Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_16-cv-01306/USCOURTS-azd-2_16-cv-01306-0/pdf.json

Nature of Suit Code: 320
Nature of Suit: Assault, Libel, and Slander
Cause of Action: 28:1441 Petition for Removal Libel,Assault,Slander

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

David Cains, et al., 

Plaintiffs, 

v. 

Elisa Grassi, et al., 

Defendants. 

No. CV-16-01306-PHX-ROS

ORDER 

 Plaintiffs and Defendants are involved in the purchase, sale, and marketing of 

Arabian horses. In 2013, Defendants allegedly took numerous actions meant to “ruin” 

Plaintiffs’ reputations and prospects in the Arabian horse industry. Before the present 

suit was filed, Plaintiffs and Defendants were involved in another lawsuit, also pending in 

the District of Arizona. Plaintiffs served Defendants with the summons and complaint in 

the present suit while Defendants were in Arizona for depositions in that separate lawsuit. 

Defendants now argue they were immune from service of process while in Arizona. 

Defendants also argue, assuming they were immune from service of process, personal 

jurisdiction does not exist. Finally, Defendants argue the complaint fails to state claims 

on which relief can be granted. Only this last contention has merit. 

BACKGROUND 

 Plaintiffs David Cains and Scott Bailey live in Arizona and work in the Arabian 

horse industry. Bailey owns and operates Stonewall Farms Arabians, LLC, as well as 

Knight Media Networks, Inc. The complaint does not explain the nature of these two 

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entities’ activities but it appears Stonewall buys and sells horses while Knight owns and 

operates the “Arabhorse.com network.” That network apparently operates horse-related 

websites for third parties. (Doc. 12 at 6). 

 Defendant Elisa Grassi works as an “independent contractor” for “persons and 

entities who own Arabian horses.” (Doc. 13-1 at 2). Ms. Grassi performs this work with 

her “significant other and life partner,” Frank Sponle. Grassi and Sponle live in Germany 

but they conduct their business around the world. That business consists of “finding 

horses (or interests in horses such as breeding or embryos) for [their] clients to buy.” 

(Doc. 13-1 at 2). One of their clients is Sheikh Ammar bin Humaid Al Nuaimi, the 

Crown Prince of the Emirate of Ajman. 

 As of February 2012, Stonewall owned a horse named La Bella Versace. In late 

February 2012, Grassi, acting on behalf of Sheikh Ammar, expressed an interest in 

purchasing La Bella Versace. Cains informed Grassi that any sale would have to include 

a right for Cains to retrieve two embryos from La Bella Versace. Grassi agreed to this 

condition provided “the embryos were retrieved before La Bella Versace was shipped out 

of the United States.” (Doc. 12 at 4). Stonewall sold the horse to Sheikh Ammar on 

February 25, 2012. After that date, but before La Bella Versace left Arizona, Cains 

retrieved two embryos from La Bella Versace. Once the embryos were retrieved, La 

Bella Versace was shipped to California. 

 In 2013, Cains and Bailey “acted as Sheikh Ammar’s agent” in purchasing a horse 

for him at the Scottsdale Arabian Horse Show. (Doc. 12 at 5). Grassi and Sponle were 

not involved in this transaction but they later demanded they receive a commission from 

Cains and Bailey based on that sale. After Cains and Bailey refused to pay a 

commission, “Grassi told Bailey ‘I will ruin you in the Arabian horse business.’” (Doc. 

12 at 5). Grassi and Sponle then “began a campaign to financially ruin [Plaintiffs] . . . by 

making false statements about the Plaintiffs to others in the Arabian Horse Industry.” 

(Doc. 12 at 6). The centerpiece of that campaign consisted of Grassi and Sponle telling 

third parties that “Bailey, Cains and/or Stonewall stole horse embryos from Sheikh 

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Ammar.” (Doc. 12 at 7). Grassi and Sponle based this on the fact that embryos were 

retrieved from La Bella Versace after Sheikh Ammar purchased her on February 25. 

Grassi and Sponle also removed their website from Bailey’s Arabhorse.com network and 

induced others to remove their websites as well. 

 On April 16, 2015, a business entity known as Ajman Stud sued Cains, Bailey, and 

Stonewall for breach of contract. (CV-15-1045-DJH, Doc. 1-1 at 34). According to the 

complaint in that action, Sheikh Ammar had transferred all of his interest in La Bella 

Versace to Ajman Stud sometime prior to the suit being filed. The complaint alleged the 

retrieval of embryos after Sheikh Ammar owned La Bella Versace constituted a breach of 

the purchase agreement. In June 2015, Cains, Bailey, and Stonewall answered the 

complaint and the following month the court issued a scheduling order. In early October 

2015, the parties sought a ruling from the court on a discovery dispute regarding 

depositions. 

 According to the parties’ discovery dispute filing, Cains, Bailey, and Stonewall 

wished to depose Sheikh Ammar, Grassi, and Sponle. The parties could not agree on 

whether the depositions were appropriate and, if they were, where they should occur. 

The court resolved the dispute by directing Cains, Bailey, and Stonewall to issue written 

interrogatories to Sheikh Ammar in lieu of his deposition. The court stated, however, 

that Grassi and Sponle could be deposed in Arizona. The relevant portion of the court’s 

order stated “The Court will grant Defendants’ request to take the depositions of Mr. 

Sponle and Ms. Grassi in Arizona.” Grassi and Sponle believed that order was binding 

on them.1

 After the order, the parties negotiated dates for the depositions, scheduling 

them for April 12 and 13, 2016. (Doc. 17-4). 

 

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 This belief is evidenced by statements by Grassi and Sponle in their motion to dismiss as well as their declarations. The motion argues Grassi’s and Sponle’s 

“attendance was required by court order” and they were in Arizona “pursuant to a court order.” (Doc. 13 at 5, 7). In their declarations, Grassi and Sponle both state the court “required [they] be made available for deposition in . . . Arizona.” (Doc. 13-1 at 4, 13-2 

at 4). 

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 On April 11, Grassi and Sponle traveled from Germany to Arizona. Grassi was 

deposed on April 12. On April 13—the day of Sponle’s deposition—Cains, Bailey, 

Stonewall, and Knight filed the present suit against Grassi and Sponle. At the conclusion 

of Sponle’s deposition, Grassi and Sponle were served with the complaint and summons 

in the present suit. Thus, Grassi and Sponle were physically present in Arizona at the 

time they were served. After being served, Grassi and Sponle returned to Germany. A 

short while later, they filed a motion to dismiss arguing they had not been properly 

served, personal jurisdiction did not exist, and the complaint fails to state claims for 

relief. 

ANALYSIS 

Normally, a challenge to personal jurisdiction presents a “threshold matter” that 

must be resolved before any other issue. Sandpiper Vill. Condo. Ass’n., Inc. v. 

Louisiana-Pac. Corp., 428 F.3d 831, 840 (9th Cir. 2005). In this case, however, the issue 

of service of process may dictate the outcome of the personal jurisdiction dispute. That 

is, Grassi and Sponle were in Arizona when they were served and personal jurisdiction 

will exist if that service were permissible. See Burnham v. Superior Court of California, 

Cty. of Marin, 495 U.S. 604, 610 (1990) (“Among the most firmly established principles 

of personal jurisdiction in American tradition is that the courts of a State have jurisdiction 

over nonresidents who are physically present in the State.”). Therefore, the propriety of 

service will be addressed first. 

I. Service was Proper 

 This case was filed in state court and was still in state court at the time Grassi and 

Sponle were served. Because of that, whether service was proper “is strictly a state law 

issue.”2

 Lee v. City of Beaumont, 12 F.3d 933, 936-37 (9th Cir. 1993), overruled on 

 

2

 The parties do not discuss whether Arizona or federal law applies and there is substantial disagreement amongst courts on this issue. See, e.g., Pointer v. Ghavam, 107 

F.R.D. 262, 264 (E.D. Ark. 1985) (discussing issue and citing cases). It appears, however, that when service is attempted before removal, state law should control the 

issue. Id. (when service is completed before removal “the case for using state law, either under Erie principles or under comity principles, becomes overwhelming”). Because Arizona law applies, Grassi’s and Sponle’s reliance on Moylan v. AMF Overseas Corp., 

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other grounds by California Dep’t of Water Res. v. Powerex Corp., 533 F.3d 1087 (9th 

Cir. 2008). Under Arizona law, it is Plaintiffs’ burden to prove proper service. See

Pioneer Fed. Sav. Bank v. Driver, 804 P.2d 118, 122 (Ariz. Ct. App. 1990). 

 According to Grassi and Sponle, Arizona law rendered them immune from service 

because the only reason they were in Arizona was the court’s order in the related suit. 

This immunity, referred to as “process immunity,” is rarely invoked and is a surprisingly 

difficult issue to resolve. As recognized by a court over one hundred years ago, process 

immunity has “engaged the attention of common-law courts under every conceivable 

variety of circumstances” and courts have written “[v]olumes of opinions” consisting of 

“conflicting decisions and almost any dictum that one may be looking for.” Netograph 

Mfg. Co. v. Scrugham, 90 N.E. 962, 962 (Court of Appeals N.Y. 1910). Fortunately, 

Arizona has issued relatively few decisions on process immunity. Unfortunately, those 

decisions do not provide clear guidance. 

 The earliest Arizona decision discussing process immunity appears to be an 

Arizona Supreme Court decision from 1921. In Rizo v. Burruel, 202 P. 234, a citizen of 

Mexico “instituted in the superior court of Yuma county habeas corpus proceedings to 

recover the possession” of his daughter from a couple who had been caring for the child 

for the previous seven years. 202 P. at 235. When the father showed up for the hearing 

on his habeas corpus proceedings, he was served with a petition for adoption filed by the 

couple. The father argued he was immune from service of process because he was in 

Arizona “for the sole purpose of prosecuting a writ of habeas corpus.” Id. The trial court 

rejected this argument and, after a trial, granted the adoption petition and denied the 

petition for writ of habeas corpus. On appeal, the Arizona Supreme Court rejected the 

father’s position regarding process immunity. In doing so, however, the court quoted 

from another opinion that seemed to squarely support the father’s position. 

 354 F.2d 825 (9th Cir. 1965), is not convincing. That case was litigated in Guam and involved a witness who had voluntarily traveled to Guam to testify on behalf of his employer. In determining the witness was immune from service, the Ninth Circuit 

appears to have applied only federal law. Id. at 829. 

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 As quoted by the Arizona Supreme Court, the Supreme Court of Tennessee had 

recently held “[s]uitors, whether plaintiff or defendant, from a foreign jurisdiction are 

exempt from the service of civil process while attending court and for such reasonable 

time before and after trial as may enable them to go from and return to their homes.” Id.

(quoting Sofge v. Lowe, 176 S.W. 106 (1915)). The Arizona Supreme Court concluded 

this broad view of the immunity was inappropriate in the particular factual circumstances 

it was reviewing because the habeas corpus proceedings and the petition for adoption 

presented “the same question.” Id. at 236. The court’s reasoning seems to have been that 

granting the father immunity from service of process would not have accomplished 

anything as the ultimate issue—custody of the child—would have been resolved either in 

the habeas corpus proceedings or the adoption proceedings. Thus, the court concluded 

process immunity was not applicable but made clear it was not deciding what general 

“rule of immunity” should apply in future cases. Id.

 No Arizona appellate court discussed the process immunity holding from Rizo

until 1965. That year, in Turner v. Viault, 400 P.2d 599, the Arizona Court of Appeals 

addressed whether process immunity applied to an individual who had agreed to 

voluntarily appear in Arizona for depositions in a suit between two other parties. The 

individual came to Arizona and was served during his depositions. The trial court 

granted a motion to quash that service. On appeal, the court began its analysis by quoting 

at length from Rizo. The court then quoted from Lamb v. Schmitt, an intervening decision 

by the United States Supreme Court addressing process immunity. As explained in 

Lamb, process immunity was meant to promote “the voluntary attendance of those whose 

presence is necessary or convenient to the judicial administration in the pending 

litigation.” 285 U.S. 222, 225 (1932). And limitations on process immunity had been 

recognized where “the service was made on one whose attendance was not voluntary.” 

Id. at 226. In those situations, service of process “had no tendency to interfere with 

judicial administration.” Id. 

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 Relying on this language from Lamb, as well as language from Rizo, the court of 

appeals in Turner held the “basic principles of exemption of service of process” 

mandated the service be quashed. 400 P.2d at 601. It is unclear what “basic principles” 

the court of appeals was divining from Rizo and Lamb. In particular, it is unclear if the 

court was resting its decision on the witness voluntarily appearing in Arizona or if some 

other consideration mandated the result. 

 The only additional Arizona authority comes from a 1977 case that, quoting 

Turner, stressed process immunity “should not be enlarged beyond the reason upon 

which it is founded, and that it should be extended or withheld only as judicial necessities 

require.” Bradford v. Nat’l Distillers & Chem. Corp., 571 P.2d 1040, 1041 (Ariz. Ct. 

App. 1977). That case, however, did not engage with the merits of process immunity 

because the question presented was whether process immunity was waived by a failure to 

exert it. Id. 

 In light of these Arizona cases, process immunity must be assessed under a factspecific analysis, taking due consideration of the “judicial necessities” at issue. Id. In 

other words, Arizona law does not recognize any bright-line rules involving process 

immunity. Instead, the circumstances of each case will dictate whether process immunity 

is appropriate. Of particular importance, Arizona seems to have a practical view of 

process immunity, recognizing it is a discretionary matter that should turn on “judicial 

necessities” rather than the interests of the litigants. Id. 

 Arizona law is not unique in failing to provide clear rules to govern process 

immunity. As noted earlier, courts outside of Arizona have reached conflicting decisions 

providing support for almost any formulation of process immunity a court wishes to 

deploy. See Netograph Mfg. Co. v. Scrugham, 90 N.E. 962, 962 (N.Y. 1910). Generally, 

however, courts outside of Arizona have been less likely to apply process immunity in 

two circumstances. First, some courts have concluded process immunity “is designed to 

encourage nonresident witnesses to voluntarily enter a jurisdiction.” Am. Centennial Ins. 

Co. v. Handal, 901 F. Supp. 892, 895 (D.N.J. 1995). Thus, a grant of process immunity 

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is appropriate “where a district court wishes to shield an individual from service of 

process to encourage his or her travel to the forum state.” N. Light Tech., Inc. v. N. 

Lights Club, 236 F.3d 57, 63 (1st Cir. 2001). When a witness is present due to a court 

order, i.e. involuntarily, process immunity often is not granted. 

 The second circumstance where other courts have not granted process immunity is 

“where the action in which process is sought to be served is related to the action which is 

responsible for the person being present in the jurisdiction.” Pointer v. Ghavam, 107 

F.R.D. 262, 264 (E.D. Ark. 1985). See also ARW Expl. Corp. v. Aguirre, 45 F.3d 1455, 

1460 (10th Cir. 1995) (process immunity does not apply when witness was in location 

due to related action). Courts have not delineated clear rules for how close of 

relationship between the two actions is required. Instead, there appears to be a general 

guideline that the cases either involve the same parties, the same facts, or one case arose 

as a direct consequence of the other. When two actions are sufficiently related, “good 

judicial administration demands [their] prompt determination . . . and that immunity 

should be withheld.” Immunity from Service of Process—Immunity in Related Actions, 

4A Fed. Prac. & Proc. Civ. § 1080 (4th ed.). 

 The two circumstances where process immunity often is rejected are present here. 

Addressing first the voluntary nature of Grassi’s and Sponle’s presence in Arizona, their 

motion and declarations described their attendance as “required by court order.” (Doc. 

13 at 5). Based on their filings, Grassi and Sponle seemed to be arguing they were in 

Arizona involuntarily. But at oral argument defense counsel changed strategy and argued 

Grassi and Sponle came to Arizona voluntarily. According to defense counsel’s oral 

argument, the order for Grassi and Sponle to appear in Arizona was not binding because 

the court hearing the other suit did not have jurisdiction over them at the time it ordered 

them to appear in Arizona. Thus, defense counsel argued process immunity would be 

appropriate because it would reward Grassi and Sponle for voluntarily coming to 

Arizona. While presenting a difficult issue, defense counsel’s current approach is flawed 

under the undisputed facts. 

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 Whether the court hearing the other suit had jurisdiction over Grassi and Sponle to 

require their attendance in Arizona is not an issue properly litigated in this case. If Grassi 

and Sponle believed the order requiring their attendance had no basis, they could have 

filed a motion asking for reconsideration or at least clarification on whether compliance 

was mandatory. The other court then could have explained the jurisdictional basis for its 

order. That would have been helpful because the other court may have had jurisdiction 

over Grassi and Sponle. Cf. S. Seas Catamaran, Inc. v. Motor Vessel Leeway, 120 F.R.D. 

17, 21 (D.N.J. 1988) (noting “general rule requir[es] plaintiff or its agents to appear for 

the taking of depositions in the district in which the suit is brought”). Grassi’s and 

Sponle’s failure to litigate jurisdiction in the other case left the precise basis for the 

discovery order unclear. This Court is hesitant to interpret the order as having no basis 

such that Grassi and Sponle were, in fact, free to ignore it. 

 But even assuming there were some flaw with the other court’s discovery order, 

the most important developments after that order were Grassi’s and Sponle’s 

interpretation of it and their actions based on it. In seeking process immunity in this case, 

they repeatedly described their trip to Arizona as if they had no choice in the matter. 

According to Grassi, Sponle, and their counsel, the trip to Arizona was “required by court 

order” and “pursuant to court order.” (Doc. 13-1 at 4, 13-2 at 4); (Doc. 13-1 at 4, 13-2 at 

4). Given these statements, it is quite clear Grassi, Sponle, and defense counsel 

subjectively believed the discovery order was binding on them. Conferring process 

immunity to Grassi and Sponle in these circumstances would run counter to the idea that 

process immunity is only meant to incentivize voluntary attendance. Rather than 

promoting voluntary attendance, conferring process immunity to Grassi and Sponle 

would simply be an inappropriate “windfall.” U. S. Nat. Bank of Or. v. Great Republic 

Life Ins. Co., 54 F.R.D. 498, 499 (D. Or. 1971). Therefore, the first circumstance 

involving the voluntary nature of appearing in the forum state is not present here. 

 The second circumstance involving the two cases being related is also present 

here. Grassi and Sponle concede they were in Arizona due to their involvement in the 

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other suit. That suit alleges Cains, Bailey, and Stonewall breached the purchase 

agreement negotiated with Grassi by retrieving embryos without authorization. The 

present suit alleges Grassi and Sponle spread false statements that Cains, Bailey, and 

Stonewall retrieved the embryos without authorization. These two suits are not entirely 

dependent on each other but they are substantially related. They involve the same parties 

and many of the same underlying facts. Requiring such interrelated suits proceed in 

different forums would be counter to “good judicial administration.” See Immunity from 

Service of Process—Immunity in Related Actions, 4A Fed. Prac. & Proc. Civ. § 1080 

(4th ed.). 

 The contours of Arizona’s process immunity are genuinely unclear. But Grassi 

and Sponle believed they were in Arizona involuntarily and the two suits are closely 

related. Under these circumstances, Grassi and Sponle were not immune from process 

when they were served. Having been served while in Arizona, personal jurisdiction 

exists.3

III. Two of the Four Claims Must Be Dismissed 

 Beyond arguing personal jurisdiction does not exist, Grassi and Sponle also seek 

dismissal of the complaint based on a purported failure to allege sufficient facts. For two 

of the four claims in the complaint, Grassi and Sponle are correct. 

 One of Plaintiffs’ four claims is for intentional infliction of emotional distress 

(“IIED”). To state a plausible IIED claim, the complaint must allege sufficient facts 

establishing three elements. First, there must be allegations of “extreme” and 

“outrageous” conduct by a defendant. Ford v. Revlon, Inc., 734 P.2d 580, 585 (Ariz. 

 

3

 Even if the Court were to conclude otherwise, Plaintiffs have made an adequate showing of personal jurisdiction at this stage. Because no evidentiary hearing has been held, Plaintiffs “need only make a prima facie showing of jurisdictional facts” to proceed with their claims. Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (quotation marks and citation omitted). For tort claims, personal jurisdiction will exist when a defendant commits an intentional act, expressly aimed at the forum state, that causes harm in the 

forum state. Id. at 1214. Grassi and Sponle allegedly made defamatory statements about Plaintiffs, who they knew were residents of Arizona. Moreover, Grassi and Sponle repeated these statements to other Arizona residents besides Plaintiffs. This is sufficient 

for a prima facie showing of jurisdiction. 

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1987). Second, there must also be allegations establishing the conduct was intended “to 

cause emotional distress” or constituted reckless disregard of the “near certainty that such 

distress [would] result.” Id. And third, there must be allegations that “severe emotional 

distress [did] occur as a result of defendant’s conduct.” Id. 

 As best as can be determined, the “extreme” and “outrageous” conduct at issue 

here consisted of Grassi and Sponle telling third parties that Plaintiffs had “stole[n] horse 

embryos from Sheikh Ammar.” (Doc. 12 at 7). While this statement involves a unique 

subject matter, Plaintiffs do not cite any authority supporting their contention that, in 

context, the statement qualifies as sufficiently “extreme” or “outrageous.” To be 

actionable, a statement must “strike to the very core of one’s being” and threaten “to 

shatter the frame upon which one’s emotional fabric is hung.” Pankratz v. Willis, 744 

P.2d 1182, 1189 (Ariz. Ct. App. 1987) (quotation marks and citation omitted). Absent 

other factual allegations showing an accusation of embryo theft is particularly damning in 

the Arabian horse industry, the present allegations are not enough. That is, Grassi and 

Sponle telling third parties that Plaintiffs were involved in misconduct in their business 

does not, at present, appear sufficiently “shatter[ing]” to support a claim for intentional 

infliction of emotional distress. Id. This claim will be dismissed with leave to amend. 

 Plaintiffs also assert a claim for interference with contract. That claims is based 

on allegations that “Knight had a contract with Ajman Stud,” Grassi and Sponle 

interfered with that contract, and that interference caused a “breach or termination” of the 

contract. (Doc. 12 at 11). This is simply a recital of the elements of the cause of action, 

which is not sufficient. To be allowed to proceed, this claim would need to be supported 

by factual allegations establishing what, exactly, Grassi and Sponle are alleged to have 

done which led to the “breach or termination” of the contract. This claim will be 

dismissed. 

 Plaintiffs’ two remaining claims are for defamation and false light.4

 Arizona law 

recognizes these as separate torts. Desert Palm Surgical Grp., P.L.C. v. Petta, 343 P.3d 

 

4

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438, 449 (Ariz. Ct. App. 2015). However, the distinction between the two is “subtle.” 

Id. In general, both torts involve a defendant publicizing something that either causes 

damage to a person’s reputation or a person’s “mental and emotional interests.” 

Godbehere v. Phoenix Newspapers, Inc., 783 P.2d 781, 787 (Ariz. 1989). Accusing 

Plaintiffs of stealing horse embryos satisfies the elements for both defamation and false 

light. Given that Plaintiffs work in the horse industry, a false accusation of embryo theft 

would plausibly damage Plaintiffs’ reputations. And this accusation could also plausibly 

harm the emotional interests of Cains and Bailey. Therefore, these two claims will be 

allowed to proceed. 

 In sum, the claims for defamation and false light may proceed but the claims for 

intentional infliction of emotional distress and interference with contract will be 

dismissed with leave to amend. Should Plaintiffs attempt to amend these claims, they 

must provide substantially more information regarding the basis for these claims. 

 Accordingly, 

IT IS ORDERED the Motion to Dismiss (Doc. 13) is GRANTED IN PART and 

DENIED IN PART. Should Plaintiffs wish to amend their complaint, they must do so 

no later than October 14, 2016. 

IT IS FURTHER ORDERED the Motion for Leave to File Supplement (Doc. 

19) is DENIED AS MOOT. 

 Dated this 4th day of October, 2016. 

Honorable Roslyn O. Silver

Senior United States District Judge

 

 only by Cains and Bailey. (Doc. 12 at 9-10). 

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