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Karpinski v. Union Leader Corp.

United States District Court, D. New Hampshire

July 16, 2019

Olivia Karpinski & Paul Edalat
v.
Union Leader Corporation, Patricia J. Grossmith, & Trent E. Spiner

          ORDER

          Paul Barbadoro United States District Judge.

         Olivia Karpinski and Paul Edalat allege that they were defamed in an article published by the New Hampshire Union Leader. They have sued the paper's owner, its executive editor, and the article's author for defamation, false light invasion of privacy, conspiracy, and violation of the New Hampshire Consumer Protection Act. The defendants have responded with a motion to dismiss contending that: (1) the statements that gave rise to the defamation and false light claims are protected by the fair report privilege; (2) the complaint cannot support a conspiracy claim because it does not sufficiently allege that the defendants entered into an unlawful agreement; and (3) the Consumer Protection Act claim fails because the article in question is not deceptive. After carefully considering the parties' respective arguments, I agree that the complaint must be dismissed.

         I. BACKGROUND[1]

         Olivia Karpinski is a graduate of the University of New Hampshire and a runner-up in the Miss New Hampshire USA pageant. In early 2015 she moved to California and began working as Director of Sales for PharmaPak, Inc. (“PharmaPak”), a medical products company founded by Bruce Cahill. See Complaint, Doc. No. 1 ¶¶ 12-14. During her time at PharmaPak, Karpinski met Paul Edalat, a major shareholder of the firm. Id. ¶ 21. Things soon went south. In April 2016, Cahill filed a federal lawsuit against numerous defendants, including Edalat and Karpinski, alleging RICO violations, securities violations, fraud and deceit, and fraud by concealment. See Id. ¶ 20; Complaint, Cahill et al. v. Edalat et al., No. 8:16-cv-00686-AG-DFM (C.D. Cal. Apr. 12, 2016), Doc. No. 1 [hereinafter “Cahill docket”].

         Karpinski responded with counterclaims of her own.[2] In pleading her claims, she details an incident in November 2015, when

Cahill grabbed Karpinski's arm, and pulled her bodily towards himself in an attempt to kiss Karpinski. She deflected the kiss by turning her face away, and pulling her body away from Cahill.

Cahill docket, Karpinski Counter-Claim and Cross-Complaint, Doc. No. 30 at 5. That incident is cited to support two of her causes of action: first, that Cahill breached the covenant of good faith and fair dealing by “sexually harass[ing] Karpinski and create[ing] a hostile work environment;” and second, that Cahill wrongfully terminated her by firing her “in the hopes of silencing here [sic] and to hide the fact of his sexual assault on her.” See Id. at 36. Karpinski also brought claims against Cahill for common law assault and common law battery that are based in part on the unwanted kiss. See Id. at 37.

         Karpinski accompanied her counterclaims with public relations articles and social media activity. She issued an online press release titled “UCI Trustee Allegedly Wrongfully Terminates Former Employees” that stated “Former Vice President of Sales Olivia Karpinski also alleges sexual harassment and sexual assault by Cahill.” See Cahill docket, Doc. No. 95-8; Doc. No. 94-1 at 13. And she instagrammed a statement advocating for dignified workplace treatment of women, asserting that she “was in a constantly stressful and hostile environment and was sexually assaulted after being given a promotion” by Bruce Cahill. See Cahill docket, Doc. No. 95-6. Edalat linked to Karpinski's posts on social media, writing, “Bruce Cahill and his fraud of a gang will face justice soon!” See Cahill docket, Doc. No. 95-15. Not to be outdone, Cahill fired back with an amended complaint, adding libel claims against Edalat and Karpinski for wrongfully accusing him, inter alia, of sexual assault, sexual harassment, and wrongful termination. See Cahill docket, Cahill Second Amended Complaint, Doc. No. 142 at 71-77.

         Cahill later deposed Karpinski in an apparent attempt to undermine her claim that he had sexually assaulted her. Referring to the parts of the body that California's civil sexual assault statute[3] defines as “intimate parts, ” see Cal. Civ. Code § 1708.5(d), his counsel asked Karpinski:

Q. Did he ever at any time touch you in or around your breast area to try to make sexual contact with you?
A. More my shoulder.
Q. Breast? “Yes” or “no.”
A. No.
Q. How about the genital areas?
A. No.

Q. How about the buttock areas?

A. No.

         Cahill docket, Doc. No. 95-7 at 2. She also described the story of the unwanted kiss from Cahill, testifying that “He did kiss me. It landed on my face, just not on my lips.” Cahill docket, Doc. No. 95-7 at 5. Cahill's counsel later relied on this exchange in contending in a pleading that “[b]y far the most damaging accusation, that Mr. Cahill sexually assaulted Karpinski, was actually admitted by her to be false just days ago when Karpinski's deposition was taken on October 14, 2016.” See Cahill docket, Doc. No. 94-1 at 12-13.

         Denterlein Worldwide, a public relations company, subsequently reached out to the Union Leader about publishing an article on the case. See Complaint, Doc. No. 1 ¶ 24. The Denterlein agent framed the case as “a story out of California with a strong local connection in New Hampshire.” See Doc. No. 1-1 at 3. The agent's email included “background” on the case and claimed that Edalat and Karpinski “publicly accused Cahill of alleged crimes and misdeeds . . . includ[ing] a false claim of sexual harassment that Karpinski later admitted, under oath, was baseless.” Doc. No. 1-1 at 4. The next day, the agent emailed excerpts of Karpinski's deposition in the California case and contact information for various litigation counsel to Patricia Grossmith, a Union Leader reporter. See Complaint, Doc. No. 1 ¶ 29.

         Four days after the initial contact from Denterlein, the Union Leader published its article. The front page of the June 4, 2017 New Hampshire Union Leader Sunday Edition boasted the headline “California Fraud Suit Names NH Pageant Finalist.” See Complaint, Doc. No. 1 ¶ 13; Union Leader Article, Doc. No. 1-2. Under a large headshot of Karpinski, the article begins

A former beauty queen from Auburn is among those being sued in California in a fraud case involving allegations that at least $2.3 million of investors' money in a pharmaceutical company was used on junkets to Las Vegas and other lavish items.

         Doc. No. 1-2 at 2. It covers Cahill's allegations that Edalat defrauded the company while living luxuriously and that Karpinski and Edalat falsely reported that Cahill was distributing illegal drugs. Id. The author does not expressly cite Karpinski's counterclaims but instead states that “Edalat has accused Cahill of sexually harassing Karpinski, but under oath she later admitted the allegations were baseless, according to court records.” Id. at 3.

         The Cahill case was tried later that summer. In November 2017, judgment was entered in favor of Cahill against Edalat for $700, 000; in favor of Cahill against Karpinski for $11, 000; in favor of Edalat against Cahill for $250, 000, and in favor of Karpinski against Cahill for $10, 000. See Cahill docket, Doc. No. 367. Because the jury returned general verdicts, it is unclear which claim or claims it deemed meritorious. See Verdict Form, Cahill docket, Doc. No. 324.

         II. STANDARD OF REVIEW

         In considering a motion to dismiss under Federal Rule of Civil Procedure Rule 12(b)(6), I “accept as true the well- pleaded factual allegations of the complaint, draw all reasonable inferences therefrom in the plaintiff's favor and determine whether the complaint, so read, sets forth facts sufficient to justify recovery on any cognizable theory.” Martin v. Applied Cellular Tech., 284 F.3d 1, 6 (1st Cir. 2002). The plaintiff must make factual allegations sufficient to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible if it pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

         In ruling on a motion to dismiss, the court accepts all plausibly pleaded facts to be true and can consider “matters of public record[ ] and other matters susceptible to judicial notice.” Lydon v. Local 103, Int'l Bhd. of Elec. Workers, 770 F.3d 48, 53 (1st Cir. 2014). Such documents include records “the authenticity of which are not disputed by the parties; . . . official public records; . . . documents central to plaintiffs' claim; [and] . . . documents sufficiently referred to in the complaint.” Freeman, 714 F.3d at 36 (quoting Watterson, 987 F.2d at 3 (1st Cir. 1993)) (internal quotation marks omitted).

         In an appropriate case, an affirmative defense may be adjudicated on a motion to dismiss. See, e.g., Blackstone Realty LLC v. FDIC, 244 F.3d 193, 197 (1st Cir. 2001). Such adjudication is appropriate only if “the facts that establish the defense [are] definitively ascertainable” from the complaint and matters of judicial notice and those facts “conclusively establish the affirmative defense.” In re Colonial Mortg. Bankers Corp., 324 F.3d 12, 16 (1st Cir. 2003).

         III. ANALYSIS

         Karpinski and Edalat base their claims on four allegedly false and defamatory ...


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