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Salem v. Egan

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

July 29, 2019

M. JAMES SALEM, Plaintiff,
v.
DIANE EGAN, Defendant.

          MEMORANDUM OPINION AND ORDER

          Ruben Castillo United States District Judge.

         M. James Salem ("Plaintiff) brings this diversity action alleging defamation against Diane Egan ("Defendant"). (R. 1, Compl.) Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), Defendant moves to dismiss this case for lack of subject-matter jurisdiction and failure to state a claim, respectively. (R. 19, Mot. to Dismiss at 1.) For the reasons that follow, the motion to dismiss is granted.

         BACKGROUND

         This defamation suit arises out, of Plaintiff s and Defendant's involvement in another action in this District pending before U.S. District Judge Andrea Wood, Doe v. Law School Admissions Council ("Doe v. LSAC), 17-cv-6656. (R. 1, Compl. ¶¶ 1-4, 8.) Plaintiff serves as counsel to John Doe ("Doe"), the plaintiff in Doe v. LSAC. (Id. ¶ 1.) Plaintiff sought a psychologist to conduct a diagnosis of Doe and recommend testing accommodations for Doe to the Law School Admissions Council ("LSAC"). (Id. ¶¶ 2-3.) Plaintiff alleges that Defendant falsely represented she was a psychologist and then made false representations to LSAC after diagnosing Doe and authorizing Plaintiff to send LSAC two letters-one on July 25, 2017, and another on September 5, 2017-regarding Doe's testing accommodations. (Id. ¶¶ 3-4, 12-17.) Specifically, Plaintiff claims that, on November 21, 2017, Defendant misrepresented to LSAC's counsel that: Doe was not disabled; Defendant had not authorized Plaintiff to send letters regarding Doe to LSAC; and Plaintiff had made fraudulent representations to LSAC regarding Doe's disability. (Id. ¶¶ 3, 15-17.) Plaintiff also claims that, two days later, Defendant signed a declaration under oath in Doe v. LSAC repeating these alleged misrepresentations. (Id. ¶¶ 4, 18, 21; 17-cv-6656, R. 38-1, Egan Decl.) According to Plaintiff, the Chicago Daily Law Bulletin published an article repeating Defendant's "false and defamatory statements," and Defendant's allegedly false statements damaged Plaintiffs professional reputation. (R. 1, Compl. ¶ 22.)

         Plaintiff alleges that he is "domiciled in New York." (Id. ¶ 5.) He claims that Defendant is a psychologist licensed in Ohio who is "domiciled in Cook County, Illinois." (Id. ¶¶ 5, 11.) To support his assertion that he is domiciled in New York, Plaintiff submits airplane tickets showing that he traveled to New York several times in 2015 and 2016. (R. 23-2, Airplane Tickets.) In addition, Plaintiff asserts that he is a graduate of Columbia University's School of Engineering and Applied Science in New York, and he provides a response to an email from the director of alumni relations at the university asking for any "professional updates, recent travels, personal milestones, or simply an overall update on what's been happening since leaving [Columbia University.]" (R. 23-3, July 22, 2018, Email.) In his response to the email, Plaintiff stated that he did not have any alumni notes to share, but that he had "written a physics paper that [he] will share ..., hopefully by next year," which "resolves the physics in a black hole, dark matter[, ] and energy[.]" (Id.)

         Plaintiff declares "under oath and under the penalties of perjury" that he resided in New York from elementary school until 2004, at which time he rented a house in Palos Heights, Illinois. (R. 23, Resp. at 2.) Plaintiff then states that he regularly travels between Illinois and New York, and that he maintains a residence in New York by "paying the rent" for that residence in "checks and cash to [his] sister." (Id. at 3.) Plaintiff also declares that he "maintain[s] a part-time law practice in New York, receiv[es] mail in New York," and that he has "an attorney I.D. card with an address registered online in New York." (Id.) Plaintiff represents that he regularly litigates cases in New York. (Id.) Plaintiff states that after his children finish law school, "within 3 to 4 years from now, [his] intention is to reside[] only in New York and purchase a house in New York." (Id. at 3-4.) Plaintiff declares that he plans to return to New York because he has few familial connections in Illinois and plans to pursue a career in physics in New York. (Id. at 4.)

         On the issue of Plaintiff s domicile, Defendant submits to the Court a report and recommendation from the Hearing Board of the Illinois Attorney Registration and Disciplinary Commission ("ARDC") dated October 18, 2017, which responded to allegations that Plaintiff, among other things, had practiced law in Illinois without an Illinois license in violation of Illinois Rules of Professional Conduct. (R. 20-3, Oct. 18, 2017, Report & Recommendation at 1-2.) The report states that Plaintiff worked in New York at the Westchester County Attorney's Office from 1990 until 2003, and that he "moved to Illinois with his family in December 2003 and has had a permanent residence here since that time." (Id. at 3, 16.) The report also states that "[i]t is undisputed that [Plaintiff] has been an Illinois resident since 2003," and that "he did have an office in his home which he used for the practice of law." (Id. at 8.) According to the report, Plaintiff incorporated his law practice in Illinois, Plaintiffs business cards list his Illinois address and phone numbers, and Plaintiff testified that he has used those business cards for the last ten years. (Id. at 4-5, 9-10.) The report also found that Plaintiffs business letterhead listed his Illinois address, phone number, and fax number. (Id. at 13.) Plaintiff also filed tax appeal matters before the Cook County Board of Review in September 2015. (Id. at 17.)

         The Hearing Board concluded that Plaintiff engaged in the unauthorized practice of law. (Id. at 18.) Plaintiff appealed to the ARDC's Review Board, and the Review Board affirmed the Hearing Board's findings. (R. 20-4, Review Bd. Op. at 10.) The Illinois Supreme Court subsequently suspended Plaintiff from the practice of law for 90 days "and until further order of the Court." (R. 20-5, Jan. 29, 2019, ARDC Decision; R. 25, Rule to Show Cause.)

         Defendant also submits a January 31, 2019, court transcript from Doe v. LSAC, in which Plaintiff represented to Judge Wood that he "essentially lived in Illinois" since at least 2004. (R. 20-6, Doe v. LSAC Tr. at 6.) He also told Judge Wood that, although he is licensed to practice law in New York and "grew up" in New York, he is representing clients in Illinois. (Id. at 7-8, 12.) When Judge Wood asked Plaintiff about his recent travel to New York, Plaintiff stated that he was there "three or four months ago" and that he stayed there "[m]aybe a day or two" with his sister. (Id. at 9.) He stated that it is his "intention to eventually go back to New York," and that he "reside[s] with [his sister] and [pays] rent there[.]" (Id.) When asked how much longer Plaintiff planned on living in Illinois, Plaintiff responded that he did not plan to reside in Illinois indefinitely, and that he would probably stay in Illinois until his children finished school, which would occur within the next three or four years. (Id. at 10-11.) Plaintiff also told Judge Woods that he is registered to vote in both Illinois and New York. (Id. at 12.)

         Plaintiff stated that he does not own the residence he stays at when he is in New York, but that the residence is owned by a landlord to whom his sister pays rent. (Id. at 12-14.) Plaintiff says that he gives money to his sister who pays the landlord, and that his sister also pays for utilities, which are registered in her name. (Id. at 14.) When asked whether he had a business address in New York, Plaintiff responded that his New York attorney's license lists his sister's residence as his address, and that the "only reason [he] came to Illinois was [because his] wife has an illness[.]" (Id. at 14.) He then told Judge Wood that it is "genuinely [his] intent, to go back to New York" because he and his wife "lived in New York for 15 years[.]" (Id.) He also stated that he has many "connections" in New York and has gone back to New York "many times," "spent months" there, and "litigated cases in the federal court" there. (Id. at 17.) The business address Plaintiff listed for the Doe v. LSAC case and this case, however, is an Illinois address. (Id. at 15-16.)

         PROCEDURAL HISTORY

         On November 19, 2018, Plaintiff filed his complaint, which brings a claim for defamation under Illinois law against Defendant. (R. 1, Compl.) Plaintiff alleges that the Court has subject-matter jurisdiction based on diversity of citizenship pursuant to 28 U.S.C. § 1332. (Id. ¶ 5.) Consistent with the Illinois Supreme Court's order suspending Plaintiffs Illinois license for 90 days, this Court entered an order imposing reciprocal discipline, suspending Plaintiff from the practice of law in this district for 90 days and until further order of the Illinois Supreme Court. (R. 25, Rule to Show Cause.) On June 11, 2019, after Plaintiff failed to adequately respond or show cause why additional sanctions should not be imposed on him, this Court's Executive Committee ruled that Plaintiff cannot apply for reinstatement to practice before this Court until one year from June 11, 2019. (R. 29, Order at 2-4.)

         On February 6, 2019, Defendant filed a motion to dismiss, which maintains that Plaintiffs complaint should be dismissed for either of two reasons. (R. 19, Mot. to Dismiss.) First, Defendant argues that the Court lacks subject-matter jurisdiction under 28 U.S.C. § 1332 because Plaintiff and Defendant are both domiciled in, and thus citizens of, Illinois. (Id. at 2.) Defendant contends that Plaintiff has "resided uninterrupted in Illinois for more than 15 years" with his wife and children. (R. 20, Mem. at 3-4.) Consequently, Defendant argues, Plaintiff is not domiciled in New York despite his allegations to that effect. (R. 19, Mot. to Dismiss at 2.) Defendant then contends that even if the Court has subject-matter jurisdiction, the Court must dismiss Plaintiffs complaint for failure to state a claim because Defendant's allegedly false statements were made as a witness in a court proceeding and therefore are not statements that can form the basis of a defamation lawsuit under Illinois law. (Id. at 2-3; R. 20, Mem. at 8-11.)

         In response, Plaintiff argues that diversity jurisdiction exists because the record before the Court shows that he is domiciled in New York, and therefore he has diversity of citizenship with Defendant, who is domiciled in Illinois. (R. 23, Resp. at 8-10.) Plaintiff also argues that he sufficiently states a claim for defamation because Defendant's allegedly false statements were made ...


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