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The Glocoms Group, Inc. v. Center for Public Integrity

United States District Court, N.D. Illinois, Eastern Division

June 5, 2018

THE GLOCOMS GROUP, INC., Plaintiff,
v.
CENTER FOR PUBLIC INTEGRITY, Defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN ROBERT BLAKEY UNITED STATES DISTRICT JUDGE

         Plaintiff Glocoms Group sued Defendant Center for Public Integrity (CPI) after CPI published an article about Glocoms' consulting work for the U.S. government and foreign governments. Glocoms alleges that the article contained false statements that damaged its reputation. CPI moved to dismiss all claims. For the reasons explained below, this Court grants that motion.

         I. The Complaint's Allegations

         Since 2000, Glocoms has done consulting work for both U.S. and foreign government agencies. [33] ¶ 1. Maurence Anguh is Glocoms' sole shareholder. Id. ¶ 6. CPI publishes news to the general public through its website. Id. ¶ 3.

         In September 2016, CPI published an article about Glocoms entitled: “A Trail of Contracting Fiascos: How a Company Using a Rented Mailbox in Chicago Got Millions of Dollars from International Agencies and the U.S. Government, Despite Official Allegations of Lying and Repeated Sanctions.” [33-2] at 15-18. The article's authors included one graduate student and three undergraduate students. [33] ¶ 11. The article stated, among other things, that the World Bank debarred Glocoms in 2010 from working on Bank-funded projects, but that Glocoms still received millions of dollars in contracts from U.S. agencies after the debarment. [33-2] at 15-18.

         Glocoms contends that the article contains numerous false statements that hurt its “good reputation for honesty and truthfulness” in its industry. See [33] ¶ 8 (identifying ten allegedly false statements: 8(a)-(j)). Glocoms also contends that CPI acted recklessly or negligently in publishing the allegedly false statements. Id. ¶ 9. Glocoms demanded a written retraction from CPI in October 2016, but CPI refused to issue a retraction. Id. ¶ 16. Glocoms sued CPI in September 2017. [1].

         II. Legal Standard

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must provide a “short and plain statement of the claim” showing that the pleader merits relief, Fed.R.Civ.P. 8(a)(2), so the defendant has “fair notice” of the claim “and the grounds upon which it rests, ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must also contain “sufficient factual matter” to state a facially plausible claim to relief-one that “allows the court to draw the reasonable inference” that the defendant committed the alleged misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). This plausibility standard “asks for more than a sheer possibility” that a defendant acted unlawfully. Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).

         In evaluating a complaint, this Court accepts all well-pled allegations as true and draws all reasonable inferences in the plaintiff's favor. Iqbal, 556 U.S. at 678. This Court does not, however, accept a complaint's legal conclusions as true. Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). Rule 12(b)(6) limits this Court to considering the complaint, documents attached to the complaint, documents central to the complaint (to which the complaint refers), and information properly subject to judicial notice. Williamson, 714 F.3d at 436.

         III. Analysis

         CPI seeks to dismiss Glocoms' claims on three alternative grounds: (1) the Illinois Citizen Participation Act (ICPA), 735 ILCS 110/1 et seq., bars Plaintiff's suit; (2) the fair report privilege protects CPI; and (3) Glocoms fails to plead that CPI acted with actual malice or even negligence. [36] at 4. This Court addresses each argument in turn.

         A. ICPA

         The ICPA bars “strategic lawsuits against public participation, ” or SLAPPs. Sandholm v. Kuecker, 962 N.E.2d 418, 427 (Ill. 2012). By definition, SLAPPs have no merit because the plaintiff does “not intend to win but rather to chill a defendant's speech or protest activity” through “delay, expense, and distraction.” Id. CPI argues that this suit qualifies as a prohibited SLAPP. [36] at 4.

         Illinois courts employ a three-step analysis for identifying SLAPPs subject to dismissal under the Act: (1) the defendant acted in furtherance of its “right to petition, speak, associate, or otherwise participate in government to obtain favorable government action”; (2) the plaintiff's claims are “solely based on, related to, or in response to” the defendant's acts in furtherance of its constitutional rights; and (3) the plaintiff cannot produce clear and convincing evidence that the defendant did not genuinely and solely aim to procure “favorable government action.” Chi. Reg'l Council of Carpenters v. Jursich, 986 N.E.2d 197, 201 (Ill.App.Ct. 2013) (emphasis added) (citing Sandholm, 962 N.E.2d at ...


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