API's publication of the June 2008 letter and the breach of contract

action now pending before this Court. The letter is titled "Notice of Breach of Contract,"

and it lays out all the ways that API believed TechnoMedia to be in violation of their

agreement. (Compl., Ex. B [# 1-1] at 1). If that alone were not enough, the letter goes on to

warn TechnoMedia that if the breach is not corrected within thirty days, "API will take

appropriate action to protect its rights." (Id.). This letter clearly raised the specter of future

litigation. In that sense, it is quite similar to the letter found to be privileged in Messina v.

Krakower, which had warned: "If we do not hear back from you ... by the close of

business on January 13,2003, we will assume that you are not interested in resolving this

matter amicably, and will proceed accordingly."

(D.C. Cir. 2006).

Given that the obvious purpose of the letter was to put TechnoMedia on notice of possible

legal action and given that legal action has in fact materialized due to the alleged breaches

set forth in the letter, I conclude that API is immune from liability for defamation based on

its publication of the June 2008 "Notice of Breach ofContract."g

8 At the risk of beating a dead horse, I also agree with API that TechnoMedia's defamation claim based on the June 2008 letter is barred by the statute of limitations. "A defendant may raise the affirmative defense of a statute of limitations via a Rule I2(b)( 6) motion when the facts giving rise to the defense are apparent on the face of the complaint." Nat 'I R.R. Passenger Corp. v. Lexington Ins. Co., 357 F. SUpp. 2d 287,292 (D.D.C. 2005). Because statutes of limitation are procedural, Jovanovic v. Us. -Algeria Business Council, 561 F. SUpp. 2d 103, 111 (D.D.C. 2008), the District of Columbia's one-year statute of limitations applies,

(4). Here, TechnoMedia alleges pUblication of the defamatory letter dated June 5, 2008, (Am Countercl. [#32] ~ 23(d», and republication of the letter by email on June 24, 2008, (id. ~ 23(£). TechnoMedia did not file its Amended Counterclaim until July 6, 2009. In its original counterclaim, TechnoMedia did not raise any allegation of defamation based on the June 2008 letter. As a result, that claim cannot "relate back" to the original counterclaim filed on June 5, 2009, and is therefore barred by

16 The grounds for dismissing TechnoMedia's claim that is based on the January 2009

termination letter are even stronger. First, like the June 2008 letter, publication of the

termination letter is protected by the absolute privilege for statements made preliminary to a

judicial proceeding. Indeed, within a matter of days, TechnoMedia commenced litigation in

Texas based on that letter, (CompI., Ex. A [#1-1] ~ 53), and this litigation soon followed.

Second, TechnoMedia has completely failed to allege what content in the termination letter

is defamatory. The Amended Complaint describes the January 2009 letter as "a defamatory

letter of termination of contract." (Am. CountercI. [#32] ~ 23( c». This conclusory

characterization, however, hardly satisfies the requirement that defamation plaintiffs plead

"the time, place, content, speaker, and listener of the alleged defamatory matter." Wiggins

v. Dist. Cablevision, Inc.,

(D.D.C. 1994) (emphasis added); see also

Twombly,

(noting the plaintiffs obligation under the Federal Rules to

provide "more than labels and conclusions"). Nor has TechnoMedia stated a claim for

defamation by alleging that the termination letter "purports to require TechnoMedia to

completely dismantle the API-University project, immediately cease all marketing, sales and

support of the eLearning courseware and software, and terminate all existing contracts."

(Am. CountercI. [#32] ~~ 23(h), (i». Statements like these do not remotely approach the

kind of injurious language that constitutes defamation under District of Columbia law. See

Clawson v. St. Louis Post-Dispatch, LLC,

(D.C. 2006) ("[A]n allegedly

the one-year limitations period. See Caudle v. Thomason,

(D.D.C. 1996) ("Because the slander claim involves publications entirely distinct from the publication of the memo, and made to a number of individuals not mentioned in the original complaint, the Court finds that the slander claim does not relate back to the filing of the original complaint. ").

17 defamatory remark must be more than unpleasant or offensive; the language must make the

plaintiff appear 'odious, infamous, or ridiculous.'" (internal quotation marks omitted)).9

Even less persuasive is TechnoMedia's final allegation that API's outside counsel

made "disparaging and defamatory" statements about TechnoMedia and its owner to the

police in Carrollton, Texas. (Am. Countercl. [#32] ,-r 62). Yet again, TechnoMedia has

made no attempt to allege the content or substance of the supposedly defamatory statements.

Even after amending its counterclaim, TechnoMedia still offers nothing more than labels

and conclusions. \0 Accordingly, that defamation claim must be dismissed as well. ll

9 To the extent that TechnoMedia raises a disparagement allegation separate and apart from its defamation allegations, it does so only briefly when describing the so-called "Schechter Document." (Am. Countercl. [#32] ,-r 29). The allegedly disparaging statement in that document is that "TWL Skill Ventures" is the "exclusive distributor" of e-Iearning products for API. (ld.,-r 29(a)). This statement, even if untrue, does not constitute injurious falsehood for the same reason that the January 2009 termination letter does not constitute defamation: The statement is not capable of defamatory or injurious meaning. See Clawson v. Sf. Louise Post-Dispatch, LLC,

(D.C. 2006) (affirming the dismissal of a disparagement or injurious falsehood claim where the communication did not make the plaintiff appear odious, infamous, or ridiculous). 10 This claim is also barred by the one-year statute of limitations. See

(4). TechnoMedia alleges that the defamatory communication occurred on or about March 18, 2008, (Am. Countercl. [#32] ,-r 62), well over a year before it filed its original counterclaim on June 5, 2009. II TechnoMedia also claims throughout its Amended Counterclaim that it self-

published API's defamatory remarks to third parties and that this self-publication is sufficient to state a defamation claim. Because self-publication cannot be a basis for defamation under District of Columbia law, Austin v. Howard Univ.,

(D.D.C. 2003), but can be under Texas law, Austin v. INET Techs., Inc.,

(Tex. App. 2003), the Court must determine which law applies. To decide that question, the District of Columbia follows the "substantial interests" test, under which the Court must "balance the competing interests of the two jurisdictions, and apply the law of the jurisdiction with the more 'substantial interest' in the resolution of the issue." Jaffe v. Pallotta Team Works,

(D.C. Cir. 2004) (internal quotation marks omitted). Because the self-publication purportedly occurred in Texas, where TechnoMedia is located, and because the harm will most likely occur there, Texas has the more substantial interest in resolving this particular dispute. Under Texas law, however, self-publication is

18 IV. Intentional Interference With Economic Advantage (Count Five)

In its fifth count, TechnoMedia alleges that API intentionally interfered with

TechnoMedia's economic advantage arising from its contracts with TWL, its expected

business relationships with a foreign government and a foreign company, its "Qualification

Centers," and its customer base. (Am. Countercl. [#32] ,-r 83). To state a claim for tortious

interference, a plaintiff must plead "( I) the existence of a valid business relationship or

expectancy, (2) knowledge of the relationship or expectancy on the part of the interferer, (3)

intentional interference inducing or causing a breach or termination of the relationship or

expectancy, and (4) resultant damage." Browning v. Clinton,

(D.C. Cir.

2002) (internal quotation marks omitted). No claim will lie, however, where "the

interference is caused by the defendant's breach of his own contract with plaintiff." Bus.

Equip. Ctr., Ltd. v. DeJur-Amsco, Corp.,

(D.D.C. 1979).

In this case, the only interference alleged by TechnoMedia is entirely a product of

API's alleged violations of the API-TechnoMedia Agreement. TechnoMedia asserts, for

instance, that "API deprived TechnoMedia of revenue generating opportunities that were

specifically included in the API-TechnoMedia Agreement, including the Worksafe program

that API was bound to direct to TechnoMedia." (Am. Countercl. [#32] ,-r 26 (emphasis

added». TechnoMedia also asserts that because of API's termination of the agreement,

which resulted in "API's unilateral directive that TechnoMedia not enter into any 'long-

actionable only "if the defamed person's communication of the defamatory statements to the third person was made without an awareness of their defamatory nature." Austin,

. That requirement is not satisfied here. Besides being hopelessly vague and inadequately pled, TechnoMedia's claim that it was somehow forced to self-publish defamatory statements, (Am. Countercl. [#32] ,-r 56), is not actionable in light of its assertion that the statements were "defamatory per se," (id. ,-r 57).

19 term' contracts, TechnoMedia was essentially shut out of the revenue generating

opportunities to which it was entitled, including the Qualification Centers." (Id. (emphasis

added)). In further support of its interference claims, TechnoMedia alleges that "API

refused to deal with TechnoMedia in good faith as it is required to do under the parties'

agreements, the law of the District of Columbia, and other applicable law," (id. ~ 28

(emphasis added)), by among other things "misappropriating and interfering with business

opportunities with Coastal and WCS/CUDD," (id. ~ 28(1)); "interfering with TechnoMedia

in the performance of its agreements with Skill Ventures, TWL, or both," (id. ~ 28(p));

"interfering with TechnoMedia in the performance of its agreements with various third-

party licensees and sub-licensees," (id. ~ 28( q)); and "interfering with TechnoMedia in

regard to Qualification Centers," (id. ~ 28(r)). TechnoMedia cannot assert that API

breached its contract with TechnoMedia by "interfering" with business opportunities that

flow from the contract and then assert a separate claim in tort that API intentionally

interfered with those opportunities. TechnoMedia's "remedy is not a claim for tortious

interference with contract, rather, it is an element of damages for [its] breach of contract

claim." In re Beitzel! & Co., Inc.,

(Bankr. D.D.C. 1993). Because the

lost opportunities alleged by TechnoMedia arise from the API-TechnoMedia Agreement and

API's alleged breach of that agreement, they cannot serve as the basis for TechnoMedia's

tortious interference claims. 12

12 TechnoMedia's argument that API's defamation constituted tortious interference

separate and apart from any breach of contract is ultimately unavailing because TechnoMedia has failed to state any claim for defamation. In any event, TechnoMedia has not pled facts showing that API made defamatory remarks to any third party with whom TechnoMedia had a current or expectant business arrangement, with the possible exception

20 V. Breach Of Fiduciary Duty (Count Six)

TechnoMedia's final count asserts that API and TechnoMedia formed ajoint venture

that gave rise to fiduciary duties, which API subsequently breached by, among other things,

violating the terms of the API-TechnoMedia Agreement, by misappropriating

TechnoMedia's confidential information, and by allowing Ecoman (a foreign company with

alleged ties to Iran) to use TechnoMedia's API-branded materials. (Am. Countercl. [#32] ~

86-87). Unfortunately for TechnoMedia, its claim is foreclosed by the unambiguous terms

of the API-TechnoMedia Agreement, which states:

It is expressly understood between the parties hereto that by virtue of the rights granted by API to CONTRACTOR, that the CONTRACTOR is acting as an independent contractor and that no association, partnership or joint venture of any kind has been created. CONTRACTOR agrees not to refer to itself as API's agent nor refer to the relationship between the parties as a joint venture or partnership.

(Compl., Ex. A [#1-1] ~ 30). Indeed, "[w]here the language ofa contract is wholly

unambiguous, [courts] will not consider extrinsic evidence of the parties' intent." Vulcan

Arbor Hill Corp. v. Reich, 81 F 3d 1110, 1117 (D.C. Cir. 1996); see also Holland v.

Hannan,

(D.C. 1983) (stating that, absent any ambiguity, "a written

contract duly signed and executed speaks for itself and binds the parties without the

necessity of extrinsic evidence"). Again, TechnoMedia is a sophisticated business fully

capable of understanding and executing the API-TechnoMedia Agreement. Because that

ofTWL. The Court agrees with API, however, that TechnoMedia cannot now argue that the allegedly defamatory statements by API interfered with the TWL-TechnoMedia relationship when TechnoMedia has alleged all along that TWL and its principals were the original source of those statements. (See, e.g., Am. Countercl. [#32] ~ 26 (alleging that "API listened to and republished TWL's libel and slander" and then "ultimately repudiated the API-TechnoMedia Agreement"».

21 agreement speaks for itself, TechnoMedia cannot now argue based on evidence beyond the

plain language of the agreement that API and TechnoMedia formed ajoint venture or

partnership. There being no basis to conclude that a joint venture ever existed between the

parties, TechnoMedia cannot state a claim for breach of fiduciary duty.

CONCLUSION

Having employed a "kitchen sink" approach to pleading its tort counterclaims,

TechnoMedia has played unacceptably fast and loose with the already generous pleading

standards of the Federal Rules and with the law itself. Accordingly, with the exception of

TechnoMedia's claim that API is wrongfully withholding TechnoMedia's trade secrets,

API's Motion to Dismiss as to all other claims and allegations is GRANTED. In addition,

TechnoMedia's wholly unsubstantiated Application for Preliminary Injunction is DENIED.

An Order consistent with this Memorandum Opinion is attached .

.t

I', ,~.~ RICHARD ~.- ON United States District Judge

22