Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_20-cv-00106/USCOURTS-azd-2_20-cv-00106-1/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Personal Injury

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Jeffrey Peterson,

Plaintiff,

v. 

Gannett Company Incorporated, et al.,

Defendants.

No. CV-20-00106-PHX-MTL

ORDER 

Before the Court is the Motion to Dismiss Plaintiff’s Second Amended Complaint 

With Prejudice filed by Defendants Gannett Co., Inc. (“Gannett”) and Phoenix 

Newspapers, Inc. (“PNI”). (Doc. 61.) Gannett and PNI, the two remaining defendants in 

this case, move to dismiss Plaintiff Jeffrey Peterson’s defamation claim regarding two

articles published in The Arizona Republic and on azcentral.com in 2017. They argue that

the one-year statute of limitations has expired as to the first article, and that Plaintiff, as a 

public figure, has not adequately alleged actual malice as to the second. The motion is 

granted; Plaintiff will be given partial leave to amend.

I. BACKGROUND

A. Parties

Plaintiff Jeffrey Peterson is a self-described “well-known technology entrepreneur” 

and the founder and CEO of “the first online community for Hispanics, Quepasa.com, Inc.”

(Doc. 13-1 ¶ 17.) Founded in the late 1990s, Quepasa.com “maintains its place in history 

as one of the top bilingual English/Spanish internet brands, and as the first social network 

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to trade publicly on a national stock exchange in the United States.” (Id. at ¶ 18.) The 

website “became a national sensation” after a successful initial public offering and reached 

peak market valuation of approximately $500 million. (Id. at ¶ 17). It was also “endorsed 

by and did business with national and international celebrities, including Grammy-award 

winning singer Gloria Estefan and actress Jennifer Lopez, who is the daughter of defendant 

David Lopez.” (Id.)

Plaintiff claims that he gained various connections, political and otherwise, as the 

founder of Quepasa.com. He befriended then-Arizona Attorney General Janet Napolitano 

and “advocated for” her 2002 gubernatorial campaign. (Id. ¶¶ 21–23.) Following her 

election, Governor Napolitano appointed Plaintiff as a director of the Arizona-Mexico 

Commission. (Id.) Plaintiff “interacted frequently” with Governor Napolitano and her 

associates in the coming years, including senior members of the Arizona Democratic Party 

and the Democratic National Committee. (Id. ¶¶ 25–26.) He also maintained relationships 

with other “significant political and business personalities in both the United States and 

Mexico,” (id. ¶13(f)), including Dennis Burke, former U.S. Attorney for the District of 

Arizona, and Marco Lopez Jr., former mayor of Nogales, Arizona. (Id.)

Gannett and PNI are the only remaining defendants in this case (collectively, 

“Defendants”). Gannett is a media and marketing company and the largest newspaper 

company in the United States. (Doc. 61 at 3.) PNI is a subsidiary of Gannett and publishes 

The Arizona Republic newspaper and operates the website azcentral.com. (Id.) 

B. Alleged “Retaliatory Campaign”

Plaintiff claims that after their “long-standing professional relationship and 

friendship deteriorated,” Burke led a group of Plaintiff’s former associates in a “lengthy, 

ongoing tortious campaign” to “silence and harm” him. (Id. ¶¶ 9-10.) Plaintiff states that 

he has “significant personal knowledge” about Burke and his colleagues. He claims that 

they sought to prohibit Plaintiff from sharing information about their allegedly improper 

conduct, including certain political, business, and personal relationships with Mexican 

officials. (Id. ¶ 9.) 

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As part of the alleged campaign against Plaintiff, “one or more false and defamatory 

news articles” were published in The Arizona Republic and on azcentral.com.1(Id. ¶ 12.) 

First, on October 23, 2017, PNI published an article by reporter Craig Harris on 

azcentral.com titled “State Orders Failed Internet Payday Loan Venture to Pay $250K to 

Defrauded Investors” (the “October 2017 Article”).2(Doc. 13-1 ¶¶ 143-144; Doc. 62-1.) It 

describesthe Arizona Corporation Commission’s order that Plaintiff and his two co-owners 

of LoanGo, “a failed Chandler-based internet payday-loan company,” pay $250,000 in 

restitution to five “defrauded” investors. (Doc. 62-1 at 2.) Plaintiff was also ordered to pay 

a $15,000 fine. The article describes Plaintiff as “a former Arizona-Mexico Commission 

member, major donor to Arizona Democratic candidates, and founder of Quepasa, a nowdefunct Latino online social-media outlet.” (Id.) 

Second, on December 14, 2017, PNI published an article on azcentral.com, also by 

Mr. Harris, titled “Once-High-Flying Quepasa Chief Jeff Peterson Under Fire as $9M Gone 

in Online Startups” (the “December 2017 Article”).3(Doc. 13-1 ¶¶ 151-152; Doc. 62-3.) 

The article describes Plaintiff’s fundraising efforts for Mobile, another internet startup he 

founded. It states that Mobile raised at least $8.6 million between 2013 and 2016 from 

various investors. (Doc. 62-3 at 2-3.) Plaintiff also recruited board members including 

Lopez Jr. and Burke. Mobile’s advisers and consultants “included Democratic National 

Committee chairman and presidential candidate Howard Dean; ex-Phoenix May Phil 

1 The two articles at issue were not attached to the Second Amended Complaint, but were 

attached to a declaration to the Motion to Dismiss. (Doc. 62.) Generally, if “matters outside 

the pleadings are presented to and not excluded by the court” on a Rule 12(b)(6) motion, 

“the motion must be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 

12(d). An exception exists for documents whose “authenticity ... is not contested” and on 

which “the plaintiff’s complaint necessarily relies.” Lee v. City of Los Angeles, 250 F.3d 

668, 688 (9th Cir. 2001) (citation omitted). The Court may therefore consider the articles

without converting the motion to one for summary judgment.

2 The same article appeared in print in The Arizona Republic on October 24, 2017 with the 

headline “Online Firm Ordered to Repay Investors $250K.” (Doc. 61 at 3; Doc. 62-2.)

3 The same article appeared in print in The Arizona Republic on December 27, 2017 with 

the headline “$9M Missing After Quepasa Founder’s New Startup Fails.” (Doc. 61 at 4; 

Doc. 62-4.)

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Gordon; Mexican-American Grammy winner Pepe Aguilar; and Hollywood movie-maker 

Howard ‘Hawk’ Koch.” (Id. at 3.) 

The article reported that at the time of publication, “all the money is gone.” (Id.) It 

describes former investors’ concerns with Plaintiff’s management of Mobile and reviewed 

the company’s bank records. The article also states that Peterson developed an idea for “a 

new Quepasa” in 2014, which ultimately became financially “intertwined” with Mobile. 

(Id. at 7.) It states that investors and board members planned to turn over internal 

documents to law enforcement, the IRS, and others “in hopes of bringing additional 

investigations and forcing investors’ repayment.” (Id. at 8.) The December 2017 Article 

states that Plaintiff “made his name in the Valley,” “had a track record of getting big names 

to back him,” and “became a major donor to Democrats.” (Id. at 9.)

C. Procedural History

Plaintiff filed the original Complaint pro se in the United States District Court for 

the District of Massachusetts on December 14, 2018. (Doc. 1.) He then filed the First 

Amended Complaint after retaining counsel on January 4, 2019 (Doc. 6), and the Second 

Amended Complaint on May 27, 2019. (Doc. 13-1.) The Second Amended Complaint 

asserted claims for defamation, intentional infliction of emotional distress, tortious 

interference with contract, civil conspiracy, and criminal harassment against a dozen

defendants, including Burke, Lopez Jr., the Democratic National Committee, Gannett, and 

PNI, among others. On January 10, 2020, the District of Massachusetts granted Gannett’s 

and PNI’s motion to transfer the case to this district pursuant to 28 U.S.C. § 1404(a).4(Doc. 

53.) Ten defendants have been dismissed from the case to date.

5 Only Gannett and PHI

4 Gannett and PNI did not waive their ability to file a Rule 12(b)(6) motion by first filing a 

motion to transfer under Rule 12(b)(3). A defendant must raise improper venue under Rule 

12(b)(3) in its first Rule 12 motion; otherwise, the defense is waived. See Fed. R. Civ. P. 

12(g)(2)-(h)(1)(a). However, “a defendant who omits a defense under Rule 12(b)(6)—

failure to state a claim upon which relief can be granted—does not waive that defense.” In 

re Apple iPhone Antitrust Litig., 846 F.3d 313, 317–18 (9th Cir. 2017), aff’d sub nom. 

Apple Inc. v. Pepper, 139 S. Ct. 1514, 203 L. Ed. 2d 802 (2019).

5 On January 10, 2020, the District of Massachusetts dismissed Defendants Dennis K. 

Burke, Marco A. Lopez Jr., Victor Flores, the Honorable Lisa Flores, and Mario Diaz for 

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remain. The sole claim against them is for defamation. (Doc. 13-1 ¶¶ 200-204.) 

Defendants filed the pending motion on February 21, 2020. (Doc. 61.) It argues, 

first, that the October 2017 article falls outside of the one-year statute of limitations for 

defamation claims. Second, Defendants argue that Plaintiff has failed to meet his 

constitutional burden as a limited-purpose public figure to allege “actual malice” with 

respect to the December 2017 Article. Plaintiff filed a response on March 6, 2020. (Doc. 

63). Defendants filed a reply on March 13, 2020 (Doc. 65).

II. LEGAL STANDARD

To survive a motion to dismiss, a complaint must contain “a short and plain 

statement of the claim showing that the pleader is entitled to relief” such that the defendant 

is given “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. 

Corp. v. Twombly, 550 U.S. 545, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2); Conley v. 

Gibson, 355 U.S. 41, 47 (1957)). Dismissal under Rule 12(b)(6) “can be based on the lack 

of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable 

legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). A 

complaint should not be dismissed “unless it appears beyond doubt that the plaintiff can 

prove no set of facts in support of the claim that would entitle it to relief.” Williamson v. 

Gen. Dynamics Corp., 208 F.3d 1144, 1149 (9th Cir. 2000).

The Court must accept material allegations in the Complaint as true and construe 

them in the light most favorable to Plaintiff. North Star Int’l v. Arizona Corp. Comm’n, 

720 F.2d 578, 580 (9th Cir. 1983). “Indeed, factual challenges to a plaintiff’s complaint 

have no bearing on the legal sufficiency of the allegations under Rule 12(b)(6).” Lee, 250 

F.3d at 688. Review of a Rule 12(b)(6) motion is “limited to the content of the complaint.” 

North Star Int’l, 720 F.2d at 581. 

lack of personal jurisdiction. (Doc. 50 at 18; Doc. 53.) Following the transfer, this Court 

dismissed Defendants Luis Borbon Holguin, Craig Harris, Suzanne Barr, David Lopez, and 

the Democratic National Committee without prejudice pursuant to Fed. R. Civ. P. 4(m) for 

lack of service on January 17, 2020. (Doc. 57.) It also dismissed fictitious defendants Jane 

Doe Diaz, White Entities 1-10, John & Jane Does 1-10, and Black Corporations 1-10. (Id.)

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III. ANALYSIS

A. Time-Barred

Defendants first argue that Arizona’s one-year statute of limitations for defamation 

claims has expired as to the October 2017 Article. Plaintiff argues that Massachusetts’s 

three-year statute of limitations should apply because venue transfer is not “intended as a 

weapon of dismissal in the Defendant[s’] arsenal.” (Doc. 63 at 4.) The Court agrees with 

Defendants.

1. Choice of Law

Federal courts sitting in diversity generally apply the forum state’s choice of law 

rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Orr v. Bank of Am., 

285 F.3d 764, 772 n.4 (9th Cir. 2002). But when a case is transferred pursuant to 

28 U.S.C. § 1404(a), as this case was, typically “the transferee court must follow the 

choice-of-law rules of the transferor court.” Muldoon v. Tropitone Furniture Co., 1 F.3d 

964, 965 (9th Cit. 1993) (citing Van Dusen v. Barrack, 376 U.S. 612 (1964)). This rule 

“does not apply,” however, “when a case is transferred because venue was improper in the 

transferor court, or because personal jurisdiction was lacking there; in those cases the 

transferee court applies the default Klaxon rule for choice of law.” Hanson Crawford Crum 

Family Law Grp., LLP v. Randall, No. 18-CV-03371-VC, 2019 WL 6699802, at *6 (N.D. 

Cal. Dec. 9, 2019) (citing Nelson v. International Paint Co., 716 F.2d 640, 643 (9th Cir.

1983)). Further, in cases transferred under § 1404(a), the transferor court’s 

“characterization of the transfer is not controlling.” Muldoon, 1 F.3d at 967. The transferee 

court must determine whether the lawsuit was properly filed in the transferor court, and 

whether the plaintiff is consequently entitled to that court’s choice of law rules. Id.

Here, the District Court for the District of Massachusetts transferred the case to the 

District of Arizona because “public and private interest factors weigh strongly in favor” of 

the transfer.6(Doc. 50 at 16.) The court noted that “plaintiff’s choice of forum is the only 

6

In the transfer order, the District Court for the District of Massachusetts specifically 

“decline[d] to engage in an extended choice-of-law analysis.” (Doc. 50 at 16.)

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factor that weighs against transfer to the District of Arizona”; that “plaintiff fails to proffer 

any reason why Massachusetts is a more convenient forum than Arizona”; that the “entirety 

of the alleged conduct occurred in Arizona”; and that the “tenuous connection” between 

the litigation and Massachusetts “further supports transfer.” (Id. at 14-15.) Based on the 

transfer order and this Court’s independent review of the record, this case was not properly 

filed in the District of Massachusetts. The Court will apply Arizona choice of law rules.

Arizona courts apply the rules set forth in the Restatement (Second) of Conflict of 

Laws (1971) (“Restatement”). See Bryant v. Silverman, 703 P.2d 1190, 1191 (Ariz. 1985). 

The Restatement states that the “local law of the forum determines ... whether an action is 

barred by the statute of limitations. This law also determines all matters involving the 

application of the statute of limitations.” Restatement § 142(a). Accordingly, the Court will 

apply Arizona’s statute of limitations.

2. Arizona Statute of Limitations

Arizona’s statute of limitations for defamation claims is one year. See A.R.S. § 12-

541(1). It begins to run, and the defamation action accrues, upon publication of the 

defamatory statement. See Lim v. Superior Court In and For Pima City, 126 Ariz. 481, 482 

(Ariz. Ct. App. 1980). The October 2017 Article was published on October 23, 2017. (Doc. 

13-1 at 143.) Plaintiff filed the original complaint more than one year later, on December 

14, 2018. (Doc. 1.) Plaintiff’s defamation claim with respect to the October 2017 Article 

is therefore time-barred.

In response, Plaintiff argues that “transfer isn’t intended as a weapon of dismissal 

in the Defendant[s’] arsenal.” (Doc. 63 at 4.) He claims that the Court should instead apply 

Massachusetts’s three-year statute of limitations for defamation claims.

7

In support of this 

argument, Plaintiff states that the “interest of justice does not allow the preclusion of an 

action because it becomes time-barred in the transferee forum.” (Id. at 5.) The one case 

7

“The statute of limitations for a defamation claim is three years, Mass Gen Laws. Ch. 

260, § 4, and the ‘general rule is that the accrual period begins upon publication of the 

defamatory statement.’” McLaughlin v. Bos. Ret. Bd., 146 F. Supp. 3d 283, 290 (D. Mass. 

2015) (citation omitted).

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Plaintiff cites in support of this position, however, is inapposite. 

In Burnett v. New York Cent. R.R. Co., 380 U.S. 424 (1965), the petitioner first sued 

in Ohio state court within the statute of limitations period. The action was dismissed for

improper venue. Id. at 425. After dismissal, the petitioner filed an identical action in the 

federal District Court for the Southern District of Ohio. The district court dismissed 

because although the state court lawsuit was timely, the statute of limitations expired before

the federal case was filed. Id. The U.S. Supreme Court ultimately reversed, holding that 

“petitioner’s state court action tolled the federal limitation provision and therefore 

petitioner’s federal court action here was timely.” Id. at 426. In so ruling, the Court noted

“the unfairness of barring a plaintiff’s action solely because a prior timely action is 

dismissed for improper venue after the applicable statute of limitations has run.” Id. at 430.

Burnett is distinguishable from the present case for multiple reasons. For one, this

case has never been dismissed. Burnett also involved a matter that was initially filed in 

state court and subsequently re-filed in federal court. Id. at 425. Further, the Burnett case 

involved only one applicable limitations period, whereas the issue at hand is whether one 

of two possible statutes of limitations—Arizona’s or Massachusetts’s—applies. That case 

also involved the tolling of a statute of limitations, which no party argues should apply 

here. Id. at 426. Burnett does not support Plaintiff’s argument that the Massachusetts statute 

of limitations should apply to this case.

Transfer of venue was not used as a “weapon” against Plaintiff. (Doc. 63 at 4.)

Rather, for the numerous reasons described by the District Court for the District of 

Massachusetts, venue is proper in this district. This Court applies Arizona’s one-year 

statute of limitations, which expired as to the October 2017 Article before Plaintiff filed 

his original Complaint. 

B. Defamation

Defendants next argue that Plaintiff’s defamation claim as to the December 2017 

Article fails as a matter of law. (Doc 61 at 7.) A defamation claim generally requires a false 

publication that brings “the defamed person into disrepute, contempt, or ridicule, or must 

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impeach plaintiff’s honesty, integrity, virtue, or reputation.” Godbehere v. Phoenix 

Newspapers, Inc., 162 Ariz. 335, 341 (1989). When the plaintiff is a “public figure,” the 

burden is heightened. To prevail on a defamation claim, a public figure plaintiff must also 

prove (i) the falsity of the statements and issue and (ii) by clear and convincing evidence, 

that the statements were made with “actual malice”; that is, with knowledge of falsity or 

reckless disregard for the truth.8 See New York Times Co. v. Sullivan, 376 U.S. 254, 279-

80 (1964); Gertz v. Robert Welch, Inc., 418 U.S. 323, 345 (1974). Defendants argue that 

the Second Amended Complaint demonstrates that Plaintiff is a public figure but that he 

failed to adequately allege that Defendants acted with actual malice. 

1. Public Figure

The Court first addresses whether Plaintiff is a “public figure.” This concept extends 

beyond government officials and other policy makers. Public figures include “artists, 

athletes, business people, dilettantes, anyone who is famous or infamous because of who 

he is or what he has done.” Cepeda v. Cowles Magazines &Broad., Inc., 392 F.2d 417, 419 

(9th Cir. 1968). The U.S. Supreme Court has identified two types of public figures: (1) allpurpose public figures, who occupy “positions of such persuasive power and influence that 

they are deemed public figures for all purposes,” and (2) limited-purpose public figures, 

who “thrust themselves to the forefront of particular public controversies in order to 

influence the resolution of the issues involved.” Gertz, 418 U.S. at 345. Because “[i]n either 

case such persons assume special prominence in the resolution of public questions,” both 

categories face a heightened burden. Id. at 351.

The Court does not find that Plaintiff is an all-purpose public figure. Defendants do 

8 Through a series of landmark cases, the U.S. Supreme Court “has federalized major 

aspects of libel law.” Gertz, 418 U.S. at 370 (White, J. dissenting). While defamation clams 

are brought under state law, no state may impose liability for a defamatory statement 

regarding a “public official” or “public figure” unless the plaintiff proves that it was made 

with knowing falsehood or reckless disregard of the truth. New York Times Co., 376 U.S. 

at 279-80 (public official); Curtis Publishing Co. v. Butts, 388 U.S. 130, 154-55 (public 

figure). 

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not argue as much (Doc. 65 at 5), and all-purpose public figures generally require “clear 

evidence of general fame or notoriety in the community, and pervasive involvement in the 

affairs of society” Id. at 352. The Second Amended Complaint does not indicate that 

Plaintiff is generally famous or that he wields vast influence in public affairs. (Doc. 13-1.)

The relevant inquiry is whether Plaintiff is a limited-purpose public figure. In 

determining whether a defamation plaintiff is a limited-purpose public figure, courts look 

to “whether (i) a public controversy existed when the statements were made, (ii) whether 

the alleged defamation is related to the plaintiff’s participation in the controversy, and (iii) 

whether the plaintiff voluntarily injected itself into the controversy for the purpose of 

influencing the controversy’s ultimate resolution.” Makaeff v. Trump Univ., LLC, 715 F.3d 

254, 266 (9th Cir. 2013). Limited-purpose public figures exist “[m]ore commonly” than 

all-purpose public figures. Gertz, 418 U.S. at 351.

Defendants argue that, according to the Second Amended Complaint, Plaintiff is a 

limited-purpose public figure “with respect to his high-profile business dealings.” (Doc. 61 

at 7.) The Court agrees. Plaintiff states that he is a “well-known technology entrepreneur” 

who founded the social networking site Quepasa.com, Inc. (Doc. 13-1 ¶ 11). As described 

above, Quepasa.com’s status as a “national sensation” (id. ¶ 17) permitted Plaintiff to forge 

relationships with “significant political and business personalities in both the United States 

and Mexico.” (Id. ¶13(f).) Plaintiff was appointed as a director of the Arizona-Mexico 

Commission as a result of these connections. (Id. ¶¶ 21–23.) He also maintained 

relationships with former U.S. Attorney Burke and former Nogales Mayor Lopez, Jr.—

both of whom Plaintiff recruited to the board of Mobile, another company he founded. 

Plaintiff states that Defendants engaged in a “retaliatory campaign” to “permanently 

damage” his “reputation and credibility,” including through the two articles at issue.

(Id. ¶ 11-12.) It also alleges that Burke “reported facts he knew were false[] to the Arizona 

Corporation Commission,” which “caused at least one investigation of the Plaintiff, the 

Plaintiff’s business colleagues and business interests.” (Id. ¶ 14(a).)

These allegations, taken together, indicate that a “public controversy existed when 

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the statements were made”—that is, the allegations and investigations regarding Plaintiff’s 

business practices. Makaeff, 715 F.3d at 266. The Second Amended Complaint also clearly 

demonstrates that the “alleged defamation is related to the plaintiff’s participation in the 

controversy,” and that Plaintiff “voluntarily injected” himself into the controversy. Id. The 

Second Amended Complaint describes, in detail, Plaintiff’s efforts to engage in highprofile business dealings and to court prominent connections, political and otherwise, to 

promote himself and his businesses. (Doc. 13-1 at 15-18.) The Court finds, based on 

Plaintiff’s own allegations, that he is a limited-purpose public figure.

Plaintiff argues that he is not a public figure because “in family conversations 

around American kitchen tables or while the news is being watched, it’s likely no one 

would know who Jeffrey Peterson is or was.” (Doc. 63 at 1.) That level of fame is not 

required to become a limited-purpose public figure. As noted, although in “some instances” 

a person achieves “such pervasive fame or notoriety” to become an all-purpose public 

figure, it is “more common[]” that an individual become a public figure “for a limited range 

of issues.” Gertz, 418 U.S. at 351; see also Harris v. Tomczak, 94 F.R.D. 687, 702 (E.D. 

Cal. 1982) (holding that “nationwide fame is not required” to qualify as a public figure). 

Plaintiff also argues that “[p]ast successes don’t make the Plaintiff a prominent figure like 

President Trump of Mark Zuckerberg of Facebook fame.” (Id. at 2.) However, once 

attained, an individual does not lose public figure status. See Partington v. Bugliosi, 56 

F.3d 1147, 1152 n.8 (9th Cir. 1995) (“[E]very court of appeals that has specifically decided 

this question has concluded that the passage of time does not alter an individual’s status as 

a limited purpose public figure.”).

In reaching this conclusion, the Court notes that numerous other courts have found

limited-purpose public figures at the motion to dismiss stage. See, e.g., Resolute Forest 

Prod., Inc. v. Greenpeace Int’l, 302 F. Supp. 3d 1005, 1017 (N.D. Cal. 2017) (“[Plaintiff’s] 

own allegations about their world-wide reach and influence, as well as the public nature of 

its work in forestry and sustainability, show that the company is a limited public figure for 

purposes of its participation in the forestry industry...”); Heller v. NBCUniversal, Inc., No. 

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CV-15-09631-MWF-KS, 2016 WL 6573985, at *5 (C.D. Cal. Mar. 30, 2016) (finding a 

limited-purpose public figure where “Plaintiff’s own allegations show that his relationship 

with N.W.A. was the subject of great public interest that prompted him to write a book 

recounting his side of the story.”); Biro v. Conde Nast, 963 F. Supp. 2d 255, 270 (S.D.N.Y. 

2013), aff’d, 807 F.3d 541 (2d Cir. 2015), and aff’d, 622 F. App’x 67 (2d Cir. 2015) 

(“Where the question whether a plaintiff is a public figure can be determined based upon 

the pleadings alone, the Court may deem a plaintiff a public figure at the motion to dismiss 

stage.”). Pursuant to his own allegations, Plaintiff is a limited-purpose public figure.

2. Actual Malice

The next issue is whether Plaintiff has adequately alleged that Defendants acted with 

actual malice. As noted, to satisfy First Amendment concerns, a public figure plaintiff must 

prove by clear and convincing evidence that the defendant made a defamatory statement 

with actual malice—that is, “knowledge that it was false or with reckless disregard of 

whether it was false or not.” Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 52 (1988) 

(citing New York Times Co., 376 U.S. 254). Actual malice is “not measured by whether a 

reasonably prudent man would have published or would have investigated before 

publishing,” but by whether “the defendant in fact entertained serious doubts as to the truth 

of [its] publication.” St. Amant v. Thompson, 390 U. S. 727, 731 (1968). The existence of 

actual malice is a question of law. Milkovich v. Lorain Journal Co., 497 U.S. 1, 17 (1990).

The Court finds that Plaintiff has not adequately alleged that Defendants acted with 

actual malice. Plaintiff apparently concedes this point. With respect to actual malice, his 

response to Defendants’ motion states only, “the Plaintiff is not a prominent public figure, 

and lacking that nomenclature, the Plaintiff is under no burden to prove actual malice, 

although he’s prepared to do so.” (Doc. 63 at 4.). 

Plaintiff has also not alleged actual malice under guiding case law. The Ninth 

Circuit previously held that a plaintiff need only allege “the required state of mind 

generally” because “the issue of actual malice ... cannot be properly disposed of by a 

motion to dismiss, where the plaintiff has had no opportunity to present evidence in support 

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of his allegations.” Flowers v. Carville, 310 F.3d 1118, 1131 (9th Cir. 2002) (citation and 

quotations marks omitted). The Supreme Court’s subsequent Iqbal decision contradicted 

Flowers, however, in holding that actual malice is subject to a heightened pleading 

standard. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (“[m]alice, intent, knowledge, 

and other conditions of a person’s mind” must be pled under the “strictures of Rule 8”). 

While the Ninth Circuit has not specifically addressed whether Flowers remains good law, 

“the circuits that have considered the question have uniformly held that a claim may be 

dismissed for failing plausibly to allege actual malice without permitting discovery.” 

Resolute Forest Prods., 302 F. Supp. 3d at 1027-28; see also Michel v. NYP Holdings, Inc., 

816 F.3d 686, 702 (11th Cir. 2016) (“[E]very circuit that has considered the matter has 

applied the Iqbal/Twombly standard and held that a defamation suit may be dismissed for 

failure to state a claim where the plaintiff has not pled facts sufficient to give rise to a 

reasonable inference of actual malice.”). 

This Court will, “consistent with the overwhelming weight of post-Iqbal authority,” 

address whether Plaintiff has plausibly alleged that Defendants acted with actual malice at 

the pleading stage. Miller v. Watson, No. 3:18-CV-00562-SB, 2019 WL 1871011, at *6

(D. Or. Feb. 12, 2019), report and recommendation adopted, No. 3:18-CV-00562-SB, 2019 

WL 1867922 (D. Or. Apr. 25, 2019); see also Resolute Forest Prods., Inc. v. Greenpeace 

Int’l, No. 17-cv-02824-JST, 2019 WL 281370, at *8 (N.D. Cal. Jan. 22, 2019) (“it is proper 

to dismiss a complaint when the Court concludes the plaintiff fails to plead actual malice 

as a matter of law” under the Rule 12(b)(6) standard); Wynn v. Chanos, 75 F. Supp. 3d 

1228, 1238-40 (N.D. Cal. 2014) (dismissing defamation claim under Rule 12(b)(6) for 

failure to allege actual malice).

The Second Amended Complaint contains two relevant allegations. First, it 

describes the two articles as “intentionally orchestrated by Burke as the group leader, and 

published by the Arizona Republic newspaper and on the azcentral.com website with illwill and knowledge of falsehood. The Complaint seeks redress for these statements which 

were made with actual malice.” (Doc. 13-1 ¶ 12) (emphasis omitted). Second, “[w]hen 

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[d]efamatory statements were made regarding Peterson, Defendants acted with actual 

malice.” (Id. ¶ 203.) The second statement notably applied to all twelve of the defendants 

in the case at that time. Plaintiff also alleges that various individuals quoted in the article

“knew the statements [they] made in the article were false.” (Id. ¶¶ 159-162.) At no point, 

however, does Plaintiff allege “factual content that allows the court to draw the reasonable 

inference” that Gannett or PNI acted with actual malice regarding the December 2017 

Article.9Iqbal, 556 U.S. at 678.

Construed in the light most favorable to Plaintiff, the Second Amended Complaint’s 

conclusory allegations are insufficient. See id., 556 U.S. at 678 (“Threadbare recitals of the 

elements of a cause of action, supported by mere conclusory statements, do not suffice.”). 

A public figure defamation plaintiff “must point to details sufficient to render a claim 

plausible.” Resolute Forest Prod., 302 F. Supp. 3d at 1018 (citing Pippen v. NBCUniversal 

Media, LLC, 734 F.3d 610, 614 (7th Cir. 2017). Plaintiff’s “formulaic recitations” that 

Defendants acted with “ill-will and knowledge of falsehood” (Doc. 13-1 ¶ 12) and with 

“actual malice” (id. ¶ 203) fall short. Resolute Forest Prod., Inc., 302 F. Supp. 3d at 1019 

(citing Twombly, 550 U.S. at 555). Plaintiff has not made “any specific allegations that 

would support a finding that [Defendants] harbored serious subjective doubts as to the 

validity of [their] assertions.” Wynn, 75 F. Supp. at 1239. Plaintiff has failed to satisfy the 

“demanding burden” for pleading actual malice. Id. He has therefore failed to state a claim 

for defamation against Gannett and PNI as to the December 2017 Article. 

C. Leave to Amend

Rule 15(a)(2) of the Federal Rules of Civil Procedure is a liberal standard, stating 

9 As Defendants note, “alleging actual malice as to Gannett and PNI specifically is 

something Plaintiff knows how to do.” (Doc. 61 at 10.) With respect to the October 2017 

Article, the Second Amended Complaint states, “Defendant Phoenix Newspapers, and 

Gannett Co. Inc., knew the statement characterized above--that Plaintiff, ‘is a ... founder 

of Quepasa, a now-defunct Latino online social-media outlet’ was not true because, among 

other reasons, the Arizona Republic itself had previously published numerous articles about 

Quepasa...” (Doc. 13-1 ¶ 150; Doc. 61 at 10.) This statement indicates that Plaintiff could 

have made allegations about Defendants’ state of mind with respect to the December 2017 

Article, but chose not to do so.

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that “[t]he court should freely give leave [to amend a pleading] when justice so requires.” 

Fed. R. Civ. P. 15(a)(2). In granting a motion to dismiss, a district court should provide 

leave to amend unless it is clear that the complaint could not be saved by any amendment. 

See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

Exceptions to the general policy of granting leave exist “where the amendment: 

(1) prejudices the opposing party; (2) is sought in bad faith; (3) produces an undue delay 

in litigation; or (4) is futile.” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 

946, 951 (9th Cir. 2006). 

The Court finds that amendment would be futile as to the October 2017 Article, for 

which the one-year statute of limitations has expired. As to the December 2017 Article, 

this case has been pending since December 14, 2018, and Plaintiff has already amended 

the complaint twice. The Court is accordingly concerned that further amendment would 

produce “undue delay.” Id. Nonetheless, in light of the considerations above, the Court will 

permit Plaintiff one final opportunity to amend the complaint. 

IV. CONCLUSION

Accordingly,

IT IS ORDERED that Defendants’ Motion to Dismiss Plaintiff’s Second Amended 

Complaint With Prejudice (Doc. 61) is granted.

IT IS FURTHER ORDERED allowing Plaintiff 21 days from the issuance of this 

Order to file a Third Amended Complaint that conforms with the requirements set forth in 

this Order. Because the Court is giving Plaintiff leave to amend, the Clerk of the Court 

shall not enter judgment at this time.

IT IS FINALLY ORDERED that the oral argument previously scheduled for April 

30, 2020 (Doc. 66) is hereby vacated. Upon full consideration of the pending motion, 

relevant authorities, and related documents, the Court believes that oral argument would 

not significantly aid the decisional process. See Fed. R. Civ. P. 78(b); LRCiv 7.2(f). 

/ /

/ /

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Dated this 22nd day of April, 2020.

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