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Wyoming Corporate Services v. CNBC, LLC

United States District Court, D. Wyoming

July 11, 2014

WYOMING CORPORATE SERVICES, Plaintiff,
v.
CNBC, LLC, a Delaware corporation, and REUTERS AMERICA LLC, a Delaware corporation, and DOES 1-10, Defendants

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Wyoming Corporate Services, Plaintiff: Graham H Norris , Jr, LEAD ATTORNEY, Provo, UT.

For CNBC LLC, a Delaware corporation, Reuters America LLC, a Delaware corporation, Defendants: Katherine M Bolger, LEAD ATTORNEY, PRO HAC VICE, LEVINE SULLIVAN KOCH & SCHULZ LLP, New York, NY; Khale J Lenhart, Robert Carl Jarosh, LEAD ATTORNEYS, HIRST APPLEGATE, LLP, Cheyenne, WY; Mara J Gassmann, LEAD ATTORNEY, PRO HAC VICE, LEVINE SULLIVAN KOCH & SCHULZ LLP, Washington, DC; Thomas B Kelley, LEAD ATTORNEY, PRO HAC VICE, LEVINE SULLIVAN KOCH & SCHULZ LLP, Denver, CO.

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ORDER GRANTING DEFENDANTS' CONVERTED MOTION FOR SUMMARY JUDGMENT

NANCY D. FREUDENTHAL, CHIEF UNITED STATES DISTRICT JUDGE.

This matter is before the Court on Defendants' converted Motion for Summary Judgment. Having considered the converted motion, the response, the reply, and otherwise being fully informed in the premises, the Court concludes the converted motion is GRANTED.

Background

In 2014, CNBC re-published a 2011 article by Reuters. Both articles concerned Wyoming Corporate Services's (WCS's) line of business: creating and incorporating businesses. In 2011, Reuters published an article on its wire service detailing this industry. Doc. No. 19-12, pp. 4--7 (2011 Article). The Article chronicled " the mass production of paper businesses." Id. at 4. It identified Delaware, Wyoming, and Nevada as " hotbeds" for " mass incorporators" because of their " light regulatory touch." Id. The 2011 Article stated how businesses, such as WCS, have a number of companies " for sale" in a number of states. Id. at 5. While noting that services provided by incorporators, such as WCS, " serve legitimate services," the 2011 Article discussed how some utilize their services to further illegitimate/illegal means. See id. at 5 (noting WCS operates " legally," " [b]ut clients of [WCS] have run into trouble" ). It provided examples of how some used services provided by incorporation businesses, such as WCS, to create a " maze" of companies and businesses to protect their illegal activities. For example, it noted how a former Ukrainian

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prime minister used shell companies and offshore bank accounts to create a " labyrinthine" paper trail to hide stolen Ukrainian government funds. Id. at 5. One of the companies he used was registered at WCS's former headquarters in Cheyenne. Id. It also discussed how Ira N. Rubin, as alleged by federal prosecutors, used 18 different " front companies" to further his telemarketing scams. Id. at 6. One of the companies used was also registered at WCS's former headquarters in Cheyenne. Id. The 2011 Article alleged that some use shelf companies " [t]o hide who they are and what they are doing." Id.

WCS never sued Reuters based on the 2011 Article. On January 23, 2014, CNBC republished Reuters's 2011 Article almost verbatim. Doc. No. 19-13, pp. 5-9 (2014 Article). The only differences were: (1) the title; (2) the picture used; and (3) the date of publication. Doc. No. 25-1, p. 3 (Affidavit of Gerald Pitts). On February 4, 2014, WCS sued both Reuters and CNBC for defamation. WCS sought " at least $10,000,000" in damages. WCS identified twenty-two allegedly false statements in the 2014 Article. Doc. No. 2 (Complaint). On March 31, 2014, Defendants moved to dismiss the complaint. Doc. No. 18. After reviewing the filings attached to Defendants' motion, the Court converted their motion to dismiss into a motion for summary judgment. Doc. No. 24. For the reasons discussed below, the Court concludes the converted motion is GRANTED.

Standard of Review

" The Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. Rule 56(a); Mata v. Anderson, 635 F.3d 1250, 1252 (10th Cir. 2011). In determining whether summary judgment is appropriate, the Court views the evidence and draws all reasonable inferences therefrom in the light most favorable to the nonmoving party. Mumby v. Pure Energy Servs. (USA), Inc., 636 F.3d 1266, 1269 (10th Cir. 2011) (citation omitted). To survive a motion for summary judgment, there must be more than " [t]he mere existence of a scintilla of evidence in support of the [nonmoving party's] position . . . there must be evidence on which the jury could reasonably find for the [nonmoving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Hull v. I.R.S., U.S. Dept. of Treasury, 656 F.3d 1174, 1196 (10th Cir. 2011). A fact is material if, under the applicable substantive law, it is " essential to the proper disposition of the claim." Wright ex rel. Trust Co. of Kan. v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). An issue of fact is " genuine" if " there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).

When moving for summary judgment, the initial burden of persuasion rests squarely on the moving party. Trainor v. Apollo Metal Specialties, Inc., 318 F.3d 976, 980 (10th Cir. 2002). The moving party has the initial burden of production on a motion for summary judgment and the burden to establish that summary judgment is appropriate as a matter of law. Kannady v. City of Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010). If the movant carries the initial burden, " the nonmovant may not rest on its pleadings, but must bring forward specific facts showing a genuine issue for trial as to those dispositive matters for which it carries the burden of proof." Id. " To defeat a motion for summary judgment, evidence, including testimony, must be based on more than mere speculation, conjecture, or surmise."

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Bones v. Honeywell Intern, Inc., 366 F.3d 869, 875 (10th Cir. 2004).

Discussion

WCS brings a single claim for defamation against Defendants. Doc. No. 2. It alleges the 2014 Article contains " at least" twenty-two false statements. They are:

A. " The CNBC Article's title is 'Investigation unearths secret of the Great Plains.' However, . . . there is no investigation by Reuters, CNBC or anyone else currently being conducted, nor has any investigation been conducted recently."
B. " The Article states that more than 2,000 companies are registered at [] 2710 Thomes Avenue, in Cheyenne, Wyoming."
C. " The Article States that 'the walls of the main room at [2710 Thomes Avenue] are covered floor to ceiling with numbered mailboxes.'"
D. " The Article states that 'a bulky copy machine sits in the kitchen." '
E. " The Article states that 'in the living room, a woman in a headset answers calls and sorts ...

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