David P. Lennon, OSB # 125575

Lennon & Klein, P.C.

3922 Bellinger Lane

Medford, OR 97501

Telephone: 212-465-2020

Facsimile: 212-202-5337

E-mail: david@lennon-klein.com

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

MEDFORD DIVISION

ORBITAL PUBLISHING GROUP, INC., a

New York corporation, and LIBERTY

PUBLISHERS SERVICE, INC., a New York

corporation,

Plaintiffs,

-againstBRIDGET WELLS, individually, and

PERIODICAL WATCHGUARD, LLC., a

North Carolina limited liability company,

Defendants.

Case No. 1:15-cv-00480-CL

PLAINTIFFS’ MEMORANDUM IN

OPPOSITION TO DEFENDANTS’

MOTION TO DISMISS

(ORAL ARGUMENT REQUESTED)

Of Counsel:

David P. Lennon 
TABLE OF CONTENTS

Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

THE ALLEGATIONS OF THE COMPLAINT AND THE BACKGROUND ..............3

Defendants’ Improper Conduct Within the Publishing Industry ...................5

Wells’ Improper Conduct with Attorney Generals’ Offices .......................9

Wells’ Improper Conduct With Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

POINT I

THIS COURT HAS PERSONAL JURISDICTION OVER WELLS AND

PERIODICAL WATCHGUARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

A. Purposeful Availment or Direction Generally . . . . . . . . . . . . . . . . . . . . . 15

B. Defendants’ Conduct With Oregon Gives Rise to Plaintiffs’ Claims . . 19

C. It Is More Than Reasonable for the Court to Find Jurisdiction Over

Defendants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

POINT II

VENUE IS PROPER IN OREGON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

POINT III

OREGON’S ANTI-SLAPP STATUTE DOES NOT APPLY, AND EVEN IF IT

DOES APPLY, PLAINTIFFS DEMONSTRATED A PROBABILITY THAT

THEY WILL PREVAIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

A. Oregon’s Anti-SLAPP Statute Should Not Even Apply in 

Federal Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

B. If the Court Determines That Oregon’s Anti-SLAPP Statute Even Applies

in Federal Court, the Anti-SLAPP Statute Does Not Apply in this Case as

There Is No Protected Speech at Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

C. Assuming Defendants Carry Their Burden to Show That Their Conduct

and Statements Are Covered by O.R.S. § 31.150(3), Plaintiffs Have

Demonstrated A Prima Facie Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

POINT IV

PLAINTIFFS HAVE STATED A CLAIM FOR 

INTENTIONAL INTERFERENCE WITH BUSINESS RELATIONS . . . . . . . 28

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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TO DISMISS 
TABLE OF AUTHORITIES

Allen v. Hall, 328 Or. 276, 974 P.2d 199 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Ballard v. Savage, 65 F.3d 1495 (9th Cir. 1995) ................................. 13, 14

Bates v. Bankers Life and Casualty Company, 993 F. Supp.2d 1318 (D. Or. 2014) . . . . . . . . . 14

Burger King Corporation v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 

85 L.Ed.2d 528 (1985) ............................................. 13, 15, 16, 20

Daniels-Hall v. National Educational Association, 629 F.3d 992 (9th Cir. 2010) . . . . . . . . . . 28

Data Discount Incorporated v. Systems Technology Assocs., 

Incorporated, 557 F.2d 1280 (9th Cir. 1977) ................................. 12, 14

Decker Coal Company v. Commw. Edison Company, 805 F.2d 834 (9th Cir. 1986) . . . . . . . . 13

Doe v. Unocal Corporation, 248 F.3d 915 (9th Cir.2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Employers’ Fire Insurance Company v. Love It Ice Cream Company, 

670 P.2d 160, 64 Or.App. 784 (Or. App., 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Erie Railroad Company v. Tompkins, 304 U.S. 64 (1938) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Federal Deposit Insurance Corporation v. British - American Insurance 

Company., LTD, 828 F.2d 1439 (9th Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Foman v. Davis, 371 U.S. 178 (1962) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . 23

Gray and Company v. Firstenberg Machinery Company, 913 F.2d 758 . . . . . . . . . . . . . . . . . . 12

Hanna v. Plumer, 380 U.S. 460 (1965) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d

404(1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

International Shoe Company v. State of Wash., 326 U.S. 310 (1945) . . . . . . . . . . . . . . . . . . . . 13

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TO DISMISS 
Keeton v. Hustler Magazine, Incorporated, 465 U.S. 770, 

104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) ................................... 15, 16, 21

Makaeff v. Trump University, LLC, 715 F.3d 254 (9th Cir. 2013) . . . . . . . . . . . . . . . . . . . . . . . 23

Mattel, Incorporated v. MCA Records, Incorporated, 296 F.3d 894 (9th Cir.2002) . . . . . . . . . 16

McGanty v. Staudenraus, 321 Or. 532, 901 P.2d 841 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Metabolic Research, Incorporated v. Ferrell, 693 F.3d 795 (9th Cir. 2012) . . . . . . . . . . . . . . . 23

Metabolife International, Incorporated v. Wornick, 264 F.3d 832 (9th Cir. 2001) . . . . . . . . . . 24

Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038 (9th Cir. 2008) . . . . . . . . . . . . . . . . . . . 28

Plant Food Co-Op v. Wolfkill Feed and Fertilizer Corporation, 633 F.2d 155 (9th Cir.1980) 16

Royalty Network, Incorporated v. Harris, 756 F.3d 1351 (11th Cir. 2014) . . . . . . . . . . . . . . . . 25

Schwarzenegger v. Fred Martin Motor Company, 374 F.3d 797 (9th Cir., 2004) ........ 13, 15

Shroyer v. New Cingular Wireless Servs., Incorporated, 622 F.3d 1035 (9th Cir. 2010) . . . . . 28

Starr v. Baca, 652 F.3d 1202 (9th Cir. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Swift v. Tyson, 41 U.S. 1 (1842) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

United States ex rel. Newsham v. Lockheed Missiles and Space Company, 

190 F.3d 963 (9th Cir. 1999) ........................................... 23, 24, 25

Vess v. Ciba-Geigy Corporation USA, 317 F.3d 1097 (9th Cir., 2003) . . . . . . . . . . . . . . . . . . . 29

Walden v. Fiore, 134 Southern Ct. 1115 (2014) ................................. 15, 16

Wells Fargo and Company v. Wells Fargo Exp. Company, 556 F.2d 406 (9th Cir 1977) . . . . . 14

Wilson v. Hewlett-Packard Company, 668 F.3d 1136 (9th Cir. 2012) . . . . . . . . . . . . . . . . . . . . 28

Page iii- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
David P. Lennon, OSB # 125575

Lennon & Klein, P.C.

3922 Bellinger Lane

Medford, OR 97501

Telephone: 212-465-2020

Facsimile: 212-202-5337

E-mail: david@lennon-klein.com

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

MEDFORD DIVISION

ORBITAL PUBLISHING GROUP, INC., a

New York corporation, and LIBERTY

PUBLISHERS SERVICE, INC., a New York

corporation,

Plaintiffs,

-againstBRIDGET WELLS, individually, and

PERIODICAL WATCHGUARD, LLC., a

North Carolina limited liability company,

Defendants.

Case No. 1:15-cv-00480-CL

PLAINTIFFS’ MEMORANDUM IN

OPPOSITION TO DEFENDANTS’

MOTION TO DISMISS

(ORAL ARGUMENT REQUESTED)

PRELIMINARY STATEMENT

This memorandum of law is respectfully submitted on behalf of Plaintiffs Orbital

Publishing Group, Inc. (“Orbital”) and Liberty Publishers Service, Inc. (“Liberty”) in opposition

Page 1- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
to the motion by defendants Bridget Wells and her company, Periodical Watchguard, LLC.

(“Periodical Watchguard”) to dismiss the complaint. 

Plaintiffs Orbital and Liberty are companies that marketed and sold magazine

subscriptions to consumers through direct mail. Plaintiffs successfully engaged in this business

until they were targeted by defendant Bridget Wells and her company, defendant Periodical

Watchguard. With the intent of putting plaintiffs out of business, defendants flooded magazine

publishers, plaintiffs’ banks, attorney generals and other government agencies across the country

with fraudulent proclamations about plaintiffs’ business practices. Defendants maliciously

claimed that plaintiffs were mailing out fraudulent solicitations, engaging in mail fraud, and

defrauding customers by not fulfilling their magazine orders and stealing their money – all of

which was untrue. As a result of defendants’ tortious interference, publishers and their

clearinghouses terminated their relationship with plaintiffs, one bank after another closed

plaintiffs’ bank accounts and terminated their relationships, and state attorney generals across the

country have initiated investigations or actions against plaintiffs. Unable to sustain business

under the weight of these fraudulent allegations, plaintiffs ceased doing business.

Defendants motion to dismiss should be denied because:

a. This court has jurisdiction over defendants Wells and Periodical

Watchguard in Oregon as these defendants engaged in tortuous acts in Oregon

which gave rise to the action and it is not unreasonable for them to have to defend

this action in Oregon;

b. Venue is proper in Oregon because defendants committed acts in

Oregon and the plaintiffs, which are the subject of the action, are located in

Oregon;

Page 2- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
c. The Oregon Anti-Slapp statute does not preclude the prosecution

of this actions because ORS 31.150 — an Oregon procedural statute and not a

substantive statute — should not apply to this federal court action; and even if

ORS 31.150 did apply, Defendants have not demonstrated that their actions are

protected under Oregon’s Anti-SLAPP and Plaintiffs have demonstrated that

there is a probability that they will prevail on the claim; and

d. Plaintiff stated a claim for tortious interference with business

relationships that is not time barred since there can be no issue that defendants

Wells and Periodical Watchguard has continued their tortious towards Plaintiffs

earlier this year. 

THE ALLEGATIONS OF THE 

COMPLAINT AND THE BACKGROUND

The allegations are contained in the complaint, to which the Court is respectfully

referred. A copy of the complaint is annexed to the Declaration of David P. Lennon dated

August 14, 2015 as Exhibit A.1 For the convenience of the Court, a summary of the salient

allegations of the complaint is set forth below.

Plaintiff Orbital is a New York corporation and that had places of business in Reno,

Nevada and in Medford, Oregon. Orbital was incorporated and started doing business in 2010. 

Orbital was engaged in the business of marketing and selling magazine subscriptions by direct

mail. Orbital and Liberty were independent magazine subscription agents. Orbital ceased

1

 The Declaration of David P. Lennon dated August 14, 2015 is hereinafter referenced as

“Lennon Decl.” and the exhibits attached to the Lennon Decl. are referenced as “Lennon Decl.,

Ex. ___.” 

Page 3- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
operations in or about 2012 when it was no longer able to open and maintain banking

relationships in Oregon. 

Plaintiff Liberty is a New York corporation with its place of business in Medford,

Oregon. Liberty was also engaged in the business of marketing and selling magazine

subscriptions by direct mail. Liberty was incorporated in 2011 and started doing business when it

became apparent that Orbital would not be able to continue to maintain bank accounts. Liberty

acquired certain assets and liabilities of Orbital. Liberty ceased operations in or about 2014

when it was unable to open and maintain banking relationships in Oregon.

Defendant Bridget Wells is the owner and founder of Periodical Watchguard located in

North Carolina. Periodical Watchguard was purportedly established to assist publishers in

identifying “fraudulent sales” and to educate consumers in how to recognize the difference

between a “good deal” and a “scam.” (See the printout of the Periodical Watchguard’s website,

Lennon Decl., Ex. B.)

2

Wells, both individually and through her company, Periodical Watchguard, set out on a

four-prong course of attack to put Orbital and Liberty out of business by disseminating false and

disparaging information about their business practices to: (1) members of the publishing

industry, (2) Attorney Generals in numerous states, (3) Orbital and Liberty’s banks and (4) other

government agencies, including the U.S. Postal Service.

Magazine subscription agents, such as Orbital and Liberty, solicit consumers through

direct mail to sell subscriptions for magazines whose publishers accept orders from independent

2

 After the commencement of this action, Wells and Periodical Watchguard changed their

website to remove some the tortious references to Plaintiffs. The version submitted herewith is

how the defendants’ website existed prior to this action. 

Page 4- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
agents. Orbital and Liberty’s direct mail solicitations clearly state that they are independent

agents that may not have a direct relationship with the publishers. (See an example of Plaintiffs’

direct mail solicitation, in blank, Lennon Decl., Ex. C.) 

Typically, upon receipt of orders from consumers, magazine subscription agents forward

the orders to clearing firms that work directly with publishers, or other clearing firms, together

with the previously agreed upon remittance. There may be multiple levels of clearing firms

handling the order before the publisher receives it depending on which clearing firm has the

direct relationship with the publisher. Once the publisher (or its designee) processes the order,

the consumer begins to receive the magazine. Magazine subscription agents make their profit on

the difference between the remittance paid to the clearing firm and the price they sell the

magazine subscriptions for, less the cost of operations and marketing.

Defendants’ Improper Conduct 

Within the Publishing Industry 

Beginning in and around 2010, Wells set out on a course of contacting publishers and

falsely asserting, inter alia, that Orbital and then Liberty were “illegitimate businesses” that were

defrauding customers. Wells undertook the malicious campaign to put Orbital and Liberty out of

business to improperly divert business away from Orbital and Liberty to those clearing firms,

agents, and publishers in which she has an interest or that pay her. 

Specifically, defendants falsely asserted to publishers and other members of the

publishing industry that Orbital and Liberty were engaged in the following fraudulent conduct: 

a. mailing solicitations to customers that purported to be renewal

solicitations direct from the publishers thereby defrauding consumers; 

Page 5- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
b. by collecting fees from consumers for magazine subscriptions and

only remitting certain orders to clearing firms and stealing the rest of the

consumers’ money; and

c. committing “mail fraud.” 

On defendant Periodical Watchguard’s website, defendants specifically identified

plaintiffs under the heading “Scams” for direct mail and made the following statement:

Bogus Renewal Solicitations

Many consumers are receiving solicitations that

appear to be a request for renewal. These

solicitations generally come from the same location

– White City, Oregon. In the recent past, the

solicitations were mailed from Reno, Nevada. 

The solicitations have a variety of names, but the

parent company is Orbital Publishing Group. If

your magazine has been targeted by these rogue

sellers, please contact us to discuss the latest

developments.3

Wells encouraged publishers to take steps to ensure that their magazines not be sold

through Orbital and Liberty because they were purportedly “illegitimate businesses.” Wells

encouraged publishers to take all steps necessary to ensure that their clearing firms and agents

not deal with Orbital and Liberty. 

In or about December 2014, Wells disseminated an email to members of the publishing

industry inviting them to a seminar in New York regarding, inter alia, fraud in the magazine

3

 Orbital and Liberty both used clearing firms located in White City, Oregon. [Footnote

not in original.]

Page 6- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
industry and what steps should be taken. On January 21, 2015, Wells conducted that seminar in

New York City entitled, “Fraud/Bogus Renewal/Unauthorized Sellers: Lunch with an Expert.”45

Throughout that seminar, and in conjunction with the alleged fraud being perpetrated

against publishers, defendants repeatedly made reference to “Liberty Publishers Service and

Orbital Publishing Group” as being the leading culprits. 

Defendants fraudulently misrepresented to the attendees at the seminar that plaintiffs

only clear a small percentage of their orders and steal the balance of the money collected. To

lend an air of credibility to her false statements, defendants misrepresented that they were

working with the U.S. Postal Service to put an end to plaintiffs’ purported ongoing mail fraud. 

Wells advised and encouraged the attendees at the seminar and all those publishers she

contacts, to take action to put Orbital and Liberty out of business to stop the “mail fraud” by

contacting the U.S. Postal Service.

Defendants also urged the attendees at the seminar that both the publishers and their

customers should call their Attorney General and claim that they have been defrauded if they

receive a solicitation from either Orbital or Liberty. Wells provided the attendees at her seminar

with the names of certain companies who were purportedly clearing magazine orders for Orbital

4

 During the seminar, in addition to her tortious statements regarding Plaintiffs, she made

numerous false and disparaging factual assertions regarding the people and the companies that

worked with Plaintiffs. Just as an example, she stated that Dennis Simpson, a client of David

Lennon (attorney for Plaintiff in this action) was David Lennon’s law partner. Mr. Simpson is

not even an attorney and is certainly not Mr. Lennon’s law partner. This is but an example of the

fabrications uttered by Defendant at the seminar. 

5

 Plaintiffs obtained a recording of Defendant’s January 21, 2015 seminar. Accordingly,

at the appropriate hearing, the court will be able to hear in Defendant Wells’ own words the lies

and misrepresentations she espouses regarding Plaintiffs and those companies and people that

work with Plaintiffs.

Page 7- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
or Liberty and advised them not to do business with those companies, so that no company would

do any business with plaintiffs. During her seminar, Wells stated that while she was employed

by a major publisher, Hearst Publications, she was unable to convince Hearst lawyers to bring

action against the magazine subscription agents. (Of course, the attorneys would not bring action

against the agents because the agents were not engaging in any activity which would subject

them to a law suit.) Wells stated, “I started my own company so I wouldn’t have to run into

that.” In her own words she stated that although she knew that there was no legitimate legal

basis for bringing claims against Plaintiffs to stop their activity, she decided to start her own

company to take matters into her own hands outside of the judicial process. 6

Defendants intentionally interfered in the business relations between plaintiffs and

publishers and clearing firms who deal with Orbital and Liberty for the sole purpose of putting

plaintiffs out of business and did so through improper means by telling falsehoods about

Plaintiffs.

As a result of defendants’ conduct, plaintiffs suffered non-economic and economic

damages, including lost income and impairment of future income. 

6

 She even referenced prior litigations where publishers brought actions against magazine

subscription agents which resulted in the court dismissing those actions. Again, frustrated with

the lack of being able to use the judicial process because the magazine subscription agents

engage in no wrongful conduct, Wells decided to take matters into her own hands to stop the

magazine subscription agents.

Page 8- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
Wells’ Improper Conduct 

with Attorney Generals’ Offices

Indeed, at here seminar in New York in January, Wells was boasting that she was getting

a contract from the State of Oregon to work with the Oregon Department of Justice to prosecue

Plaintiffs. 

Indeed, at the January 2015 seminar, Defendant Wells explained how she is “in final

negotiations for the contract with Oregon to be a witness for them.” She identified Geoffrey

Darling, Chief Investigator for the Oregon Department of Justice, as being “another key player

in this game, for lack of a better way of saying it. Um, and I already told him when I saw him I

didn’t, I didn’t care about personal space, I was giving him a big old hug and kiss just because

he’s, you know, interested and, wanting to carry on. So, anyway, working with him.” 7

Moreover, at the seminar, Wells stated that the authorities need to pursue Plaintiffs

criminally: “it needs to be criminal.” Notwithstanding Wells advocating for the criminal

prosecution of Plaintiffs and those that they worked with, there is no criminal prosecutions

against Plaintiffs, or those that they work with, as they did not commit any crimes, let alone

violate the law.

Defendants encouraged publishers to contact the attorney generals’ office in their

respective states to file a complaint about the allegedly fraudulent business practices of Orbital

and Liberty and assert they had been harmed.

7

 It is noteworthy that in her declaration in support of her motion to dismiss, Wells stated

that she has not even been to Oregon (other than a two day vacation six years ago), yet in

January in New York she told a room full of people that when she saw Geoffrey Darling, Chief

Investigator for the Oregon Department of Justice she was going to give him a hug and a kiss.

Page 9- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
Wells encouraged publishers to contact the Attorney General’s office to complain about

fraudulent acts perpetrated by Orbital and Liberty notwithstanding that Orbital and Liberty’s

customers paid for magazine subscriptions and either received magazines or received refunds

where appropriate.

Wells encouraged publishers to direct their customers to contact the Attorney General’s

office in their respective states to complain about the allegedly fraudulent business practices of

Orbital and Liberty, and to assert they had been harmed. In response to the false, disparaging

and malicious information Wells was disseminating about Orbital and Liberty, and at

defendants’ urging, publishers and/or their customers were filing baseless complaints with

Attorney Generals’ offices across the country.

As a result of defendants’ actions, Attorney Generals’ offices across the country received

an increase in the number of complaints that were filed against Orbital and Liberty. Wells

personally contacted the Attorney Generals in multiple states and misrepresented, inter alia, that

Orbital and Liberty are illegitimate companies that are mailing fraudulent solicitations to

consumers. 

Based on the false and disparaging information provided by Wells, these Attorney

Generals opened investigations into Orbital and Liberty. Wells is providing these Attorney

Generals with information as to whom Orbital and Liberty do business so that the Attorney

Generals would also target them for investigation. 

Based on the false and disparaging information provided by Wells, these Attorney

Generals opened investigations into numerous companies with whom Orbital and Liberty did

business.

Page 10- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
These Attorney Generals are contacting Orbital and Liberty’s vendors, members of the

publishing industry, banks and customers as part of their investigations into purported fraud. 

These investigations had a chilling effect on Orbital and Liberty’s business relationships with its

banks, members of the publishing industry, vendors and customers. 

As a result of Wells’ fraudulent misrepresentations to Attorney Generals’ offices, and in

answer to these investigations, Orbital and Liberty have had to utilize their funds and resources

to defend against these false accusations of fraud.

Wells’ Improper Conduct With Banks 

Wells contacted Orbital and Liberty’s banks and fraudulently misrepresented, inter alia,

that Orbital and Liberty were using their bank for improper purposes to launder money and

defraud consumers. (While Wells states in her declaration that “to the best of [her] knowledge

she never contacted any bank in Oregon, given that every bank with which Plaintiffs maintained

accounts were closed without explanation, it appears that Wells either directly or caused other

people to raise issues with Plaintiffs’ banks. Moreover, Wells states that to the best of her

knowledge she did not contact any “Oregon” banks, she does not deny that she contacted banks. 

Many of the banks with whom Plaintiffs conducted business are national banks such as Chase,

Bank of America and Wells Fargo.)

Wells’ encouraged publishers to contact Orbital and Liberty’s banks and claim that

plaintiffs are defrauding them. Wells’ also encouraged publishers to enlist their customers to

contact Orbital and Liberty’s banks and claim that plaintiffs are defrauding them. 

As a result of Wells’ misrepresentations and incitement, Orbital and Liberty’s banks have

been contacted by publishers and/or their customers claiming that they have been defrauded by

Orbital and/or Liberty.

Page 11- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
As a result of Wells’ conduct, banks have terminated their business relationships with

Orbital and Liberty and have terminated their bank accounts. As a result, Orbital and Liberty

were unable to deposit checks from customers. 

As a result of Wells’ conduct, Orbital and Liberty were forced to jump from bank to bank

and ultimately they were unable to open accounts at any bank whatsoever thereby forcing them

out of business.

As a result of Wells’ conduct, Orbital and Liberty have suffered non-economic and

economic damages to their business, including disruption to their business, delay of submitting

orders due to the inability to submit the required remit to clearing firms, legal fees to compel

banks to honor outstanding checks upon termination of accounts, and lost income and

impairment of future income. 

ARGUMENT

POINT I

THIS COURT HAS PERSONAL JURISDICTION 

OVER WELLS AND PERIODICAL WATCHGUARD

Federal courts may exercise personal jurisdiction over a non-resident defendant where

the state’s long-arm statute confers jurisdiction over the defendant and the exercise of

jurisdiction does not violate due process. Data Disc. Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d

1280, 1286 (9th Cir. 1977). Because Oregon law confers jurisdiction over an out-of-state

defendant that is coextensive with due process, the court need only analyze whether the exercise

of jurisdiction comports with due process. Gray & Co. v. Firstenberg Mach. Co., 913 F.2d 758,

760 n.l (9th Cir. 1990). 

Page 12- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
Due process requires a court to have general or specific jurisdiction over a defendant to

avoid “offend[ing] traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. State

of Wash., 326 U.S. 310, 316 (1945) (citations omitted). A court has general jurisdiction where

the defendant’s contacts with the forum are “substantial” or “continuous and systematic.” Decker

Coal Co. v. Commw. Edison Co., 805 F.2d 834, 839 (9th Cir. 1986). A court has specific

jurisdiction over a defendant if “there is a strong relationship between the quality of the

defendant’s forum contacts and the cause of action.” Id. Plaintiffs contend that this court has

specific personal jurisdiction over Defendants.

In the Ninth Circuit, courts apply the following three-part test when determining whether

they have specific jurisdiction over a defendant: (1) The nonresident defendant must do some act

by which he purposefully avails himself of the privilege of conducting activities in the forum,

thereby invoking the benefits and protections of the forum; (2) the claim must be one which

arises out of or results from the defendant’s forum-related activities; and (3) exercise of

jurisdiction must be reasonable. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th

Cir., 2004); Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995).

The plaintiff bears the burden of satisfying the first two prongs of the test. If the plaintiff

fails to satisfy either of these prongs, personal jurisdiction is not established in the forum state. If

the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the

defendant to “present a compelling case” that the exercise of jurisdiction would not be

reasonable. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004), citing

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

Page 13- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
In evaluating defendant’s motion, the court may consider evidence presented in affidavits

to assist it in its determination and may order discovery on the jurisdictional issues.8

 Doe v.

Unocal Corp., 248 F.3d 915, 922 (9th Cir.2001), citing Data Disc, Inc. v. Systems Technology

Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir.1977). If the court decides the motion based on the

pleadings and affidavits submitted by the parties without conducting an evidentiary hearing, the

plaintiff need make only a prima facie showing of jurisdictional facts to withstand the motion to

dismiss. Id., Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995). In the absence of an

evidentiary hearing, the court accepts uncontroverted allegations contained within the plaintiff’s

complaint as true, and resolves conflicts between statements contained within the parties’

affidavits in the plaintiff’s favor. Bates v. Bankers Life & Cas. Co., 993 F. Supp.2d 1318 (D. Or.

2014).

8

 During conferral with opposing counsel, Plaintiffs’ counsel requested limited discovery

on the personal jurisdictional issue which defendants’ counsel declined. During a preliminary

conference with the court on July 20, 2015, Plaintiffs’ counsel then requested leave of the court

to conduct limited jurisdictional discovery. The court denied Plaintiffs leave to conduct any

jurisdictional discovery at that time in connection with the instant motion. 

To the extent the court determines that a greater showing is necessary to establish

personal jurisdiction, Plaintiffs request leave to conduct limited discovery on the jurisdictional

issue. Wells Fargo & Co. v. Wells Fargo Exp. Co., 556 F.2d 406, 430 n.24 (9th Cir 1977)

(“Discovery, however, ‘should be granted where pertinent facts bearing on the question of

jurisdiction are controverted . . . or where a more satisfactory showing of the facts is

necessary.’”); LaDue v. City of Talent, No. 1:14-CV-01421-CL (D. Or. 2015) (Clarke, J.)

(“Based on the evidence and allegations proffered by both parties, it is not clear to the Court

‘that further discovery would not demonstrate facts sufficient to constitute a basis for

jurisdiction.’ . . . Rather than rule on an incomplete record, the Court will allow limited

jurisdictional discovery.”).

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TO DISMISS 
A. Purposeful Availment or Direction Generally

As the Ninth Circuit explained in Schwarzenegger, 

We often use the phrase “purposeful availment,” in shorthand

fashion, to include both purposeful availment and purposeful

direction,, but availment and direction are, in fact, two distinct

concepts. A purposeful availment analysis is most often used in

suits sounding in contract. A purposeful direction analysis, on the

other hand, is most often used in suits sounding in tort.

Schwarzenegger, 374 F.3d at 802 (9th Cir. 2004) (citations omitted). This is the exact analysis

that the United States Supreme Court directed courts to use for decades to determine if there is

jurisdiction and Walden v. Fiore, 134 S. Ct. 1115 (2014) has not changed that analysis. Walden

is not new law. Walden simply explained that the lower court misapplied the law and that “the

well established principles of personal jurisdiction are sufficient to decide this case.” Walden v.

Fiore, 134 S. Ct. 1115 (2014). In Walden, the Court held that the “proper focus of the

‘minimum contacts’ inquiry in intentional-tort cases is ‘the relationship among the defendant,

the forum, and the litigation.’” Id. citing Calder v. Jones, 465 U. S. 783, 788 (1984). Here,

Defendants’ actions towards the Plaintiffs in connection with Oregon demonstrates that there is

specific jurisdiction.

In Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985), the Supreme Court held: 

Where a forum seeks to assert specific jurisdiction over an

out-of-state defendant who has not consented to suit there, this

“fair warning” requirement is satisfied if the defendant has

“purposefully directed” his activities at residents of the forum,

Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct.

1473, 1478, 79 L.Ed.2d 790 (1984), and the litigation results from

alleged injuries that “arise out of or relate to” those activities,

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,

414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404(1984).

Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774-75, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984)

(finding purposeful direction where defendant published magazines in Ohio and circulated them

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TO DISMISS 
in the forum state, New Hampshire); accord Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894,

899 (9th Cir.2002) (finding purposeful direction where defendant distributed its pop music

albums from Europe in the forum state, California); see also World-Wide Volkswagen, 444 U.S.

at 297-98, 100 S.Ct. 559 (noting that a “forum State does not exceed its powers under the Due

Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into

the stream of commerce with the expectation that they will be purchased by consumers in the

forum State”); Plant Food Co-Op v. Wolfkill Feed & Fertilizer Corp., 633 F.2d 155, 158-60 (9th

Cir.1980) (relying on this language in World-Wide Volkswagen to hold that a Canadian fertilizer

distributor that shipped defective or mislabeled fertilizer to Montana may properly be subject to

personal jurisdiction there). 

The Supreme Court has held that due process permits the exercise of personal jurisdiction

over a defendant who “purposefully direct[s]” his activities at residents of a forum, even in the

“absence of physical contacts” with the forum. Burger King, 471 U.S. at 476, 105 S.Ct. 2174

(citing Keeton, 465 U.S. at 774-75, 104 S.Ct. 1473)

Walden does not support the defendants’ argument that there is no jurisdiction because

— unlike in Walden — defendants themselves established their contacts with Oregon. In

Walden, the defendant had absolutely no contacts with the venue state. 

In the case at bar, Wells and Periodical Watchguard admittedly contracted with the

Oregon Department of Justice to give testimony in an Oregon court on behalf of the Oregon

Department of Justice against defendants Orbital and Liberty. Wells, as the president of

Periodical Watchguard, on November 7, 2013, actually gave live voluntary testimony by

telephone in the Jackson County Circuit Court in Oregon in a case involving one of Plaintiffs’

vendors, Customer Access Services, Inc., a clearing firm. In her declaration in support of her

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TO DISMISS 
motion to dismiss this action, Wells states that case did not “involve these Plaintiffs” but that is

not true. After she was sworn in by Judge Gerking, Wells testified regarding defendant Orbital’s

role in the magazine industry, that Orbital was not authorized to solicit magazine subscription

orders and that Orbital charged amounts different that what the publishers charge. She testified

as follows: 

Q. So can you tell the judge, before you tell us anything that you know about

it, how you became aware of the name Shannon Balero?

A. Yes. With my company Periodical Watchguard, it is my job to seek out

those owners, those runners, those managers of companies that publishers

-- my clients have asked me to seek. In doing research on corporate

entities, business entities and so forth, I came across the name of Shannon

Balero and the address for her with regard to a company called at the time

Orbital Publishing Group going under a bunch of AKAs.

(Wells Tr. 15, Lennon Decl., Ex. D.) She also testified that Orbital did not have authorization to

solicit magazine subscription order which not true.

Q. And do you know they were not authorized?

A. I know that no publisher has directly authorized Orbital Publishing Group

to sell their titles.

Q. You just testified you know who the agent was; you just testified it was

Orbital Publishing Group. Is that -- do you now recollect that was the

agent?

A. I recollect that that is what -- you keep using the word agent, and I

disagree with the word agent. 

Q. Well, as to -- was that the plaintiff in the case against Bank of America?

A. I believe that it was Orbital Publishing Group that was the plaintiff in the

case of Bank of America.

Q. And you testified that you are not aware of any publishers that authorized

the Orbital Publishing Group to sell those magazines; is that right? Was

that your testimony?

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TO DISMISS 
A. My testimony is that I know of no publisher who has directly authorized

those sales; that is correct. 

(Wells Tr. 56-57, Lennon Decl. Ex. D.) Wells also again testified that Orbital was not

“authorized” and that consumers that purchased magazines from Orbital did not get their

magazine – both of which was not true.

Q. Did you talk to any clearing firms to see if they authorized Orbital

Publishing Group to sell certain magazines?

A. Yes, I have spoken to many of those, all of the major ones, and said have

you authorized these? If so, this publisher does not -- because I can only

speak for my publishers. And Hearst when I worked there, I could speak

for all 19 titles. We do not want that business. This is not authorized

business; I don’t want it.

Q. Now, you identified two problems with consumers. One is that they do not

get the magazine and that the other problem is that they pay a price

different than what the publisher authorizes?

A. Yes.

Q. Okay. With respect to the Orbital Publishing Group, were

you aware of any instances where consumers didn’t get the

magazine?

A. Yes.

Q. Are you aware of complaints by publishers that Orbital

charged a different amount than publishers --

A. Yes.

Q. -- wanted?

A. Yes. 

(Wells Tr. 59-60, Lennon Decl., Ex. D.)

Wells claims that she recently contracted to give expert testimony at the Oregon

Department of Justice’s request, but Wells fails to advise the court that she had been working

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TO DISMISS 
with the Oregon Department of Justice for years in trying to put the Plaintiffs out of business. 

(See Lennon Decl., Ex. E)

In addition to testifying about Plaintiffs and assisting Oregon the Department of Justice,

Wells and Periodical Watchguard also sent numerous cease and desist letters to defendants in

Oregon. (Lennon Decl., Ex. F) 

In her declaration, Wells claims that she that “to the best of [her] knowledge” she has not

contacted any of defendants’ banks in Oregon, but does not deny that she contact defendants

bank in Oregon. Since defendants were established, they have lost all of their banking

relationships with many different banks. Plaintiffs believe that they lost these banking

relationships as a result of defendants contacting Plaintiffs’ banks directly or directing

publishers, or consumers to contact Plaintiffs’ banks. 

Based on the allegations and evidence that Defendants engaged in activity in Oregon

giving rise to Plaintiffs’ claims, as well as engaging activity outside of Oregon which gives rise

to Plaintiffs’ claims, Plaintiffs have demonstrated that Defendants have purposely availed

themselves to Oregon. These contacts are not contacts based on the conduct of Plaintiffs or third

parties; these are contacts as a result of Defendants’ purposeful availment. 

B. Defendants’ Conduct With Oregon Gives Rise to Plaintiffs’ Claims 

The Defendants’ contacts with Oregon are not limited to “phone calls” she purportedly

had with the Oregon Department of Justice. As the court can see from the volume of

correspondence between Defendants and Oregon Department of Justice, her communication was

not limited to phone calls. (See Lennon Decl., Ex. E)

Here, Defendants contracted with Oregon Department of Justice to assist them in its

investigation and prosecution against Plaintiffs based on the false and misleading information

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TO DISMISS 
provided by Defendants about Plaintiffs. Similarly, Wells testified in Oregon State Court

regarding Plaintiffs’ activities. Accordingly, there are far more than “minimum” contacts — all

that is required — between and among the forum, Defendants and Plaintiffs’ claims. 

Accordingly, Plaintiffs have established a prima fascia showing of personal jurisdiction.

C. It Is More Than Reasonable for the 

Court to Find Jurisdiction Over Defendants

To determine reasonableness such that the exercise of jurisdiction comports with “fair

play and substantial justice,” once Plaintiff establishes the first two prongs of the specific

jurisdiction test, it is Defendants’ burden to “present a compelling case” that the reasonable

exercise of jurisdiction would not be reasonable. Bates v. Bankers’ Life and Casualty Co.,993 F.

Supp 2d, 1318, 1333 (D. Or. 2014), quoting Burger King v. Rudzewicz, 471 U.S. 462, 476-78

(1985). In determining reasonableness, the Ninth Circuit has identified seven factors for the

court to consider in determining whether or not it would be reasonable for Defendants to defend

the action in the forum state. The court need consider: (1) the extent of the Defendants’

purposeful injection into the forum state’s affairs; (2) the burden on the Defendants to defend the

suit; (3) the extent of the conflict with the sovereignty of the Defendants’ state; (4) the forum

state’s interest in adjudicating the dispute; (5) the most efficient judicial resolution of the

controversy; (6) the importance of the forum to the Plaintiffs’ interest in obtaining convenient

and effective relief; and (7) the existence of an alternative forum. Shute v. Carnival Cruise Lines,

897 F 2d 377, 386 (9th Cir. 1990), citing Federal Deposit Insurance Corp. v. British - American

Insurance Co., LTD, 828 F.2d 1439, 1442 (9th Cir. 1987). The court must balance the seven

factors to determine whether the exercise of jurisdiction would be reasonable. Id.

There can be no issue of the Defendants’ purposeful injection into the forum state given

the voluntary testimony proffered in the Jackson County Circuit Court and the voluntary

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TO DISMISS 
agreement to testify on behalf of the Oregon Department of Justice in another case in Oregon

State Court. Furthermore, Defendants injected themselves into Oregon’s affairs by sending

numerous cease and desist letters on behalf of purported clients to Plaintiffs and other companies

that work Plaintiffs. It is inconceivable how Defendants can claim that they have not

intentionally injected themselves into the affairs of the forum state. See Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 774-75 (1984).

The burden on Defendants Wells and Periodical Watchguard is substantial given that

they voluntarily agreed to testify in two separate court proceedings against Plaintiffs. They can

hardly be heard to complain to having to defend themselves in Oregon having injected

themselves into Oregon’s affairs. There is certainly no conflict with North Carolina sovereignty, 

the Defendants’ state, as none of the contacts or claims relate to or arise from any relationship

with North Carolina. There is certainly an interest in having these claims adjudicated in Oregon

where all of the Plaintiffs are located as well as many of the companies with which Plaintiffs

conducted their business. There are no companies with which Plaintiff conduct their business in

Defendants’ home state of North Carolina. Given that Plaintiffs and many of the companies

with whom they conduct their business are located in Oregon, there would be an efficient

resolution of the controversy here and it would be difficult for Plaintiffs, as wells as their

numerous witnesses, to have to testify in another state. While there may be an alternative forum

to Plaintiff to assert these claims, any alternative venue lacks the interest that exists in Oregon

with respect to Plaintiffs. While New York may be a viable alternative venue, the fact that

virtually all of the witnesses from Plaintiffs, those companies that they work with, the Oregon

Department of Justice with whom Defendants contracted to give testimony, and the numerous

banking relationships that Plaintiffs had that were destroyed, are all located in Oregon.

Page 21- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
Accordingly, it is not unreasonable for Defendants to defend this action here

POINT II

VENUE IS PROPER IN OREGON

Venue is proper in the District of Oregon because “a substantial part of the events or

omissions giving rise to the claim occurred” in Oregon. 28 U.S.C. § 1391(b)(2). As admitted by

Defendants, Defendant Wells testified in the Jackson County Circuit Court in Oregon regarding

Plaintiffs’ business practices. Moreover, Defendants admit that they “contracted” to give

testimony and to assist the Oregon Department of Justice in a case to be filed in Oregon to shut

down Plaintiffs’ business and the businesses of the companies with which Plaintiffs worked.

Accordingly, venue is proper is the District of Oregon.

In the alternative, Defendants ask the court to transfer this case to the District of North

Carolina pursuant to 28 U.S.C. § 1404(a) because the District of Oregon is purportedly an

inconvenient venue. Defendants’ argument that Oregon is an inconvenient venue to litigate is

belied by the fact that Defendant Wells, has already voluntarily testified in an Oregon state court

regarding Plaintiffs’ purported business practices and Defendants contracted with the Oregon

Department of Justice to testify in another state court action against Plaintiffs and those with

whom they work. Moreover, virtually all of the witnesses, including the banks that terminated

their relationships with Plaintiffs based on Defendants’ conduct are located in Oregon, as are all

of the former officers and employees of Plaintiffs and many of the companies with whom they

worked. There is nothing in North Carolina except for Defendants.

Page 22- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
POINT III

OREGON’S ANTI-SLAPP STATUTE DOES NOT 

APPLY, AND EVEN IF IT DOES APPLY, PLAINTIFFS 

DEMONSTRATED A PROBABILITY THAT THEY WILL PREVAIL

A. Oregon’s Anti-SLAPP Statute Should Not Even Apply in Federal Court

Initially, Oregon’s procedural Anti-SLAPP Statute should not apply to this action

pending in federal court. While Plaintiffs recognize the holding of United States ex rel.

Newsham v. Lockheed Missiles and Space Co., 190 F.3d 963, 973 (9th Cir. 1999), and its

progeny, including Metabolic Research, Inc. v. Ferrell, 693 F.3d 795, 796 (9th Cir. 2012) (cited

by Defendants), the doctrine as to whether a state’s Anti-SLAPP statute should apply in Federal

court should be reconsidered in the Ninth Circuit.

The seminal case of Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), overruling Swift

v. Tyson, 41 U.S. 1 (1842), held that state law governed substantive issues in diversity cases. It is

now just as axiomatic that procedure in federal court is governed by federal law and not state

law. See Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996); see also Hanna v.

Plumer, 380 U.S. 460 (1965) (“Erie and its offspring cast no doubt on the long recognized power

of Congress to prescribe housekeeping rules for federal court.”) 

In Makaeff v. Trump University, LLC, 715 F.3d 254 (9th Cir. 2013), Chief Judge

Kozinski, joined by Judge Paez, in a concurrence opinion on the application of Nevada’s AntiSLAPP statute stated that he believe Newsham is wrong and should be reconsidered. Judge

Kozinski stated that under Erie, Anti-SLAPP statutes create no substantive rights but merely

provide procedural mechanisms for vindicating existing rights. Makaeff, 715 F.3d at 273. Judge

Kozinski stated:

The language of the statute is procedural: its mainspring is a “special motion to

strike”; it contains provisions limiting discovery; it provides for sanctions for

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TO DISMISS 
parties who bring non-meritorious suit or motion; the court’s ruling on a the

potential success of Plaintiff’s claim is not “admissible in evidence at any later

stage of the case”; and an order granting or denying the special motion is

immediately appealable [in California]. The statute deals only with the conduct

of the lawsuit; it creates no rights independent of existing litigation; and its only

purpose is the swift termination of certain lawsuits the legislators believe to be

unduly burdensome. It is codified in the State Code of Civil Procedure and the

California Supreme Court has characterized it as a “procedural devise to screen

out merit-less claims.” See Kibler v. N. Inyo County Local Hospital Dist., 39 Cal

4

th

 192, 46 Cal Rep. 3d 41, 138 P 3d 193, 198 (2006).

Maekeff 715 F.3d at 273. Judge Kozinski determined that the Anti-SLAPP statute is

quintessentially procedural and should have no application in federal court. Judge Kozinski

stated that federal courts must ignore state court’s rules of procedures because it is Congress that

has plenary authority over the procedures employed in federal court and this power cannot be

usurp by the states. 

The federal rules aren’t just a series of disconnected procedural

devises. Rather, the Rules provide an integrated program of pretrial, trial and post-trial procedures to ensure “just, speedy, and

inexpensive determination of every action and proceeding.” See

Fed.R.Civ.P. 1. Pre-discovery motions, discovery, summary

adjudication, and trial follow a logical order and pace so that cases

proceed smartly towards final judgment or settlement.

The California Anti-SLAPP Statue cuts an ugly gash

through this orderly process.

Id at 274. Indeed, Judge Kozinski found that this hybrid substantive/procedural scheme was

further undermined by the Ninth Circuit’s decision in Metabolife International, Inc. v. Wornick,

264 F.3d 832, 845 (9th Cir. 2001), which held that the discovery limiting aspects of the antiSLAPP statute do not apply in federal court. Judge Kozinski stated unequivocally, “Newsham

was a big mistake.” Judge Paez fully joined in Chief Judge Kozinski’s concurrence that

Newsham should be overturned. Maekeff, 715 F.3d at 275. 

Page 24- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
Indeed, Chief Judge Kozinski’s position on Newsham has been accepted in other circuits

and by district courts where circuits courts have not yet rendered a decision on the applicability

of Anti-SLAPP statutes in federal court. See Abbas v. Foreign Policy Grp., LLC., No.

12-cv-01565 (D.C. Cir. April 24, 2015) (The D.C. Anti-SLAPP statute does not apply in federal

court since Fed.R.Civ.P. 12 and 56 already address the same procedural issue.); Royalty

Network, Inc. v. Harris, 756 F.3d 1351 (11th Cir. 2014) (Georgia’s Anti-SLAPP statute does not

apply in diversity cases in federal court.); Unity Healthcare, Inc. v. Cnty. of Hennepin, Case No.

14-CV-114 (JNE/JJK) (D. Minn. June 25, 2015) (Minnesota’s Anti-SLAPP law is inapplicable

because it conflicts with Federal Rule of Civil Procedure 56.).

Plaintiffs respectfully submit that Newsham should be reversed by the Ninth Circuit, or

the Supreme Court, and that Oregon’s anti-SLAPP statute should not apply in federal court.

B. If the Court Determines That Oregon’s Anti-SLAPP Statute Even Applies in

Federal Court, the Anti-SLAPP Statute Does Not Apply in this Case as There Is No

Protected Speech at Issue

Notwithstanding that the Oregon Anti-SLAPP statute should not apply in federal court as

a matter of federal procedural law, in the instant case, the Oregon Anti-SLAPP statute does not

apply to this action. Defendants’ purported speech is not protected under the statute. 

Defendants claim that the their tortious conduct is covered by Anti-SLAPP sections (b)

regarding statements to “legislative, executive or judicial bodies or other proceedings authorized

by law” and (d) “any other conduct in furtherance of the exercise of the constitutional right of

petition or the constitutional right to free speech in connection with a public issue or an issue of

public interest.” O.R.S. § 31.150(2)(b) and(d). 

Defendants misunderstand the grounds of plaintiff’s claim. Defendants’ “lobbying” of

attorney generals throughout the country is only part of the improper interference with plaintiffs’

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TO DISMISS 
business relations. As alleged in the complaint, defendants undertook their malicious campaign

to put plaintiffs out of business by making false and disparaging statements to publishers and

other members of the publishing industry. (Cmplt, ¶ 20.) 

The statute allows Defendants to make a special motion to protect a person for exercising

free speech or participating in judicial proceedings. The nature of Plaintiffs’ instant claims is not

related to Defendants’ free speech or for testimony in connection with a judicial proceeding. 

The gravamen of Plaintiffs’ claim is that Defendants are engaged in a crusade to put Plaintiffs

(and those with which they do business) out of business. Defendants are engaged in their own

commercial enterprise — buy charging publishers and government agencies — to provide their

services to put the Plaintiffs out of business notwithstanding that Plaintiffs were engaged in a

legitimate endeavor and simply provided competition to Defendants’ so called “clients” and

others who pay Defendants for their purported “protection.” It is Defendants that have created

the aura of purported illegitimacy regarding Plaintiffs’ business. It is Defendants that have

solicited the publishers to quell the competition created by the Plaintiffs’ commercial endeavor. 

There are no First Amendment concerns at issue in this case.

These claims are not subject to Oregon’s Anti-SLAPP statute. Accordingly, defendants

have failed to carry the burden to demonstrate that plaintiffs’ claims are subject to Oregon’s

Anti-SLAPP statute. O.R.S. § 31.150(3). 

C. Assuming Defendants Carry Their Burden to Show That Their Conduct and

Statements Are Covered by O.R.S. § 31.150(3), Plaintiffs Have Demonstrated A

Prima Facie Case

Plaintiffs have shown that Defendants are making false statements about Plaintiff

business practices to publishers and are lobbying Attorney Generals purportedly on behalf of

those publishers to put Plaintiffs out of business. Defendants are disseminating false information

Page 26- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
about Plaintiffs operations by claiming that it is a criminal enterprise, that they only remit a

small portion of the orders that they procure to publishers and that the Plaintiffs make

misrepresentations, which they do not. It is Defendants, by these improper means, that created

the environment which makes it virtually impossible for Plaintiffs to engage in their legitimate

enterprise. 

If Plaintiffs are unable to proceed with their claim, defendants will have been able to

make false statements to an untold number of industry participants with the sole purpose of

putting plaintiffs out of business. Defendant Wells admitted in the seminar which she conducted

in New York in January 2015 that publishers were unable to successfully litigate against

plaintiffs, and that she had to resort to the propaganda tactics of making false statements about

plaintiffs business practices and directing scores of publishers and hundreds of consumers to file

“complaints” to the Attorney Generals throughout the country and to plaintiffs banks. This

conduct resulted in plaintiffs’ banks terminating their relationship with plaintiffs repeatedly such

that plaintiffs were unable to establish banking relationships with any bank such that they could

not operate.

While Defendants claim in their declaration that they did not communicate with banks in

Oregon, defendants certainly are responsible for directing other people to contact defendants’

banks in Oregon, and elsewhere, for the sole improper purpose of putting defendants out of

business.9

9

 This tactic was extraordinarily effective given the U.S. Department of Justice’s

“Operation Choke Point”, which in essence directed the FDIC to direct banks to close accounts

of purported “high risk” customers, such as tobacco sellers, firearm sales and, at issue in this

case, magazine subscription sales. (See Lennon Decl., Ex. G.) Simply because the bank

received complaints, banks would simply terminate accounts so as not to run afoul of the FDIC

and the U.S. Justice Department.

Page 27- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
POINT IV

PLAINTIFFS HAVE STATED A CLAIM FOR 

INTENTIONAL INTERFERENCE WITH BUSINESS RELATIONS

A claim for intentional interference with business relations has six elements: (1) the

existence of a professional or business relationship (which could include, e.g., a contract or a

prospective economic advantage), (2) intentional interference with that relationship, (3) by a

third party, (4) accomplished through improper means or for an improper purpose, (5) a causal

effect between the interference and damage to the economic relationship, and (6) damages. Allen

v. Hall, 328 Or. 276, 974 P.2d 199, 202 (1999).

A motion to dismiss for failure to state a claim may be granted only when there is no

cognizable legal theory to support the claim or when the complaint lacks sufficient factual

allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,

Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint’s factual

allegations, the court must accept as true all well-pleaded material facts alleged in the complaint

and construe them in the light most favorable to the non-moving party. Wilson v.

Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat’l Educ. Ass’n,

629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a

complaint “may not simply recite the elements of a cause of action, but must contain sufficient

allegations of underlying facts to give fair notice and to enable the opposing party to defend

itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences

from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office

Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008).

Defendants assert that plaintiffs failed to state a claim not because the complaint was in

any means deficient but because defendants made certain allegations “upon information and

Page 28- PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION

TO DISMISS 
belief” and that defendants believe they may be able to assert the affirmative defense of the

statute of limitations. 

The Twombly plausibility standard does not prevent a plaintiff from pleading facts

alleged “upon information and belief” where the facts are peculiarly within the possession and

control of the defendant, or where the belief is based on factual information that makes the

inference of culpability plausible. Carolina Cas. Ins. Co. v. Team Equip., Inc., 741 F.3d. 1082

(9th Cir. 2014); Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010). 

The allegation in the complaint made upon information and belief are all allegations that

are uniquely within the possession and knowledge of defendants and those persons that the

defendants communicated. Plaintiffs were not directly privy to all of defendants’ tortious

statements and conduct. However, given defendants known statements about Plaintiffs,

defendants’ goal to put Plaintiffs out of business and the known effects on Plaintiffs, namely the

termination of certain of Plaintiffs’ vendors and banking relationships, the allegations upon

information and belief are certainly proper inferences and beyond plausible. 

The statute of limitations defense is also no defense since there is no issue that

defendants engaged in tortious conduct as recently as January of this year during the seminar on

how to put Plaintiffs out of business that defendants gave in New York. 

Defendants also claim that the complaint is deficient for failure to plead fraud with

specificity as required by Federal Rules of Civil Procedure 9(b), although defendants do not state

what purported specificity is lacking. However, Rule 9(b) does not apply to this case because

plaintiffs have not alleged a fraud claim. Rule 9(b) does not apply to this action for a claim for

intentional interference with business relations. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097

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TO DISMISS 
(9th Cir., 2003), cited by defendants, is not an intentional interference with business relations

case, and thus, has no applicability to this action.

If the court were to determine that certain of plaintiffs’ allegations “sounded in fraud,”

plaintiffs have pled with the requisite specificity. (See e.g. Cmplt, ¶¶ 20 and 27.) 

Defendants also contend that plaintiffs have a “pleading” issue based on the actions of

third parties, including state attorney generals. Plaintiffs’ claim against defendant is not based

on the independent actions of the attorney generals and certain banks; plaintiffs’ claim is based

on the fact that certain attorney generals and banks took action against plaintiffs directly as a

result of false information about plaintiffs’ business practices provided by defendants to those

attorney generals and banks. 

The fact that plaintiffs ceased operations as a result of defendants’ tortious actions does

not relieve defendants of liability. Defendants are still corporations in existence that have their

claims against defendants, and but for defendants’ continuing tortious actions against defendants

— we know as recently as January 2015 — defendants could enjoy the benefit of their business

and prospective business relations. McGanty v. Staudenraus, 321 Or. 532, 535, 901 P.2d 841

(1995) (noting that tort protects prospective economic advantage in addition to existing contracts

and business relationships); Employers’ Fire Ins. Co. v. Love It Ice Cream Co., 670 P.2d 160, 64

Or.App. 784 (Or. App., 1983).

In the event the court finds that plaintiffs did not properly state a claim, plaintiffs request

leave to file an amended complaint. Rule 15(a) states that leave to amend “shall be freely given

when justice so requires.” Fed. R. Civ. P. 15(a). In interpreting Rule 15(a), the Supreme Court

has held that: 

in the absence of any apparent or declared reason — such as undue

delay, bad faith or dilatory motive on the part of the movant,

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TO DISMISS 
repeated failure to cure deficiencies by amendments previously

allowed, undue prejudice to the opposing party by virtue of

allowance of the amendment, futility of amendment, etc. — the

leave sought should, as the rules require, be “freely given.”

Foman v. Davis, 371 U.S. 178, 182 (1962).

CONCLUSION

Based on all of the foregoing, it is respectfully requested that defendants’ motion to

dismiss be denied in its entirety, and in the alternative, if the court grants defendants’ motion to

dismiss in accordance with Federal Rule of Civil Procedure 12, that plaintiffs have leave to file

an amended complaint, and that Plaintiffs have such other, further and different relief as this

Court may deem just and proper. 

DATED this 14th day of August, 2015.

LENNON & KLEIN, P.C. 

By: /s/ David P. Lennon 

David P. Lennon, OSB # 125575

david@lennon-klein.com

212-465-2020

Attorneys for Plaintiffs

Orbital Publishing Group, Inc. 

and Liberty Publishers Service, Inc. 

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TO DISMISS