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Memorandum Opinion Resolving All Pending Motions and Granting Defendants' Motion for Summary JudgmentDennis L. Montgomery, Plaintiff, v. James Risen, et al., Defendants
Civil Action No.: 16-0126 (RC)
USDC, District of Columbia
by Rudolph Contreras, USDC Judge
July 15, 2016
[Montgomery v. Risen
Summary
Holding that claims in affidavits that are "so conclusory—and presented without any supporting facts in the record—that [they] [would] leave[] the jury 'in no position to assess' the veracity of statement" cannot withstand a motion for summary judgment (quoting Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999))]
Civil Action No.: 16-0126 (RC)
07-15-2016
Dennis L. MONTGOMERY, Plaintiff, v. James RISEN, et al., Defendants.
Larry E. Klayman, Klayman Law Firm, Washington, DC, for Plaintiff. Laura Rose Handman, Lisa Beth Zycherman, Davis Wright Tremaine, LLP, Washington, DC, for Defendants.
RUDOLPH CONTRERAS, United States District Judge
Larry E. Klayman, Klayman Law Firm, Washington, DC, for Plaintiff.
Laura Rose Handman, Lisa Beth Zycherman, Davis Wright Tremaine, LLP, Washington, DC, for Defendants.
MEMORANDUM OPINION
RESOLVING ALL PENDING MOTIONS AND GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
RUDOLPH CONTRERAS, United States District Judge
I. INTRODUCTIONThe twists and turns of this case could fill the pages of a book. In fact, much of it already has. In October 2014 Defendant James Risen authored, and his co-defendants Houghton Mifflin Harcourt Publishing Company and Houghton Mifflin Harcourt Company (collectively, "Defendants") [1] published, Pay any Price: Greed, Power, and Endless War.
One of the book's chapters focuses heavily on Plaintiff Dennis Montgomery, who claimed to have developed several technologies that the government subsequently employed in the war on terrorism in the years following the September 11, 2001 terrorist attacks. One of those technologies, Montgomery claimed, could detect hidden numbers and letters that appeared in Al Jazeera broadcasts. Government officials purportedly concluded that those strings of letters and numbers identified airline flight numbers or longitudinal and latitudinal coordinates representing targets of anticipated al Qaeda terrorist attacks. If this sounds too good to be true, you are not alone. The relevant chapter in Pay Any Price explains how government officials, Montgomery's former employees, and others came to believe that his technology did not work as billed. The chapter repeats others' assertions that Montgomery is a con man and describes his technology as a hoax.1. Defendants note that Houghton Mifflin Harcourt Company is improperly sued as "HMH Holdings, Inc." See Defs.' Mot. for Summ. J. & Mem. Supp. at 1, ECF No. 201. Although the Court refers generally to "Defendants" throughout this opinion, for ease of reference the Court will refer to "Houghton Mifflin" when referring only to the publishing company defendants.
This memorandum opinion is an extended epilogue of sorts, and picks up where Pay Any Price leaves off. Montgomery filed this action claiming, primarily, that Defendants defamed him in the chapter and in the course of promoting the book. After a protracted, and largely unresolved, saga in the United States District Court for the Southern District of Florida, the case was transferred to this district and assigned to the undersigned. Before the Court are Defendants' motion to dismiss and motion for summary judgment and a number of outstanding discovery related motions. The tale of the Court's resolution of those motions follows.
For those not otherwise tempted to skip to the final chapter—spoiler alert—the end result is that the Court will grant Defendants' motion for summary judgment.II. FACTUAL & PROCEDURAL BACKGROUND
A. The Challenged ChapterDefendant James Risen is the author of Pay Any Price: Greed, Power, and Endless War, which was published on October 14, 2014 by Houghton Mifflin. See Defs.' Stmt. of Undisputed Material Facts ¶¶ 1, 3 ("Defs.' SUMF"), ECF No. 202.
The nine-chapter book "describes how the war on terror led to waste, fraud, and abuse by U.S. government officials and the contractors who stood to gain from it. Id. ¶ 5. Chapter two of the book ("the Chapter"), entitled "The Emperor of the War on Terror," claims that in the post-September 11th era government officials were quick to fund potential counterterrorism efforts. The Chapter posits that, as Congress "thr[ew] cash at the FBI, CIA, and Pentagon," a "counterterrorism bubble, like a financial bubble grew in Washington, and a new breed of entrepreneur learned that one of the surest and easiest paths to riches could be found ... in Tysons Corner, Virginia, coming up with new ways to predict, analyze, and prevent terrorist attacks—or, short of that, at least convincing a few government bureaucrats that you had some magic formula for doing so."" Am. Compl. Ex. A at 31 ("Chapter"), ECF No. 44. [2] To illustrate this point, the Chapter presents "the example of [Plaintiff] Dennis Montgomery." Id. at 31. Risen describes Montgomery as "the perfect case study to explain how during the war on terror greed and ambition have been married to unlimited rivers of cash to create a climate in which someone who has been accused of being a con artist was able to create a rogue intelligence operation with little or no adult supervision." Id. at 32. The Chapter claims that Montgomery's example "demonstrates how hundreds of billions of dollars poured into the war on terror went to waste." Id. at 33.2.
The entire book Chapter is filed as Exhibit A to Plaintiff's Amended Complaint. The complaint alleges that a large number of the Chapter's statements are defamatory. For brevity and ease of reading, this factual background section paraphrases much of the book's assertions. When the Court cites to or quotes the Chapter, it cites to the specific page number of the book, as indicated by the scanned copy reproduced in Exhibit A.
The Chapter focuses on several types of technology that Montgomery developed. The Central Intelligence Agency ("CIA") and other federal intelligence and law enforcement agencies apparently relied on the technology beginning in or around 2003. Id. at 37. The Chapter claims that the technology did not work as billed. For example, Montgomery allegedly created video compression and object recognition technology which the Air Force and other agencies believed could be helpful in storing and analyzing Predator drone video. Id. at 36. In particular, the Chapter states that "Montgomery claimed that his facial recognition software was so good that he could identify individual faces from the video camera flying on a Predator high above the mountains of southern Afghanistan." Id. at 37. By 2003, the U.S. Special Operations Command and the Air Force had awarded government contracts related to the technology to eTreppid Technologies, the company Montgomery founded along with his financial backer, Warren Trepp. Id. at 34–35, 37.
The Chapter claims that while Montgomery performed field tests of the object recognition technology for Pentagon officials, former employees now allege that those tests were fabricated. Specifically, the Chapter reports one occasion on which Montgomery attempted to show that his technology could detect, from a great distance, a toy bazooka Montgomery carried in a field outside eTreppid. Id. at 37. According to the Chapter, Warren Trepp informed the Federal Bureau of Investigation ("FBI") that "Montgomery told two eTreppid employees to go to an empty office and push a button on a computer when they heard a beep on a cell phone." Id. While carrying the bazooka, Montgomery purportedly "used a hidden cell phone to buzz the cell phone of one of the eTreppid employees, who then pushed a key on a computer keyboard, which in turn flashed an image of a bazooka on another screen prominently displayed in front of the military officers standing in another room." Id. This course of events "convinced" the military officials "that Montgomery's computer software had amazingly detected and recognized the bazooka in Montgomery's hands." Id.
The technology most emphasized in the Chapter, however, is technology Montgomery claimed he had developed "enable[ing] him to decipher al Qaeda codes embedded in the network banner displayed on the broadcasts of Al Jazeera, the Qatar-based news network." Id. at 40. This software is often referred to as the "noise filtering" software. See, e.g. , Decl. of James Risen ¶ 15 ("Risen Decl."), ECF No. 203; id. Ex. 11 at 2, ECF No. 203-11. Risen writes that "Montgomery sold the CIA on the fantasy that al Qaeda was using the broadcasts to digitally transmit its plans for future terrorist attacks"—which included "series of hidden letters and numbers that appeared to be coded messages about specific airline flights that the terrorists were targeting." Chapter at 40–41. By late 2003 CIA officials visited eTreppid's offices in Reno, Nevada to observe the software. Id. at 40.
The Chapter posits that "Montgomery brilliantly played on the CIA's technical insecurities as well as the agency's woeful lack of understanding about al Qaeda and Islamic terrorism." Id. Although noting that "Montgomery insists that he did not come up with the idea of analyzing Al Jazeera videotapes," and that the CIA instead came to him, Risen writes that "even if it wasn't Montgomery's idea, he ran with it as fast as he could." Id. at 41. Montgomery allegedly informed the CIA that the Al Jazeera broadcasts had hidden letters and numbers embedded in them, which "included the letters ‘AF’ followed by a series of numbers, or the letters ‘AA’ and ‘UA’ and two or three digits." Id. Other series of numbers "looked like coordinates for the longitude and latitude of specific locations." Id.
The Chapter states that "[t]he CIA made the inevitable connections," and Risen contends in the Chapter that the technology "so enraptured certain key government officials that it was considered the most important and most sensitive counterterrorism intelligence that the Central Intelligence Agency had to offer President Bush." Id. at 41, 39. Senior CIA officials in the agency's Directorate of Science and Technology began to vouch for Montgomery's work. Id. at 39. The Chapter reports that the Directorate's chief, Donald Kerr, believed the claims about the embedded codes, and convinced George Tenet, Director of the CIA, to take the information seriously. Id. at 42. "As a result, in December 2003, Tenet rushed directly to President Bush when information provided by Montgomery and his software purported to show that a series of flights from France, Britain, and Mexico to the United States around Christmas were being targeted by al Qaeda." Id. President Bush ordered those flights grounded. Id. The Chapter also recounts that "[o]ne former senior CIA official recalled attending a White House meeting in the week following Christmas to discuss what to do next about the information coming from Montgomery," a conversation that included a "brief but serious discussion about whether to shoot down commercial airliners over the Atlantic based on the intelligence." Id. at 45.
Eventually, French officials apparently demanded answers from the United States, and the CIA "was finally forced to reveal to French intelligence the source of the threat information." Id. at 46. French officials arranged for a French technology firm to "reverse-engineer" the technology. Id. The firm concluded that the broadcasts contained too few pixels to contain hidden bar codes or unseen numbers. Id. While the Chapter reports Montgomery's claim that "CIA officials continued to work with him for months after Christmas 2003, and that CIA personnel were still showing up at his offices in Nevada until late 2004," Risen writes that once the CIA came to terms with the French findings, the agency "tried to forget all about him." Id. Risen claims that "the CIA never investigated the apparent hoax nor examined how it had been handled inside the agency." Id.Given this course of events, the Chapter describes Montgomery as "the maestro behind what many current and former U.S. officials and others familiar with the case now believe was one of the most elaborate and dangerous hoaxes in American history, a ruse that was so successful that it nearly convinced the Bush administration to order fighter jets to start shooting down commercial airliners filled with passengers over the Atlantic." Id. at 32; see also id. at 32–33 (stating that
"Montgomery almost single-handedly prompted President Bush to ground a series of international commercial flights based on what now appears to have been an elaborate hoax"). The Chapter concludes that, "once the fever broke and government officials realized that they had been taken in by a grand illusion, they did absolutely nothing about it";
the CIA acted like the episode had not happened, the Pentagon "just kept working with Montgomery," and the Department of Justice invoked the state secrets privilege in several lawsuits involving Montgomery to prevent information from becoming public. Id. at 32. Risen presents his own explanation for the government's silence: he posits that
"CIA officials were reluctant to tell their Pentagon counterparts much about their experiences with Montgomery, so Defense Department officials apparently did not realize that his technology was considered suspect at CIA headquarters." Id. at 47–48.
The Chapter also describes the apparent aftermath. Beginning in 2005, Trepp and Montgomery became embroiled in a series of personal and legal disputes.
Montgomery claimed Trepp had not adequately provided him with a share of the money flowing from eTreppid's government contracts. See id. at 49. Montgomery allegedly absconded with his technology's source code, and deleted the code and data from eTreppid's computer files, which prompted an FBI investigation and a lawsuit between the two. Id. It was during that investigation that many of the allegations concerning Montgomery's software came to light. Id. at 49–50. Montgomery also made several high-profile allegations that former-Nevada Congressman Jim Gibbons, who had recently been elected as Nevada's governor, accepted bribes from Trepp in exchange for assisting eTreppid secure defense contracts. Id. at 49. Those allegations led to a federal corruption investigation, which eventually cleared Gibbons of any wrongdoing. Id. at 49–50. Finally, the Chapter detailed Montgomery's work with a subsequent backer, Edra Blixseth, with whom Montgomery attempted to secure additional government contracts for his noise filtering and object recognition technologies through a company they created called Blxware. Id. at 50–51. These efforts led to a meeting with an aide of Vice President Dick Cheney and efforts to convince the Israeli government to use his technology. Id. at 51. Neither proved successful. Id. In part based on these and other events, and drawing from court documents and FBI investigation reports, the Chapter explains that Trepp came to believe Montgomery's work was not what he claimed it was, id. at 49, and that
Montgomery's former lawyer, Michael Flynn, "concluded that Montgomery was a fraud," id. at 36.
The Chapter also published Montgomery's counter-statements, albeit with somewhat less emphasis. In its opening pages, Risen states that "Montgomery strongly denies that he peddled fraudulent technology" and that Montgomery "insists that the charges have been leveled by critics with axes to grind, including his former lawyer and former employees." Id. at 33.
Risen also reports that Montgomery claims he "was following direct orders from both the NSA and the CIA, and says that the CIA, NSA, and U.S. military took his technology so seriously that it was used to help in the targeting of Predator [drone] strikes and other raids." Id. Specifically, "Montgomery insists that he did not come up with the idea of analyzing Al Jazeera videotapes" and "says that the CIA came to him in late 2003 and asked him to do it." Id. at 41. Montgomery claims that "[t]he fact that the government is blocking public disclosure of the details of its relationship with him ... shows that his work was considered serious and important." Id. at 33–34. The Chapter also acknowledges Montgomery's claim that his former employees "lied when they claimed that he had asked them to fix the [object recognition] tests" and that the Air Force "issued a report showing that it had verified the tests." Id. at 37. Finally, in its closing paragraph, the Chapter reiterates that "Dennis Montgomery continues to argue that he is not a fraud, that his technology is genuine, and that he performed highly sensitive and valuable work for the CIA and the Pentagon." Id. at 53.
In reporting this episode, the Chapter also relies in several instances upon FBI investigation reports, depositions and affidavits filed in various lawsuits, Congressional testimony, and other information in the public domain. For example, the Chapter identifies court documents, which contained Warren Trepp's statements to the FBI, as the Chapter's source of the information regarding Montgomery's purportedly fabricated tests of his object identification software. See id. at 37 ("
Warren Trepp later told the FBI that he eventually learned that Montgomery had no real computer software programming skills, according to court documents that include his statements to the FBI."); id. ("Trepp also described to federal investigators how eTreppid employees had confided to him that Montgomery had asked them to help him falsify tests of his object recognition software when Pentagon officials came to visit."); id. (describing the fabricated tests, and the use of Montgomery's hidden cell phone, "according to court documents"). The Chapter also relies on John Brennan's testimony before the Senate Intelligence Committee during Brennan's confirmation as CIA Director in 2013. Id. at 47. In 2003, Brennan had been head of the Terrorist Threat Integration Center, which was responsible for distributing intelligence throughout the United States government. Id.
When asked in a written questionnaire about Montgomery's technology, Brennan wrote that the technology "was determined not to be a source of accurate information." Id. ; see also Risen Decl. Ex. 19 at 10.
B. Prior Media CoverageMedia coverage concerning Montgomery's purportedly fabricated technology, specifically, and discussing Montgomery, more generally, predated publication of Pay Any Price by nearly a decade.
On June 27, 2005, NBC News published an article authored by Lisa Myers and Aram Roston discussing the 2003 grounding of several flights. The article reported that
"senior U.S. officials now tell NBC News that the key piece of information that triggered the holiday alert was a bizarre CIA analysis, which turned out to be all wrong," although the article did not name Montgomery as the source of the technology. Risen Decl. Ex. 4.
The article reported that CIA officials believed that they had found secret messages in the crawl bar of Al Jazeera news broadcasts, and quoted Tom Ridge, who had been the Secretary of the Department of Homeland Security in 2003. Secretary Ridge "confirm[ed] there were no secret terror messages," but maintained it was not a mistake to raise the threat level, and acknowledged that the analysis was not the only factor in raising the threat level. Id.
In the interim, the Jim Gibbons bribery allegations broke. Media reports indicated that the allegations' source was sworn testimony Dennis Montgomery provided in the context of his lawsuit with Trepp concerning the rights to his software code. See, e.g. , Risen Decl. Ex. 5 at 3. Montgomery's allegations led to a series of articles in the media, and culminated in Dennis Montgomery sitting down for an interview with Lisa Myers of NBC news to discuss his allegations. Id. Ex. 6, Ex. 7 (transcript of NBC news interview). During the course of Montgomery and Trepp's legal battle, documents concerning eTreppid and Montgomery's software were unsealed and media outlets described the contents of those documents while simultaneously rehashing the allegations against Jim Gibbons. See, e.g. , id. Ex. 8.
The software was even discussed in the context of Edra Blixseth's divorce proceedings, and a 2008 Bloomberg News article fully canvassed Trepp's allegations that Montgomery stole eTreppid's computer code, Flynn's charge that the "software was a sham," and the allegations found in the FBI interview reports—which were unsealed as part of the legal proceedings. Id. Ex. 10. That article also discussed how United States intelligence agencies had asked that certain information in the various lawsuits remain sealed. Id.The focus eventually shifted to Montgomery's software.
Aram Roston, who had written the 2005 story for NBC News with Lisa Myers, wrote a much more expansive article on the Montgomery saga in 2010 for Playboy Magazine, entitled "The Man Who Conned the Pentagon." See Risen Decl. Ex. 11. The article states that Montgomery "apparently convinced the Bush White House, the CIA, the Air Force, and other agencies that Al Jazeera—the Qatari-owned TV network—was unwittingly transmitting target data to Al Qaeda sleepers." Id. at 2. And in 2011 Risen and Eric Lichtblau wrote an article for the New York Times canvassing much of the same information. The article, entitled "Hiding Details of Dubious Deal, U.S. Invokes National Security,"was published on February 19, 2011. See id. Ex. 3. The article explained that the Department of Justice had secured protective orders in two cases to shield details of Montgomery's technology from the public. Id. The article canvassed many of the allegations that would be repeated in the Chapter, including that Montgomery's technology appeared to be a hoax, that Montgomery's former lawyer now viewed him as a "con man," that former employees believed Montgomery had fabricated demonstrations of his technology for government officials, and that Montgomery's technology prompted President Bush to ground several airliners. See id. at 1–3. The article also stated that "[s]enior administration officials even talked about shooting down planes identified as targets ..., according to a former senior intelligence official who was at a meeting where the idea was discussed." Id. at 4.
Risen claims that, in writing his book, he relied on these articles and other media coverage. See Risen Decl. ¶¶ 7–18; see also id. Exs. 13, 14. In a footnote of the Chapter, Risen explicitly acknowledges both Aram Roston's Playboy article, and Risen's own New York Times article. See Chapter at 53. None of the articles have ever been retracted.
C. Procedural HistoryOn February 24, 2015, following publication of Pay Any Price , Montgomery filed this action in the Southern District of Florida. See generally Compl., ECF No. 1.
The operative, Amended Complaint asserts a multitude of claims for defamation, defamation per se, and defamation by implication based on forty-three allegedly defamatory statements. See Am. Compl. ¶¶ 96–239, ECF No. 44. The Amended Complaint also alleges additional claims of intentional infliction of emotional distress, tortious interference with prospective advantage, and assault. See id. ¶¶ 240–256. The allegedly defamatory statements include statements made in the Chapter, see, e.g. , id. ¶¶ 106, 109, 111, as well as statements Risen made in interviews when promoting the book, see, e.g. , id. ¶¶ 139–141, 145, 149. The latter statements, in many respects, repeat allegations made in the Chapter or the Chapter's characterization of Montgomery. Compare, e.g. , id. ¶ 149 (asserting in interview that "when they [the CIA] realized it was a hoax, they covered the whole thing up and never did anything about it"), with Chapter at 32 ("Once it was over, once the fever broke and government officials realized that they had been taken in by a grand illusion, they did absolutely nothing about it. The Central Intelligence Agency buried the whole insane episode and acted like it had never happened."). In large part, the Amended Complaint asserts that Defendants' statements or implied assertions that Montgomery's technology was a hoax or fraudulent are defamatory. See, e.g. , Am. Compl. ¶¶ 107, 108, 112, 113, 120. [3]
See also, e.g., Am. Compl. ¶¶ 122, 124, 126, 127, 129, 131, 133, 135, 136, 138, 142, 143, 144, 146, 147, 148, 150, 152, 154, 155, 158, 169, 182, 184, 185, 187, 190, 194, 200, 202, 204, 206, 208, 210, 212, 216, 218, 220, 222, 224, 230, 232, 234, 236.
On April 9, 2015, Defendants filed a motion to dismiss or transfer for lack of personal jurisdiction. See Defs.' Mot. to Dismiss or Transfer at 12–17, ECF No. 25. In the alternative, Defendants also moved to transfer for improper venue under 28 U.S.C. § 1391, to transfer venue for the convenience of the parties and in the interest of justice under 28 U.S.C. § 1404(a), or to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. [4] See id. at 17–30. After Montgomery filed his Amended Complaint, the district court denied Defendants' initial motion to transfer or dismiss as moot. See Paperless Order, ECF No. 42. Thereafter, Defendants filed a renewed motion to transfer or dismiss in response to the Amended Complaint. See Defs.' Mot. to Dismiss or Transfer, ECF No. 52.
4. Defendants also filed a motion to dismiss the complaint under the District of Columbia's Anti-SLAPP statute, which they renewed after Montgomery filed his Amended Complaint. See Defs.' Special Mot. to Dismiss the Compl., ECF No. 26; Defs.' Renewed Special Mot. to Dismiss, ECF No. 53. Defendants withdrew that motion after the Washington Supreme Court held Washington state's anti-SLAPP statute unconstitutional, presumably because the motion relied on Washington state's statute in addition to D.C.'s. See Notice of Suppl. Auth. & Withdrawal of Defs.' Anti-SLAPP Mot., ECF No. 61.
Shortly after filing his complaint, Montgomery also raised issues concerning his poor health, and sought to expedite consideration of his claims. See, e.g. , Emergency Pl.'s Mot. for Status Conf., ECF No. 9. The Court set an initial discovery deadline of September 16, 2015, with trial slated to begin on November 30, 2015. See Order Setting Civil Trial Date & Pretrial Schedule, ECF No. 48. Defendants argued that no discovery should occur before their initial motions were resolved, and filed a formal motion to stay discovery pending resolution of Defendants' motion to dismiss on May 19, 2015. See Defs.' Mot. to Stay Disc. Pending Resolution of Mots. to Dismiss, ECF No. 55; Pl.'s Opp'n to Defs.' Mot. to Stay Disc., ECF No. 68. On September 10, 2015—nearly four months later, and after most of the discovery period had already run—the district court summarily denied that motion. See Paperless Order, ECF No. 130. On that same day, the Court also granted in part and denied in part Defendants' motion to modify the scheduling order. The Court rescheduled trial for March 21, 2016, and extended discovery until November 19, 2015. See Paperless Order, ECF No. 131.
Several discovery disputes arose throughout this period, and were considered by Magistrate Judge Jonathan Goodman.
Of most relevance to the merits of Montgomery's claims is Defendants' request that Montgomery produce the software that is the subject of the Chapter. As explained in more detail below, after initially objecting to that request, Montgomery eventually claimed that he had turned over the only copy of his software to the FBI, along with a large volume of other computer drives and electronic information, in connection with an unrelated criminal investigation. Magistrate Judge Goodman ordered Montgomery on more than one occasion to produce the software and to coordinate with the FBI in locating the software, using his self-described right of continued access to the software. See Aug. 22, 2015 Post-Disc. Hr'g Order ¶ 6, ECF No. 107; Oct. 19, 2015 Post-Disc. Hr'g Order ¶¶ 2–4, ECF No. 154. Montgomery filed objections to those orders with the district court. See Pl.'s Obj. to Portions of Magistrate Judge's Order of Aug. 22, 2015, ECF No. 125; Pl.'s Obj. to Magistrate Judge's Order of Oct. 19, 2015 & Req. to Stay, ECF No. 164. In addition, Defendants eventually filed a motion for spoliation sanctions, arguing that Montgomery's Amended Complaint should be dismissed, and Defendants should be awarded attorneys' fees, as a consequence of his failure to produce the software. See Defs.' Mem. of Law Supp. Mot. for Sanctions, ECF No. 166; Pl.'s Praecipe, ECF No. 170. On January 5, 2016, Magistrate Judge Goodman held a lengthy hearing on the sanctions motion. See Tr. of Misc. Mot. Hr'g ("Sanctions Hr'g Tr."), ECF No. 230.
In the interim, discovery closed (although Montgomery filed a motion to extend that deadline, which also remains pending). See Paperless Order, ECF No. 131; see also Pl.'s Mot. for Extension of Time to Reset Disc. Deadline, ECF No. 181. On December 14, 2015, consistent with the deadline set by the district court, and even though their motion to dismiss or transfer remained pending, Defendants filed a motion for summary judgment. [5] See Paperless Order, ECF No. 131; Defs.' Mot. for Summ. J. & Mem. Supp. ("Defs.' Mem. Supp. Summ. J."), ECF No. 201.
5. Montgomery's motion for an extension of time to file his response to Defendants' motion for summary judgment remains outstanding, despite the fact that he later filed that opposition. See Pl.'s Mot. for Extension of Time to File Opp'n, ECF No. 221; see also Pl.'s Mem. Opp'n to Defs.' Mot. for Summ. J., ECF No. 233. The Court grants the motion nunc pro tunc and accepts his opposition as filed.
On January 25, 2016, the district court ruled in part on Defendants' motion to dismiss or transfer. In a four-page order, the district court granted in part Defendants' motion to dismiss or transfer, concluding that the convenience of the parties and the interests of justice warranted transfer under 28 U.S.C. § 1404(a) to the United States District Court for the District of Columbia. See generally Order Grant'g Mot. to Transfer, ECF No. 247. The district court noted that Defendants' motion to dismiss for failure to state a claim remained pending, id. at 4, and the court did not otherwise resolve the various objections to the magistrate judge's discovery rulings, Plaintiff's motion to extend the discovery deadline, or the parties' motions to file various documents under seal. [6] The magistrate judge also was unable to rule on Defendants' motions for sanctions prior to transfer.
6. After this Court ordered the parties to file certain sealed documents that were omitted from the docket as transferred from the Southern District of Florida, Montgomery withdrew his requests to seal. The Court therefore denied those motions as moot. See June 15, 2016 Minute Order.
This action was transferred to this district, and randomly assigned to the undersigned. Since transfer, the parties have completed briefing Defendants' motion for summary judgment. That motion—which the Court concludes subsumes the pending motion to dismiss—is now ripe for determination along with all of the other, outstanding motions. [7] After review of the lengthy record in this case, the pleadings, the relevant transcripts of proceedings, and the parties' various motions, the Court is prepared to rule.
7. After this action was transferred, the Court issued an order requesting that the parties submit a joint status report addressing, among other things: the history of the litigation; any impending events or proceedings that might affect the course of the litigation; which motions and issues remained pending; whether any party sought to withdraw any pending motions; whether any pending motions had become moot, subsumed by other motions, or required additional briefing; and whether any pending motions should be consolidated. See Feb. 3, 2016 Order, ECF No. 257. In their response, Defendants did not seek to withdraw their motion to dismiss, but conceded that "[t]o the extent the motion to dismiss tracks the summary judgment motion, the court can deem it subsumed by the subsequent summary judgment motion." See Joint Status Report at 13, ECF No. 258. Having reviewed both motions, the Court concludes that Defendants' summary judgment motion addresses issues identical to the outstanding issues addressed in Defendants' motion to dismiss. Therefore, the Court will deny Defendants' motion to dismiss as moot. In addition, the Court notes that Montgomery also represented in the parties' joint status report that he would be moving for leave to file a surreply to address certain arguments made in Defendants' reply in support of their motion for summary judgment. See Joint Status Report at 8–9, 13. Montgomery never sought leave to file a surreply, and the Court will decide the motion on the basis of the memoranda that have been filed to date.
III. ANALYSISThe Court will first resolve the outstanding discovery issues before turning to Defendants' motion for summary judgment.
A. A Note Concerning Choice of LawAt the outset, the Court clarifies the substantive law it will apply in this case. As will become clear, the question is relevant to both the summary judgment motion and the outstanding discovery disputes, because Montgomery claims that the software is wholly irrelevant to this action.
"[T]here is no federal cause of action for defamation," Bartel v. F . A . A . , 725 F.2d 1403, 1405 n. 2 (D.C.Cir.1984), and Montgomery's substantive claims depend on the application of state law. Montgomery's Amended Complaint repeatedly invokes Florida law. See, e.g., Am. Compl. ¶¶ 103–05, 173. In their motion to dismiss, Defendants briefly asserted that District of Columbia law, and not Florida law, would most likely apply to this case, and they provided a more lengthy argument for applying D.C. law in the context of their motion to dismiss under various states' applicable anti-SLAPP statutes. See Defs.' Mot. to Dismiss at 26, ECF No. 52; Defs.' Renewed Special Mot. to Dismiss under the Applicable Anti-SLAPP Statute at 2–5, ECF No. 53. In his opposition to Defendants' motion to dismiss, Montgomery argued that Florida law applies. See Pl.'s Mem. in Opp'n to Defs.' Mot. to Dismiss at 24–29, ECF No. 63. Defendants' motion for summary judgment discusses the issue only in a passing footnote, however, see Defs.' Mem. Supp. Summ. J. at 16 n.6, and Montgomery's opposition fails to discuss the choice of law issue at all. See generally Pl.'s Opp'n to Defs.' Mot. for Summ. J. ("Pl.'s Opp'n"), ECF No. 233. Finally, Defendants' reply in support of their motion for summary judgment asserts in a passing footnote that "[n]ow that the case has been transferred to the District of Columbia, D.C. law clearly applies." Defs.' Reply at 7 n.4, ECF No. 250. Yet, the district court's order did not resolve, let alone discuss, which jurisdiction's substantive law was most likely to apply to this action. Instead, its decision to transfer venue was grounded on other considerations.
In sum, the issue remained unresolved upon transfer, and the parties have not adequately briefed the issue in the context of Defendants' motion for summary judgment. Nevertheless, the Court believes that the question is immaterial. All but one of Defendants' arguments for granting summary judgment in their favor depend upon the application of a federal constitutional limitation on state defamation claims. [8] See, e.g. , Masson v. New Yorker Magazine, Inc. , 501 U.S. 496, 510, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991) (explaining that "[t]he First Amendment limits California's libel law in various respects"); Garrison v. Louisiana , 379 U.S. 64, 67, 85 S.Ct. 209, 13 L.Ed.2d 125 (1964) (explaining that "the Constitution limits state power" in defamation cases). For example, a plaintiff's inability to assert defamation based on a statement of opinion, a plaintiff's burden to demonstrate falsity (at least in circumstances like these), and the requirement that a limited-purpose public figure show actual malice, each emanate from the Constitution. See, e.g., Masson, 501 U.S. at 510, 111 S.Ct. 2419; Milkovich v. Lorain Journal Co., 497 U.S. 1, 20–21, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990); Phila. Newspapers, Inc. v. Hepps , 475 U.S. 767, 776, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986); Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). These limitations apply with equal force to causes of action arising under D.C. as well as Florida law, and the Court has found no meaningful difference among those jurisdictions' law in faithfully applying those principles. Indeed, Defendants assert that the jurisdictions' law are the same on the issues relevant to their motion, and Montgomery's opposition does not claim otherwise. See Defs.' Mem. Supp. Summ. J. at 16 n.6. As a result, the Court cites to both D.C. and Florida cases as appropriate. Ultimately, the Court's holdings are the same regardless of whether D.C. or Florida law applies.
8. The exception is the common law privilege for fair reporting of official government reports. The law in each state on this question is substantially similar. See infra.
B. Outstanding Discovery IssuesAs the Court's description of this case's procedural history makes clear, several discovery issues remain outstanding. Most of the motions involve the software that is at the center of the Chapter's claims. Montgomery had filed several objections to the magistrate judge's orders that he produce that software, and has moved to extend the discovery deadline to allow the search for the software to continue.
Defendants have filed a motion for spoliation sanctions based on Montgomery's failure to provide the software. Before proceeding to consider Defendants' motion for summary judgment, the Court must resolve these motions.
1. BackgroundSome background regarding this dispute is necessary to understand the parties' motions and the Court's ultimate ruling.
In their first set of production requests, Defendants requested that Montgomery produce his software. See Defs.' First Set of Interrogs. & First Set of Requests for Prod. of Docs. to Pl. at 12, ECF No. 90-1 at 13 (request number eight). In response to that request, Montgomery asserted a blanket objection "to any interrogatories or document request regarding a copy of his software," on grounds of "confidentiality, intellectual property rights, legal restrictions on the Plaintiff responding, that the individual document request by its nature is unreasonably burdensome and oppressive, that the total number of document requests is unreasonably burdensome, oppressive and harassing, and also on the grounds that the request is neither relevant nor reasonably calculated to lead to admissible evidence." Pl.'s Resps. to Defs.' First Set of Doc. Reqs. to Pl. at 7, ECF No. 90-2 at 34. Based on those grounds "and other considerations," Montgomery asserted that he "[would] not produce a copy of any software." Id.
Notably, Montgomery did not claim that he did not possess or have control over the software.Defendants eventually noted a discovery dispute with the court, and Magistrate Judge Goodman scheduled a hearing for August 21, 2015. In their papers,
Defendants cited and reproduced a Nevada federal district court's orders from Montgomery's lawsuit against eTreppid in which the software had been excluded from a government-endorsed Protective Order. In that case, Montgomery had been ordered to produce, and then held in contempt for not producing, his software. See Defs.' Pre-Hearing Mem. at 2–3, ECF No. 94; id. Exs. 2–6.
On August 19, two days prior to the discovery hearing before Magistrate Judge Goodman, Montgomery apparently turned over what he would later claim is his only copy of the software to the FBI, along with a large volume of other computer drives and electronic information, in connection with an unrelated criminal investigation. [9] At his deposition, which was held on August 20, he confirmed this series of events. See Montgomery Dep. at 127:12–133:19, ECF No. 166-2. And at the motion hearing the next day, Montgomery's counsel, Mr. Klayman, represented to the court that the software had been turned over to the FBI. See, e.g. , Tr. of Disc. Hr'g at 6:25–7:10, ECF No. 110.
Mr. Klayman also conceded that Defense counsel was not given advanced warning of the transfer, but he did represent that Montgomery had arranged to have "continuing access to documentation which is not classified." Id. at 16:21–17:4.
9. Both in their filings and throughout the course of the discovery dispute, Montgomery and his counsel repeatedly invoke this purported whistleblower investigation concerning illegal government surveillance on American citizens, legislators, judges, and other persons. Beyond the fact that Montgomery claims that the software relevant to this case was bound up among the material he provided to the FBI to substantiate his allegations, he never meaningfully explains any connection between those allegations and the subject of the Chapter. Therefore, the Court will not discuss it further. In his Amended Complaint, Montgomery does allege that Defendants' "tortious actions alleged herein were furthered and aided and abetted by the CIA and the NSA, who want to destroy Plaintiff Montgomery to prevent him from disclosing as a whistleblower the full extent of their unconstitutional and illegal Government surveillance on American citizens to the Congress, the Inspector General, and to the courts." Am. Compl. ¶ 256. Beyond the fact that Risen admits he spoke with certain CIA officials and officials from other government agencies, Montgomery has provided no evidence supporting this allegation. He also suggests that government officials are "falsely discrediting me to cover up wrong-doing." Am. Compl. Ex. C. ¶ 61. To the extent this allegation is relevant to Montgomery's claims that government officials' potential for bias should have provided Risen with reason to doubt the allegations made in the Chapter, the Court considers those assertions in the actual malice context, below.
Following the hearing,
Magistrate Judge Goodman ordered Montgomery to "use his self-described right of continued access to non-classified information ... and produce the software to Defendants" by September 4, and to advise FBI General Counsel James Baker and Assistant U.S. Attorney Deborah Curtis of the order. Post-Disc. Hr'g Order at 2–3, ECF No. 107. Montgomery moved to stay that order pending resolution of his objection to the order before the district court, but Magistrate Judge Goodman denied that motion. See Pl.'s Mot. to Stay Implementation of Para. 5 of Magistrate's Order of Aug. 22, 2015, ECF No. 112; Order Den. Pl.'s Mot. to Stay One Para. of Disc. Order, ECF No. 122.
Montgomery failed to produce the software, and instead filed an objection to the magistrate judge's order, which remains pending. See Pl.'s Obj. to Portions of Magistrate Judge's Order of Aug. 22, 2015, ECF No. 125.
His primary argument was that the software is "nothing more than a red herring" and irrelevant to the litigation because Risen admits he never reviewed or had access to the software when writing his book. Id. at 3–6. In addition, Montgomery argued that Defendants had not properly designated an expert witness to analyze the software, because they had only provided the name of the expert and not the additional information required by Federal Rule of Civil Procedure 26.1. Id. at 7.
On September 8, 2015, James Baker, the FBI's General Counsel, responded by letter, disputing Mr. Klayman's representations concerning Montgomery's continued access to the software and stating that Montgomery "did not associate potential retrieval of this information [certain personal information] with any pending civil litigation." Letter from James A. Baker, Gen. Counsel, FBI, to Larry Klayman (Sept. 8, 2015), ECF No. 126. Mr. Baker also wrote that the government "resolved to treat the materials under review as presumptively classified for security purposes," and "neither agreed to undertake, nor understood any obligation to conduct, a classification review of any of these materials for the purpose of any civil litigation." Id. Nevertheless, the government stated that it would be "prepared to facilitate Mr. Montgomery's reasonable access to unclassified information resident on the drives" but noted the burden that the government would undertake if it were to search for the software, without specific instructions, among the 51.6 million files and 600 million pages of documents Montgomery represented were contained on the hard drives. Id. As a result, the government requested that Montgomery provide several pieces of information necessary to identify the software, and said that if the software was located "appropriate U.S. Government agencies and/or departments will conduct a classification review of the software." Id. Mr. Klayman and his paralegal thereafter filed declarations reiterating that they did inform the government that Montgomery was involved in civil litigation and that Defendants had asked for access to the software. See Notice of Filing of Decls., ECF No. 127.
Magistrate Judge Goodman held a second hearing on October 16, 2015. At that hearing, Mr. Klayman argued that he was not certain whether the software was in fact contained among the materials turned over to the FBI. Tr. of Disc. Hr'g at 10:17–22, ECF No. 163. He also claimed that he did not know whether or not the software was classified. Id. at 15:20–16:9. Following the hearing, Magistrate Judge Goodman ordered Montgomery to turn over to the FBI a comprehensive set of instructions as to how to pinpoint the software, and to produce the software to the Defendants by October 26, 2015. He also instructed Montgomery to produce all of his correspondence with the FBI up until that point. See Post-Disc. Hr'g Admin. Order, ECF No. 154.
On October 21, Montgomery then filed an affidavit contending, for the first time, that "upon searching my memory, I do not believe that I have had access to any of the subject software, nor did I provide it to the [FBI] when I turned over the drives." Montgomery Decl., ECF No. 158-1.
Nevertheless, he claimed that he would provide additional information to the FBI that would enable the agency to locate the software, if it existed, on his drives.
On October 23, in an e-mail to Mr. Klayman, FBI Assistant General Counsel Ted Schwartz informed Mr. Klayman that Montgomery had not provided the information the agency requested in its September 8, 2015 letter. See E-mail from Ted Schwartz, Assistant Gen. Counsel, FBI, to Larry Klayman (Oct. 23, 2015, 3:44 PM), ECF No. 166-4. Mr. Schwartz also pointed out that Montgomery had now represented that he does not believe the software was located on the drives. Id. Therefore, Mr. Schwartz stated that "the FBI will not search the drives to locate software requested in the Risen litigation." Id.On October 26, 2015, Montgomery filed another objection to Magistrate Judge Goodman's most recent order that he produce the software, claiming that he had made a good faith effort to facilitate the search of the software. See Pl.'s Obj. to Magistrate Judge's Order of Oct. 19, 2015 & Req. Stay, ECF No. 164.
Despite Mr. Schwartz's October 23 representation to the contrary, Montgomery claimed that the "FBI is working with due speed to search through the millions of files in order to determine whether such software does exist in the documents provided by Plaintiff," and again reiterated his contentions that the software was not relevant and that Defendants had failed to properly designate an expert to analyze it. Id. at 6, 10–11. Shortly thereafter, Defendants filed a motion for spoliation sanctions, arguing that Montgomery had spoliated the software by providing his only copy to the FBI. See Defs.' Mem. Supp. Mot. for Sanctions, ECF No. 166. Defendants sought dismissal of the case and attorneys' fees. See id. at 1.
On December 11, 2015, Mr. Schwartz informed Mr. Klayman, by e-mail, that because Mr. Montgomery had not provided the necessary information and no longer believed that the FBI was in possession of the software, the agency's October 23 position—that they would not search for the software—remained unchanged. [10] See E-mail from Ted Schwartz, Assistant Gen. Counsel, FBI, to Larry Klayman (Dec. 11, 2015, 10:43 PM), ECF No. 196-1.
10. Although Montgomery initially moved to file Mr. Klayman's communications with the FBI regarding the search for the software under seal, he has since withdrawn that request. The communications can be found on the docket at ECF No. 273. Those filings include several e-mails from Mr. Klayman to General Counsel James Baker in November 2015 raising concerns about Mr. Schwartz's responses, but there is no indication in the record of Mr. Baker's response, if any.
Nevertheless, Mr. Klayman represented at the January 5, 2016 sanctions hearing that officials on the "criminal side" of the FBI continue to search for the software, at least incidentally. He argued that Mr. Schwartz and those on the "civil side" of the FBI were not involved in that process. He claimed that they were searching everything on Montgomery's drives as part of the criminal investigation and that Mr. Klayman continued to advise them to keep the software relevant to this litigation in mind. See Sanctions Hr'g Tr. at 54:4–58:15. [11]
11. In response to Magistrate Judge Goodman's invitation, Defendants filed five specific questions for the court to ask Montgomery's counsel during the sanctions hearing, requesting that the document be sealed, at a minimum, through the conclusion of the hearing. See Defs.' Mot. to Seal, ECF No. 210; see also Defs.' Renewed Mot. to Seal, ECF No. 269. That hearing having concluded, the Court will deny the motion to seal.
