UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ROCKWELL CAPITAL PARTNERS, INC., and SAMUEL OSHANA, Plaintiffs,

v. CD INTERNATIONAL ENTERPRISES, INC., and HENRY L. KLEIN, Defendants. Case No. 17-cv-1537 (CRC)

MEMORANDUM OPINION AND ORDER In 2016, CD International Enterpri ses (“CDII”) unsuccessfully s ued Rockwell Capital Partners over a promissory note . Turning the tables, Rockwell now brings suit ag ainst CDII and its attorney—New Orleans sole pra ctitioner Henry L. Klein—for v arious claims arising from the first lawsuit. CDII and Klei n have filed a motion for judgment on the pleadings with respect to two of the claims: abuse of pro cess and malicious prosecution. Because Rockwell fails to adequately plead those claims , the Court will dismiss them and stay the remaining claims, which are brought only against CDII, i n light of the company’s recent suggestion of bankruptcy.
I. Background This suit stems from another cas e that this Court dismissed in 2016. To recap the basic facts of that case: C DII is a small, family-run trading company focused on Asian markets. In September 2015, Rockwell agreed to assume some of CDII’s debt i n exchange for a promissory note that permitted Rockwell to convert the debt into CDII stoc k at a discounted price. Compl. ¶¶ 22, 25. After Rockwell quickly be gan to exercise its conver sion rights and sell its newly acquired stock at a profit, CDII’s share price fell dramaticall y. Id. ¶¶ 31–36. CDII, represented by Henry Klein, then sued Rockw ell, its principal, and two othe r defendants. CD International2 Enterprises, Inc. v. Rockwell Ca pital Partners, Inc., 16-cv-394 . The complaint included claims that the promissory note was voi d due to lack of consideration and fraud; that the note was unenforceable as against public po licy; that Rockwell violated the terms of the note by failing to provide notice to CDII prior to e xercising its con version right s; and that Rockwell wrongfully converted its CDII shares. Roc kwell moved to dismiss. While R ockwell’s motion was pending, CDII moved for partial summary j udgment, moved to voluntarily d ismiss a count of its complaint, moved for leave to file a restated opposition to the motion, moved to request an ex parte hearing on the restated oppositi on, and moved for leave to fil e limited requests for admissions. Id. The Court granted Rockwell’ s motion to dismiss on April 24, 201 7. While noting that profiting at CDII’s expense may wel l have been Rockwell’s goal from the outset, the Court nonetheless concluded that “beca use Rockwell’s actions were con sistent with the parties’ negotiated, written agreements , no cause of action lies.” CD I nt’l Enterprises, Inc. v. Rockwell Capital Partners, Inc., 251 F. Supp. 3d 39, 41 (D.D.C. 2017). Following dismissal, CDII filed a notice of appeal, which the D.C. Circuit recently dismissed for failure to prosecute. Which brings us to the curre nt suit. On July 31, 2017, Rockwel l filed a complaint alleging that CDII and Klein knew that their claims in the 2016 lawsuit “were not warranted by applicable law and that its alleg ed factual contentions were wi thout evidentiary support.” Compl. ¶ 1. Rockwell also conte nds that CDII and Klein filed “ frivolous motions” intended to drive up Rockwell’s attorneys’ fees and force it to loan additi onal money to CDII. Id. ¶¶ 2–4. Rockwell further alleges that C DII and Klein entered into agree ments with other institutional investors both before and after filing the lawsuit that had “es sentially the same or worse terms than [CDII] complained of again st Rockwell” in the 2016 lawsuit , yet chose not to sue those3 investors. Id. ¶¶ 39–68. Finall y, in support of its malicious prosecution claim, Rockwell claims that prospective business partne rs and clients expressed concer ns about doing business with Rockwell as a result of the 2016 l awsuit, which led to it losin g deals, revenue, and the “possibility of future t ransactions.” Id. ¶¶ 104–05. The complaint invokes the Court’ s diversity jurisdiction and in cludes five claims: tortious interference with contract and pros pective economic advantage ( against CDII); breach of contract (against CDII); b reach of implied duty of good faith ( against CDII); abuse of process (against CDII and Klein); and m alicious prosecution (against CD II and Klein). Following a hearing on November 17, 2017, CDII a nd Klein filed a motion for judgment on the pleadings on Rockwell’s abuse of process and m alicious prosecution claims. And on February 7, 2018, CDII filed a “suggestion of bankruptcy,” thus triggering the automat ic stay provision of the Bankruptcy Code, 11 U.S.C. § 362. B y operation of the automati c stay, none of Rockwell’s remaining claims may proceed against CDII. 1

II. Standard of Review In resolving a motion for judgm ent on the pleadings under Feder al Rule of Civil Procedure 12(c), a court must “ view the facts presented in the pleadings and the inferences to be drawn therefrom in the light m ost favorable to the nonmoving pa rty.” Peters v. National R.R. Passenger Corp., 966 F.2d 1483, 1485 (D.C. Cir. 1992). A court “will grant a motion for judgment on the pleadings only if , after the close of the plead ings, no material fact remains in

1 Because the Court finds that Ro ckwell did not sufficiently all ege its abuse of process and malicious prosecution claims, it will dismiss them against both Mr. Klein and CDII. See, e.g., Dennis v. A.H. Robin s Co., 860 F.2d 871, 872 (8th Cir. 19 88) (holding that a district court has the power to dismiss claims notwithstanding a bankruptcy st ay).4 dispute, and the moving party is e ntitled to judgment as a matt er of law.” Transworld Prods. Co. v. Canteen Corp., 908 F. Supp. 1 (D.D.C. 1995).

III. Analysis
A. Abuse of Process The crux of Rockwell’s abuse of pr ocess claim is that CDII and Klein filed the 2016 lawsuit and subsequent “basele ss motions” in order to force Roc kwell to incur “extraordinary” legal expenses and ultim ately “extort Rockw ell into providing a dditional funds to CDII.” Opp’n at 7–8. As an indication of this s upposed motive, Rockwell all eges that CDII and Klein chose not to sue other investors over “v irtually identical” agreement s because those investors, unlike Rockwell, were willing to c ontinue funding CDII. Id. at 8. Courts in this jurisdiction have tended to take a restrictive v iew of abuse of process claims given their potential to limit “unfettered access to the courts” and to cause a “chilling and inhibitory effect on would-be litigants of justiciable issues.” Bannum, Inc. v. Citizens for a Safe Ward Five, Inc., 383 F. Supp. 2d 32, 46 n.10 (D.D.C. 2005). To prevail on a claim for abuse of process under D.C. law, the moving party must demonstrate a “pe rversion of the judicial process and achievement of some end not c ontemplated in the regular pro secution of the charge.” Morowitz v. Marvel, 423 A.2d 196, 198 (D.C. 1980). An ulterior motive for using the judicial system is not alone a sufficien t basis for an abuse of process claim. See, e.g., Houlahan v. World Wide Ass’n of Specialty Programs and Schools, 677 F. Supp. 2d 1 95, 200 (D.C. 2010). Rather, Rockwell must allege that CDII a nd Klein misused the judicial p rocess to seek relief beyond what “the system legitimately offered.” Bannum, 383 F. Supp. 2 d at 46. Stated differently, they must allege, in addition to an ulte rior motive, “[s]ome act or threat directed to an immediate objective not legitimate in the use of process.” Restatement ( Second) of Torts § 682 (1977).5 Such acts usually involve “some form of extortion . . . .” Sco tt v. District of Columbia, 101 F.3d 748, 755 (D.C. Cir. 1996) (adopting Restatement’s formulation o f abuse of process). Rockwell fails to adequately pl ead this second element of an ab use of process claim. The only affirmative acts that Rockwell alleges Klein and CDII took are initiating the s uit in the first place and then filing “baseless” motions whose aim was to drive up Rockwell’s litigation costs. That is not enough. The filing of the lawsuit is insufficient because under D.C. law “mere issuance of [] process is not actionable, no matter what ulteri or motive may have prompted it; the gist of the action like in the improper use after issuance.” Morowitz, 423 A.2d at 198 (internal citation omitted) (emphasis a dded). And while filing vexatious pleadings could in some circumstances support an abuse of process claim, Rockwell alleg es nothing to suggest that the motions CDII filed were anything but good faith (though mostly unsuccessful) efforts to obtain relief to which CDII believed it was entitled when it filed the motion. 2 Absent any other alleged threat or extortionate conduct by Klein or CDII, the filing of a few misguided motions does not plausibly amount to a perversion of the legal process to achiev e a collateral purpose. Any other result would turn the litigati on of many routine civil suits in to grounds for abuse of process claims. Rockwell’s abuse of process clai m also fails for a different re ason. Under D.C. law, a plaintiff “must demonstrate no t only ulterior motive, but succe ss in achieving illegitimate ends with resulting injury.” Yello w Bus Lines, Inc. v. Drivers, Cha uffeurs & Helpers Local Union,

2 Indeed, one of the motions about w hich Rockwell complains sough t to voluntarily dismiss one of CDII’s claims. Case No. 16-cv-394, March 7, 201 6 Notice of Voluntary Dismissal (ECF No. 8). And anothe r—to file a restated oppositi on brief—was granted by the Court. Case No. 16-cv-394, Apr il 24, 2017 Minute Order. In an y case, the Court views Federal Rule of Civil Procedure 11 as the proper vehicle for sanctionin g frivolous filings intrinsic to a lawsuit; not retaliatory a buse of process actions.6 883 F.2d 132, 137–38 (D.C. Cir. 1989). So even if CDII and Kle in filed the lawsuit in order to obtain additional financing, Rockw ell suffered “no actionable i njury” because CDII did not “accomplish this impermissible purpose.” Id. at 138. 3 And high attorneys’ fees and expenses, the only “end” Rockwell alleges CDII and Klein achieved through the lawsuit, do not suffice: “such results are the unhappy incid ent of almost any litigation and are an insufficient basis for an abuse of process claim.” B annum, 383 F. Supp. at 47. Finally, CDII and Klein’s decision to sue Rockwell rather than other thir d parties does not support an ab use of process claim. Choosing Rockwell as the sole target of its lawsuit may speak to CDII’s motivation for filing the suit. But it does not alone suggest that CDII sought to obtain some extra -legal end, as is required to show an abuse of process claim. The Court will, accordingly, dismis s Rockwell’s abuse of process claim.

3 In Whelan v. Abell, the D.C. Cir cuit found that the abuse of p rocess claim under D.C. law does not require that the de fendant “fully achieve[] his ul terior goal.” 953 F.2d 663, 670 (D.C. Cir. 1992). To the extent this statement of the law is c ontrary to Yellow Bus Lines’ requirement that the improper purpose be achieved, the Court is bound to follow Yellow Bus Lines because it was decided first. See Sierra Club v. Jackson , 648 F.3d 848, 854 (D.C. Cir. 2011) (“[W]hen a decision of one pane l is inconsistent with the decision of a prior panel, the norm is that the later decision, be ing in violation of that fix ed law, cannot prevail.”). To the extent that Whelan and Ye llow Bus Lines are distinguisha ble on their facts, the Court finds the facts of this cas e to be more akin to those of Yellow Bus Lines. Whelan involved a lawsuit that the district c ourt judge described as “nothing m ore than a desperate attempt by disappointed investors to creat e a cause of action where none e xists.” 953 F.2d at 667. It also involved explicit threats of leg al action if a company did not agree to take certain financial actions, and ultimately resulted in the bankruptcy of the compa ny after major investors withdrew their support as a result of the lawsuit. Id. at 666–67. The Whelan panel distinguished those facts from Yellow Bus Lines, w here the plaintiff did not suffer a “significant injury” because the threatening party dropped its e xtra-legal demands and the case ultimately settled for $3,000. Id. at 671. So while Rockwell may allege an improper, collateral m otive for CDII’s suit—forcing Rockwell to loan it additional m oney—there is no allegation tha t Rockwell experienced significant injury that was rela ted to that colla teral goal (as opposed to monetary and reputational costs inherent in any lawsuit).7 B. Malicious Prosecution Moving to Rockwell’s malicious pr osecution claim, the company c ontends that CDII and Klein acted with “malice” and without probable cause in bringin g suit against Rockwell knowing that their “factual and legal a llegations were unsupported.” O pp’n at 12. Rockwell argues that it “suffered special injury in the f orm of lost business and harm to its reputation” as a result of the 2016 suit. Id. at 13. To establish a claim of malici ous prosecution in the District o f Columbia, a plaintiff must plead: “(1) that the underlying s uit terminated i n plaintiff’s favor; (2) malice on the part of the defendant; (3) lack of probable cause for the und erlying suit; and (4) special i njury occasioned by the plaintiff as a result of t he original action.” Morowitz , 423 A.2d at 198. “‘Special injury’ is defined as an arrest, a sei zure of property, or an injury wh ich would not necessarily result from suits to recover for like causes of action.” Havilah Real Prop erty Services, LLC v. VLK, LLC, 108 A.3d 334, 354 (D.C. 2015). D.C. courts have “repeatedly he ld” that “injuri es to reputation, emotional distress, loss of incom e, and substantial expense in defending are outside the scope of what constitutes a ‘special injury.’” Id. See also Mazanderan v. McGranery, 490 A.2d 180, 182 (D.C. 1984); Epps v. Vogel, 454 A.2d 320, 324 (D.C. 1982). Rockwell’s sole asserted “special injury” is “lost business and harm to its reputation.” Opp’n at 13; 2017 Compl. ¶¶ 104–05. But because injury to repu tation and loss of income do not constitute a “special injury,” Rockwell’s complaint fails t o state a claim for malicious prosecution.

IV. Conclusion For the foregoing reasons, it is hereby8 ORDERED that [15] Defendants’ Motion f or Judgment on the Pleadings is GRANTED. It is further
ORDERED that the remaining claims are stayed pursuant to 11 U.S.C. § 3 62.

SO ORDERED

.

CHRISTOPHER R. COOPER United States District Judge Date: April 27, 2018