Filed: Jul. 23, 2004
Latest Update: Feb. 21, 2020
Summary: United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS For the Fifth Circuit July 23, 2004 No. 02-30940 Charles R. Fulbruge III Clerk MICHAEL HENRY, Plaintiff - Appellant, VERSUS CISCO SYSTEMS, INC.; CISCO SYSTEMS CAPITAL CORPORATION Defendants - Appellees Appeal from the United States District Court For the Eastern District of Louisiana (00-CV-3519) Before EMILIO M. GARZA and DENNIS, Circuit Judges, and HEAD*, District Judge. DENNIS, Circuit Judge:** Plaintiff-app
Summary: United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS For the Fifth Circuit July 23, 2004 No. 02-30940 Charles R. Fulbruge III Clerk MICHAEL HENRY, Plaintiff - Appellant, VERSUS CISCO SYSTEMS, INC.; CISCO SYSTEMS CAPITAL CORPORATION Defendants - Appellees Appeal from the United States District Court For the Eastern District of Louisiana (00-CV-3519) Before EMILIO M. GARZA and DENNIS, Circuit Judges, and HEAD*, District Judge. DENNIS, Circuit Judge:** Plaintiff-appe..
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United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit July 23, 2004
No. 02-30940 Charles R. Fulbruge III
Clerk
MICHAEL HENRY,
Plaintiff - Appellant,
VERSUS
CISCO SYSTEMS, INC.; CISCO SYSTEMS CAPITAL CORPORATION
Defendants - Appellees
Appeal from the United States District Court
For the Eastern District of Louisiana
(00-CV-3519)
Before EMILIO M. GARZA and DENNIS, Circuit Judges, and HEAD*,
District Judge.
DENNIS, Circuit Judge:**
Plaintiff-appellant Michael Henry appeals the district court’s
rulings regarding his fraudulent inducement claim and his four
defamation claims against defendants-appellees Cisco Systems, Inc.
*
District Judge of the Southern District of Texas, sitting by
designation.
**
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
1
and Cisco Systems Capital Corporation (“Cisco”). The court granted
summary judgment on Henry’s fraudulent inducement claim on
prescriptive grounds. As for the defamation claims, the district
court dismissed one claim1 and granted summary judgment in favor of
Cisco on the others because Cisco’s alleged defamatory statements
were protected by an absolute litigation privilege. We affirm.
I. Background
Henry, a Louisiana citizen, is a successful businessmen in the
telecommunications industry. He built Megasnet, an Internet
Service Provider, which he sold in 1999 for $100 million. Cisco
provides hardware and software products and services used to
support, among other things, telecommunications equipment. Cisco
was in a strategic alliance with American MetroComm Corporation
(“AMC”), to whom it had sold $20 million of VCO/4K equipment, a
programmable phone switch intended to allow unlimited long distance
phone calls over the Internet.
In June 1999, shortly after Henry sold Megasnet, Cisco
recruited Henry to become CEO of AMC because AMC was experiencing
delays in deployment of its network and needed Henry’s expertise.
After negotiations, Henry accepted the CEO position on July 1, 1999
and agreed to invest $2 million in AMC. While Henry was CEO of
AMC, he encountered a number of difficulties with the VCO/4K
1
Cisco did not file a motion to dismiss the remaining
defamation claims based on an absolute litigation privilege.
2
equipment, which could not be properly installed because it was not
NEBS compliant,2 and AMC’s financial solvency. Despite attempts
to fix the equipment and become more financially stable, AMC was
unable to do so.
On August 16, 2000, AMC filed a bankruptcy petition in the
United States Bankruptcy Court for the District of Delaware. Among
AMC’s creditors was Cisco. In connection with the bankruptcy
proceeding, Cisco filed a motion to appoint a trustee to conduct
and oversee the affairs of AMC’s bankruptcy along with a memorandum
in support. In the memorandum, Cisco called into question Henry’s
ability to successfully and effectively protect the interests of
AMC, its creditors, and its equity holders during the bankruptcy,
given his “volatile and contentious nature.” Allegedly, a copy of
this pleading was given to a Dow Jones reporter, Jeffrey St. Onge,
who published an article in The Daily Bankruptcy Review on the AMC
bankruptcy.
On October 5, 2000, in Dallas, Texas, counsel for Cisco, Kent
Roger and Larry Engel, met with a number of AMC investors and their
counsel to discuss AMC’s bankruptcy. Roger and Engel allegedly
distributed the bankruptcy memorandum discussed above and accused
Henry of accepting “kickbacks.”
2
NEBS is an acronym for “Network Equipment Building Systems”
and if equipment is certified as NEBS compliant then it can
interface directly with other equipment that forms the world’s
telecommunications “backbone.” Henry Original Brief, at 5 n.4.
3
In addition to the above, on May 20, 2000, Thomas Papson, a
Washington, D.C. attorney acting as counsel for Cisco, participated
in a phone conference with Chip Cooper, an Ohio attorney
representing Kevin Bennett, a former Cisco employee. Bennett and
Cisco were involved in litigation pending in federal court in Ohio
and in an arbitration proceeding in California. The purpose of the
call was to discuss settlement possibilities. According to Henry’s
Amended Complaint, Papson told Cooper that “Cisco believed Mr.
Henry, Kevin Bennett, and Vince Rotundo were involved in a kickback
scheme as part of the arrangement between [Worldwide Web Systems,
Inc., the software provider for the VCO/4K] and AMC.”
On November 29, 2000, Henry filed a diversity jurisdiction
suit in the United States District Court for the Eastern District
of Louisiana asserting state law claims against Cisco. Henry
alleged that Cisco fraudulently induced him to accept the AMC CEO
position and to invest $2 million in AMC by falsely telling him
that the equipment Cisco sold AMC had been tested as NEBS compliant
and worked properly and that AMC was financially solvent. He also
alleged that he was defamed by statements made in the pleading
Cisco filed in AMC’s bankruptcy.
On February 12, 2001, Henry amended his complaint to add three
additional defamation claims. These claims contend that Henry was
defamed: (1) when a copy of the Cisco bankruptcy pleading was
distributed to the Dow Jones reporter; (2) when Roger and Engel
4
accused Henry of accepting kickbacks in the Dallas meeting; and (3)
when Papson told Cooper during a phone conversation that he
believed Henry accepted kickbacks.
In response, Cisco filed a motion to dismiss. On September
19, 2001, the district court granted Cisco’s motion and dismissed
Henry’s initial defamation claim concerning the statements in the
bankruptcy pleading, finding that an absolute litigation privilege
applied. Cisco also sought summary judgment as to Henry’s
remaining claims, which the district court granted. The district
court held that the remaining defamation claims were also subject
to an absolute litigation privilege and that the fraudulent
inducement claim was barred by prescription. On August 28, 2002,
the district court rendered a final judgment and Henry timely
appealed.
II. Analysis
A. Standard of Review
We review both the grant of a motion to dismiss and the grant
of summary judgment de novo, applying the same standards applicable
to the district court.3 In deciding a motion to dismiss, the
district court must take the facts as alleged in the complaint as
true, and may not dismiss the complaint unless it appears that the
3
Kennedy v. Chase Manhattan Bank USA, NA,
369 F.3d 833, 839
(5th Cir. 2004); Morris v. Covan World Wide Moving, Inc.,
144 F.3d
377, 380 (5th Cir. 1998).
5
plaintiff can prove no set of facts in support of his claim that
would entitle him to relief.3 Summary judgment is properly granted
if there is “no genuine issue as to any material fact and [] the
moving party is entitled to judgment as a matter of law.”4
B. Fraudulent Inducement Claim
Henry argues that the district court erred in holding that his
fraudulent inducement claim was barred by prescription. He
maintains that two exceptions to the general rules of prescription,
contra non valentum and continuing tort, made his claim timely.
Cisco disagrees, arguing that Henry was fully aware of his cause of
action more than one year prior to filing to suit and that neither
exception delayed the commencement of the prescriptive period for
Henry’s claim.
Because Henry’s fraudulent inducement claim is a Louisiana
state law claim, Louisiana law will determine the applicable
statute of limitations period.5 Under Louisiana law, delictual
actions, such as Henry’s fraudulent inducement claim, have a
prescriptive period that commence one year “from the date injury or
3
Kennedy, 369 F.3d at 839.
4
Fed. R. Civ. P. 56(c).
5
U.S. ex rel. Mathews v. HealthSouth Corp.,
332 F.3d 293,
295 (5th Cir. 2003).
6
damage is sustained.”6 Moreover, “[t]he defendant has the initial
burden of proving that a tort claim has prescribed.”7 “[B]ut if the
defendant shows that one year has passed between the tortious acts
and the filing of the suit, then the burden shifts to the plaintiff
to prove an exception to prescription.”8
Id.
Here, Henry alleges that he was fraudulently induced into
accepting the AMC CEO position and investing $2 million in AMC.
“Fraud exists if it can be shown that material misrepresentations
have been made by one party designed to deceive another, and to
obtain some unjust advantage or to cause loss or inconvenience to
the other.”9 Thus, the general elements of a fraudulent inducement
claim are: “(1) a misrepresentation of a material fact, (2) made
with an intent to deceive, and (3) causing justifiable reliance
with resulting injury.”10 Here, Henry claims that Cisco knowingly
6
La. Civ. Code art. 3492; Bell v. Demax Management Inc.,
824
So. 2d 490, 492 (La. Ct. App. 2002); Griffin v. BSFI Western E & P,
Inc.,
812 So. 2d 726, 734 (La. Ct. App. 2002).
7
Terrebonne Parish Sch. Bd. v. Columbia Gulf Transmission
Co.,
290 F.3d 303, 320 (5th Cir. 2002)(citing Miley v. Consol.
Gravity Drainage Dist. No. 1,
642 So. 2d 693, 696 (La. Ct. App.
1994); Dixon v. Houck,
466 So. 2d 57, 59 (La. Ct. App. 1985)).
8
Id.
9
La. Civ. Code art. 1953; Altex Ready-Mixed Concrete Corp. v.
Employers Commercial Union Ins.,
308 So. 2d 889, 892 (La. Ct. App.
1975).
10
Kendall Co. v. Southern Med. Supplies, Inc.,
913 F. Supp.
483, 487 (E.D. La. 1996); Silver v. Nelson,
610 F. Supp. 505, 517
7
made false assurances in June 1999 that the equipment Cisco sold
AMC was NEBS compliant and worked properly and that AMC was
financially solvent. He further claims that these fraudulent
misrepresentations induced him to accept the AMC CEO position and
to invest $2 million in AMC. Because he did not file suit until
November 29, 2000, Cisco’s alleged tortious acts occurred more than
one year prior to Henry filing suit. Therefore, Henry has the
burden of proving an exception to prescription that would delay the
commencement of the prescriptive period to after November 28, 1999.
1. Contra Non Valentum
Henry first contends that contra non valentum protects his
fraudulent inducement claim. This doctrine is “a limited exception
where in fact and for good cause a plaintiff is unable to exercise
his cause of action when it accrues,” for example if a defendant
“has done some act to effectually prevent the [plaintiff] from
availing himself of the cause of action” or if “the cause of action
is not known or reasonably knowable by the plaintiff.”11 Henry
argues that he was unable to exercise his fraudulent inducement
claim until at least January 2000 because Cisco attempted to
conceal the fact that the VCO/4K equipment was not NEBS compliant
and told him that it would fix the equipment problem and maintain
(E.D. La. 1985).
11
Corsey v. State Dep’t of Corrections,
375 So. 2d 1319, 1321-
22 (La. 1979).
8
its alliance with AMC.
Cisco, however, has provided documents, affidavits, and
deposition testimony to support its contention that Henry was fully
aware, or at least reasonably should have been aware, prior to
November 28, 1999, that the equipment was not NEBS compliant and
that Cisco’s representations to the contrary were false.12 Further,
Cisco maintains that Henry, as a sophisticated businessman who was
CEO of the company of which he claimed to be ignorant, was aware of
AMC’s financial problems.13
12
Cisco’s proof that Henry knew before November 28, 1999 that
the VCO/4K switch was not NEBS compliant, and that it was not
forthcoming with Henry about it, includes: (1) a June 27, 2000
affidavit, in which Henry stated “[t]hat when he took over as AMC’s
CEO [in July 1999], the company ... was experiencing serious and
continuous problems with crucial network equipment it had purchased
from” Cisco; (2) a third party demand filed by Henry against Cisco
in another lawsuit in which Henry admitted that “AMC had discovered
during September [1999] that the Cisco equipment was not NEBBS
compliant”; (3) a January 4, 2002 affidavit in which Henry stated
that “[a]s of the first week of November 1999, AMC discovered that
the equipment Cisco had delivered was not NEBBS compliant”; (4) an
AMC Position Paper, prepared under Henry’s supervision and
authorship, which states that between August and September 1999,
AMC learned that the VCO/4K switch was not NEBS compliant and that
a Cisco employee had told Henry that Cisco had “lied” about the
switch being compliant; and (5) a January 4, 2001 deposition in
which Henry testified that he was told by a Cisco employee in
October 1999 that the equipment was not NEBS compliant and that
Cisco had been “less than truthful.”
13
Cisco’s proof as to Henry’s knowledge of AMC’s financial
circumstances prior to November 28, 1999, includes: (1) a June 26,
1999 AMC internal memo, which states that “Henry has been briefed
on the Company’s financial circumstances” and that Henry “stated
that he does not want to become an officer of the Company unless
[there is] at least $1Million in the bank, to address huge
financial issues before us”; (2) a June 27, 2000 affidavit in which
9
Henry does not contest the veracity of Cisco’s evidence
proving that Henry should have known of his fraudulent inducement
claim prior to November 28, 1999. Instead Henry contends that
Cisco’s attempts at concealment, such as failing to provide timely
discovery after his suit was filed and Cisco’s attempts to fix the
equipment problems, delayed the commencement of the prescriptive
period. Henry’s failure to contest Cisco’s evidence and Henry’s
argument itself reveal that he was aware of the facts necessary to
establish his cause of action prior to November 28, 1999. Thus,
his argument that Cisco still attempted to conceal information from
and mislead him are irrelevant because those attempts were
ineffectual. When considering the doctrine of contra non valentum,
we focus on whether the plaintiff was able to bring his cause of
action.14 If, as here, the plaintiff knew of his cause of action
and the defendant’s attempts at concealment were ineffectual, the
plaintiff was not prevented from bringing his claim; he just chose
not to do so. “Contra non valentum does not suspend prescription
when a litigant is perfectly able to bring its claim, but fails or
refuses to do so.”15 Therefore, the district court properly
Henry states “[t]hat when he took over as AMC’s CEO, the company
was unable to service its debt”; and (3) a July 23, 1999 e-mail
from Henry acknowledging that “[w]e are 4.7 million in the hole.”
14
Corsey, 375 So. 2d at 1321-22.
15
Terrebonne Parish Sch. Bd. v. Mobil Oil Corp.,
310 F.3d
870, 885 (5th Cir. 2002). This is also applicable to Henry’s other
argument, that he was lulled into inaction because Cisco issued a
10
concluded that contra non valentum did not extend the commencement
of the prescriptive period past November 28, 1999.
2. Continuing Tort
Henry next argues that because his claim alleges a continuing
tort, his prescriptive period commenced late enough to make his
claim timely. Under the continuing tort doctrine, “continuing and
repeated wrongful acts are to be regarded as a single wrong which
gives rise to and is cognizable in a single action, rather than a
series of successive actions.”16 Multiple acts will constitute a
continuing tort “when the acts are continuous on an almost daily
basis, by the same actor, of the same nature, and the conduct
becomes tortious and actionable because of its continuous,
cumulative, synergistic nature.”17 If the plaintiff’s claim
involves a continuing tort, “then prescription does not commence
until the last act occurs or the conduct is abated.”18
Although Henry asserts that because Cisco’s fraudulent conduct
press release on October 12, 1999 announcing a $60 million
investment in AMC and because Cisco and AMC discussed fixing the
NEBS problem. These actions did not affect Henry’s ability to
bring his claim; at most they just affected his desire to do so.
16
Wilson v. Hartzman,
373 So. 2d 204, 207 (La. Ct. App. 1979).
17
Bustamento v. Tucker,
607 So. 2d 532, 542 (La. 1992); see
also Crump v. Sabine River Authority,
737 So. 2d 720, 728 (La.
1999)(“A continuing tort is occasioned by unlawful acts, not the
continuation of the ill effects of an original, wrongful act.”).
18
Bustamento, 607 So. 2d at 542.
11
did not abate until after November 28, 1999, the prescriptive
period did not commence until that time, his argument is not
persuasive. In his complaint, Henry contended only that Cisco’s
misrepresentations made prior to his accepting the CEO position and
investing $2 million in AMC induced him to take these actions.
Henry now contends that Cisco’s supposed fraudulent actions that
occurred after Henry became CEO and invested in AMC are actions
that constitute part of the same continuing tort. But there is a
clear delineation between Cisco’s actions that took place prior to
Henry acting and those that took place after, namely that the
latter actions could not have induced Henry to take the actions he
now regrets. They thus cannot form the basis for a claim of
fraudulent inducement. Therefore, these two sets of activities are
not of a “continuous, cumulative, synergistic nature” and thus
cannot constitute a continuing tort.
Henry’s argument that prescription should not begin to run
until his damages ceased is also without merit. Even if Henry did
suffer damages after November 28, 1999, this will not affect when
prescription commences. “When a defendant’s damage-causing act is
completed, the existence of continuing damages to a plaintiff, even
progressively worsening damages, does not present successive causes
of action accruing because of a continuing tort.”19 Instead,
19
In re Med. Panel Review for the Claim of Moses,
788 So. 2d
1173, 1183 (La. 2001).
12
prescription commences when the last tortious act occurs or the
defendant’s tortious conduct is abated.20 Because, as discussed
above, the last tortious acts, i.e., those that induced Henry to
act, committed by Cisco related to Henry’s fraudulent inducement
claim took place well before November 28, 1999, prescription began
to run prior to that date. Accordingly, the district court
correctly held that Henry’s fraudulent inducement claim was barred
by prescription.
B. Defamation Claims
Henry claims that the district court erred in holding that his
defamation claims were barred by an absolute privilege afforded to
statements by parties and counsel made during the course of
judicial proceedings. Henry’s four defamation claims were for: (1)
the statements made in a motion to appoint trustee in AMC’s
Delaware bankruptcy; (2) the copy of that motion distributed to a
Dow Jones reporter; (3) Cisco counsel’s statements accusing Henry
of accepting kickbacks in a meeting to discuss the AMC bankruptcy
with investors; and (4) Cisco counsel’s statements during
settlement negotiations for an Ohio lawsuit and a California
arbitration that he believed Henry accepted kickbacks.
Henry disagrees with the district court’s decision to apply
Delaware law to the first three claims and Ohio law to the fourth
claim. Delaware and Ohio law provide an absolute privilege against
20
Bustamento, 607 So. 2d at 542.
13
defamation claims to parties and attorneys over otherwise
defamatory statements made during the course of judicial
proceedings that are relevant to the case.21 “In Louisiana,
however, the [litigation] privilege is a qualified one, and in
order for the privilege to apply, the statement must be material
and must be made with probable cause and without malice.”22
A federal court sitting in diversity applies the law of the
forum state, including its choice-of-law provisions.23 Under
Louisiana’s choice-of-law provisions, delictual obligations such as
fraud are generally controlled by Louisiana Civil Code Article
3542, which provides that issues involving delictual obligations
are “governed by the law of the state whose policies would be most
seriously impaired if its law were not applied to that issue.”24
The district court concluded that the purpose of the absolute
privilege is to “facilitate the flow of communication between
persons involved in judicial proceedings and thus, to aid in the
complete and full disclosure of facts necessary to a fair
21
Barker v. Huang,
610 A.2d 1341, 1345 (Del. 1992); Willitzer
v. McCloud,
453 N.E.2d 693, 695 (Ohio 1983).
22
Freeman v. Cooper,
414 So. 2d 355, 359 (La. 1982)(quoting
Waldo v. Morrison,
220 La. 1006,
58 So. 2d 210 (La.1952)).
23
Klaxon Co. v. Stentor Electric Mfg.,
313 U.S. 487, 496
(1941)(citing Erie R.R. v. Tompkins,304 U.S. 64 (1938)).
24
La. Civ. Code art. 3542.
14
adjudication.”25 After balancing this with Louisiana’s policy of
protecting its citizens from tortious conduct, the court held that
“Delaware would be the state whose policies would be most seriously
impaired if its laws were not applied.”26 Thus, the court concluded
that the first three claims, which all concerned statements made as
part of the AMC bankruptcy proceeding in Delaware, were subject to
Delaware law. For the same reason, the court concluded that Ohio
law applied to Henry’s fourth defamation claim.
Henry contends that the district court erred and should have
applied either Louisiana or federal common law regarding the
litigation privilege. But Henry’s arguments are not persuasive.
First, Henry makes no cognizable argument as to why Louisiana law
should apply. Instead he only makes the conclusory assertion that
the district court was wrong in failing to apply Louisiana law.
Because this issue was inadequately briefed, we consider it waived
and will not reassess the district court’s analysis of Louisiana’s
choice-of-law provisions.27
25
Sept. 20, 2001 District Court Order, at 13 (quoting
Barker,
610 A.2d at 1341).
26
Id. at 14.
27
Raven Servs. Corp. v. NLRB,
315 F.3d 504 n.7 (5th Cir.
2002). At most, Henry cites to Louisiana Civil Code Article 3543
when stating that “[u]nder the Louisiana choice of law provisions,
the test is whether the defendants would have foreseen where the
injury would occur.” Henry Original Brief, at 18. Article 3543 is
not applicable to our situation. Article 3543 regulates choice of
law analysis for tort issues relating to standards of conduct and
safety.
Id. However, issues of immunity, such as an absolute
15
Second, Henry contends that we should not apply an absolute
privilege because it encourages retaliatory actions against
whistleblowers in violation of federal common law principles and
the Sarbanes-Oxley Act. Therefore, Henry, relying on the Seventh
Circuit decision in Steffes v. Stepan & Co.,28 urges the court to
adopt a qualified privilege similar to that of Louisiana under
federal common law.
But Henry’s reliance on Steffes is misplaced. In Steffes, the
Seventh Circuit declined to apply a state law absolute litigation
privilege to a plaintiff’s retaliation claims under Title VII and
the Americans with Disabilities Act (“ADA”), instead affirming the
district court’s dismissal on other grounds.29 In addition, the
court also decided not to adopt a specific federal common law
privilege, are considered “rules of loss distribution and financial
protection,” which are not covered by Article 3543. La. Civ. Code
art. 3543 rev. cmt. a (“This Article applies to “‘issues pertaining
to standards of conduct and safety’ as distinguished from ‘issues
of loss distribution and financial protection’ which are governed
by Article 3544 .... By way of illustration, so-called ‘rules of
the road’ establish or pertain to ‘standards of conduct and
safety’, whereas rules that impose a ceiling on the amount of
compensatory damages or provide immunity from suit are ‘rules of
loss distribution and financial protection.’”); Rigdon v. Tank &
Tower Co.,
682 So. 2d 1303, 1306 (La. Ct. App. 1996) (holding that
“whether defendants are immune from tort liability, is an issue of
loss distribution and financial protection.”). Henry does not cite
Article 3544 and does not argue that the application of that
Article would affect the outcome.
28
144 F.3d 1070 (7th Cir. 1998).
29
Id. at 1074-76.
16
litigation privilege, either qualified or absolute.30
In any event, Steffes is inapposite because it concerns
whether a federal court should apply a state law privilege to
federal claims. Here, Henry has not asserted any federal law
claims, instead bringing only state law defamation claims. Sitting
as an Erie court, we must employ the forum state’s choice-of-law
provisions to determine which state’s law applies to the
plaintiff’s state law claims, including its privileges.31 Here, the
district court, applying Louisiana choice-of-law provisions,
concluded that the appropriate state laws for Henry’s defamation
claims are those of Delaware and Ohio,32 both of which preclude
causes of action against counsel and parties for defamation when a
statement is made during the course of a legal proceeding. Because
Henry has not argued on appeal that any of the alleged defamatory
statements occurred outside the context of a judicial proceeding,
we must apply the appropriate state law privilege to Henry’s
defamation claims.33 Accordingly, the district court’s decision
30
Id.
31
Shanks v. AlliedSignal, Inc.,
169 F.3d 988, 993 (5th Cir.
1999)(applying Texas state law absolute litigation privilege in a
diversity jurisdiction suit to plaintiff’s Texas state law claims).
32
The settlement negotiations in the fourth claim also
concerned a pending California arbitration. But even if we applied
California law, California law recognizes an absolute litigation
privilege. Albertson v. Raboff,
295 P.2d 405, 408 (Cal. 1956).
33
Any argument that the Sarbanes-Oxley Act applies to our
case is also misplaced. This Act, passed in 2002, makes it a
17
dismissing Henry’s first defamation claim and granting summary
judgment in favor of Cisco on the others is affirmed.
III. Conclusion
Because Henry’s fraudulent inducement claim is barred by
prescription and because an absolute litigation privilege applies
to each of Henry’s defamation claims, we affirm the decision of the
district court dismissing one defamation claim and granting summary
judgment as to Henry’s remaining claims.
AFFIRMED.
criminal act for a person to retaliate against another who provided
truthful information to a law enforcement officer about the
commission or possible commission of a federal offense. 18 U.S.C.
§ 1513(e). Henry contends that if we apply the state law absolute
litigation privilege to Henry’s state law claims, we will be
subverting the objectives of this Act and “[c]orporations would
have the freedom to retaliate against the whistle blower by
unleashing a legion of lawyers with absolute immunity from alleging
false statements without the fear of reprisal in the form of a
defamation lawsuit of the harmed plaintiff.” Henry Original Brief,
at 16.
But Henry’s argument is completely without merit. Even if we
could ignore our Erie mandate to apply state law, there has never
been any accusation that Cisco committed a federal offense that
would even implicate the Act.
18