Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-02078/USCOURTS-casd-3_19-cv-02078-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity Action

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19-CV-2078-CAB-KSC

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

HEATHER HOLLANDER KEELY, 

STEVE WOLF, and BRITTANY 

DOSTER,

Plaintiffs,

v.

SKYLAB APPS, INC. et al,

Defendants.

AND RELATED COUNTERCLAIMS

Case No.: 19-CV-2078-CAB-KSC

ORDER DENYING MOTION TO 

DISMISS AMENDED 

COUNTERCLAIM

[Doc. No. 16]

On January 20, 2020, Defendants Skylab Apps, Inc. (“Skylab”) and Dean Grey filed 

and answer and first amended counterclaim that asserted three claims against Plaintiffs: (1) 

breach of contract; (2) intentional interference with prospective economic advantage; and 

(3) defamation. On February 3, 2020, Plaintiffs filed a four page motion to dismiss all 

three counterclaims or for a more definite statement. The only argument in support of the 

motion is that the counterclaim does not comply with Federal Rule of Civil Procedure 9(g) 

because it does not state special damages with specificity. Along these lines, Plaintiffs 

argue that a cause of action for trade libel requires pleading special damages.

Yet, there is no counterclaim for trade libel. The defamation claim asserted is not 

the same as trade libel.

Case 3:19-cv-02078-CAB-KSC Document 28 Filed 03/13/20 PageID.<pageID> Page 1 of 2
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19-CV-2078-CAB-KSC

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Under California law, “trade libel is an intentional disparagement of the 

quality of property, which results in pecuniary damage.” Witkin, B., 5 

Summary of California Law, Torts § 573 (9th ed. Bancroft–Whitney 

Co.1988); Leonardini v. Shell Oil Co., 216 Cal.App.3d 547, 574, 264 

Cal.Rptr. 883 (1989) (citing Witkin). Trade libel is more like unfair 

competition than true libel and is not actionable as defamation. Microtec 

Research, Inc. v. Nationwide Mutual Ins. Co., 40 F.3d 968, 972 (9th 

Cir.1994). Although the defamatory torts of slander and libel are similar to 

what is known in California as “trade libel,” the torts are distinct and must be 

treated individually. Thus, “an ‘action for defamation is designed to protect 

the reputation of the plaintiff, and the judgment vindicates that reputation, 

whereas the action for disparagement is based on pecuniary damages and lies 

only where such damage has been suffered.’” Leonardini v. Shell Oil Co., 216 

Cal.App.3d 547, 573, 264 Cal.Rptr. 883 (1989) (quoting 5 Witkin, Summary 

of Cal.Law, Torts, pp 661–62 (9th ed.1988)).

Films of Distinction, Inc. v. Allegro Film Prods., Inc., 12 F.Supp. 2d 1068, 1081–82 (C.D. 

Cal. 1998). Thus, Plaintiffs’ argument is inapplicable. Because Plaintiffs do not offer any 

authority for the proposition that any of the actual claims asserted require pleading special 

damages with specificity under Rule 9(g), the motion to dismiss is DENIED.

It is SO ORDERED.

Dated: March 13, 2020

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