Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_03-cv-00371/USCOURTS-casd-3_03-cv-00371-2/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1962 Racketeering (RICO) Act

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 On March 11, 2004, on stipulation, the Court dismissed Plaintiffs Herbert Nevyas and

Nevyas Eye Associate’s claims against MDTV and Argen.

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

EYE LASER CARE CENTER, LLC

Plaintiff/Counter Defendant,

CASE NO. 03CV371-BEN (AJB)

ORDER GRANTING MOTION

FOR SUMMARY JUDGMENT

[Doc. No. 183]

vs.

MDTV MEDICAL NEWS NOW Inc., PAUL

ARGEN

Defendants/Counterclaimants.

Plaintiff/Counter Defendant Eye Laser Care Center LLC (“Eye Laser”) moves for

summary judgment on all claims Defendants/Counterclaimants MDTV Medical News Now, Inc.

(“MDTV”) and Paul Argen (“Argen”) (collectively “Counterclaimants”) assert against it. For the

reasons that follow, Eye Laser is entitled to judgment. 

BACKGROUND

 This diversity action was initiated by Plaintiffs Eye Laser, Nevyas Eye Associates and

individual doctors--Herbert Nevyas, Michael Mazaheri, Stephen Weinstock, Norman Rappaport,

and Warren Cross against MDTV and MDTV’s Chief Executive Officer, Argen (collectively

“Plaintiffs”).1 Plaintiffs purchased commercial advertising and marketing programs from MDTV. 

Plaintiffs allege MDTV and Argen misrepresented their services, overcharged Plaintiffs, did not

Case 3:03-cv-00371-BEN-AJB Document 250 Filed 01/22/07 Page 1 of 8
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 MDTV and Argen also asserted counterclaims against other Plaintiffs, but only the claims

against Eye Laser are addressed in this Order. 

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produce their television programs with adequate production capabilities, did not run their

television programs at the appropriate times, did not honor the exclusivity provisions, and refused

to refund their money. 

MDTV and Argen answered and asserted the following counterclaims against Eye Laser2:

(1) breach of duties of confidentiality and loyalty; (2) tortious interference with contractual

relations and with prospective economic advantage; (3) breach of contract; (4) breach of duty of

good faith and fair dealing; (5) conversion; and (6) defamation. 

MDTV and Argen make no specific allegations against, or attribute specific conduct to,

Eye Laser as a separate entity. Their claims instead appear to be based on conduct or statements

attributed to Eye Laser’s owner, Dr. Lee T. Nordan (“Nordan”), and Eye Laser’s attorney Richard

Sax (“Sax”). Specifically, the Counterclaimants allege “Sax, a business partner in Dr. Nordan’s

practice, who was involved in negotiating the terms of Dr. Nordan’s contract with MDTV,

contacted . . . Argen . . ., and threatened . . . Argen with a baseless Class Action law suit if MDTV

did not pay Sax over $100,000.00 as compensation for alleged losses in his business with Dr.

Nordan resulting from contracted advertising that allegedly did not produce satisfactory results.” 

(Defendants’ Answer and Counterclaim ¶ 57). The Counterclaimants further allege Dr. Weinstock

“colluded” with Plaintiffs in this action, including Dr. Nordan “and/or shared trade secrets

belonging to MDTV with each other, individually or jointly, informing each of the actual costs

associated with MDTV’s business plans and operations, including costs of purchasing cable

television time, the sources thereof, and costs associated with producing advertising associated

with contracts belonging to MDTV.” (Id. ¶ 59). 

STANDARD OF REVIEW/BURDEN OF PROOF ON SUMMARY JUDGMENT 

As noted, Eye Laser is moving for summary judgment on counterclaims asserted against it

by MDTV and Argen--claims which MDTV and Argen would have the burden of proof at trial. 

Thus, Eye Laser “is not required to produce evidence showing the absence of a genuine issue of

material fact with respect to” the asserted counterclaims. United Steelworkers of America v.

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3

 See also Shawmut Bank, N.A. v. Kress Associates, 33 F.3d 1477, 1497-1498 (9th Cir. 1994)

(“[T]he Supreme Court squarely rejected the idea that the party moving for summary judgment must

itself produce evidence if it is to show the absence of a genuine issue of material fact. Rather, the

Court held, the moving party’s burden on summary judgment may be discharged by showing-that is,

pointing out to the district court-that there is an absence of evidence to support the nonmoving party’s

case.” (internal quotations and citation omitted)); Maffei v. Northern Ins. Co. of New York, 12 F.3d

892, 899 (9th Cir. 1993) (“The moving party must show the absence of a genuine issue concerning

any material fact, but it need not produce evidence to do so; it may merely point out to the court the

absence of evidence.” (citation omitted)). 

4

 “A ‘material’ fact is one that is relevant to an element of a claim or defense and whose

existence might affect the outcome of the suit. The materiality of a fact is thus determined by the

substantive law governing the claim or defense.” T.W. Elec. Service, Inc. v. Pacific Elec. Contractors

Ass’n, 809 F.2d 626, 630 (9th Cir. 1987).

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Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (citation omitted). Nor is Eye Laser

required to “support [its] motion with affidavits or other similar materials negating” the

counterclaims. Id. at 1543. Rather, Eye Laser “need[s] only point to shortfalls in the

[Counterclaimants’] case to demonstrate the absence of evidence” supporting their counterclaims. 

United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1543 (9th Cir. 1989)

(alterations not in original).3 Eye Laser may do this by simply pointing to the pleadings and

arguing that Counterclaimants have failed to establish an element essential to their case. See

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

To defeat summary judgment, MDTV and Argen “must respond with more than mere

hearsay and legal conclusions.” Orr v. Bank of America, NT & SA, 285 F.3d 764, 783 (9th Cir.

2002) (citation omitted). MDTV and Argen also “must do more than simply show that there is

some metaphysical doubt as to the material facts4

.” Id. (citation omitted); see also Matsushita

Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 586 (1986). Rather, MDTV and Argen must

come forward with sufficient evidence demonstrating to the Court that there are genuine issues of

material fact to be decided at trial. Fed. R. Civ. P. 56(e). To do so, MDTV and Argen “may not

rely merely on the unsupported or conclusory allegations of [its] pleadings.” Coverdell v.

Department of Social and Health Services, State of Wash., 834 F.2d 758, 769 (9th Cir. 1987)

(citations omitted); see also Celotex Corp., 477 U.S. at 324. That is the Counterclaimants “may

not rest upon the mere allegations or denials of [their] pleadings”, but must respond “by affidavits

or . . . must set forth specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P.

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5

 “In a diversity case, a federal court must follow the substantive law of the state in which it

sits.” Moore v. Greene, 431 F.2d 584, 589 (9th Cir. 1970) (citation omitted); see also Snead v.

Metropolitan Property & Cas. Ins. Co., 237 F.3d 1080, 1090 (9th Cir. 2001). 

6

 California’s litigation privilege doctrine is codified under California Civil Code § 47(b). 

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56(e); Celotex Corp., 477 U.S. at 324. Put differently, the Counterclaimants must “present

affirmative evidence from which a jury might return a verdict in [their] favor.” Phelps Dodge

Corp., 865 F.2d at 1542 (citation and internal quotation omitted). And, “a complete failure of

proof concerning an essential element of [their] case necessarily renders all other facts

immaterial.” Celotex Corp., 477 U.S. at 323. 

DISCUSSION

Eye Laser has challenged the veracity of the counterclaims asserted against it, and MDTV

and Argen have neither submitted evidence nor otherwise controverted Eye Laser’s supporting

evidence to present a jury question. For example, Eye Laser argues the counterclaims are barred

under California5

’s litigation privilege doctrine6 to the extent they are premised on

communications or conduct in furtherance of filing the complaint in this case against MDTV and

Argen. The Court agrees. 

“For well over a century, communications with ‘some relation’ to judicial proceedings

have been absolutely immune from tort liability by the privilege codified as section 47(b).” Kimes

v. Stone, 84 F.3d 1121, 1126 (9th Cir. 1996 ) (citation omitted). “[T]he privilege applies to any

communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other

participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some

connection or logical relation to the action.” Id. at 1127. 

“The California courts have applied the privilege quite expansively.” Rodriguez v.

Panayiotou, 314 F.3d 979, 988 (9th Cir. 2002) (citation omitted); see also Sacramento Brewing

Co. v. Desmond, Miller & Desmond, 75 Cal. App. 4th 1082 1089 (1999) (The litigation privilege 

“should be denied only where [the communication] is so palpably irrelevant to the subject matter

of the action that no reasonable person can doubt its irrelevancy.” ). “Although originally enacted

with reference to defamation, the privilege is now held applicable to any communication, whether

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or not it amounts to a publication, and all torts except malicious prosecution.” Stone, 84 F.3d at

1127 (citation omitted). That is the only tort cause of action which can be based upon the

initiation of a lawsuit (or communicative acts related to the lawsuit) is that of malicious

prosecution.” Ludwig v. Superior Court, 37 Cal. App. 4th 8, 24 (1995). “The privilege protects

attorneys, judges, jurors, witnesses, and other court personnel.” Id. (citation omitted). “Any doubt

as to whether such relationship or connection existed must be resolved in favor of a finding of

privilege.” Costa v. Superior Court, 157 Cal. App. 3d 673, 678 (1984) (citations omitted). 

The privilege applies to statements even if made “outside the courtroom and no function of

the court or its officers is involved.” Panayiotou, 314 F.3d at 988 (citation omitted). “The

privilege has also been applied to pre-litigation communications.” Id. (citation omitted); see also

Hagendorf v. Brown, 699 F.2d 478, 480 (9th Cir. 1983). Accordingly, “California courts have

ruled explicitly that the privilege extends to preliminary communications such as demand letters

from attorneys . . . [and that] [f]iling suit before the publication is not required.” Brown, 699 F.2d

at 480 (citations omitted). “The litigation privilege is absolute; it applies, if at all, regardless

whether the communication was made with malice or the intent to harm. Put another way,

application of the privilege does not depend on the publisher’s motives, morals, ethics or intent.”

American Products Co., Inc. v. Law Offices of Geller, Stewart & Foley, LLP, 134 Cal. App. 4th

1332, 1342 (2005) (internal quotations omitted). 

Here, even if the Counterclaimants’ allegations against Eye Laser are true, they are

primarily based on communications or actions that were preparatory to or in anticipation of

bringing of the original action against MDTV and Argen, and thus barred under the litigation

privilege doctrine. As noted, the Counterclaimants allege “Sax, a business partner in Dr. Nordan’s

practice, who was involved in negotiating the terms of Dr. Nordan’s contract with MDTV,

contacted . . . Argen . . ., and threatened . . . Argen with a baseless Class Action law suit if MDTV

did not pay Sax over $100,000.00 as compensation for alleged losses in his business with Dr.

Nordan resulting from contracted advertising that allegedly did not produce satisfactory results.” 

(Defendants’ Answer and Counterclaim ¶ 57). The Counterclaimants further allege Dr. Weinstock

“colluded” with Plaintiffs in this action, including Dr. Nordan “and/or shared trade secrets

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belonging to MDTV with each other, individually or jointly, informing each of the actual costs

associated with MDTV’s business plans and operations, including costs of purchasing cable

television time, the sources thereof, and costs associated with producing advertising associated

with contracts belonging to MDTV.” (Id. ¶ 59). 

The litigation privilege, however, includes statements concerning litigation threatened in

the event a demand is not met. See Aronson v. Kinsella, 58 Cal. App. 4th 254, 260-261 (1997);

see also American Products Co., Inc., 134 Cal. App. 4th at 1341(“The privilege has been broadly

applied to demand letters and other prelitigation communications by attorneys.”); Lerette v. Dean

Witter Organization, Inc., 60 Cal. App. 3d 573, 577 (1976) (settlement demand letter was fully

privileged as preliminary to a judicial proceeding). Thus, any alleged unlawful demands fall

within the ambit of the litigation privilege because they were part of a judicial proceeding (the

initial lawsuit against MDTV and Argen) and were made to achieve an object of the litigation. 

The privilege also encompasses statements made to third parties who have a substantial interest in

the outcome of the litigation. Costa v. Superior Court, 157 Cal. App. 3d 673, 678 (1984). 

Therefore, “the privilege has been applied to publications which were private communications

between parties and which communications were related not only to actual but potential court

actions.” Chen v. Fleming, 147 Cal. App. 3d 36, 41 (1983) (citation omitted). Accordingly,

counterclaims are barred under the litigation privilege doctrine. 

The Counterclaimants first argue their defamation claim should survive, because of certain

paragraphs in the complaint filed against them. Specifically they allege the complaint stated that

MDTV’s “marketing program and television show was a failure and had not produced new

patients or increase revenues that would come close to the amount of fees charges Rapport had

paid MDTV” and that “after two years Weinstock had received very few new patients that had

heard of [him] from the television show . . . and the show had not produced an increase in revenue

that would come close to the amount of fees and charges . . . paid MDTV.” (Counterclaimants’

Opposition at ¶¶ 3 and 4 (alterations in original)). 

There is, however, no question that the statements in support of the complaint are subject

to the litigation privilege. It “cannot be disputed that the filing of a lawsuit is a publication in the

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course of a judicial proceeding.” Abraham v. Lancaster Community Hospital, 217 Cal. App. 3d

796, 822 (1990) (citation and internal quotations and alterations removed). The statements were

thus clearly made in a judicial proceeding, by a litigant or litigant’s counsel who had substantial

interest in the outcome of the litigation, and are directly and logically related to the legal theories

against the Counterclaimants. Further, “communications made in connection with litigation do not

necessarily fall outside the privilege merely because they are, or are alleged to be, fraudulent,

perjurious, unethical, or even illegal . . . .” Blanchard v. DirecTV, 123 Cal. App. 4th 903, 921

(2004) (citation and internal quotations omitted).

The Counterclaimants next argue that Eye Laser somehow waived the privilege. 

“California courts will find waiver when a party intentionally relinquishes a right or when that

party’s acts are so inconsistent with an intent to enforce the right as to induce a reasonable belief

that such right has been relinquished.” Old Republic Ins. Co. v. FSR Brokerage, Inc., 80 Cal. App.

4th 666, 678 (2000) (citations and internal quotations omitted). “The burden . . . is on the party

claiming a waiver of a right to prove it by clear and convincing evidence that does not leave the

matter to speculation, and doubtful cases will be decided against a waiver.” Id. (citations and

internal quotations omitted). Simply put, MDTV has failed to show waiver.

MDTV argues Eye Laser’s attorney, Sax, waived any and all privileges for his clients

during a hearing before the Court in March 2004. The transcript of that hearing, however, does

not even mention or discuss litigation privilege, much less provide a “clear expression” of any

party’s intent to waive such right or that his conduct warrants the inference that Eye Laser has

relinquished that right. See Davies v. Grossmont Union High School Dist., 930 F.2d 1390, 1395

(9th Cir. 1991). 

///

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///

///

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CONCLUSION

The Counterclaimants have failed to create a triable issue of fact on their counterclaims

against Eye Laser, and thus have failed to sustain their burden in opposing Eye Laser’s summary

judgment motion. Summary judgment is required “against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party’s case, and on which that

party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322. Accordingly, Eye

Laser is entitled to judgment on all counterclaims asserted against it. 

SO ORDERED.

 DATED: January 22, 2007

Hon. Roger T. Benitez

United States District Judge

Case 3:03-cv-00371-BEN-AJB Document 250 Filed 01/22/07 Page 8 of 8