Opinion
21-CV-807 (AJN) (KHP)
02-22-2022
TRISHA PARAVAS, Plaintiff, v. LONG TRAN, Defendant.
TO: THE HONORABLE ALISON J. NATHAN, UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION
KATHARINE H. PARKER, UNITED STATES MAGISTRATE JUDGE
Plaintiff Trisha Paravas commenced this action on January 29, 2021 against Defendant Long Tran alleging defamation of character under New York law, libel per se, tortious interference, intentional infliction of emotional distress, breach of contract, and violation of the Computer Fraud and Abuse Act (“CFAA”). (Complaint, ECF No. 1.)
Presently before this Court is Plaintiff's order to show cause and motion for default judgment pursuant to Federal Rule of Civil Procedure (“FRCP”) 55, following Defendant's failure to appear after being properly served as required by FRCP 4. On January 21, 2022, the Plaintiff appeared at the court-ordered inquest hearing. The Defendant did not appear, despite being served notice of the hearing. At the hearing, I granted Plaintiff until February 10, 2022, to submit medical treatment records and other relevant information as to the damages she sustained. Plaintiff submitted relevant documentation including Plaintiff's sworn affidavit, which were reviewed by the Court and incorporated herein as necessary. Accordingly, for the 1 reasons set forth below, I respectfully recommend that Plaintiff's motion for default judgment be granted in part and denied in part and Plaintiff be awarded damages as outlined below.
BACKGROUND
Plaintiff alleges she began working with Defendant in 2013 and helped Defendant launch a career in fashion. On December 8, 2016, FW Investors, Inc., (hereinafter “FW Investors”) a company founded and operated by Plaintiff, negotiated and entered into a profit sharing agreement with Defendant. However, shortly after the execution, Defendant terminated the agreement, leading FW Investors to sue Defendant for breach of contract in New York state court. They settled the case after mediation on October 2, 2017, which included a non-disparagement clause.
The facts are taken from Plaintiff's complaint and deemed true for the purposes of the instant motion.
Plaintiff alleges that during the time she worked with the Defendant, he became aware of and gained direct knowledge of a trademark infringement lawsuit (filed in 2019 in this District) between Plaintiff and a third party regarding the ownership of disputed trademarks. On February 14, 2020, three years after the settlement between FW Investors and Defendant, Defendant created an email account (trishaparavas@gmail.com) and sent an email to Plaintiff's adversary in the trademark infringement lawsuit purporting to be Plaintiff. Specifically, Defendant wrote:
I planned to created (sic) the [Disputed Trademark] years ago to sue people who use it. Sue (sic) IMG and CFDA is in my plan to earn money or at least I will get my name out there. Finally, you can google me “Trisha Paravas”, then you can see now I am on Wikipedia. Thank you so much for this opportunity. P.S. I filed my lawsuit to sue you guys on Fashion Week a few years back so you cannot prepare and lost (sic). You can look up my history to see how many people I sued. I am really good at it by the way[.]2
Plaintiff believes the email was intended to provide her adversary with evidence to use against her in the trademark infringement lawsuit. After receiving the email, Plaintiff's adversary forwarded the email to Plaintiff's trademark counsel to ask that Plaintiff not contact it directly, but rather, communicate through counsel. Plaintiff's counsel responded that the email was fraudulent and not sent by Plaintiff.
Plaintiff then retained a forensic expert at a cost of $150 to determine the origin of the email. She also sent subpoenas to Google (at a cost of $125) and to Comcast (at a cost of $110). Through the subpoena responses, she learned that the email came from an IP address registered to the Defendant at his address in New Jersey. Plaintiff also retained a communication expert at a cost of $300 to analyze and compare the language of the fake email to sample emails actually written by Plaintiff to further demonstrate the email was fake and not sent by Paravas. Plaintiff's trademark counsel assisted Plaintiff in the above-described efforts, resulting in approximately $8,000 in legal fees. Thus, the total cost of mitigating the potential impact of the fake email and identifying the Defendant was $8,000 in legal fees and $685 in related costs.
At the inquest hearing, Plaintiff stated she will not be seeking reimbursement of attorney's fees. Accordingly, it is not included in the damages calculated below.
Plaintiff alleges the email also caused her severe emotional harm that negatively impacted her health during the investigation and before the Defendant was identified as the sender. Plaintiff alleges she feared she was being stalked and would be assaulted. This fear led Plaintiff to temporarily move from her New York City apartment to an undisclosed location of one of her personal investment properties where she incurred costs totaling over $150,000 3 from the lost rental value of the property and transportation to and from the location as well as car expenses. Plaintiff also suffered hair loss and skin irritation as a result of the added stress and fear caused by the fraudulent email.
As to the causes of action, Plaintiff alleges defamation of character under N.Y.P.L. § 190.25 because the false statements contained in the email defamed her personally and were published via the act of sending the email to Plaintiff's adversary in the trademark infringement lawsuit. She also claims libel per se because the content of the email targeted her business and her in a professional capacity with an intent to harm her and her business in that litigation. For each claim, she asserts actual damages of at least $175,000, emotional damages of at least $1,000,000, and seeks punitive damages of at least $1,000,000. As for a third cause of action, Plaintiff alleges tortious interference with prospective economic advantage because Defendant's email allegedly interfered with the ongoing trademark litigation. Plaintiff asserts she was damaged to the tune of $1,000,000 in the litigation. As a fourth cause of action, Plaintiff alleges intentional infliction of emotional distress, contending that Defendant's conduct was extreme, outrageous, and malicious, and that she suffered headaches, anxiety, nausea, hair loss, hives, and sleeplessness as a result. She requests damages of at least $1,000,000 for this cause of action. As a fifth cause of action, Plaintiff alleges breach of contract because Defendant violated the non-disparagement clause contained in the settlement agreement between FW Investors and Defendant. She seeks $1,000,000 in damages for the breach. Finally, Plaintiff alleges Defendant violated the CFAA by creating a fraudulent email account through which he attempted to impersonate Plaintiff by sending the email. In addition to monetary damages, Plaintiff asks the Court to issue a restraining order or 4 permanent injunction enjoining the Defendant from contacting Plaintiff, to stay at least 1000 feet away from Plaintiff and to cease impersonating and harassing Plaintiff. Plaintiff anticipates that she will have difficulty collecting the judgment against Defendant, and in anticipation of that, seeks and award of 25% of the “standard New York collection agency fee” of the total amount of the judgment amount. (Mot. for Default, ECF No. 12.).
DISCUSSION
1. Legal Standard
Federal Rule of Civil Procedure 55 governs judgments against a party that has failed to plead or otherwise defend itself in an action. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 64 (2d Cir. 1981) (defendant's ongoing failure to appear supported failure to plead for the purpose of entry of default). After default has been entered and the defendant fails to appear or move to set aside the default under Rule 55(c), the Court may, on plaintiff's motion, enter a default judgment against that defendant. Fed.R.Civ.P. 55(b)(2).
A default constitutes an admission of all well pleaded factual allegations in the complaint, and the allegations as they pertain to liability are deemed true. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). However, a plaintiff still bears the burden of establishing entitlement to recovery and thus must substantiate her claims with evidence to prove the extent of their damages. Id. Even when a defendant has defaulted, a substantive analysis of the alleged claims is required to determine whether the plaintiff may be awarded damages. Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). Thus, if “the complaint fails to state a cognizable claim, a plaintiff may not recover even upon 5 defendant's default.” Bolivar v. FIT Int'l Grp. Corp., 2017 WL 11473766, at *13 (S.D.N.Y. Mar. 16, 2017), adopted by 2019 WL 4565067 (Sept. 20, 2019) (internal quotation marks omitted).
Further, “when entry of a default judgment is sought against a party who has failed to plead or otherwise defend, the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.” Bracken v. MH Pillars Inc., 290 F.Supp.3d 258, 262 (S.D.N.Y. 2017) (internal citation omitted). A district court may first assure itself that it has personal jurisdiction over the defendant before granting a default judgment. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 133 (2d Cir. 2011) (internal citation omitted). A default judgment is “void” if it is rendered by a court that lacks jurisdiction over the parties. Id. (citing “R" Best Produce, Inc. v. DiSapio, 540 F.3d 115, 123 (2d Cir. 2008)). Thus, to promote judicial economy, many courts undertake an analysis of jurisdiction before entering default judgment. CKR L. LLP v. Anderson Invs. Int'l, LLC, 2021 WL 2519500, at *3 (S.D.N.Y. June 21, 2021).
2. CFAA Claim and Federal Question Jurisdiction
“CFAA is primarily a criminal statute, but it also creates a private cause of action allowing compensatory and equitable relief for any person who suffers one of several classes of damages, including losses exceeding $5,000.” JBCHoldings NY, LLC v. Pakter, 931 F.Supp.2d 514, 520 (S.D.N.Y. 2013) (citing 18 U.S.C. § 1030(g)). A civil plaintiff is entitled to relief under CFAA upon a showing that the defendant
knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1-year period.6 18 U.S.C. § 1030(a)(4). The “term ‘exceeds authorized access' means to access a computer with authorization and to use such access to obtain or alter information in the computer that the [accessor] is not entitled so to obtain or alter[.]” 18 U.S.C. § 1030(e)(6). The statute does not define “without authorization” and the “Second Circuit has not squarely addressed the issue.” JBCHoldings NY, 931 F.Supp.2d at 522.
Plaintiff fails to show that Defendant's conduct - creating a fake email account purporting to be the Plaintiff and sending a “self-disparaging” email to Plaintiff's adversary in an unrelated trademark action - is actionable under the CFAA. As noted above, the relevant CFAA provision requires the accessing of a protected computer without authorization or exceeding authorized access. Neither is present here. Defendant is not accused of accessing a computer without authorization at all. Rather, he apparently created a fake email account from his own computer and emailed a third party from his own computer using the fake email account. To be sure, creating a fake email account may be improper, but it does not create civil liability under CFAA.
Plaintiff (although proceeding pro se) does not cite a single case holding that the creation of a fake email account constitutes “accessing of a protected computer without authorization” under the CFAA. The Court's own research also did not locate any such case. To the contrary, courts have held that similar conduct does not lead to liability. For example, in Matot v. CH, the plaintiff alleged that the defendants used his name and image to create fake Facebook and Twitter accounts. 975 F.Supp.2d 1191, 1196 (D. Or. 2013). There, the court noted the “CFAA's focus is on hacking rather than the creation of a sweeping internet-policing mandate” and held “access without authorization” does not apply to “defendants' alleged 7 creation of fake social media profiles in violation of social media websites' terms of use.” Id. Similarly, in Bittman v. Fox, the plaintiff asserted, among other claims, violation of the CFAA, defamation, and IIED based on the defendants creating a Facebook page and using plaintiff's photos to impersonate her floral business. 107 F.Supp.3d 896, 899 (N.D. Ill. 2015). The court noted that it is
not persuaded that the [CFAA was] enacted to punish the creation of a fake social media account in violation of a social media company's terms of service . . . such conduct does not constitute access ‘without authorization' or ‘exceeding authorized access' as envisioned by the CFAA[. Defendants] are not hackers, nor are they virus or worm writers. They did not access a computer to damage, steal, or tamper with [Plaintiff's] data.Id. at 901. See generally, Sandvig v. Barr, 451 F.Supp.3d 73, 87 (D.D.C. 2020) (analyzing “without authorization” under the CFAA in relation to creating fictitious profiles for research purposes and holding no criminal liability may ensue).
Accordingly, Plaintiff has failed to allege sufficient facts to support a CFAA claim as a matter of law. Therefore, I respectfully recommend Plaintiff's motion for default judgment as to her CFAA claim be dismissed, as the allegations in the complaint, even if accepted as true, do not give rise to a claim.
3. Jurisdiction
Insofar as Plaintiff's sole federal question claim fails as a matter of law, the only basis for jurisdiction over her state law claims is diversity jurisdiction. Plaintiff asserts that she is domiciled in New York and that Defendant is domiciled in New Jersey. Plaintiff alleges that she 8 is entitled to no less than one million dollars, exceeding the amount in controversy threshold.Therefore, diversity jurisdiction is appropriate. See 28 U.S.C. § 1332.
At the pleading stage, the Court does not question the initial assertion of the damages amount if damages above the threshold amount are plausible. See Peoples Club of Nigeria Int'l, Inc. v. Peoples Club of Nigeria Int'l - New York Branch, Inc., 821 Fed.Appx. 32, 34 (2d Cir. 2020) (“[T]he sum claimed by the plaintiff controls if the claim is apparently made in good faith and that dismissal is appropriate only if the legal impossibility of recovering above the threshold amount is so certain as virtually to negate the plaintiff's good faith in asserting the claim.”) (internal citation and quotation omitted).
However, this does not end the inquiry. The Court also must assess whether it has personal jurisdiction over Defendant. A court may exercise two types of personal jurisdiction over a defendant properly served with process, general and specific. Brown v. Lockheed Martin Corp., 814 F.3d 619, 624 (2d. Cir 2016). General jurisdiction subjects a defendant to suit on any claims, whether or not they arise from the defendant's dealings in the forum state. Int'l Shoe Co. v. Washington, 326 U.S. 310, 318 (1945). For a court to exercise general jurisdiction over a defendant, (1) “state law must authorize general jurisdiction;” and (2) “jurisdiction must comport with constitutional due process principles.” Reich v. Lopez, 858 F.3d 55, 62-63 (2d Cir. 2017).
A federal court in New York, sitting in diversity, has general personal jurisdiction over a party pursuant to CPLR § 301 where the defendant “engaged in such a continuous and systematic course of ‘doing business' in New York as to warrant a finding of its ‘presence' in the state.” Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (internal alterations and citation omitted). “The test for ‘doing business' is a simple and pragmatic one. . . . The court must be able to say from the facts that the [defendant] is present in the State not occasionally or casually, but with a fair measure of permanence and continuity.” Duravest, Inc. v. Viscardi, A.G., 581 F.Supp.2d 628, 633 (S.D.N.Y. 2008) (citing Landoil Resources Corp. v. Alexander & Alexander Servs., Inc., 77 N.Y.2d 28, 33 (1990)). 9 In evaluating whether a defendant is “doing business” in New York, courts look to several factors, including: (1) “the existence of an office in New York”; (2) “the solicitation of business in the state”; (3) “the presence of bank accounts and other property in the state”; and (4) “the presence of employees of the foreign defendant in the state.” Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985).
Here, general jurisdiction is improper under CPLR § 301 because the Defendant has not engaged in a continuous and systematic course of business in New York so as to establish a presence in the state. See Jazini, 148 F.3d at 184. Plaintiff has not shown that the Defendant maintains an office in New York, solicits business in New York, or has employees in New York to be deemed at “home” here. And though Plaintiff does allege that Defendant owns property in New York that would be sufficient to satisfy a judgment, this alone is not enough to find that general jurisdiction exists to hail Defendant in this forum to defend this action. See Reich, 858 F.3d at 63.
Thus, the only basis on which this Court may exercise personal jurisdiction over Defendant is specific personal jurisdiction. This type of jurisdiction exists in a suit arising out of or related to the defendant's contacts with the forum. O'Neill v. Asat Trust Reg. (In re Terrorist Attacks on September 11, 2001), 714 F.3d 659, 673-74 (2d Cir. 2013) (internal quotation and citation omitted). To evaluate whether it may exercise specific personal jurisdiction over a defendant, the Court first looks to whether it has a “statutory basis” for such jurisdiction under the forum state, in this case New York's long-arm statute, and then, “[i]f the long-arm statute permits personal jurisdiction, the second step is to analyze whether personal jurisdiction 10 comports with the Due Process Clause of the United States Constitution.” Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010).
New York's long-arm statute provides, in relevant part:
[A] court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or
2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or
3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he
(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or
(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce[.]N.Y. C.P.L.R. § 302(a).
Plaintiff's breach of contract claim confers this court personal jurisdiction over the Defendant. Here, the Defendant transacted business within the state by entering into the settlement agreement in New York and breached that agreement by sending the disparaging email about the Plaintiff to her adversary in the trademark infringement lawsuit, thereby satisfying New York's long arm statute. Next, the due process test is met because the Defendant purposefully engaged in conduct in New York by sending the email to Plaintiff's adversary in New York, knowing and/or intending to hurt Plaintiff in New York, in breach of his promise not to disparage Plaintiff. This conduct rendered it foreseeable that he would be subject to suit in New York. See Laumann Mfg. Corp. v. Castings USA, Inc., 913 F.Supp. 712, 717 (E.D.N.Y. 1996) 11 (Jurisdiction is proper “where a non-domiciliary enters into a contract to do work in or send goods into New York so long as the cause of action arises out of the contract.”) (internal citation omitted); Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011) (discussing due process requirements and noting a single contact within a state may be sufficient to confer personal jurisdiction over a litigant). Accordingly, both subject matter and personal jurisdiction is established.
4. Breach of Contract
In New York, a breach of contract claim requires the Plaintiff show “(1) the existence of a contract, (2) performance by the party seeking recovery, (3) non-performance by the other party, and (4) damages attributable to the breach.” Cortes v. Twenty-First Century Fox Am., Inc., 285 F.Supp.3d 629, 637 (S.D.N.Y. 2018) (quoting RCN Telecom Servs., Inc. v. 202 Ctr. St. Realty LLC., 156 F. App'x. 349, 350-51 (2d Cir. 2005)).
Here, FW Investors and Defendant entered into the settlement agreement on October 2, 2017 where they agreed to, amongst other things, not disparage one another. Specifically, the agreement reads “[p]arties agree there shall be no disparagement of each other.” Defendant breached that agreement by creating a fake email account purporting to be Plaintiff and claiming she filed trademarks for the sole purpose of initiating lawsuits, thus disparaging Plaintiff. The actual damages sustained by Plaintiff is the amount she expended to uncover Defendant's identity and mitigate the breach. Plaintiff asserts that she spent $685.00 for the costs of experts and subpoenas. Plaintiff submitted receipts showing the $685 in costs. She also alleged she expended about $8,000 in attorneys' fees but failed to submit appropriate 12 documentation of such fees. When asked at the hearing to provide additional support, Plaintiff withdrew her request for attorneys' fees.
Relatedly, Plaintiff alleges she suffered substantial economic damages because of Defendant's breach. However, this is not the case. Plaintiff's claims are conclusory in nature and only state that Defendant's conduct potentially exposed her to substantial civil and criminal liability. Plaintiff's damages are based on theoretical scenarios of what could have happened in her trademark infringement lawsuit due to Defendant's conduct, not what actually happened. There is no evidence that Plaintiff's position was harmed in that litigation or that she ever incurred any civil or criminal liability as a result of the email. To the contrary, Plaintiff's attorney informed her adversary in the trademark litigation that the email was a fake (as facially evident from the grammar and spelling in the email itself), and the parties reached an amicable settlement of the trademark litigation after a settlement conference before the undersigned. Accordingly, Plaintiff fails to show she suffered economic damages beyond the actual costs of investigating the source of the fake email.
Lastly, a fair reading of Plaintiff's submissions suggest she is attempting to recover damages for emotional harm as consequential damages due to the breach. This is not possible for this cause of action. “In New York it is generally held that emotional and mental distress is not compensable in a breach of contract action.” Martin v. Donald Park Acres At Hasting, Inc., 389 N.Y.S.2d 31, 32 (2d Dep't 1976) (internal citation omitted); see also Seifts v. Consumer Health Sols. LLC, 61 F.Supp.3d 306, 324 (S.D.N.Y. 2014) (denying recovery of emotional damages related to a breach of contract claim under New York Law). 13
Accordingly, I respectfully recommend that a default judgment be entered in connection with the breach of contract claim and that Plaintiff be awarded $685.00 as actual damages sustained for Defendant's breach of contract.
5. Tort Claims
Plaintiff's claim of libel per se is duplicative of the defamation claim. As such, they are addressed together.
The elements of a defamation claim are “[1] a false statement, [2] published without privilege or authorization to a third party, [3] constituting fault as judged by, at a minimum, a negligence standard, and [4] either caus[ing] special harm or constituting] defamation per se.” Dillon v. City of New York, 704 N.Y.S.2d 1, 5 (1st Dep't 1999) (citing Restatement (Second) of Torts § 558 (1977)). With respect to the second element, “publication occurs when the [defamatory] words are read ‘by someone other than the person libeled and the person making the charges.'” Van-Go Transp. Co. v. New York City Bd. of Educ., 971 F.Supp. 90, 102 (E.D.N.Y. 1997) (quoting Fedrizzi v. Washingtonville Cent. Sch. Dist., 611 N.Y.S .2d 584, 585 (2d Dep't 1994)). Defamation per se, which encompasses libel per se, includes statements impugning the plaintiff's business reputation and special damages need not be pled. Van-Go Transp. Co., 971 F.Supp. at 98.
The complaint sets forth facts establishing a defamation claim. First, the entirety of the email is false insofar as it is a sham email in which Defendant purports to be Paravas and to set forth a fake motive for Paravas' trademark infringement lawsuit. Second, the email was published to Plaintiff's adversary in the trademark action. Third, the email was clearly committed purposefully and with malicious intent by Defendant insofar as he created the false 14 email and sent it to Plaintiff's adversary. It also constitutes defamation per se, as the statements in the email pertained to Plaintiff's business reputation in the fashion industry.
i. Monetary Damages
General damages are available in defamation claims and normally based on the extent of circulation of the defamation. Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 61 (2d Cir. 2002). “In determining the appropriate amount of general damages in a defamation claim, the court generally defers to the victim's pleaded amount because by the very nature of harm resulting from defamatory publications, it is frequently not susceptible of objective proof.” Robertson v. Doe, 2009 WL 10676484, at * 5 (S.D.N.Y. Dec. 17, 2009) (internal citation and quotation omitted). Such damage awards may also include compensation for mental anguish and emotional suffering. Rosario v. Amalgamated Ladies' Garment Cutters' Union, Loc. 10, I.L.G.W.U., 605 F.2d 1228, 1251 (2d Cir. 1979). A plaintiff may also obtain special damages, which must be specifically pled, and includes consequential expenses. See Robertson, 2009 WL 10676484, at * 6.
Plaintiff alleges she suffered emotional harm causing headaches, anxiety, weight loss, nausea, hair loss, hives, and sleeplessness. Plaintiff was previously being treated for hair loss and post-traumatic stress disorder (“PTSD”) which was exacerbated by Defendant's e-mail. Pursuant to the Court's request at the inquest hearing, Plaintiff submitted treatment records detailing the extent of her symptoms. Plaintiff's medical records show that the dosage of Plaintiff's medication, injections to treat her hair loss, was doubled after the disparaging e-mail 15 was sent. Plaintiff also explains that the medication is injected directly into her scalp and is often a painful experience where she bleeds for several hours following the injection. After the injections, Plaintiff's hair regrows in about six-to-nine months. Plaintiff also submitted photographs showing skin irritation/hives, however, Plaintiff did not seek medical intervention for this condition, instead she relied on over-the-counter drugs (e.g., Benadryl). Plaintiff also did not engage a mental health professional for her PTSD.
To the extent that Plaintiff describes her emotional harm under her IIED claim and given Plaintiff is proceeding pro se, the Court incorporates them under the defamation claim as emotional damages caused by defamatory statements are properly considered under a defamation claim (as further discussed below).
Plaintiff seeks $1,000,000 in monetary damages, but again, fails to provide any caselaw to support such an award. In any case, given the allegations proffered, such an award would be excessive. As caselaw pertaining to appropriate damages on similar facts appears to be scant, the Court borrows from employment cases alleging emotional distress where Plaintiffs suffered similar mental anguish and hair loss. In Tenecora v. Ba-kal Rest. Corp, the magistrate judge recommended: (1) Plaintiff Romero be awarded $30,000 in emotional distress damages after working for Defendants for two years and suffered stress, headaches, migraines, physical pain in the shoulder and neck from the stress; (2) Plaintiff Varela be awarded $4,000 in emotional distress damages after working for Defendants for two months and suffered stress, depression, humiliation, and dreaded his work environment; and (3) Plaintiff Ascenio be awarded $12,000 in damages after working for Defendants for almost two years and attesting she suffered depression, stress, and anxiety that caused hair loss and irregular menstrual cycles. 2020 WL 8771256, at *21-24 (E.D.N.Y. Nov. 30, 2020), report and recommendation adopted as to compensatory damages, 2021 WL 424364 (E.D.N.Y. Feb. 8, 2021). In Balderson v. Lincare Inc., the Court awarded $30,000 in emotional damages where the Plaintiff “established that she sought treatment for anxiety; suffered from hair loss caused by the stress of her termination; 16 and that the financial losses stemming from her termination directly affected her family's enjoyment of activities.” 2021 WL 2322827, at *14 (S.D. W.Va. June 7, 2021). Here, given there was only a single instance of defamation with minimal reach and the extent of Plaintiff's emotional harm allegations and subsequent medical treatment, I recommend that Plaintiff be awarded $5,000.00 in emotional distress damages. See, e.g., McPhatter v. M. Callahan & Assocs., LLC, 2013 WL 5209926, at *4 (E.D.N.Y. Sept. 13, 2013) (awarding $500 in emotional damages where Plaintiff received a single voice message and offered “no evidence that she sought any medical or psychological treatment for her emotional distress” despite alleging her blood pressure, trouble sleeping, and anxiety were affected by the voice message).
Next, Plaintiff failed to show any reputational harm caused by the Defendant. As noted above, Plaintiff did not suffer any adverse consequence in the trademark infringement lawsuit, which has been resolved and there was no harm to her reputation. Nor is there any allegation that the email was shared with anyone other than her adversary. In other words, there is no basis to believe the broader business community ever saw the email. Consequently, Plaintiff is only entitled to general damages related to the emotional harm she suffered.
To the extent Plaintiff details costs of relocating to another city, travel and car expenses due to a fear for her physical safety, such damages are not credible. Nothing in the email is threatening to Plaintiff's safety. Rivers v. Towers, Perrin, Forster & Crosby Inc., 2009 WL 817852, at *10 (E.D.N.Y. Mar. 27, 2009) (holding the plaintiff's complaint raises no plausible allegation of physical danger based on the claims arising from the alleged defamation accusing Plaintiff of stealing laptops); see also Abakporo v. Sahara Reps., 2011 WL 4460547, at *6 (E.D.N.Y. Sept. 26, 2011) (dismissing emotional distress claims because Plaintiff cannot plausibly 17 assert that the allegedly defamatory articles placed him in peril of imminent physical harm). Furthermore, relocation and travel expenses are not the types of damages that flow from defamation. Accordingly, I do not recommend any further award of general damages in connection with the defamation claim.
As for special damages, Plaintiff's out of pocket expenses-the cost of uncovering Defendant's identity-are set forth above and awarded pursuant to the breach of contract. Plaintiff may not recover twice for the same damages. See Diaz v. Paragon Motors of Woodside, Inc., 2007 WL 2903920, at *1 (E.D.N.Y. Oct. 1, 2007) (noting that although Defendant was found to have also engaged in deceptive practices under New York law, further recovery was not warranted because any damages for prevailing on this claim were duplicative).
Lastly, Plaintiff seeks punitive damages. “To award plaintiff punitive damages, the Court must find that plaintiff has established common law malice, showing by a preponderance of the evidence that the libelous statements were made out of hatred, ill will, or spite.” Daniels v. Kostreva, 2017 WL 823583, at *13 (E.D.N.Y. Jan. 12, 2017), report and recommendation adopted, 2017 WL 519227 (E.D.N.Y. Feb. 8, 2017) (quoting Fischer v. OBG Cameron Banfill LLP, 2010 WL 3733882, at *2 (S.D.N.Y. Sept. 24, 2010) (internal alterations omitted)). Punitive damages are meant to punish the defendant and serve as a deterrent, and “should bear some reasonable relationship to the harm done and the flagrancy of the conduct causing it.” Daniels, 2017 WL 823583, at *13 (internal citation omitted). Thus, the Supreme Court has indicated that as a rule of thumb, in most cases, punitive damages should not exceed nine times the compensatory damages awarded (i.e., a single digit ratio). State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). 18
Plaintiff sufficiently established that Defendant acted out of spite. Defendant intentionally created a fake email account purporting to be Plaintiff and sent a defamatory email meant to undermine her business credibility. Plaintiff requests that the Court use the settlement amount reached in the trademark infringement litigation as a basis for determining punitive damages. The Court disagrees and finds the proper basis to be the actual damages caused by this conduct. The disparaging email was a single incident with minimal reach and harm to warrant greater punitive damages. See Fischer, 2010 WL 3733882 at *4 (awarding $7,500 in punitive damages when libelous language was maliciously inserted in a letter to Immigration and Naturalization Services).
Accordingly, I recommend that Plaintiff be awarded a total of $17,055 in punitive damages (3 x $5685 (which is $5000.00 for emotional distress and $685.00 for out of pocket costs)).
ii. Injunctive Relief
Plaintiff also seeks injunctive relief. Specifically, Plaintiff request that the court enjoin the Defendant from contacting her, that he stay at least 1000 feet away from her, and to cease impersonating and harassing her. A plaintiff seeking a permanent injunction must satisfy a four-factor test. Weitsman v. Levesque, 2018 WL 1990218, at *7 (N.D.N.Y. Apr. 25, 2018).
A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.Id. (quoting eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). Of note, courts are often hesitant to enjoin speech and “unprotected speech, like defamation, may be enjoined in 19 extraordinary circumstances.” Weitsman, 2018 WL 1990218, at *7 (citing Ferri v. Berkowitz, 561 F. App'x. 64, 65 (2d Cir. 2014)).
Here, Plaintiff's claim fails at the first step as there is no showing of irreparable harm. In this circuit, irreparable harm “must be shown by the moving party to be imminent, not remote or speculative.” Reuters Ltd. v. United Press Intern., Inc., 903 F.2d 904, 907 (2d Cir.1990) (citing Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 972 (2d Cir.1989)). The movant is required to establish not a mere possibility of irreparable harm, but that it is “likely to suffer irreparable harm if equitable relief is denied.” JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75, 79 (2d Cir.1990)). Although Defendant agreed not to disparage Plaintiff in the settlement agreement and violated that promise, this case involves only a single instance of defamation that was sent to one person in the trademark infringement lawsuit. There is no evidence that Defendant's conduct will continue, and Plaintiff fails to show irreparable harm is likely and more than just speculative. Additionally, given that enjoining speech is disfavored, that Defendant is already under a contractual obligation not to defame Plaintiff, and that injunctive relief is only granted in extraordinary circumstances, it is clear irreparable harm is speculative and a discussion of the remaining factors is not warranted. See Reuters Ltd., 903 F.2d at 907 (“Because a showing of probable irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction, the moving party must first demonstrate that such injury is likely before the other requirements for the issuance of an injunction will be considered.”) (internal quotations and citations omitted). To the extent Plaintiff seeks a restraining order requiring Defendant to stay away from her, Plaintiff also has shown no facts warranting issuance of such an order. Defendant has not done anything since the email and 20 has never physically threatened Plaintiff. Accordingly, I recommend that the requested injunctive relief be denied.
b. Intentional Infliction of Emotional Distress
Plaintiff fails to meet the high burden of showing intentional infliction of emotional distress (hereinafter “IIED”). In New York, the tort of IIED is “extremely disfavored.” Hogan v. J.P. Morgan Chase Bank, 2008 WL 4185875, at *4 (E.D.N.Y. Sept. 4, 2008). New York law sets a very high bar for conduct that is “extreme and outrageous.” See Murphy v. Am. Home Prods. Corp., 58 N.Y.2d 293, 303 (1983) (extreme and outrageous conduct is that which is so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society) (citations and quotation marks omitted). The question of whether the conduct alleged by a plaintiff may rise, as a matter of law, to the level of “extreme and outrageous” conduct is a question left to the district court in the first instance. See Stuto v. Fleishman, 164 F.3d 820, 827 (2d Cir. 1999) (affirming dismissal of emotional distress claim, and holding that “[w]hether the conduct alleged may reasonably be regarded as so extreme and outrageous as to permit recovery is a matter for the court to determine in the first instance”). Claims of IIED often fail because the alleged conduct is not sufficiently outrageous. See e.g., Anderson v. Abodeen, 816 N.Y.S.2d 415 (1st Dep't 2006) (outrageousness was not established when defendant was accused of fabricating an email in plaintiff's name in which plaintiff was made to appear to be a rude, petty, self-absorbed cartoonist and in which people were encouraged to vomit on plaintiff).
Furthermore, “defamatory statements generally cannot constitute the extreme and outrageous behavior required for an intentional infliction of emotional distress claim.” 21 Stuto, 164 F.3d at 827. New York courts commonly refuse to award IIED damages where the underlying allegations of wrongdoing and injury are actionable under other forms of traditional tort liability, such as defamation. Daniels, 2017 WL 823583, at *10. As such, “[r]ecovery on a theory of [IIED] for the emotional distress caused by publication of a libel has been held to be duplicative and more properly addressed within the context of a libel suit.” Id. (quoting Trachtenberg v. Failedmessiah.com, 43 F.Supp.3d 198, 206 (E.D.N.Y. 2014)).
Here, Defendant created a fraudulent email account purporting to be the Plaintiff and sent a single email to Plaintiff's adversary in a pending litigation. Such behavior, although malicious, is not so outrageous in character and extreme to be said to be intolerable in a civilized society. Plaintiff also alleges she feared that she was being stalked and would be assaulted because of the fraudulent email. However, that is unlikely and implausible given that the email did not threaten bodily harm and only included her business address. Accordingly, Plaintiff's claim of IIED is woefully deficient. See Potts, 2021 WL 4440666, at *10 (dismissing IIED claim where “[e]ven viewing the facts in the light most favorable to Plaintiff, nothing Defendant stated in the [defamatory email sent to Plaintiff's employer] arose to the level of conduct so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency”); see also Constantine v. Teachers College, 2010 WL 4187655 (Table) (N.Y. Sup. Oct. 13, 2010) (accusations of plagiarism did not rise to the level of egregious conduct necessary to satisfy the standard for IIED, which requires behavior that “transcends the bounds of decency as to the regarded as atrocious and intolerable in a civilized society”) (citation omitted); Montalvo v. J.P. Morgan Chase and Co., 2009 WL 4893939 (N.Y. Sup. Dec. 18, 2009) 22 (“allegations involving a threat to cause a plaintiff's arrest, or even to provide the police with false information to cause such an arrest are insufficient to support an [IIED claim]”).
Further, monetary recovery under Plaintiff's IIED claim would be duplicative of the emotional harm addressed above under Plaintiff's defamation claim. As recovery on a theory of IIED is best addressed within the context of defamation, it is clear that this claim warrants dismissal. See Daniels, 2017 WL 823583, at *10 (finding “although defendant's [defamatory] conduct was extreme and outrageous, plaintiff's claim for [IIED] should be denied as her remedy is entirely encompassed within her claim for libel per se.”).
Accordingly, even if the allegations are deemed true, Plaintiff has failed to allege sufficient facts to support an IIED claim as a matter of law and such claim is also subsumed in Plaintiff's defamation claim. Therefore, I respectfully recommend Plaintiff's motion for default judgment as to this claim be denied and dismissed.
c. Tortious Interference with Prospective Economic Advantage
Similarly, Plaintiff's tortious interference claim also fails as a matter of law. Courts have recognized that a tortious interference claim seeking economic damages derived entirely from defamatory statements is properly dismissed as duplicative of a defamation claim. Goldman v. Barrett, 733 Fed.Appx. 568, 570-71 (2d Cir. 20180) (citing Krepps v. Reiner, 588 F.Supp.2d 471, 485 (S.D.N.Y. 2008) (“[A] [p]laintiff is not permitted to dress up a defamation claim as a claim for intentional interference with a prospective economic advantage.”). Both the defamation and tortious interference claims in Plaintiff's complaint seek recovery for Defendant's statements affecting her legal position in the trademark infringement lawsuit. Accordingly, this claim is duplicative and warrants dismissal. See Potts, 2021 WL 4440666, at *10 (dismissing 23 “the tortious interference with contract claim and the defamation claim [because] both seek damages for loss of promotional opportunities as ‘a direct and proximate cause of' Defendant's [email]”).
Accordingly, I respectfully recommend Plaintiff's motion for default judgment as to this claim be denied and this claim dismissed.
6. Costs and Interest
a. Court Costs
Plaintiffs seeks an award of $557.98 in costs. This amount consists of the filing fee ($402.00), service of process ($150.00), and mailing costs ($5.98). This amount is reasonable, and I recommend that Plaintiff be awarded this cost. See Latimore v. Schilling, 2008 WL 2421628, at *4 (S.D.N.Y. June 13, 2008), report and recommendation adopted, 2008 WL 2774465 (S.D.N.Y. July 16, 2008) (awarding reasonable fees including filing fee and service of process upon default judgment on multiple causes of action including defamation). However, Plaintiff's request for collection fees should be denied, as this is a prospective and unproven cost based on Plaintiff's belief that Defendant will fail to pay the judgment and is not properly awarded. See Hoover v. W. New York Cap., 2010 WL 2472500, at *4 (W.D.N.Y. June 16, 2010) (denying recovery for anticipated collection costs and noting Plaintiff has provided “no explanation of what that means or what authority the Court has to grant such an award.”). 24
In her February 10, 2022 affidavit, Plaintiff requests an additional award of $130.00 for service of process fees related to serving Defendant notice of the inquest hearing. However, Plaintiff failed to submit receipts for this expense. Accordingly, I do not include such fees in the award calculation.
b. Pre-Judgment Interest
Plaintiff also seeks pre-judgment interest at the New York statutory rate and post judgment interest under 28 U.S.C. § 1961 from February 14, 2020 to the date of entry of judgment.
A federal court sitting in diversity applies the prejudgment interest law of the state governing the claims. AGCS Marine Ins. Co. v. World Fuel Servs., Inc., 220 F.Supp.3d 431, 440 (S.D.N.Y. 2016). This Court applies New York law to determine whether to award prejudgment interest because it applies New York law to the substantive claims. See Schwartz v. Liberty Mut. Ins. Co., 539 F.3d 135, 147 (2d Cir. 2008) (“Under New York choice of law principles, the allowance of prejudgment interest is controlled by the law of the state whose law determined liability on the main claim.”) (internal quotation marks, citation and alterations omitted). Under New York law, “[i]nterest is generally mandatory” upon a sum awarded for breach of contract. Rhodes v. Davis, 628 Fed.Appx. 787, 792 (2d Cir. 2015) (citing N.Y. C.P.L.R. §§ 5001 (a) and 5004). “Interest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred.” N.Y. C.P.L.R. § 5001 (b). In New York, interest accrues at 9 percent per year. N.Y. C.P.L.R. §5004 (2012). At 9 percent, the annual interest on the principal damages sum of $5,685 is $511.65 ($1.40 per day). Accordingly, I recommend pre-judgment interest to be awarded at the interest rate of $1.40 per day from February 14, 2020 through the date of entry of judgment.
c. Post-Judgment Interest 25
As to an award of post-judgment interest, it is mandatory pursuant to 28 U.S.C. § 1961. See Bleecker v. Zetian Sys., Inc., 2013 WL 5951162, at *2 (S.D.N.Y. Nov. 1, 2013); Westinghouse Credit Corp. v. D'Urso, 371 F.3d 96, 100 (2d Cir. 2004). Accordingly, I respectfully recommend an award of post-judgment interest at the statutory rate calculated by the Clerk of the Court pursuant to 28 U.S.C. § 1961.
CONCLUSION
For the reasons stated above, I respectfully recommend that Plaintiff's motion for default judgment of her CFAA, intentional infliction of emotional distress, and tortious interference with prospective economic advantage claims be denied and dismissed without prejudice. I further recommend that injunctive relief and judgment collection fees be denied. Lastly, I recommend that Plaintiffs motion for default judgment as to her breach of contract and defamation claims be granted and Plaintiff awarded the following:
• Breach of Contract damages in the amount of $685;
• Defamation damages in the amount of $22,055 ($5000 in general damages and $17,055 in punitive damages);
• Court costs in the amount of $557.98;
• Pre-judgment interest on such damages, at the interest rate of $1.40 per day from February 14, 2020 through the date of entry of judgment; and
• Post-judgment interest pursuant to 28 U.S.C. § 1961.
Plaintiff is further ordered to mail a copy of this report and recommendation to Defendant by regular mail. To be clear, Plaintiff need not engage a process server to formally serve the Defendant. 26
NOTICE
The parties shall have seventeen days from the service of this Report and Recommendation to file written objections to the Report and Recommendation, pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days only when service is made under Fed.R.Civ.P. 5(b)(2)(C) (mail), (D) (leaving with the clerk), or (F) (other means consented to by the parties)).
If any party files written objections to this Report and Recommendation, the opposing party may respond to the objections within seventeen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Alison J. Nathan at the United States Courthouse, 40 Foley Square, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Nathan. The failure to file these timely objections will result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985). 27