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Defendents’ Motion to Dismiss the Complaint or in the Alternative for Summary Judgment (2/13/2001)






FREEDOM, et. al.,



Case No. 1:00CV02411

Judge Gladys Kessler

Defendents’ Motion to Dismiss the Complaint or in the Alternative for Summary Judgment

Come now the Defendants, LEGION FOR SURVIVAL OF FREEDOM (LSF) and Mark Weber by and through counsel, John F. Mercer, pursuant to Federal Rules of Civil Procedure 12 (b) and 56, and pray that this Court dismiss the above referenced matter, or in the alternative grant the defendants a summary judgment, for the following reasons which shall be further defined and set forth in the accompanying memorandum and attached exhibits filed herewith:

  1. The claims set forth in the complaint are barred or otherwise precluded by statute of limitation or by settlement agreement between the parties wherein claims have, for good and adequate consideration, been waived.
  2. This Court has no jurisdiction over the matters set forth in the complaint.
  3. The complaint fails to set forth actionable or justiciable claims.

WHEREFORE THE PREMISES CONSIDERED, THE Defendants pray that this matter be dismissed with prejudice and that costs be granted to the defendants.

Respectfully submitted,

John F. Mercer, Esq.

Certificate of Service

I hereby certify that a copy of the foregoing motion and memorandum of points and authorities in support thereof, was mailed postage prepaid to the office of Mark Lane, Esq., Counsel for plaintiff 105 Second Street, N.E., Washington, D.C. 20002, this 13th day of February, 2001.


John F. Mercer






FREEDOM, et. al.,



Case No. 1:00CV02411

Judge Gladys Kessler

Defendants' Memorandum of Points and Authorities
in Support of Motion to Dismiss or in the Alternative,
Motion for Summary Judgment



Table of Authorities

  1. Alfred A. Altamont, Inc. v.Chatelain, 374 A2d. 284, (D.C. App. 1977)
  2. Ames Publishing v. Walker Davis Publishing, Inc., 372 F. Supp.1 (D.C.Pa. 1974)
  3. Anderson v. Liberty Lobby, 106 S.Ct. 2505, 477 U.S. 242, 91 L.Ed. 2d.202 (1986)
  4. Anthony v. Security Pacific Fin. Serv., 75 F3d.311 (7th Cir. 1996)
  5. Ayala v. Washington, 679 A2d. 1057( D.C. App. 1996)
  6. Bennet v. Kiggins, 377 A2d 57 ( D.C. App. 1977)
  7. Berry v. Strubel, 20 CA 2d. 303 (1937)
  8. Boston Pro Hockey Ass'n v. Dallas Cap, 510 F2d. 1004 ( 5th Cir. 1975)
  9. Brady v. Southern R. Co., 320 U.S. 476, 64 S.Ct. 232, 88 L.Ed. 239 (1943)
  10. Brant v. California Dairies, Ins, 4 Cal. 2d. 128 (1935)
  11. Burda v. Nat. Ass'n of Postal Sup., 592 F.Supp. 273 (1984)
  12. Casey v. Proctor, 59 Cal. 2d. 97 (1963)
  13. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 48, 91 L. Ed. 2d. 265 (1986)
  14. Chase Manhattan Bank v. Nat.Bank & Trust, 93 F3d. 1064 (2nd Cir. 1996)
  15. Chin v. Bond, 953 F2d. 154 (4th Cir. 1991)
  16. Colligan v. Activities Club of New York, 442 F2d.686 (2d Cir. N.Y. 1971)
  17. Columbia First Bank v. Ferguson, 665 A2d. 650 (D.C. App. 1995)
  18. Conservative Club for Wash. v. Finkelstein, 738 F. Supp. 6 (D.D.C. 1990)
  19. Croissant v. Empire State Realty Co., 29App. D.C. 538 (1907)
  20. Crowley v. North Am. Tele., 691 A2d. 1169 ( D.C. App. 1997)
  21. D'Ambrosio v. Colonade Council of Owners, 717 A2d. 3567 (D.C. App. 1977)
  22. Dausch v. Rykse, 52 F3d. 1425 ( 7th Cir. 1994)
  23. Edwards v. Comstock Ins., 205 Cal. App. 3d. 1164 (1985)
  24. Emerson v. Amercan Express Co., A2d. 236 (1952)
  25. Erie R.R. v. Thompkins, 304 U.S.64, 585 S. Ct. 817, 82 L. Ed. 1188 (1938)
  26. Fisher v. Washington Post, 212 A2d. 335 (D.C. App. 1965)
  27. Fitzgerald v. Henderson, 36 F. Supp. 2d. 490 (NDNY 1998)
  28. Foretich v. Glamour, 741 F. Supp. 247 (D.D.C. 1990)
  29. Foretich v. CBS, 619 A2d 48 (D.C. App.1994)
  30. Fur Info.& Fashion Coun. v. R.F. Timme &Son, 364 F. Supp.16 (DCNY 1973)
  31. Gertz v. Robert Welch, 94 S.Ct. 2997, 41 L.Ed. 2d. 789 (1974)
  32. Gilson v. Republic of Ireland, 682 F2d 1022 (D.C. Cir.1982)
  33. Gurary v. Winehous, 190 F3d. 37( 2nd Cir. 1999)
  34. Hanna v. Plummer, 380 U.S. 460, 85 S.Ct. 1136, 14 L. Ed. 2d. 8, (1965)
  35. Howard v. Riggs Nat.Bank, 432 A2d. 701 (D.C. App. 1981)
  36. Hunter v. District of Columbia, 943 F2d. 69 (D.C. Cir. 1991)
  37. Hunter Vending Co. v. D.C.Vending Co., 345 A2d. 142 (D.C. App. 1975)
  38. Ingber v. Ross, 479 A2d. 1256 ( D.C. App. 1993)
  39. John Doe v. District of Columbia, 624 A2d 440 (D.C. App. 1993)
  40. Jones v. DaCosta, 930 F.Supp. 223 (D.Md. 1996)
  41. Kostic v. Swain, 116 CA2d 187 (1953)
  42. Larsen v. Johannes, 7CA3d 491 (1970)
  43. Liberty Lobby v. Dow Jones, 838 F2d. 1287 (D.C. Cir. 1988)
  44. L&L White Metal Casting v. Joseph, 387 F. Supp. 1349 (DCNY 1975)
  45. Lucas Films v. High Frontier, 622 F. Supp. 93 (D.D.C. 1985)
  46. Marshall v. Proctor and Gamble, 170 F.Supp. 828 (D. Md.1959)
  47. Masson v. New York Mag.111 S.Ct. 2419, 501 U.S. 496, 115 L.Ed. 2d. 447 (1991)
  48. Mazaderan v. Mcgranery, 490 A2d. 180 (D.C. App. 1984)
  49. McBride v. Pizza Hut, 658 A2d.205 ( D.C. App. 1995)
  50. McCray v. Casual Corner, 812 F. Supp. 1046(CD Cal. 1992)
  51. Mitchell v. Data General Corp., 12 F3d1310 (4th Cir. 1993)
  52. Mittleman v. United States, 997 F. Supp. (D.D.C. 1998)
  53. Mosrie v. Trusell, 467 A2d. 475 (D.C. App. 1983)
  54. Moss v. Stockard, 580 A2d. 1011 (D.C. App. 1995)
  55. New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 735, 11L.Ed. 2d. 686 (1964)
  56. Novecon v. Bulgarian Am.Ent.Fund, 190 F3d. 556 (D.C. Cir. 1999)
  57. Novecon v. Bulgarian Am.Ent.Fund, (II) 997 F.Supp.1382 (D.D.C. 1997)
  58. Old Dom. Branch No.496, Nat. Ass'n of Let Carriers v. Austin 418 U.S. 264, 94 S.Ct. 2770. 41 L.Ed. 2d. 745 (1974)
  59. Phillips v. Evening Star Newspaper Co., 424 A2d. 78 (D.C. App. 1980)
  60. Pic Design Corp. v. Sterling Precision Corp., 231 F. Supp. 106 ( DCNY 1964)
  61. Prins v. International Tel.&Tel. Corp., 757 F. Supp.87 (D.D.C. 1991)
  62. Professional Golfer’s Ass'n v. Banker’s L&C Co., 514 F2d. 665 (5th Cir.1975)
  63. Randall-Speranza v. Nassim, 942 F. Supp. 621 (D.D.C. 1996)
  64. Reddy Comm.Inc. v. Environmental Action Fund, 477 F. Supp. 936 (D.D.C. 1979)
  65. Rosenblatt v. Baer,383 U.S. 75, 86 S.Ct. 669, 15 L.Ed.2d. 597 (1966)
  66. Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct. 1811, 29 L. Ed. 2d. 296 (1971)
  67. Samson Crane v. Union Nat. Sales, Inc. 87 F. Supp.1 (D,.D.C. Pa. 1974)
  68. Schiff v. American Ass'n of Retired Persons, 697 A2d. 1193 (D.C. App. 1997)
  69. Shanagan v.Cahill, 58 F3d. 106 (4thCir. 1995)
  70. Siegelman v. Cunard White Star Limited, 221 F2d 189 (2nd Cir. 1991)
  71. Sigal Constr. Co. v. Stanbury, 586 A2d 1204 (D.C. App. 1991)
  72. St.Amant v.Thompson, 88 S.Ct. 1323, 390 U.S 727, 20 L.Ed. 2d. 262 (1968)
  73. Thomas v. New World Comm., 681 F. Supp. 55 (D.D.C. 1988)
  74. Tongkook American, Inc. v. Shipton Sportswear 14 F3d. 781 (2d Cir. 1994)
  75. Vincent v. Anderson, 621 A2d. 367 (D.C. App. 1993)
  76. Volkswagen Aktiengesellschaft v. Rickard, 492 F2d 474 (5th Cir. 1974)
  77. Wallace v. Skadden, Arps, Slater, Meagher & Flom, 715 A2d 873, (D.C. App. 1998)
  78. Wilcox v. Superior Court, 27 Cal. App. 4th 809 (1994)
  79. Willmar Poultry Co. v. Morton- Norwich Products, Inc. 520 F. 2d. 289 (8th Cir.1975), cert. den. 424 U.S. 915, L.Ed.2d. 320, 96 S.Ct.116 (1976)
  80. Winet v. Price, 6 Cal. Rptr.554 (Cal. App. 4th Dist. 1992)
  81. Zandford v. National Ass'n of Securities Dealers, 30 F. Supp. 2d.1 (D.D. C. 1998)


Defendants argue that the Plaintiff has failed to state a justiciable claim in any count in the complaint. Each count in plaintiff’s complaint is based upon alleged defamation by a libelous letter published by the defendants. Even if the plaintiff had a valid factual basis for the defamation claim, his action is barred by statute of limitations. In addition, the plaintiff entered into a settlement agreement with the defendants. The settlement agreement contained a release of claims (including unknown claims) and a covenant not to sue. The release and covenant vitiate plaintiff’s right to sue.

Substantively, plaintiff’s claims under Title 36 USCA § 1125(a), as well as claims of defamation, tortious interference with contract and business relations and fraud are fatally deficient. Plaintiff fails to allege facts sufficient to substantiate the elements of any of those causes of action.



The plaintiff, Liberty Lobby, Inc., (Liberty) a not for profit corporation, was registered in the District of Columbia in 1962. By its own description, Liberty engages in grass roots lobbying and publishes a weekly newspaper called the Spotlight (First Amended Complaint, hereinafter the Complaint Exhibit #1, Para. 4).

The defendant, Legion for the Survival of Freedom, (LSF) is a non-profit corporation registered in the State of Texas in 1952 (Complaint, Para.6). The primary business of LSF is the compilation of historical and scholarly materials. It is being sued in its organizational capacity.

The defendant, Mark Weber is a director and employee of LSF. He is being sued in his official capacity as employee of the corporation. (Complaint, Para.6).

History of the Present Action:

The parties are before this Court on a matter which results from a history of controversies between them. These controversies, several of which are manifested in litigation, overlap in chronology and subject matter. The present action derives indirectly from a California suit, filed by defendant LSF, which alleged that Liberty and others fraudulently combined to embezzle and convert assets of LSF. That action went to trial and LSF prevailed (LSF v. Willis Carto1, et al, hereinafter Liberty I). A judgment was rendered against Liberty in the amount of $2,650,000, plus interest of ten percent. Pursuant to the judgment, Liberty and its co-defendants were ordered to account to LSF for property which they were found to have converted. (See Exhibit #2 (a), copy of Judgment By Court After Trial, Exhibit 2(b) Civil Complaint, Liberty I).

After the Liberty I judgment was perfected, Liberty was aggressive in avoiding and resisting payment thereupon. As a result, LSF instituted action to enforce and collect the judgment. The pursuit of actions for enforcement and collection of the judgment brought LSF to the District of Columbia. In D.C., a court appointed California receiver attempted to collect the judgment from Liberty’s accounts and receivables. In response to the actions to collect, Liberty filed suit against LSF, the receiver and the United States Postal Service, alleging RICO, violation of the Sherman Anti Trust Act, other tortious conduct and praying for injunctive relief from the collection efforts (Liberty Lobby, Inc. v. Legion for the Survival of Freedom, et.al., 1:98cv0236-HHK, hereinafter Liberty II). LSF and the other defendants filed a Motion for More Definite Statement (the Motion) in that matter.2 On May 13, 1998, while the Motion was pending, Liberty filed for bankruptcy, under Chapter 11, in the United States Bankruptcy Court for the District of Columbia. (In re: Liberty Lobby, Inc., Case No. 98-1046, hereinafter the Bankruptcy). Liberty II and other proceedings in California were stayed pending resolution of the Bankruptcy. LSF was listed in the Bankruptcy schedule as a judgment creditor based upon the California judgment in Liberty I. The Bankruptcy proceeded for approximately fourteen months. On July 29, 1999, the parties entered into a Forebearance and Settlement Agreement and Mutual General Release (the Agreement, Exhibit # 4), settling the Bankruptcy matter.The mutual release contained in the Agreement was intended to settle all litigation between the parties including Liberty I, Liberty II, the Bankruptcy and potential related claims.3

Facts Alleged in the First Amended Complaint:

Liberty filed the instant civil action in the United States District Court for the District of Columbia on October 10, 2000. An amended complaint was filed on October 24, 2000 (Plaintiff’s First Amended Complaint Exhibit #1, hereinafter the Complaint). In the Complaint, Liberty alleges that it has been damaged by various torts committed by the Defendants. Plaintiff’s FIRST CAUSE OF ACTION alleges that LSF, through its employee Mark Weber (Weber) and another defendant, Kirk Lyons (Lyons), violated the Lanham Act, U.S. Code, Title 15 § 1125 (a) by false designation of origin.

In paragraphs four through fifty-six of the Complaint, Liberty describes, in detail, the conduct on the part of the defendant, which it alleges constituted false designation of origin. In summary, Liberty states that LSF and Lyons authored a letter which was sent out to Liberty members (the Letter, Exhibit #5). According to Liberty, the Letter purporting to be from a Committee of Concerned Americans featured a professionally done graphic or logotype incorporating the letters CCA. (Complaint, Para 16). Liberty describes how the font used for the Letter was similar to a font used by Liberty (Complaint, Para.17). According to Liberty, the Letter was sent from a commercial mail drop (Paragraph 19). Liberty claims upon information and belief that no such Committee of Concerned Americans exists or has ever been incorporated. (Complaint, Para. 20). In paragraph 23 of the Complaint, Liberty claims the non existent committee urged recipients [of the Letter] to save and preserve Liberty Lobby.

Paragraph 23 of the Complaint claims that the name Liberty Lobby is a trade name incorporated in 1962 and is or has been referenced in thousands of published books, magazine articles, newspapers and in court records, (Complaint, Paragraph 23). Liberty claims that the defendants knew they could not successfully raise funds from Liberty supporters for their own purposes by merely using their own names and therefore decided to raise funds by deceitfully alleging that they wanted to save and preserve Liberty and by stating they were a Liberty Lobby organization (Complaint, Para.24).

Plaintiff’s SECOND CAUSE OF ACTION, (Complaint, Para.62-4) alleges tortious interference with contracts and business relations. It reasserts paragraphs 1-61 of the Complaint and claims that By making and publishing to supporters of Liberty the scurrilous and defamatory remarks about plaintiff, the defendants and their associates have interfered with the relationship between Liberty and its subscribers, Liberty and its advertisers, Liberty and its supporters and Liberty and its suppliers as well as business relations and contracts between Liberty and others (Complaint, Para. 64).

Liberty’s THIRD CAUSE OF ACTION (Complaint, Para. 65-75) alleges Liability for business tort of injurious falsehood and defamation-libel and slander. Liberty claims that the defendants have injured the plaintiff by asserting that the plaintiff’s leadership has engaged in the Big Lie. (Complaint, Para.66). Liberty accuses the defendants of asserting that the Spotlight has published smears against some of the most outstanding fighters for our common cause (Complaint, Para.67) asserting that Liberty has been managed irresponsibly, that the leadership of Liberty has become much more erratic and destructive during the past two or three years (Complaint, Para. 67) and asserting that Liberty’s officers have engaged in corruption and mismanagement (Complaint, Para. 68).

In the THIRD CAUSE OF ACTION, plaintiff alleges that the defendants caused it harm by publishing false allegations to various organizations which maintained web sites on the Internet, including the Holocaust Research Mailing List, the Nizkor organization and the publishers of the Shofar FTP Archive File (Complaint, Para.69).

Liberty alleges, in its FOURTH CAUSE OF ACTION (Complaint, Para.76-90), the tort of Common Law Fraud. The plaintiff claims the defendants falsely represented themselves as a Committee of Concerned Americans seeking to raise funds for the purpose of getting the U.S. Bankruptcy Court to appoint an impartial trustee (Complaint, Para. 77). Liberty accuses the defendants of falsely stating that their efforts were intended to save [Liberty] from ruin (Complaint, Para. 79), that they wanted to save and preserve [Liberty] through the appointment of a special or impartial bankruptcy Trustee (sic) (Complaint, Para. 81).

Liberty further alleges in its FOURTH CAUSE OF ACTION that the defendants made intentionally false representations that they were seeking donated funds … [a]s a ruse and method to induce [Liberty’s] supporters and subscribers to send money to this non-existent committee, which was allegedly associated with [Liberty] in order that the funds could be diverted to themselves (Complaint, Para.82). Plaintiff alleges (Complaint, Para. 87) that counsel for [LSF] … stated that no funds collected by Lyons and his associates had been sent to him and that he was neither responsible nor aware of the fraudulent representation.


The Plaintiff makes claims of intentional torts, defamation (libel and slander), tortious interference with contract, and business relations. The statute of limitations governing common law tort claims is determined by the applicable law of the forum. Randall- Speranza v. Nassim, 942 F Supp. 621, 625 (D.D.C. 1996) quoting Gilson v. Republic of Ireland, 682 F2d 1022, 1024-25, n-7 (D.C. Cir. 1982). The pertinent statute of limitations is contained in D.C. Code, §12-301 (4).

Claims of defamation must be brought within a year from when the right to maintain the action accrues, Hunter v. District of Columbia, 943 F2d 69, 72 (D.C. Cir. 1991), John Doe v. District of Columbia, 624 A2d 440, 444, (D.C. App. 1993). In defamation cases, the right to maintain an action accrues at the time of publication of the defamatory language. Wallace v. Skadden, Arps, Slater, Meagher, & Flom, 715 A2d 873, 882, (D.C. App.1998) citing Foretich v. Glamour, 741 F.Supp.247, 252, (D.D.C. 1990).

D.C. Code §12-301 does not specify a limitation period for tortious interference with contract or interference with business relations. The limitation period for those torts would normally be controlled by D.C. Code §12-301(8) which provides a three year limitation period for all actions … not otherwise specially prescribed …. Burda v. National Association of Postal Supervisors, 592 F. Supp. 273, 281, (DDC. 1984), aff'd, 771 F.2d 1555 (D.C. Cir. 1985). However, when the plaintiff has alleged the same acts which would support a defamation claim and a claim for interference with business relations/tortious interference with contract, the causes of action are intertwined. Where the causes of action are intertwined and the defamation action is the primary action, the statute of limitations for all claims is the one year statute applicable to defamation. Mittleman v. United States, 997 F. Supp.1,7, (D.D.C. 1998).

The action upon which the plaintiff bases its complaint, publication of the Letter which contained the alleged defamatory language, occurred on June 7, 1999. On July 2, 1999, Defendant’s bankruptcy counsel received by fax a letter from the editor of plaintiff’s publication, the Spotlight, complaining about the Letter. Andrew Arnold, editor of the Spotlight, in this fax, complained of a fraudulent fundraising letter sent out on behalf of … the Legion for the Survival of Freedom …4 (The letter about which he complained, is the Letter subject of the instant lawsuit). Mr. Arnold’s fax was an acknowledgment of publication.

The original complaint in this matter was filed on October 10, 2000. The filing date of the complaint was more than twenty months after the plaintiff had sent the fax to the defendants' attorney about the alleged defamatory publication. Assuming reasonable diligence on the part of the plaintiff, discovery of its claims had to have occurred before the fax was sent on July 2, 1999.5 Thus, the applicable statute of limitations would have run one year after discovery July 2, 2000. (D.C. Code § 12-301 (4), Zandford v. National Association of Securities Dealers, 30 F. Supp.2d 1, 19,(D.D.C. 1998).

Accordingly, claims of defamation and all other tort claims relying upon the same factual allegations are barred pursuant to D.C Code §12-301(4).


The Complaint alleges diversity jurisdiction under 28 USCA 1332 and 1333, et.seq.6 1332. In order to fulfill the requirements of 1332, there must be actual diversity and the plaintiff must claim damages which exceed the amount in controversy proscribed by the statute in the amount of Seventy-Five Thousand Dollars ($75,000) (See, Anthony v. Security Pacific Financial Services, 75 F3d 311, 315 (7th Cir.1996)). The plaintiff bases diversity upon its registrations as a District of Columbia corporation and the California residency of defendants Weber and LSF.

In its prayer for relief, Liberty demands monetary damages totaling Fourty-Four Million Dollars ($44,000,000.00). On its surface, the Liberty prayer for monetary damages would be more than sufficient to satisfy the jurisdictional requirement, however, upon scrutiny, the demand is revealed as illusory. Liberty’s prayer for damages relies entirely upon plaintiff’s allegations of violation of 15 USCA § 1125 (a) and alleged damages for common law business defamation. Neither of these causes of action, as we shall argue further herein, are adequately pleaded in the Complaint. (See infra, Para. II, III, IV and V).

In order that Liberty be allowed to proceed under Section 1332, the Court must find that the plaintiff has set forth, in the complaint, a reasonable probability that [its] claim is in excess of the statutory jurisdictional amount, Chase Manhattan Bank, N.A., v. American National Bank and Trust Company of Chicago, 93 F3d. 1064, 1070 (2d. Cir.1996), citing Tongkook America, Inc. v. Shipton Sportswear Co., 14 F3d 781, 784 (2d Cir.1994). The basis for monetary damages must be real and made in good faith, which must be evident in the complaint, to a legal certainty Jones v. DaCosta, 930 F. Supp. 223, 225 (D. Md. 1996) citing Shanaghan v. Cahill, 58 F3d. 106, 110, (4th Cir. 1995).


The parties entered into the Settlement and Forebearance Agreement (the Agreement) which settled the Bankruptcy and other litigation and claims related thereto. Generally, in cases where jurisdiction is based on diversity of citizenship, substantive state law is to be applied and the Agreement would be interpreted under the law of the District of Columbia. (See Erie R.R. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L. Ed. 1188 (1938), Hanna v. Plummer, 380 U.S. 460, 465, 85 S.Ct. 1136, 14 L. Ed. 2d 8, (1965). Siegelman v. Cunard White Star Limited, 221 F2d 189, 192 (2nd Cir. 1955), Dausch v. Rykse, 52 F3d 1425, 1438 (7th Cir. 1994); However, the parties provided in the Agreement that it should be interpreted under California law (See Exhibit 4, at page 4). Where the contracting parties have clearly indicated which law governs, that law [specified in the contract] should be applied. Croissant v. Empire State Realty Co.,29 App. D.C. 538, 547,(1907) Emerson v. American Express Co., 90 A2d 236, 240, note 3 (1952). Accordingly, the law of California controls.

The Agreement, at Page 4, provides the following:


This mutual release does not apply to the parties' ability to enforce the terms of this Forebearance and Settlement Agreement and Mutual General Release and Stipulated Judgment against a breaching party, nor does it apply to recovery of the Jack Graham Trust monies, the pending sanction motion against Mr. Joe A. Izen, Jr. Plaintiff’s claims against Judgment debtor, Henry Fischer, Plaintiff’s claims against Patrick Foetisch, or to the future dealings between the parties hereto, if any.

WAIVER OF CALIFORNIA CIVIL CODE,1542, [below italics provided]

The parties hereto understand and agree that this Mutual General Release extends to all claims of every nature and kind whatsoever arising from the aforementioned action and facts, unless expressly excluded, and, in that regard, acknowledge that they have considered the provisions of Section 1542 of the California Civil Code which reads as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.


The parties hereto agree forever to refrain and forebear from commencing, instituting or participating, either as named or unnamed party, in any lawsuit, action or other proceeding against each other, whether brought by a party hereto, action or other proceeding against each other, whether brought by a party hereto, or by others on their behalf, based on or arising out of the above matters.

and at page 5:

GOVERNING LAW. This Agreement shall be governed by the laws of the State of California

The Agreement contains a general release of claims by the parties. California Code, Section 1542, sets forth the parameters of a legally sufficient general release. The parties, in the Agreement, expressly waive coverage of Section 1542. An express waiver of this type is satisfactory under California law. (See: Berry v. Struble, 20 C.A. 2d 303, 66 P2d 746, 747, (1937); Kostic v. Swain, 116 CA2d 187, 194, 253 P2d 531 (1953)). As long as such a waiver is not a mere recital and has been consciously contracted between the parties to encompass unknown claims, unknown claims may be discharged by a waiver and release. Berry v. Struble at 747. If the release specifically mentions unknown claims, independent evidence must demonstrate that the releasor intended the release to apply to those released unknown claims. Casey v. Proctor, 59 Cal 2d 97, 28 Cal Rptr.307, 314 (1963). Independent evidence may be demonstrated by a showing that the release resulted from arms length negotiations and that neither party, during negotiations,was suffering from a mental disability. Where arm’s length negotiation has been shown, release of unknown claims has been held sufficient by the California courts. Edwards v, Comstock Ins.Co., 205 Cal. App. 3d 1164, 252 Cal. Rptr. 807, 809 (1985) cited in McCray v. Casual Corner, 812 F. Supp. 1046, 1049 (C.D. Cal. 1992).

Parol evidence will not be admitted on whether the release is binding where the release of unknown claims is unambiguous; Any alleged undisclosed subjective intent of the releasor is irrelevant. Brant v. California Dairies Ins. 4 Cal. 2d 128, 133, 48 P2d 13 (1935). Where the parties to the release are represented by counsel and expressly assume the risk of unknown claims, credence will not be given to a claim that the party did not intend the clear and direct language to be effected. Winet v. Price,6 Cal. Rptr. 2d 554, 559, (Cal App. 4Dist. 1992).

The obvious intent of the parties in executing the instant Agreement was to allow for the broadest possible release of claims. California courts have held that commercial releases negotiated between parties, where such parties are clear … explicit and certain. in their language, will be upheld in discharging unknown claims. Larsen v. Johannes, 7 CA3d 491, 506, 86 CR 744 (1970).

The present action derives from a claim arising from the Liberty I and Bankruptcy proceedings. The claim alleges tortious injury resulting from publication of the Letter. The purpose of the Letter, based upon its content, was to inform its readers about the circumstances of Liberty, the state of its leadership and to solicit financial help to pursue bankruptcy remedies. In the Letter, the defendants accuse plaintiff’s principals, among other things, of acting fraudulently in concealing funds which should have been reported to the bankruptcy court. The Letter proposed to its readers that action be taken to remedy Liberty’s repeated failure to comply with the law. The Letter, again, according to the plaintiff’s Complaint, was written and circulated in June,1999.7

Based upon the allegations of the Complaint and related court documents, plaintiff’s claim for defamation was certainly a claim arising out of the action or facts of the Bankruptcy and proceedings therein. Under any reading of the Agreement and the release contained therein, the plaintiff was barred from instituting the instant action. In fact, a California Court has already found that the plaintiff, its officers and its co-defendants in Liberty I, have violated the Agreement and its covenant not to sue by filing the instant action.8


Liberty alleges that the defendants have violated the Lanham Act, Title 36 USCA 1125 (a) (hereinafter Section 1125(a)). Simply put, plaintiff in its allegations does not set forth a claim under that statute.

The purpose of Congress in enacting 1125 (a) was to create special and limited unfair competition remedy. That remedy was created exclusively to protect the interests of a purely commercial class against unscrupulous commercial conduct, Colligan v. Activities Club of New York LTD, 442 F2d 686,692, (2d Cir. N.Y. 1971),(cert. den. 404 U.S. 1004, 30 Led 2d 557, 92 S.Ct. 559);

The purpose of [Section 1125(a)] was to create a new federal cause of action for false representation of goods in commerce in order to protect persons engaged in commerce from, among other things, unfair competition, fraud and deception, which had theretofore been protected by common law, L& L White Metal Casting Corp. v. Joseph, 387 F. Supp. 1349, 1356, (DC N.Y. 1975);

Though Section 1125 (a) is a remedial provision and its language is to be broadly construed, Ames Publishing Co. v. Walker Davis Publications, Inc. 372 F. Supp.1,10, (DC Pa, 1974) the false representations actionable under 1125 (a) must describe or represent, not any fact, but goods or services, Samson Crane v. Union National Sales, Inc. 87 F Supp. 218, 222, (DC Mass. 1949), aff'd, 180 F2d. 896 (1st Cir.1950).

The Plaintiff alleges false designation of goods. Section 1125 (a) makes actionable false designation by the defendant of its own goods and does not protect against unjustified disparagement of the competitor’s goods. Pic Design Corp. v. Sterling Precision Corp. 231 F. Supp. 106, 113, (D.C. N.Y. 1964), Fur Information & Fashion Council, Inc. v. R.F. Timme & Son, Inc.364 F.Supp.16, 21 (D.C.N.Y. 1973); The gravamen of the unfair competition by false designation of origin is the law’s recognition that no one shall sell his goods in such a way as to make it appear that they come from some other source, Reddy Communications, Inc. v. Environmental Action Fund, 477 F. Supp. 936, 948, (DC DC, 1979), (Citing Boston Pro. Hockey Ass'n v.Dallas Cap & E. Mfg. Inc., 510 F2d, 1004, 1009 (5th Cir. 1975)).

Section 1125 (a) has been appropriately used in trademark actions to enjoin unfair competition where there is a showing that the defendant passed off his goods or services as those of the plaintiff by virtue of a substantial similarity between the two, resulting in confusion on the part of the potential customers. (See Volkswagenwerk Aktiengesellschaft v. Rickard, 492 F2d 474, 478 (5th Cir. 1974) Professional Golfers Ass'n v. Bankers L&C Co., 514 F2d. 665, 669 (5th Cir. 1975).

It has been held that a cause of action based upon false designation arises where the defendant’s [trademark] is likely to cause confusion with that of the plaintiff's, to deceive purchasers into believing the source of origin of the goods or services is in another other than the plaintiff or imparts false impressions regarding the character or nature of the plaintiff’s services. Reddy Communications, at 948.

In Lucas Films v. High Frontier, 622 F. Supp. 931 (D.D.C 1985) it was determined that Section 1125 (a) prohibited false designation by unauthorized use in commerce of a trademark in connection with the sale and offering … of any goods or services or affixing of a false designation or description … or representation to goods and services used in commerce. In Lucas use in commerce was defined as … placing the mark on goods sold in commerce or using or displaying it in the sale or advertising of services rendered in commerce. The Court found in Lucas that the purveying of ideas or points of view was not a service under Section 1125 (a). Lucas at 622 F. Supp. 931, at 934.

In this case, the plaintiff, a self described lobbying organization alleges that a letter written by the defendants (former or present members of plaintiff), and issued to its members and others, violates 1125(a). The behavior which plaintiff describes as false origin consists of the following alleged actions of the defendants: (1) referring to themselves in the Letter as an organization, (2) sending the Letter from a mail drop, (3) sending the letter to plaintiff’s members, potential members and potential contributors and (4) via the Letter, publishing its readers information about the plaintiff and its officers, which was, at best, highly critical, at worst, insulting.9

Such alleged actions by the defendant, even if actually committed, do not amount to false origin under Section 1125 (a). Further, nothing the defendants published was damaging to the plaintiff.

In addition, there is absolutely no indication in the Complaint that defendants attempted unauthorized use of Liberty’s mark, to pass themselves off as Liberty, to give the impressions that they were licensed by Liberty or in any way attempted to cause confusion between themselves and Liberty. It is clear in the language of Letter that the defendants did not purport to act on the authority of the incumbent officers of Liberty. In fact, the defendants were harshly critical of Liberty’s incumbent leadership. Plaintiff stretches logic gymnastically to suggest that Section 1125(a) would apply to the facts described in its complaint.The claim of false designation of origin under Section 1125 (a) is baseless and should be dismissed.


Plaintiff failed to sufficiently allege facts that would under any circumstance amount to tortious interference with contracts or interference with business relations. Fundamentally, the plaintiff has failed to identify a contract with which the defendants would have interfered. Without identifying a contract, showing that it was breached and that the plaintiff thereby suffered damages, the complaint is fatally deficient. See Alfred A. Altimont, Inc. v. Chatelain, Saperton & Nolan, 374 A2d 284, 288 (D.C. 1977).10

To establish tortious interference [inducement of breach] four things must be proven (1) existence of a contract, (2) knowledge of the contract, (3) intentional procurement of its breach by the defendant and (4) damages resulting from the breach. Altimont at 288, quoting Hunter Vending Company v. D.C. Vending Co., Inc. 345 A2d 142, 143, (D.C. App.1975). The plaintiff has failed to allege the first three elements required. The Complaint is fatally deficient with respect to interference with contract and business relations and must be dismissed.


In order to make out a case of defamation, a plaintiff must present to the court the substance of the allegedly defamatory language. This language must be of and concerning the plaintiff Rosenblatt v. Baer, 383 U.S. 75, 80, 82, 86 S.Ct.669, 15 L.Ed.2d 597 (1966); Crowley v. North Am. Telecomms., Ass'n, 691 A2d 1169, 1172 (D.C. 1997). The plaintiff has appended to the Complaint, the Letter which purports to contain the alleged defamatory language. The defendants maintain that the Letter does not provide, in its content or in a reasonable interpretation of that content, the predicate for defamatory speech: falsity, defamatory content, publication, negligence, and special harm, See Crowley, 691 A2d at 1173,n.2., Prins v. International Tel. & Tel. Corp., 757 F. Supp. 87, 90 (D.D.C. 1991).

Even assuming, arguendo, that plaintiff has provided in its complaint a published writing by the defendants containing the prerequisite elements of defamation, plaintiff is a public figure or limited purposes public figure, New York Times Co. v. Sullivan, 376 U.S.254, 297, 84 S.Ct. 735, 11 L.Ed.2d 686 (1964), Gertz v. Robert Welch, Inc., 94 S.Ct. 2997, 3009, 3013, 41 L.Ed. 2d 789, (1974)12 … Thus, in order to make out a case of defamation, the plaintiff must allege facts, that if proven, would meet the actual malice standard required where a defendant is alleged to have defamed a public figure. See Foretich v. CBS, 619 A2d 48, 59, (D.C. App. 1993), Moss v. Stockard, 580 A2d 1011, 1030-31, (D.C. App.1990). Faced with the actual malice standard, plaintiff, based upon its allegations in the Complaint, cannot show clear and convincing proof that the defendants entertained serious doubts about the truth of any of the statements made by them referring to the plaintiff, Masson v. New York Magazine, Inc., 111 S.Ct. 2419, 2432, 501 U.S. 496, 115 L.Ed. 2d. 447, (1991), all of which were true and/or protected opinion on a matter of public concern, St. Amant v. Thompson, 88 S.Ct. 1323, 1326, 390 U.S. 727, 20 L.Ed. 2d 262 (1968), Ayala v. Washington 679 A2d.1057, 1062-64 ( D.C App. 1996), Columbia First Bank v. Ferguson, 665 A2d 650 (D.C. App. 1995).

All alleged defamatory statements attributed to the defendants were made in conjunction with and pertaining to judicial proceedings. They are derived from sworn affidavits, testimony, orders of court and pleadings generated by parties and the courts in Liberty I, Liberty II and the Bankruptcy.13 Accordingly, defendants' statements are privileged, protected by good faith and on their face conclusively demonstrate a lack of malice, McBride v. Pizza Hut,658 A2d 205, 207-208 (D.C. App. 1995), citing Conservative Club of Washington v. Finkelstein, 738 F.Supp. 6, 14 (D.D.C. 1990). (See also, Mazanderan v. Mcgranery 490 A2d 180, 181-182, (D.C. App.1984), Sigal Constr.Co. v. Stanbury, 586 A2d 1204, 1213 (D.C. App.1991), Phillips v. Evening Star Newspaper Co., 424 A2d 78, cert. den. 101 S.Ct. 2327, 451 U.S. 989, 68 L.Ed. 2d. 848 (1980). Defendants had far more than a reasonable basis to believe that the statements they published in the Letter were true. Their statements were substantiated by numerous factual occurrences, many of which are contained in documents referred to by the plaintiff directly or indirectly in the Complaint. Marshall v. Proctor and Gamble, 170 F. Supp. 828, 834 (DC Md., 1959). As a matter of law, the plaintiff cannot establish by clear and convincing evidence that the statements were published with malice, St. Amant, supra, at 88 S.Ct.1323, 1325, (1968), Masson, supra, at 111 SCt. 2431).14

Implicitly, in the Complaint, plaintiff has suggested that by imputing suspected bad methods and motives to the defendants in authorizing and publishing the Letter, actual malice might be supported. Such a theory does not rest on sound legal reasoning. (See Old Dominion Branch No. 496, Nat. Ass'n of Letter Carriers, AFL-CIO v. Austin, 418 U.S. 264, 281, 94 S.Ct.2770, 2780, 41 Led.2d 745, (1974) citing Rosenbloom v. Metromedia, Inc. 403 U.S. 29, 52 n.18, 91 S.Ct. 1811, 1824, 29 L.Ed. 2d 296 (1971), Mosrie v. Trusell, 467 A2d. 475, 477 (D.C. App. 1983) (ill-will toward the plaintiff or bad motives are irrelevant to the actual malice standard). Even assuming the parties had a history of heated, acrimonious rivalry, robust debate, including invective, harsh descriptions and metaphorical … exaggerated rhetoric are protected by the First Amendment. Thomas v. News World Communications, 681 F. Supp.55, 64, (D.D.C.1988). The alleged defamatory statements in the Letter are either based upon documented truth or protected opinion on matters of public concern, derived from truth. Fisher, v. Washington Post, 212 A2d. 335, 337-338 (1965) or opinion supported by factual information and published to persons believed to have a corresponding interest, Ingber v. Ross, 479 A2d 1256,1268-1269, (D.C. App. 1984).15

Based upon the foregoing, plaintiff’s claims of defamation must be dismissed. In addition, all other claims based upon the alleged defamatory language must be dismissed.


In paragraphs seventy-six through eighty-seven of the Complaint, the plaintiff alleges the torts of common law fraud. The plaintiff has failed to allege facts which would constitute the elements of that tort.

The elements of the tort of fraud, which must be pleaded with particularity in the complaint, are the following: (1) False representation, (2) in reference to material fact, (3) made with the knowledge of its falsity, (4) with the intent to deceive, and (5) action is taken [by plaintiff] in reliance on the representation.

(See D'Ambrosio v. Colonade Council of Unit Owners, 717 A2d 3567, 360-361 (D.C. App. 1998), citing Vincent v. Anderson, 621 A2d 367, 372 (D.C. App. 1993), Bennet v. Kiggins, 377 A2d 57, 59 (D.C. App. 1977) cert. den. 434 U.S. 1034, 98 S.Ct. 768, 54 L.Ed. 2d 782 (1978).See also: Schiff v. American Ass'n of Retired Persons, 697 A2d 1193 (D.C. App. 1997), citing Howard v. Riggs Nat'l Bank, 432 A2d 701, 706 ( D.C. App. 1981) indicating that the plaintiff must allege damages from actions taken in reliance on the misrepresentations or willful omissions of the defendant).

Plaintiff has not set forth in the Complaint sufficient allegations, which if proven, would constitute any single element of fraud. Therefore, this claim of fraud must be dismissed.16


Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56 ( c); see also Celotex Corp.v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L. Ed. 2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L. Ed. 2d 202 (1986).

In the instant case, plaintiff appends to Complaint the Letter, and the Agreementand implicitly incorporates by reference all relevant evidence, including to be evaluated in considering whether it has stated any justiciable claims.17 Every count of the plaintiff’s case relies upon the content of the Letter. The content of the Letter, based on any reading or interpretation, is insufficient to establish a prima face case on any count in the complaint.18 Summary judgment is the appropriate remedy when there are no material facts at issue and when there is but one reasonable conclusion as to the verdict Anderson at 106 S.Ct. 2511, quoting Brady v. Southern R. Co., 320 U.S. 476, 479-480, 64 S.Ct. 232, 234, 88 L.Ed. 239, (1943).

No discovery or amendment to the Complaint, based upon the plaintiff’s theory and causes of action, would establish plaintiff’s case. (See Novecon Ltd. v. Bulgarian - American, 190 F3d 556, (D.C. Cir. 1999), Chin v. Bond, 953 F.2d 154, 159 (4th Cir. 1991), cert. denied, 505 U.S. 1230. 120 L. Ed. 2d 922, 112 S.Ct. 3057 (1992) refusal to allow unnecessary discovery not an abuse of discretion); Willmar Poultry Co. v. Morton -Norwich Products, Inc., 520 F. 2d 289, 293, (8th Cir. 1975), cert. denied 424 U.S. 915, 47 L.Ed. 2d 320, 96 S. Ct. 1116 (1976) (summary judgment granted even without opportunity for discovery where ground asserted for judgment is the statue of limitations, a defense not going to the merits of the action and Fitzgerald v. Henderson, 36 F. Supp. 2d 490, 497, (N.D.N.Y. 1998), summary judgment granted where discovery would pertain to information already available to the non-moving party).

Discovery will not change the alleged defamatory statements which form the basis of the Complaint. There is no possible evidentiary submission by plaintiff which would support its deficient pleadings, Gurary v. Winehouse, 190 F3d 37 (2nd Cir. 1999). Where the plaintiff, in a case where he must meet the actual malice standard, fails to plead sufficient for a showing of malice, the defendant’s motion for summary judgment must be granted. (See Novecon v. Bulgarian American Enterprise Fund (Novecon II) 977 F. Supp.1382, 1390, (D.D.C. 1997), Mitchell v. Data General Corp., 12 F. 3d 1310, 1316 (4th Cir. 1993).


The instant action is part of a long-time disturbing pattern of litigation on the part of plaintiff. It is one of a succession of actions filed by plaintiff, alleging tortious conduct, primarily defamation, with the thinnest of substance. Such actions have been filed by the plaintiff and its principals over the course of more than a decade against those who oppose or speak out against Liberty’s misdeeds and policies. (See Liberty Lobby v. Dow Jones, 838 F2d 1287, 1303, (DC Cir.1988).

In pleadings before the bankruptcy court, counsel for defendant LSF chronicled many of the recent civil actions involving Liberty and LSF. Most of those actions were instituted by Liberty, its principals or associates. Those actions filed by Liberty were either dismissed, abandoned by Liberty or disposed of in a manner unfavorable to Liberty. (See Exhibit #11).

The present case is the third federal litigation in the last five years in which the defendant LSF and Weber have been forced to participate as parties to defend themselves or to affirmatively protect their rights. Being confronted with such litigation is a continuing hardship and a distraction from their professional activities.19

Defendants herein petition this Court to award the defendants costs and to impose appropriate sanctions upon the plaintiffs.


The premises considered, the Complaint and the First Amended Complaint must be dismissed with prejudice as a matter of law.

Respectfully submitted,


John F. Mercer, Esq.
Solomon & Martin
Greenbelt, Maryland 20770
Counsel for Defendants:


1. Willis Carto is and has been, during all events pertinent to this litigation, Liberty’s treasurer, a principal Liberty decision-maker and co-party to most Liberty litigation.

2. Ultimately, upon consideration of LSF’s Motion for More Definite Statement, Judge Kennedy, of this Court, sua sponte, dismissed Liberty’s complaint with prejudice. In his order dismissing the case, Judge Kennedy found Liberty’s complaint … suffused with factual allegations that have been previously adjudged and litigated in California state court. He concluded in his order that: To permit plaintiffs to use [the] court to relitigate … issues in merely recycled form [would] needlessly waste time and effort. (See Order of Judge Kennedy, April 13, 1999, Exhibit #3).

3. The Agreement, appended hereto as Exhibit #4, shall be more fully discussed in Section V, herein.

4. See Affidavit of Darrell Clark, Esq. (Exhibits 6(a) and 6(b) attached letter from Andrew Arnold, editor of the Spotlight).

5. In addition, on July 5, 1999, the Spotlight featured and an article discussing the Letter and attacking the defendants (See Exhibit #7). It could be argued that by doing so, the plaintiff republished the content of the Letter thereby undercutting its defamation claims.

6. The Plaintiff sets forth no ascertainable basis for jurisdiction of this Court under Section 1333, which establishes the admiralty jurisdiction of this Court.

7. See Exhibits 6(a) and 6(b).

8. See the judgment and order of Judge Maino issued December 15, 2000, and appended hereto as Exhibit #8).

9. The defendants do not admit that their language in the Letter was defamatory. They argue, infra., that the defendants cannot, as a matter of law, make out a valid claim for defamation. (See Section VI, herein).

10. The tort of interference with business relations is treated herein as a reiteration or amplification of the claims of tortious interference with contract and defamation alleged in plaintiff’s SECOND CAUSE OF ACTION and THIRD CAUSE OF ACTION.

11. The plaintiff treats the torts of injurious falsehood and defamation as one and the same.

12. By its own admission, does grass roots lobbying (Complaint, Para.4) and is referenced in thousands of published books, magazine articles, newspapers and in court records (Complaint, Para. 23). The plaintiff was found to be a public figure previously by this court in Anderson v. Liberty Lobby, 106 S.Ct. 2505, 2507, 477 U.S. 242, 91 L.Ed. 2d 202 (1986).

13. See Exhibits #2,#3, #4, #9, #10,#11.

14. In the Motion for Appointment of Trustee, filed on May 25, 1999, actions by Liberty’s officers and employees were described as fraud, defalcation, breach of fiduciary duty, conversion misappropriation of funds, dishonesty, incompetence, utterance of false oaths (See Exhibits 9). In the hearing on that motion, there were further descriptions of Liberty’s actions as fraud dishonesty and gross mismanagement (See excerpts from transcript of hearing on Motion for Appointment of Trustee, July 1, 199, Exhibit # 10).

15. Defendants note that plaintiff, in its publication, The Spotlight, has used its share of invective in its descriptions of the defendants. In this publication it has referred to defendants as leeches conspirators and parasites. (See Exhibit #7).

16. It appears that plaintiff is alleging a claim of fraud that if raised at all, should be raised by the alleged recipients of the Letter.

17. Defendants contend that no matters presented in their motion refer to material outside of the pleadings or which has not been incorporated into the Complaint by reference. However, if any arguments made by defendants are supported by references to some materials outside the pleadings, defendants pray that such arguments not be excluded by this Court. (See Mittlemen, supra, at 997 F. Supp. 1, 6).

18. The single document by which the plaintiff alleges the defendants committed all its tortious behavior, the Letter is appended to the Complaint. (See Exhibit #5).

19. Such cases, primarily filed as defamation suits, have recently been the subject of proposed SLAPP (Strategic Lawsuits Against Public participation) legislation. (See Wilcox v. Superior Court, 27 Cal. App. 4th 809, 815-818, 33 Cal. Rptr. 2d 446, 449-457, (1994) a case involving one such statute, California Code of Civil procedure, Section 425-16(b).