Judge denies motion to dismiss Prenda Law's libel suit; Sets briefing schedule on remand request

CHICAGO -- A federal judge today allowed briefing to move forward on Prenda Law’s renewed motion to remand its libel suit back to St. Clair County.

U.S. District Judge John Darrah gave the defendants – Minnesota attorney Paul Godfread and his client, Alan Cooper -- until Aug. 21 to submit a response, set an Aug. 28 deadline for Prenda Law to file its reply and scheduled an Oct. 30 status hearing in the case.

Also at today’s hearing, Darrah denied the defendants’ motion to dismiss the suit and granted Prenda Law attorney Paul Duffy’s motion to dismiss the defendants’ counterclaim.

But, the whole briefing schedule Darrah set over the remand request may turn out to be moot as Prenda Law filed a motion to withdraw its renewed request just hours after today’s hearing. No ruling on that motion had been entered as of late this afternoon.

Filed on Monday, Prenda Law’s renewed remand motion asserts that the court does not have jurisdiction to hear its suit against Godfread and Cooper because no federal questions are involved and diversity of citizenship does not exist.

Prenda Law sued Godfread and Cooper, as well as 10 potential John Doe defendants, in February in the St. Clair County Circuit Court. The suit was transferred southern Illinois’ federal court and in June, to the U.S. District Court for the Northern District of Illinois.

In his transfer order, Chief Judge David Herndon noted that “a virtually identical, first-filed action is currently pending” in Chicago’s federal court.

That suit -- Duffy v. Godfread, et al. — was filed in February in Cook County Circuit Court, removed to federal court and has since been consolidated with Prenda Law v. Godfread, et al., the suit originally brought in St. Clair County.

In their suits, Duffy and Prenda Law accuse Godfread and Cooper of making false and defamatory statements in a Minnesota lawsuit and that their statements, as well as those of currently unknown individuals on the Internet, have appeared on various websites.

Among other allegations, the firm contends that the defendants accused it and some of its attorneys of “criminal offenses; want of integrity in the discharge of employment; lack of ability in its profession; and the commission of fornication and adultery.”

Godfread and Cooper filed a counterclaim in which Cooper alleged he was a caretaker for Prenda Law attorney John Steele and eventually learned that his name was being used as an officer or director of AF Holdings, a client of Prenda Law, without his knowledge or consent.

They moved to dismiss the complaint under Minnesota’s Anti-SLAPP Act, which like other similar laws around the nation, aims to protect citizens in lawsuits that intend to prevent public participation. Duffy moved to dismiss their counterclaim for failure to state a claim upon which relief can be granted.

At today’s hearing, Duffy appeared on behalf of his firm and Chicago attorney Erin Kathryn Russell appeared on the defendants’ behalf.

In an attempt to support his firm’s renewed motion to remand, Duffy told Darrah that the suit can’t proceed in federal court because diversity of citizenship does not exist between the parties.

He said that Prenda Law filed an amended complaint when the suit was pending in St. Clair County Circuit Court that added Alpha Law Firm as a plaintiff.

Duffy said that two exhibits “clearly pointed out” that Alpha Law is based in Minnesota, which he asserts destroys diversity of citizenship since Godfread and Cooper are also from Minnesota.

After asking whether the exhibits were attached to the amended complaint and Duffy responded “no,” Darrah said “how could they possibly have known?”

He then asked Duffy why he didn’t bring up Alpha Law’s citizenship earlier or correct the docket sheet in the case, which he said makes no mention of the Minnesota firm. Duffy told Darrah that he informed the defendants’ attorney.

Russell, who represents the defendants, denied Duffy’s claim after the hearing.

She told Darrah that Prenda Law’s amended complaint “should never have been filed” because the firm didn’t asked for leave to file the amended complaint and no order granting leave was ever filed in St. Clair County Circuit Court.

Instead, Russell claims, Prenda Law’s local counsel, Belleville attorney Kevin Hoerner, made false representations to an employee with the clerk’s office in order to get the amended complaint filed.

She told Darrah that an affidavit from Judy Kent, an employee of the St. Clair County clerk’s office, proves her claim. Kent’s affidavit is attached as an exhibit to her May 10 response in opposition to the firm’s motion to remand.

In her affidavit, Kent states that she file stamped an amended complaint on Feb. 21 in Prenda Law v. Godfread et al. and that there was no motion seeking leave to file an amended complaint or an order granting such relief in the record.

“I was informed by Mr. Hoerner, one of Prenda Law’s attorneys, that no one had been served with the original complaint, which is why I file stamped the amended complaint without a motion for leave,” Kent states in her affidavit. “I verified on my computer that my office had not received a return as of February 21, 2013.”

At that time, however, Russell asserts that both Godfread and Cooper had been served. Exhibits attached to her May 10 response show that Godfread had been served on Feb. 15 and that Cooper was served on Feb. 20.

Russell further claims that Prenda Law knew her clients had been served because Steele left a message with Godfread about an hour after he was served, saying “I understand you just got served” and asked whether he would be representing Cooper.

At the end of the hearing, Darrah asked Russell to provide him with “any supporting information regarding the docket in St. Clair County.”

Despite Darrah’s decision to allow briefing on the renewed remand motion to proceed, Prenda Law filed a motion to withdraw its motion just a few hours after today’s hearing.

“Plaintiff vehemently disagrees with representations made by Defendants counsel at the August 14, 2013 hearing regarding its Motion, but nevertheless due to the apparent confusion arising from Plaintiff’s Motion, Plaintiff seeks to withdraw its motion,” Prenda Law states.

The firm adds, “Rather than renew its motion, Plaintiff intends to, at the appropriate time if any, amend its complaint to add Alpha Law Group LLC as a Plaintiff.”

Aside from the briefing dates Darrah scheduled over the remand motion, he issued an order today denying the defendants’ motion to dismiss under Minnesota’s Anti-SLAPP Act and granting the plaintiff’s motion to dismiss the counterclaim.

Dismissing the defendants’ motion to dismiss, Darrah explained that “Godfread and Cooper fail, at this stage, to make a threshold showing that Duffy’s claims of their defamation involved public participation or were otherwise ‘aimed in whole or in part at procuring favorable government action.’”

In regards to Darrah’s decision to grant Duffy’s motion to dismiss the defendants’ counterclaim, the judge wrote in his order that “As the Counterclaim is presently constructed, it is unclear what role Duffy played in the claims asserted.”

He added, “It is clear, however, Godfread and Cooper believe multiple other individuals and entities are involved, who have not been named as parties to this lawsuit.”

Darrah, however, gave the defendants 30 days to file an amended counterclaim. In addition, he denied Duffy’s motion to strike 10 affirmative defenses raised by Godfread and Cooper, saying they met the basic requirements and are sufficient.

Russell said after today’s hearing that her clients plan to seek reconsideration of Darrah’s ruling and provide some clarification on some of the points they previously raised.