Bar Group, LLC v. Business Intelligence Advisors, Inc. (215 F. Supp. 3d 524, 2017)

OPINION AND ORDER OF DISMISSAL WITHOUT PREJUDICE

MELINDA HARMON, UNITED STATES DISTRICT JUDGE

Pending before the Court in the above referenced cause, removed from the 112th Judicial District Court of Harris County, Texas on diversity jurisdiction pursuant to 28 U.S.C. §§ 1332(a), 1441, and 1446, and seeking damages for tortious interference with contract and with prospective contract and defamation per se, are (1) Defendant Business Intelligence Advisors, Inc.’s (“BIA’s”) motion to dismiss for lack of personal jurisdiction and/or failure to state a claim under Federal Rules of Civil Procedure 12(b)(2) and/or 12(b)(6), or, alternatively, request for stay pending resolution of related litigation in a New York State court (instrument #8), and (2) Plaintiff The BAR Group, LLC’s (“TBG’s”) motion for leave to file first amended complaint (#18).

Background Facts As Alleged in the Original Petition

In its Deception Training Course through slides, live presentations, and discussion, with anecdotes from presenters, developed in part by the Central Intelligence Agency (“CIA”) and the Federal Bureau of Investigation (“FBI”) to train FBI Special Agents, with academic research integrated by TBG, TBG provides programs and training sessions designed to teach attendees to recognize deception by identifying deceptive behaviors. TBG insists that the TBG Course Material is public information, neither confidential nor proprietary to TBG or any other business organization.

Two TBG principals, Robert Bettes (“Bettes”) and Lee Howell (“Howell”), both former special agents of the FBI, in that capacity took the Deception Detection Training Course provided to special agents of the FBI by members of the CIA. They subsequently were given governmental approval to commercialize privately the CIA Deception Training Course’s methods and content. In 2001 the CIA Course Authors sold that commercial entity to Defendant BIA. Upon information and belief, TBG states that the course was not, and is not, proprietary; it was funded by U.S. taxpayers and has always been in the public domain. BIA then recruited Bettes, Howell, and another principal of TBG, Dennis Matko (“Matko”), to provide the deception detection training for TBG in the private sector. While these men were employed by BIA, BIA prominently advertised that it was offering training in a course developed and used by the CIA to detect deception.

After their employment with BIA was over, Bettes, Howell and Matko joined with former CIA employees, who gave them slides and later copies of those slides prepared by these former CIA employees, to provide training to private industry organizations, separate from BIA. A short period, later Bettes, Howell, and Matko were granted the right to use the former CIA employees’ Deception Detection Training Course and their slides and written materials. Furthermore TBG obtained a Foundational Interview course from the FBI and incorporated a segment, called “Active Listening,” into TBG’s course. Thus TBG’s Deception Training Course was composed of materials from the former CIA and/or FBI employees along with publicly available information and content from sources other than BIA. While some TBG course materials appear very similar to BIA course materials because of the common source of publically available materials presented in the Detection Deception Course by both TBG and BIA, TBG maintains that neither the principals of TBG, Bettes, Howell, and Matko, nor anyone associated with TBG, incorporated any BIA course material nor used any proprietary or confidential information of BIA.

BIA has not sued TBG or any of the former employees now associated with TBG, but BIA has sued KPMG, BIA’s former client and TBG’s present client, in New York State, after KPMG used TBG to provide its TBG Deception Detection Training Course to KPMG employees. BIA alleges that KPMG breached and continues to breach its contracts with BIA by “permitting BAR Group to provide training sessions to KPMG employees ‘incorporating’ Foundational Interviewing Skills Material and/or Strategic Information Collection Materials (the “BIA Course Materials”) provided pursuant to those Agreements.” TBG insists that BIA knows that TBG has not and does not incorporate any BIA course materials in those it provided to KPMG, that the basics of its program and its material provided to KPMG are not proprietary and confidential, but are public information, that TBG’s employees learned the basics of the materials provided to KPMG through training they had received as special agents of the FBI, not from BIA, and that TBG has not at any time incorporated any BIA materials, including those alleged to be the basis of BIA’s suit against KPMG.

In the instant action TBG sues BIA first for tortious interference with contract and tortious interference with prospective contract. TBG points out that at the time BIA filed its suit against KPMG, TBG was actively negotiating a new contract with KPMG to provide TBG’s course to KPMG. TBG contends that BIA’s lawsuit against KPMG in New York “is a willful and transparent attempt to interfere with the existing contract and/or future contracts between TBG and KPMG and to cause damage to TBG.

TBG’s second cause of action against BIA is for defamation per se, for contacting KPMG and falsely accusing TBG and its principals, Bettes, Howell, and Matko, of improperly incorporating or otherwise using BIA’s course materials and harming TBG in its business and reputation.

Because the Court’s jurisdiction is the threshold issue, the Court addresses BIA’s motion to dismiss first.

Standards of Review

Personal Jurisdiction and Rules 8, 12(b)(2), and 12(b)(6)

A court must find that it has personal jurisdiction over that defendant before it makes any decision on the merits. Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007); Guidry v. U.S. Tobacco Co., 188 F.3d 619, 623, n.2 (5th Cir. 1999)(“Personal jurisdiction is an essential element of the jurisdiction of a district court, without which it is powerless to proceed to an adjudication.”).

When a defendant files a motion. to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant. Luv N’ Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006), citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5thCir. 1982). At the pretrial stage of litigation, if the district court does not conduct a hearing on personal jurisdiction, the plaintiff need only present a prima facie case of personal jurisdiction. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.), cert. denied, 513 U.S. 930, 115 S.Ct. 322, 130 L.Ed.2d 282 (1994); Felch v. Transportes Lar-Mex S.A. DE CV, 92 F.3d 320, 325 (5th Cir. 1996); Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008). Proof by preponderance of the evidence is not required. Johnston, 523 F.3d at 609.

When a defendant disputes the factual bases for personal jurisdiction, the district court may consider the record before it, including “affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Quick Technologies, Inc. v. Sage Group PLC, 313 F.3d 338, 344 (5th Cir. 2002)(quoting Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985), cert. denied, 540 U.S. 814, 124 S.Ct. 66, 157 L.Ed.2d 29 (2003); Kelly Law Firm, P.C. v. An Attorney for You, 679 F.Supp.2d 755, 762 (S.D. Tex. 2009). The court has discretion as to the type and amount of discovery it will allow, but unless there is a full and fair hearing, it should not act as a factfinder and must construe all disputed facts in favor of the plaintiff. Walk Haydel, 517 F.3d at 241. On a motion to dismiss under Rule 12(b)(2), uncontroverted allegations in plaintiffs complaint are taken as true, and conflicts between facts in the parties’ affidavits must be resolved in plaintiffs favor for purposes of the prima facie case of personal jurisdiction. Johnston, 523 F.3d at 609; Kelly Law Firm, 679 F.Supp.2d at 762; Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002). Nevertheless, the court is not required to credit conclusory allegations even if they are uncontroverted. Paw-da Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001).

Under the federal rules, except where a federal statute provides for broader personal jurisdiction, the district court’s personal jurisdiction is coterminous with that of a court of general jurisdiction of the state in which the district court sits. Submersible Sys., Inc. v. Perforadora Cent., S.A. de C.V., 249 F.3d 413, 418 (5th Cir. 2001). See also Wyatt v. Kaplan, 686 F.2d 276, 279 (5th Cir. 1982)(“Under the Federal Rules of Civil Procedure, a federal district court in a diversity case may exercise personal jurisdiction over a defendant residing outside the state in which it sits only to the extent permitted by state law.”). A federal court sitting in diversity may exercise personal jurisdiction over a nonresident defendant if (1) the forum state’s long-arm statute confers personal jurisdiction over that nonresident defendant and (2) if the exercise of personal jurisdiction satisfies due process under the United States Constitution. McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir. 2009), citing Moncrief Oil Int’l, Inc. v. OAO Gasprom, 481 F.3d 309, 311 (5th Cir. 2007). The Texas long-arm statute, Texas Civil Practice and Remedies Code §§ 17.0421-.045, extends jurisdiction to the limits of federal due process. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990); Gonzalez v. Bank of America Ins. Servs., Inc., 454 Fed.Appx. 295, 300 (5th Cir. 2011), citing Stroman Realty, Inc. v. Antt, 528 F.3d 382, 385 (5th Cir. 2008). “Because the Texas’ long-arm statute extends to the limits of federal due process, the two-step inquiry collapses into one federal due process analysis.” Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008). Thus a plaintiff in a diversity action in federal court in Texas need only demonstrate that (1) the defendant purposely availed himself of the benefits and protections of the forum state by establishing that the defendant had minimum contacts with the forum state, and (2) the exercise of personal jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice. Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Alpine View Co., Ltd. v. Atlas Copco AB, 205 F.3d 208, 214 (5th Cir. 2000); Moncrief Oil Int’l, Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007).

Personal jurisdiction can be either specific or general jurisdiction. Mink v. AAAA Develop., LLC., 190 F.3d 333, 336 (5th Cir. 1999). “Where a defendant ‘has continuous and systematic general business contacts’ with the forum state, the court may exercise ‘general jurisdiction over any action brought against the defendant [regardless of whether the action is related to the forum contacts].” Luv N’ Care, 438 F.3d at 469, citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). See also Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 717 (5th Cir. 1999)(“General jurisdiction can be assessed by evaluating contacts of the defendant with the forum over a reasonable number of years, up to the date the suit was filed.”), cert. denied, 531 U.S. 917, 121 S.Ct. 275, 148 L.Ed.2d 200 (2000). “[T]he minimum contacts inquiry is broader and more demanding when general jurisdiction is alleged, requiring a showing of substantial activities in the forum state. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1068 (5th Cir.), cert. denied, 506 U.S. 867, 113 S.Ct. 193, 121 L.Ed.2d 136 (1992). The test is a “difficult one to meet, requiring extensive contacts between a defendant and a forum.” Johnston, 523 F.3d at 609 (discussing cases demonstrating the difficulty of meeting general jurisdiction). A court need not credit a plaintiffs eonclusory jurisdictional allegations, even if they are not controverted. Panda Brandywine Corp. v. Potomac Elec. Co., 253 F.3d 865, 869 (5th Cir. 2001). “[V]ague and overgeneralized assertions that give no indication as to the extent, duration, or frequency of contacts are insufficient to support general jurisdiction.” Johnston, 523 F.3d at 610.

If the defendant has relatively few contacts, the court may still exercise personal jurisdiction over that party if the suit “ ‘arises out of or is related to the defendant’s contacts with the forum.” Helicopteros, 466 U.S. at 414 & n.8, 104 S.Ct. 1868. Furthermore the Fifth Circuit has concluded that specific jurisdiction is “a claim-specific inquiry: ‘A plaintiff bringing multiple claims that arise out of different forum contacts of the defendant must establish specific jurisdiction for each claim.’ “ McFadin, 587 F.3d at 759, quoting Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006).

Moreover, the Fifth Circuit has established a three-step analysis for determining whether specific jurisdiction exists: ‘“(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) whether the plaintiffs cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.’ ” Seiferth, 472 F.3d at 271, quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002). The minimum contacts review is fact-intensive and no single contact is decisive; “the touchstone is whether the defendant’s conduct shows that it ‘reasonably anticipates being haled into court’ ” there. The “ ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts... or the ‘unilateral activity of another party or a third person.’ ” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); McFadin, 587 F.3d at 759, citing Luv N’ Care, 438 F.3d at 470 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)), and Electrosource, Inc. v. Horizon Battery Tech., Ltd., 176 F.3d 867, 871-72 (5th Cir. 1999). Thus specific jurisdiction may not be based upon the mere fortuity that a plaintiff is a Texas resident. Santander Consumer USA, Inc. v. Shults Ford, Inc., Civ. A. No. 3:11-CV-614-L, 2011 WL 2601520, *4 (N.D. Tex. June 30, 2011), citing Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773, 778 (5th Cir. 1986).

Once the plaintiff has established that the defendant has minimum contacts with the forum state, the burden shifts to the defendant to show that assertion of jurisdiction would be unfair. Walk Haydel, 517 F.3d at 245. In determining whether the exercise of jurisdiction is fair and reasonable, the court examines five factors: “‘(1) the burden on the nonresident defendant, (2) the forum state’s interests, (3) the plaintiffs interest in securing relief, (4) the interest of the interstate judicial system in the efficient administration of justice, and (5) the shared interest of the several states in furthering fundamental social policies.’ ” McFadin, 587 F,3d at 759-60, quoting Luv N’ Care, 438 F.3d at 473. If the plaintiff fails to establish the existence of minimum contacts with the forum state, the court need not reach the question of whether personal jurisdiction would offend traditional notions of fair play and substantial justice. Renoir v. Hantman’s Associates, Inc., 230 Fed.Appx. 357, 360 (5th Cir. 2007).

The mere fact that a party contracted with a resident of Texas is insufficient to establish minimum contacts necessary to support personal jurisdiction. Moncrief Oil Int’l, Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007)(“Merely contracting with a resident of the forum state does not establish minimum contacts.”); Cardinal Health Solutions, Inc. v. St. Joseph Hosp. of Port Charlotte, Fla. Inc., 314 Fed.Appx. 744, 745 (5th Cir. 2009). Nor does the exchange of communications in the developing and performing of a contract constitute purposeful availment of the benefits and protections of the laws of Texas. Id.; Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 344 (5th Cir. 2004). “[Purchases and related trips, standing alone, are not a sufficient basis for a State’s assertion of jurisdiction.” Helicopteros, 466 U.S. at 417, 104 S.Ct. 1868. Moreover jurisdiction may not be based on the fortuity of one party residing in the forum state. McFadin, 587 F.3d at 760. Mere foreseeability, by itself, does not create personal jurisdiction. Moncrief Oil, 481 F.3d at 313.

A choice of law provision may be a relevant factor for determining purposeful activity directed toward the forum state, but is not necessarily determinative, and standing alone, it is insufficient to confer jurisdiction. Santander Consumer USA, Inc. v. Shults Ford, Inc., 2011 WL 2601520 at *4, citing Petty-Ray Geophysical, 954 F.2d at 1069, and Burger King, 471 U.S. at 482, 105 S.Ct. 2174. The court must examine the quality and nature of the defendant’s activities in the forum in their totality to decide whether the defendant purposely availed itself of the privileges offered by the forum state. Id. citing Electrosource, Inc. v. Horizon Battery Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999).

Personal jurisdiction can be waived by an enforceable forum selection clause in which the parties consent to personal jurisdiction in a specified forum. Burger King, 471 U.S. at 473 n.14, 105 S.Ct. 2174. Federal law governs the enforceability of forum selection and choice of law clauses. Haynsworth v. The Corporation, 121 F.3d 956, 962 (5th Cir. 1997), citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), and Scherck v. Alberto-Culver Co., 417 U.S. 506, 518-21, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974). Forum selection clauses are presumed to be valid. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. at 9, 92 S.Ct. 1907; Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 537-38, 115 S.Ct. 2322, 132 L.Ed.2d 462 (1995). A party seeking to bar enforcement of a forum selection clause bears a heavy burden of demonstrating that the clause is unreasonable under the circumstances, i.e., “that the clause results from fraud or overreaching, that it violates a strong public policy, or that the enforcement of the clause deprives the plaintiff of his day in court”. Bremen, 407 U.S. at 12-13, 15, 18, 92 S.Ct. 1907; Mitsui & Co. (USA), Inc. v. MIRA M/V, 111 F.3d 33, 35 (5th Cir. 1997).

Allegations of conspiracy will not establish a prima facie case of personal jurisdiction; a plaintiff must show that each defendant individually, and not as part of a conspiracy, purposely established minimum contacts with Texas that would satisfy due process. Guidry v. U.S. Tobacco, 188 F.3d 619, 625 (5th Cir. 1999), cited for that proposition, Moncrief Oil Intern., Inc. v. OAO Gazprom 332 S.W.3d 1, 11 n.7 (Tex.App.-Fort Worth 2010); Paolino v. Argyll Equities, LLC, 401 F.Supp.2d 712, (W.D. Tex. 2005), citing Nat’l Industrial Sand Ass’n v. Gibson, 897 S.W.2d 769, 773 (Tex. 1995); Alert 24 Sec., LLC v. Tyco Intern., Ltd., 823 F.Supp.2d 589, 594 (S.D. Tex. 2011)(“”[A] conclusory allegation of conspiracy is insufficient as a matter of law to support an exercise of personal jurisdiction”).

Whether a court has personal jurisdiction over a nonresident defendant is a question of law for the court. Moncrief Oil Intern. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2012).

Rule 8(a)

Federal Rule of Civil Procedure 8(a) provides,

(a) Claim for Relief. A pleading that states a claim for relief must contain:

(1) a short and plain statement of the grounds for the court’s jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support;

(2) a short and plain statement of the claim showing that the pleader is entitled to relief; and

(3) a demand for the relief sought, which may include relief in the alternative or different types of relief.

The purpose of Rule 8(a) is “ ‘to give the defendant fair notice of what the... claim is and the grounds upon which it rests.’ ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The court must accept as true all facts the plaintiff alleges in support of its claims and must construe those allegations in the light most favorable to the plaintiffs. Bowlby v. City of Aberdeen, Miss., 681 F.3d 215, 219 (5th Cir. 2012). The factual allegations must “be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.. “[Djetailed factual allegations” are not necessary, but the pleading must provide “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). If the allegations “state a claim to relief that is plausible on its face” and “raise a right to relief above the speculative level,” the complaint is sufficient and “will survive a motion to dismiss.” Wilson v. Birnberg, 667 F.3d 591, 595 (5th Cir. 2012), quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

Rule 12(b)(6)

When a district court reviews a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), it must construe the complaint in favor of the plaintiff and take all well-pleaded facts as true. Randall D. Wolcott, MD, PA v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011), citing Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). The plaintiffs legal conclusions are not entitled to the same assumption. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)(“The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”), citing Bell Atlantic Corp. v. Twombly, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2007); Hinojosa v. U.S. Bureau of Prisons, 506 Fed.Appx. 280, 283 (5th Cir. 2012).

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations,... a plaintiffs obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.... ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)(eitations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level.” Id. at 1965, citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004)(“[T]he pleading must contain something more... than... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”). “Twombly jettisoned the minimum notice pleading requirement of Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 ... (1957)[“a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief’], and instead required that a complaint allege enough facts to state a claim that is plausible on its face.” St. Germain v. Howard, 556 F.3d 261, 263 n.2 (5th Cir. 2009), quoting In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). “ ‘A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Montoya v. FedEx Ground Package System, Inc., 614 F.3d 145, 148 (5th Cir. 2010), quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The plausibility standard is not akin to a “probability requirement,” but asks for more than a “possibility that a defendant has acted unlawfully.” Twombly, 550 U.S. at 556, 127 S.Ct. 1955.

In Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court stated that “only a complaint that states a plausible claim for relief survives a motion to dismiss,” a determination involving “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” “[T]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice” under Rule 12(b). Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. The plaintiff must plead specific facts, not merely conclusory allegations, to avoid dismissal. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). “Dismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief....“ Rios v. City of Del Rio, Texas, 444 F.3d 417, 421 (5th Cir. 2006), cert. denied, 549 U.S. 825, 127 S.Ct. 181, 166 L.Ed.2d 43 (2006).

Dismissal under Rule 12(b)(6) is proper not only where the plaintiff fails to plead sufficient facts to support a cognizable legal theory, but also where the plaintiff fails to allege a cognizable legal theory. Kjellvander v. Citicorp, 156 F.R.D. 138, 140 (S.D. Tex. 1994), citing Garrett v. Commonwealth Mortgage Corp., 938 F.2d 591, 594 (5th Cir. 1991). “A complaint lacks an ‘arguable basis in law’ if it is based on an indisputably meritless legal theory’ or a violation of a legal interest that does not exist.” Ross v. State of Texas, Civ. A. No. H-10-2008, 2011 WL 5978029, at *8 (S.D. Tex. Nov. 29, 2011).

As noted, on a Rule 12(b)(6) review, although generally the court may not look beyond the pleadings, the Court may examine the complaint, documents attached to the complaint, and documents attached to the motion to dismiss to which the complaint refers and which are central to the plaintiffs claim(s), as well as matters of public record. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010), citing Collins, 224 F.3d at 498-99; Cinel v. Connick, 15 F.3d 1338, 1341, 1343 n.6 (5th Cir. 1994). See also United States ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 379 (5th Cir. 2003)(“the court may consider... matters of which judicial notice may be taken”). Taking judicial notice of public records directly relevant to the issue in dispute is proper on a Rule 12(b)(6) review and does not transform the motion into one for summary judgment. Funk v. Stryker Corp., 631 F.3d 777, 780 (5th Cir. 2011). “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b).

“ ‘[Documents that a defendant attaches to its motion to dismiss are considered part of the pleadings if they are referred to in the plaintiffs complaint and are central to [its] claim.’ ” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000), quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993). By such attachments the defendant simply provides additional notice of the basis of the suit to the plaintiff and aids the Court in determining whether a claim has been stated. Id. at 499. The attachments may also provide the context from which any quotation or reference in the motion is drawn to aid the court in correctly construing that quotation or reference. In re Enron Corp. Securities, Derivative & “ERISA” Litig., No. H-04-0087, 2005 WL 3504860, at 11 n.20 (S.D. Tex. Dec. 22, 2005). “Where the allegations in the complaint are contradicted by facts established by documents attached as exhibits to the complaint, the court may properly disregard the allegations.” Martinez v. Reno, No. 3:97-CV-0813-P, 1997 WL 786250, at *2 (N.D. Tex. Dec. 15, 1997), citing Nishimatsu Const. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). When conclusory allegations and unwarranted deductions of fact are contradicted by facts disclosed in the appended exhibit, which is treated as part of the complaint, the allegations are not admitted as true. Carter v. Target Corp., 541 Fed.Appx. 413, 417 (5th Cir. 2013), citing Associated Builders, Inc. v. Alabama Power Co., 505 F.2d 97, 100 (5th Cir. 1974), citing Ward v. Hudnell, 366 F.2d 247 (5th Cir. 1966). See Northern Indiana Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, (7th Cir. 1998)(“It is a well settled rule that when a written instrument contradicts allegations in the complaint to which it is attached, the exhibit trumps the allegations.”); Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007)(when attached documents contain statements that contradict the allegations in the complaint, the documents control and the court need not accept as true the allegations contained in the complaint.”).

BIA’s Alternative Motion to Stay

Without citing any legal authority, BIA asks the Court to stay or dismiss the instant federal court suit to allow the New York state court suit that BIA filed against KPMG to go forward.

It has long been established that “federal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress.” Quackenbush v. Allstate Insurance Co., 517 U.S. 706, 715, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996), citing Colorado River Water Conservation District v. U.S., 424 U.S. 800, 813, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976)(“[F]ederal courts have a ‘virtually unflagging obligation ... to exercise the jurisdiction given to them.’ ”). In Colorado River, 424 U.S. at 813-14, 96 S.Ct. 1236, the Supreme Court opined,

Abstention from the exercise of federal jurisdiction is the exception, not the rule. “The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in exceptional circumstances where the order to the parties to repair to the state court would clearly serve an important countervailing interest.” County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-89, 79 S.Ct. 1060, 3 L.Ed.2d 1163 ... (1959). “[I]t was never a doctrine of equity that a federal court should exercise its judicial discretion to dismiss a suit merely because a State court would entertain it.” Alabama Pub. Serv. Comm’n v. Southern R. Co., 341 U.S. 341, 361, 71 S.Ct. 762, 95 L.Ed. 1002 ... (1953)(Frankfurter, J., concurring in result).

The Supreme Court has identified three categories of circumstances where abstention is permissible: (1) “cases presenting a federal constitutional issue which might be mooted or presented in a different posture by a state court determination of pertinent state law,” (Railroad Commission of Tex. v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941)(“Pullman abstention”)), Frank Mashuda Co., 360 U.S. at 189, 79 S.Ct. 1060; (2) “where there have been presented difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the ease then at bar,” e.g., scope of the eminent domain power of municipalities (Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943)(“Burford abstention”), Louisiana Power & Light Co. v. City of Thobodaux, 360 U.S. 25, 79 S.Ct. 1070, 3 L.Ed.2d 1058 (1859); and (3)” where, absent bad faith, harassment, or a patently invalid state statute, federal jurisdiction has been invoked for the purpose of restraining state criminal proceedings” (Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971)(“Younger abstention”)). Colorado River, 424 U.S. at 814-16, 96 S.Ct. 1236. The instant case does not fall into any of the three categories of abstention.

Nevertheless dismissal may properly be based on other principles with concerns for “wise judicial administration,” “conservation of judicial resources[,] and comprehensive disposition of litigation,” which have given rise to the rule for actions concurrently pending in state and federal courts: generally, “the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.” Id. at 817, 96 S.Ct. 1236. Thus if the controversy in the two courts is simply an issue of personal liability not involving the possession or control of a res, each court may proceed independently without reference to the other suit and if a judgment issues in one court, the other may apply principles of res judicata. On the other hand, under the Colorado River doctrine, only in the “most extraordinary circumstances” may the federal court stay its case where the state court’s duplicative proceedings go forward based on considerations of wise judicial administration. Given the obligation of federal courts [to exercise the jurisdiction given them], and the absence of weightier considerations permitting the dismissal of constitutional adjudication and state-federal relations, the circumstances permitting the dismissal of a federal suit due to the presence of a concurrent state proceeding for reasons of wise judicial administration are considerably more limited than the circumstances appropriate for abstention.” Id.

The first step and a necessary prerequisite in applying the Colorado River doctrine is to determine if the federal and state court actions are parallel or concurrent proceedings. “ ‘Federal and state proceedings are ‘concurrent’ or ‘parallel’ for purposes of abstention when the two proceedings are essentially the same; that is, there is an identity of parties, and the issues and relief sought are the same.’” Mosley v. Baker, No. 10 Civ. 165(NRB), 2011 WL 2693513, *2 (S.D.N.Y. June 30, 2011), quoting Colorado River, 424 U.S. at 817, 96 S.Ct. 1236, and Marcus v. Quattrocchi, 715 F.Supp.2d 524, 537 (S.D.N.Y. 2010) “[L]awsusits are considered ‘parallel’ if ‘substantially the same parties are contemporaneously litigating substantially the same issues in different forums.”). The Fifth Circuit has permitted some flexibility in the parallelism requirement, finding that “there need not be applied in every instance a mincing insistence on precise identity of parties and issues.” “The critical determination is whether the non-federal litigation will dispose of all claims raised in the federal court action.” Mosley, 2011 WL 2693513, *2.

In the action in this Court and in the New York case, not only are the parties not identical, with only BIA being involved in both, here as a defendant and in New York as a plaintiff, but the causes of action are quite different. The New York litigation will not dispose of all the claims in this federal action. The Court concludes that they are clearly not parallel and concurrent.

Even if the actions were considered to be concurrent, the court must balance the six factors, with no one controlling to determine whether to stay or dismiss the concurrent federal suit in deference to a state action: (1) “the court first assuming jurisdiction over property may exercise that jurisdiction to the exclusion of other courts”; (2) “the inconvenience of the federal forum; (3) “the desirability of avoiding piecemeal litigation”; and (4) “the order in which jurisdiction was obtained by the concurrent forums.” Id. “[T]he decision whether to dismiss a federal action because of parallel state-court does not rest on a mechanical checklist, but on careful balancing of the important factors as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction” in the federal suit. Moses H. Cone Memorial Hosp., 460 U.S. at 16, 103 S.Ct. 927.

Both actions are in personam and there is no assumption by either this Court or the New York state court of any res or property, so this factor does not favor either. As for the convenience of the federal forum for the parties, “[t]he inconvenience factor focuses on the ‘physical proximity of the federal forum to the evidence and witnesses.’ ’ ” The contractual relationship between BIA and KPMG was centered in New York, where the suit was filed and most of the conduct occurred, and most of the witnesses and documents are in New York. KPMG “consented to jurisdiction and vende” in the New York Court, with the additional factors of the choice of New York forum clause and the choice of New York law clause in the contract at issue. New York Complaint, #8-1, ¶ 3; Agreement for Services Independent Contractor, #12-5, ¶ 15. Another factor, avoiding piecemeal litigation, does not work in favor of staying the federal action because the causes of action are distinctly different: TBG’s tortious interference with contract and with prospective contract and defamation per se claims against BIA in this Court, and BIA’s claim of breach of the contract between BIA and KPMG against KPMG in the New York court. Last, the New York case was filed first and its proceedings are far ahead of those in this Court. Other factors that Courts have taken into consideration include which law provides the rule of decision. Dali (USA), Inc. v. Lee, No. 96 Civ. 3305 (MBM), 1996 WL 592723, at *5 (S.D.N.Y. Oct. 16,1996). Here since both states apply their own state law, the result does not favor either, since the New York case applies New York law in part because of the choice of law clause in the contract, and in this case, Texas law because the dispute occurred in this state. Another factor, whether the federal plaintiffs rights will be protected in state court, is irrelevant since the causes of action and BIA’s rights in this suit are so different from those in New York. Dali, 1996 WL 592723, at *5.

Because the two actions are not parallel, because the balancing of the factors demonstrates that this is not an extraordinary case in which a federal action should be dismissed or stayed while the state court action is pending, and because of the presumption that the federal case should continue, the Court concludes that the Colorado River doctrine does not apply.

A final possible source for authority to stay or dismiss this federal case is Landis v. North American Co., 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936). In Landis, Justice Cardozo, writing for the majority, rejected the proposition that “before proceedings in one suit may be stayed to abide the proceedings in another, the parties to the two causes must be shown to be the same and the issues identical.” 299 U.S. at 254, 57 S.Ct. 163. He opined,

[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance. True, the suppliant for a stay must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to some one else. Only in rare circumstances will a litigant in one cause be compelled to stand aside while a litigant in another settles the rule of law that will define the rights of both. Considerations such as these, however, are counsels of moderation rather than limitations upon power.

299 U.S. at 254-55, 57 S.Ct. 163 (citations omitted). This discretionary power of a court “to stay proceedings before it in the control of its docket and in the interests of justice” is not unlimited. In re Beebe, 56 F.3d 1384, No. 95-20244, 1995 WL 337666, at *2 & nn. 9 and 10 (5th Cir. May 15, 1995), citing McKnight v. Blanchard, 667 F.2d 477, 479 (5th Cir. 1982)(Before granting a stay pending resolution of another case, the court must carefully consider the time reasonably expected for the resolution of the other case. Discretionary stay orders will be reversed when they are “immoderate or of an indefinite duration.”); In re Ramu Corp., 903 F.2d 312, 318 (5th Cir. 1990)(“The stay of a pending matter is ordinarily within the trial court’s wide discretion to control the course of litigation, which includes authority to control the scope and pace of discovery.”); and Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 545 (5th Cir. 1983)(Proper use of the court’s broad discretion to stay proceedings in the interest of justice and in control of their dockets “ ‘calls for the exercise of judgment, which must weigh competing interests and maintaining an even balance.’ ”)(citing Landis, 299 U.S. at 254-55, 57 S.Ct. 163).

Nevertheless because the parties before this Court and before the New York court are not identical, Landis does not authorize staying or dismissing the instant action.

Limited Jurisdictional Discovery before Ruling on the Motion to Dismiss

If the Court finds it lacks both general and specific jurisdiction, TBG asks the Court for an opportunity to conduct discovery to develop jurisdictional facts before the Court rules on BIA’s motion to dismiss.

When a plaintiff requests discovery on personal jurisdiction facts, it must make a “preliminary showing of jurisdiction.” Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 429 (5th Cir. 2005), citing Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (“If a plaintiff presents factual allegations that suggest with reasonable particularity the possible existence of the requisite contacts... the plaintiffs right to conduct jurisdictional discovery should be sustained.”). The decision to permit such discovery is within the court’s discretion. Id. at 419. “[Discovery on matters of personal jurisdiction need not be permitted unless the motion to dismiss raises issues of fact. When the lack of personal jurisdiction is clear, discovery would serve no purpose and should not be permitted.” Kelly v. Syria Shell Petroleum v. B.V., 213 F.3d 841, 855 (5th Cir. 2000)(denying discovery where plaintiffs failed to “describe the discovery they contend should have been allowed, what facts they hoped to obtain from such discovery, or how it would produce information that would support specific jurisdiction”), citing Wyatt v. Kaplan, 686 F.2d 276, 284 (5th Cir. 1982); Bonner v. Triple-S Management Corp., 661 Fed.Appx. 820, 822 (5th Cir. 2016). “A court may also deny jurisdictional discovery where the plaintiff only offers speculation as to jurisdiction” and “is waging a ‘fishing expedition’ into jurisdictional facts.” SGIC Strategic Global Inv. Capital, Inc. v. Burger King Europe GmbH, Civ. A. No. 3:14-CV-3300-B, 2015 WL 12731761, at *6 (N.D. Tex. July 9, 2015)(“When seeking discovery on personal jurisdiction, a plaintiff must make a ‘preliminary showing of jurisdiction’ before being entitled to such discovery.”)(citing Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 429 (5th Cir. 2005)).

BIA’s Motion for Dismissal (#8)

BIA represents that it is a Delaware corporation with its principal place of business in Boston, Massachusetts. It is not authorized to do business in the State of Texas and is a “nonresident” as that term is defined in 17.041(2) of the Texas Practice & Remedies Code.

Nevertheless TBG conclusorily claims in its Original Petition at p. 2 (#1 under Notice of Removal) that

BIA has, however, done business in Texas, as defined in § 17.042(1) — (3), Tex. Civ. Prac. & Rem. Code. BIA has contracted to do business, and has done business, with Texas residents, has contacted and hired employees in the State of Texas, and has enjoyed the benefits of doing business in Texas with Texas residents. BIA has committed a tort, in whole or in part, in the State of Texas....

BIA maintains that TBG cannot satisfy its burden of establishing either general or specific jurisdiction over BIA in Texas.

Regarding general jurisdiction, BIA clearly lacks continuous and systematic contacts with, nor has it purposefully availed itself of the benefits and protections of, the State of Texas. It does not maintain an office or any employees, bank accounts, or other business operations in Texas. Affidavit of Amber Wert (#8, Ex. A) at ¶ 5. Between 2011 and 2015 only 0.7% of BIA’s revenues has been obtained in providing services in Texas, and most of that was related to clients located outside of Texas who unilaterally requested that BIA’s training sessions be delivered in Texas venues. Id at ¶¶ 6,7,9. BIA had a commercial relationship with only a single client in Texas, accounting for 0.3% of its revenues. Id at ¶ 7. In two of the last five years, BIA provided no services in Texas and had no other activities in the state. Id at ¶ 6.

As for specific jurisdiction, BIA argues that this dispute has no nexus to Texas, but instead relates to a lawsuit filed by BIA in New York against KPMG, LLP, a Delaware Limited Liability Partnership with headquarters in New Jersey, for breach of a contract that requires all disputes to be filed in New York and governed by New York law. Id at ¶¶ 8,10. BIA maintains that TBG cannot point to any conduct by BIA that gave rise to TBG’s claims that involves, or in any way is directed to, Texas.

As to any allegation of libelous statements, BIA emphasizes that “the tort of libel is generally held to occur whenever the offending material is circulated.” Tabor, Chhabra & Gibbs, P.A. v. Medical Legal Evaluations, Inc. (“Tabor”), 237 S.W.3d 762, 774 (Tex. App.-Houston [1st Dist.] 2007). That TBG claims its reputation suffered in Texas is not enough to establish specific jurisdiction over BIA because the charge is completely unrelated to TBG’s claims against BIA here (when BIA filed suit against KPMG in New York, TBG was actively negotiating a new contract with KPMG to provide TBG’s course to KPMG and BIA’s New York suit allegedly interfered with existing and/or prospective contracts between TBG and KMPG; and the New York suit purportedly constituted defamation per se). Indeed, the dispute in this suit has no nexus to Texas.

Furthermore, BIA contends that it is BIA’s New York case against KPMG that gives rise to this dispute. In Tabor, 237 S.W.3d at 775, in which a purported libelous letter was sent from Mississippi to Pennsylvania and concerned an inadequate expert witness testimony given in a Mississippi court by a Texan, the court explained in relevant part,

While some of [plaintiffs] alleged repu-tational injury may be suffered in Texas, Texas is not the focus of the allegedly defamatory statement. Thus there is not a substantial connection between the defendants’ alleged conduct and the state of Texas sufficient to warrant the exercise of specific jurisdiction. See [Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007) ]. The mere fact that it was forseeable that an alleged libelous letter would have some effect in Texas is not a sufficient basis for an assertion of jurisdiction over a nonresident defendant. See [De Prins v. Van Damme, 953 S.W.2d 7, 14 (Tex. App.-Tyler 1997, writ denied), cert. denied, 524 U.S. 904, 118 S.Ct. 2060, 141 L.Ed.2d 138 (1998).] The record contains no evidence of any marketing efforts directed to Texas by [defendants] in connection with the use of [the plaintiffs] services of the type that creates a nexus with the state of Texas sufficient to warrant the exercise of specific jurisdiction.

The basis of TBG’s defamation claim is the allegations made in the New York suit between BIA and KPMG. The alleged “offending material” was not “circulated” in Texas. Thus there is no nexus between this claim and Texas to warrant the exercise of personal jurisdiction over BIA.

Nor is there any relationship to Texas to support BIA’s claim in the instant suit for intentional interference with contract. The court in Tabor, 237 S.W.3d at 775-76, noted that a claim for intentional interference requires proof that the plaintiff was harmed “by conduct on the part of [defendants], which was either independently tortious or unlawful.” Id. at 776, citing Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 713 (Tex. 2001). As was the case in Tabor, BIA’s allegedly defamatory statement is pleaded as an “independently tortious or willful and intentional act of interference.” The same conclusory allegations support both the claim for defamation and the claim for tortious interference with existing and prospective contractual relations, but are factually insufficient to support the exercise of specific jurisdiction in Texas in this suit.

In addition, argues BIA, the exercise of personal jurisdiction over BIA by a Texas court would offend traditional notions of fair play and substantial justice. The contractual relationship between BIA and KPMG was centered in New York, where the suit was filed and most of the conduct occurred, and most of the witnesses and documents are in New York, while a New York forüm is more appropriate to enforce an agreement governed by New York law.

In sum, BIA lacks sufficient minimum contacts to be subject to the jurisdiction of a court in the State of Texas, and it would be a violation of due process to subject BIA to litigation in Texas. Instead the Court should dismiss the claims against BIA under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction over it.

Alternatively, argues BIA, claims against BIA should be dismissed under Rule 12(b)(6) because TBG failed to state a claim upon which relief can be granted. The only illegal conduct of which TBG complains is BIA’s filing the New York lawsuit against its former customer, KPMG, for breach of a series of agreements that prevented any third party from providing training to KPMG that incorporated BIA’s material. TBG claims in the instant suit that BIA’s suit against KPMG in New York constitutes tortious interference with contract, prospective contract, and defamation per se. The result, contends BIA, is that TBG fails to state a claim for which relief can be granted for several reasons.

First, the filing of a lawsuit is absolutely privileged and cannot be the basis of civil liability. As the court in Front v. Khali, 24 N.Y.3d 713, 718, 28 N.E.3d 15, 18 (2015), opined,

Commencing with this Court’s 1897 decision in Youmans v. Smith, 153 N.Y. 214, 47 N.E. 265 (1897), we have held that absolute immunity from liability for defamation exists for oral or written statements made by attorneys in connection with a proceeding before a court “when such words and writings are material and pertinent to the questions involved” (id. at 219, 47 N.E. 265). There we stated that to allow such statements to be a basis for a defamation action “would be an impediment to justice, because it would hamper the search for truth and prevent making inquiries with that freedom and boldness which the welfare of society requires” (id. at 220, 47 N.E. 265). We also noted that where an attorney’s statements are “so needlessly defamatory as to warrant the inference of express malice,” the privilege has been abused and “protection withdrawn” (id.). Nearly a century later in Park Knoll Assoc. v. Schmidt, 59 N.Y.2d 205, 464 N.Y.S.2d 424, 451 N.E.2d 182 (1983), this Court held that relevant statements made in judicial or quasi-judicial proceedings are afforded absolute protection so that those discharging a public function may speak freely to zealously represent their clients without fear of reprisal or financial hazard (see id. at 209, 464 N.Y.S.2d 424, 451 N.E.2d 182). The privilege attaches to such statements irrespective of an attorney’s motive for making them (see Wiener v. Weintraub, 22 N.Y.2d 330, 331, 292 N.Y.S.2d 667, 239 N.E.2d 540 [1968]).

Texas law is similar. See, e.g., James v. Brown, 637 S.W.2d 914, 916-17 (Tex. 1982)(holding that communications during a judicial proceeding cannot serve as the basis for a civil action for libel or slander).

In addition, TBG fails to state a claim to recover damages for a claim for tortious interference with contract, the elements of which are “the existence of a valid contract between [the plaintiff] and a third party, the defendant’s knowledge of that contract, the defendant’s intentional procurement of the third party’s breach of that contract without justification, and damages.” Notaro v. Performance Team, 136 A.D.3d 997, 999, 26 N.Y.S.3d 201 (N.Y.A.D. 2 Dept. 2016), quoting MVB Collision, Inc. v. Allstate Ins. Co., 129 A.D.3d 1041, 1043, 13 N.Y.S.3d 137 (N.Y.A.D. 2 Dept. 2015). Texas law is similar. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 207 (Tex. 2002); Holloway v. Skinner, 898 S.W.2d 793, 795-96 (Tex. 1995)(“Texas jurisprudence has long recognized that a party to a contract has a cause of action for tortious interference against any third person (a stranger to the contract) who wrongly induces another contracting party to breach the contract.”).

Applying these elements here, BIA argues that TBG has not alleged any conduct by BIA that caused KPMG to breach any contract with TBG nor that KPMG has refused to enter into any contract with TBG because of BIA’s conduct. Nor has TBG alleged that it suffered any damages as a result of BIA’s conduct. Finally, the tortious interference claim depends on the validity of the defamation per se claim, which, as discussed, fails because the allegations in a judicial proceeding cannot form the basis of a tortious interference claim. Front v. Khalil, 24 N.Y.3d 713, 718, 28 N.E.3d 15, 18 (2015); James v. Brown, 637 S.W.2d at 916-17.

TBG’s intentional interference claim also fails because TBG cannot show that BIA’s actions were not justified. It is black letter law that the exercise of one’s own legal rights is sufficient justification to defeat a claim for tortious interference. White Plains Coat & Apron Co., Inc. v. Cintas Corp., 8 N.Y.3d 422, 835 N.Y.S.2d 530, 867 N.E.2d 381 (2007)(In response to a claim of contract interference, “a defendant may raise the economic interest defense — that it acted to protect its own legal or financial stake in the breaching party’s business.”); Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 211 (Tex. 1996)(“[T]he justification defense is based on either the exercise of (1) one’s own legal rights or (2) a good-faith claim to a color-able legal right, even though that claim ultimately proves to be mistaken. Thus, if the trial court finds as a matter of law that the defendant had a legal right to interfere with a contract, then the defendant has conclusively established the justification defense.” (citations omitted)).

BIA contends that TBG fails to state a claim for defamation per se under New York law. As noted, to state a claim for defamation per se requires the publication of an untrue statement to (1) charge a person with a serious crime; (2) to injure another in his or her trade, business or profession; (3) to .claim that the plaintiff has a loathsome disease; or (4) to impute unchastity to a woman. Liberman v. Gelstein, 80 N.Y.2d 429, 435, 605 N.E.2d 344, 348, 590 N.Y.S.2d 857 (1992); Thompson v. Bosswick, 855 F.Supp.2d 67, 76-77 (S.D.N.Y. 2012). Here the second category appears applicable. Observing that “[d]efa-mation has long been recognized to arise from ‘the making of a' false statement which tends to ‘expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society,’ ” the court opined that the plaintiff must allege a false statement about the plaintiff, published to a third party without authorization or privilege, through fault amounting to at least negligence on [the] part.of the publisher, and it must either cause special harm or constitute defamation per se as defined by Restatement (Second) of Torts § 558. “Special harm means economic or pecuniary loss.” Thompson v. Bosswick, 855 F.Supp.2d 67, 76 (S.D.N.Y. 2012). “Special harm ‘must flow directly from the injury to reputation caused by the defamation[,] not from the effects of the defamation.” Id. When, as here, the statement is one tending “to injure another in his trade, business or profession, the statement must be made with reference to a matter of significance and importance for [the operation of the business], rather than a more general reflection upon the plaintiffs character or qualities.” Id. at 77, quoting Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, 813 F.Supp.2d 489, 550 (S.D.N.Y. 2011). “The statement must be targeted at the specific standards of performance relevant to the plaintiffs business and must impute conduct that is ‘of a kind incompatible with the proper conduct of the business, trade, profession or office itself.’ ” Id. citing id.

BIA contends that TBG has not alleged sufficient facts to support a claim for defamation per se. Furthermore, McKinney’s Consolidated Laws of New York Annotated § 3016(a) requires that “[i]n an action for libel or slander, the particular words complained of shall be set forth in the complaint, but their application to the plaintiff may be stated generally.” The complaint must also allege the time, place and manner of the false statement and to specify to whom it was made.” Dillon v. City of New York, 261 A.D.2d 34, 38, 704 N.Y.S.2d 1 (1999). Truth is a complete defense to defamation claims. Id. at 39, 704 N.Y.S.2d 1. Whether statements constitute fact or opinion, which is constitutionally protected, is a question of law for the court. Id. at 39, 704 N.Y.S.2d 1.

TBG objects to the allegation that KPMG breached its contract with BIA by “permitting BAR Group to provide training sessions to KPMG employees ‘incorporating’ Foundational Interviewing Skills Materials and/or Strategic Information Collection Materials... provided pursuant to those Agreements.” Pl.’s Orig. Petition (#1) at 6, ¶ IV. The allegation that KPMG breached its contract with BIA does not allege any wrongdoing or improper conduct by TBG, and it is not a defamatory statement. The claim that TBG’s training incorporated BIA material in the New York complaint merely tracks the language in the relevant provisions of the controlling agreements that were purportedly breached and to which TBG was not a party. Today a suit claiming breach of contract is not a remarkable or scandalous event and does not constitute defamation per se. Thus TBG’s claims should be dismissed under Rule 12(b)(6).

Alternatively, BIA requests a stay pending resolution of the earlier filed New York suit, which may moot this action. A copy of the New York petition is attached as Exhibit 1 to the Affidavit of Amber Wert, attached to this motion. A federal district court has wide discretion in deciding whether to stay a case before it. McKnight v. Blanchard, 667 F.2d 477, 479 (5thCir. 1982)(“A district court, in its discretion, may stay proceedings before it for docket control purposes or in the interests of justice. Nevertheless, stay orders will be reversed when they are found to be immoderate or of an indefinitie duration.”). TBG’s Original Petition in the instant action shows that its claims here in a Texas federal court are in retaliation for, and derivative of, the contractual claims BIA has asserted against KPMG in New York state court. BIA asserts that TBG is using the New York suit as a strategic tool to obtain leverage; TBG would not have filed this suit had BIA not sought to pursue its legal right to file a breach of contract claim against KPMG in New York. The issues in the two suits overlap to a substantial degree and are directly correlated, and discovery relating to TBG’s claims and BIA’s defenses would significantly overlap with the discovery already commenced in the New York