CT Espresso LLC v. Lavazza Premium Coffees Corp.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

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:

CT ESPRESSO LLC, :

:

Plaintiff, :

: 2 2 c v 3 7 7 (DLC)

-v- :

: OPINION AND ORDER

LAVAZZA PREMIUM COFFEES CORP., LUIGI :

LAVAZZA S.P.A., and JOHN DOES 1–10, :

:

Defendants. :

:

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APPEARANCES:

For plaintiff:

Sandra Adele Hudak

Mark Berkowitz

Tarter Krinsky & Drogin LLP

1350 Broadway

New York, NY 10018

For defendants:

Lisa Ann Ferrari

Keren Goldberger

Cozen O’Connor

3 WTC

175 Greenwich Street

56th Floor

New York, NY 10006

DENISE COTE, District Judge:

CT Espresso LLC (“CT Espresso”) has moved for

reconsideration of the dismissal of its claim for defamation.

For the following reasons, CT Espresso’s motion is granted.

Background

The Court assumes familiarity with its Opinion of September

28 in this action, and summarizes only the facts necessary to

resolve this motion. CT Espresso LLC v. Lavazza Premium Coffees

Corp., 22CV00377, 2022 WL 4538339 (S.D.N.Y. Sept. 28, 2022).

Luigi Lavazza, S.p.A. manufactures coffee products, which

Lavazza Premium Coffees Corp. (together “Lavazza”) distributes

in the United States. Pursuant to an agreement with Lavazza, CT

Espresso purchases and resells Lavazza’s coffee products through

its Amazon.com (“Amazon”) storefront, RLM Coffee.

The First Amended Complaint (“FAC”) pleads the following

facts. In November of 2021, the defendants placed an order from

the RLM Coffee storefront in order to confirm the authenticity

of the Lavazza-branded coffee being sold there. The coffee was

authentic. Nevertheless, the defendants submitted seven reports

to Amazon (the “Amazon Complaints”) asserting that RLM Coffee

was selling “counterfeit” Lavazza products. CT Espresso then

contacted the defendants to demand withdrawal of the Amazon

Complaints. The defendants made a settlement offer, which they

then quickly withdrew. CT Espresso again demanded withdrawal of

the Amazon Complaints, as well as compensation for damage

caused. On November 24, 2021, the defendants withdrew the

Amazon Complaints, explaining to CT Espresso that they had

verified the authenticity of the products after a “second level

check.”

CT Espresso filed this action on January 14, 2022, bringing

claims for breach of contract, defamation, and trade libel. On

July 5, CT Espresso filed the FAC, adding a claim for tortious

interference with a contract and business relations. The case

was transferred to this Court on August 17.

On September 28, this Court ruled on a pending motion and

dismissed the plaintiff’s three claims for defamation, trade

libel, and tortious interference with a contract or business

relations. Id. at *2–4. In dismissing the plaintiff’s claim

for defamation, the September 28 Opinion explained that

defamation imposes liability for certain false statements “of

and concerning” the plaintiff, whereas an action for trade libel

imposes liability on false statements about the plaintiff’s

products of services. Id. at *2 (citation omitted). The

Opinion held that Lavazza’s accusations that CT Espresso’s

products were counterfeit denigrated only the products, and not

CT Espresso. Id. at *3. Accordingly, the Opinion found that CT

Espresso’s claim sounded in trade libel, not defamation. Id.

The Opinion found that CT Espresso had failed to state a claim

for trade libel because it did not plead special damages. The

plaintiff’s breach of contract claim, which was not subject to

the motion, remained.

On October 12, CT Espresso moved for reconsideration of the

September 28 Opinion’s dismissal of its claim for defamation.

It does not seek reconsideration of the dismissal of the trade

libel or tortious interference claim. The defendants opposed

the motion on October 28. The motion became fully submitted on

November 4.

Discussion

I. Defamation

The standard for granting a motion for reconsideration is

“strict.” Cho v. Blackberry Ltd., 991 F.3d 155, 170 (2d Cir.

2021) (citation omitted). Through a motion for reconsideration

though, a party may obtain relief “to correct a clear error.”

Id.

Under New York law, a statement “confined to denigrating

the quality of [a] business’ goods or services” may be

actionable trade libel “only if malice and special damages are

proven.” Ruder & Finn Inc. v. Searbord Sur. Co., 52 N.Y.2d 663,

670–71 (1981). A statement is actionable as defamation, however

-- even without an allegation of special damages -- if it

falsely “impugns the basic integrity or creditworthiness of a

business.” Celle v. Filipino Reporter Enterp. Inc., 209 F.3d

163, 180 (2d Cir. 2000) (quoting Ruder & Ginn Inc., 52 N.Y.2d at

670).

The September 28 Opinion held that Lavazza’s accusations of

counterfeiting spoke only to the quality of CT Espresso’s

products. CT Espresso LLC, 2022 WL 4538339, at *3. But CT

Espresso correctly argues that an accusation of counterfeiting

also sounds in defamation. This argument is appropriately

presented on a motion for reconsideration; the parties did not

address this issue in their briefing of the underlying motion.

Because the September 28 Opinion’s basis for dismissing the

defamation claim has been reconsidered, the Court must address

the defendants’ arguments for dismissal of the defamation claim

that it had declined to consider in the September 28 Opinion.

See CT Espresso LLC, 2022 WL 4538339, at *3 n.3. To state a

claim for defamation under New York law, a plaintiff must allege

“(1) a written defamatory factual statement concerning the

plaintiff; (2) publication to a third party; (3) fault; (4)

falsity of the defamatory statement; and (5) special damages or

per se actionability.” Chau v. Lewis, 771 F.3d 118, 126–27 (2d

Cir. 2014). Negligence is normally sufficient to allege fault,

unless the plaintiff is a public figure or public official, in

which case it must allege actual malice. See Biro v. Conde

Nast, 807 F.3d 541, 544 (2d Cir. 2015); Rosenberg v. Metlife,

Inc., 453 F.3d 122, 123 n.1 (2d Cir. 2006).

CT Espresso has stated a claim for defamation. CT Espresso

alleges that the defendants submitted complaints to Amazon

stating that CT Espresso was selling “counterfeit” Lavazza

products. This statement is defamatory per se, and CT Espresso

alleges that the statement was false. Additionally, the

submission of the complaints to Amazon constitutes publication

to a third party.

CT Espresso has also adequately alleged fault. CT Espresso

has alleged that Lavazza had an ongoing relationship with it,

that Lavazza tested the product it had ordered from CT Espresso,

that further review confirmed the product’s authenticity, and

that Lavazza erroneously reported to Amazon that CT Espresso was

selling a counterfeit product. These allegations are sufficient

to give rise to a plausible inference that the defendants were

negligent in their initial testing of the authenticity of CT

Espresso’s products.

The defendants nevertheless argue that CT Espresso has not

stated a claim for defamation because the Amazon Complaints were

protected by the litigation privilege and the Noerr-Pennington

doctrine. The defendants have not shown that either doctrine

precludes CT Espresso’s claim at this stage of the proceedings.

II. Litigation Privilege

New York law provides “absolute immunity from liability for

defamation . . . 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.” Front, Inc. v. Khalil, 24 N.Y.3d 713, 718

(2015) (citation omitted). The privilege also extends to

statements made during a “quasi-judicial proceeding.” Herzfeld

& Stern v. Beck, 572 N.Y.S.2d 683, 685 (1st Dep’t 1991).

Additionally, a qualified privilege attaches to statements made

in anticipation of litigation, prohibiting liability unless the

statements “were not pertinent to a good faith anticipated

litigation.” Front, Inc., 24 N.Y.3d at 720.

The defendants argue that their statements were privileged

because the Amazon complaint process is a quasi-judicial

proceeding. But this privilege is “generally reserved for

communications made by individuals participating in a public

function, such as judicial, legislative, or executive

proceedings.” Stega v. N.Y. Downtown Hosp., 31 N.Y.3d 661, 669

(2018) (citation omitted). It applies only in proceedings

“having attributes similar to a court.” Id. at 670 (citation

omitted). In cases in which the privilege has been applied to

proceedings before non-governmental bodies, New York courts

emphasized that the government delegated those organizations the

task of enforcing a technical area of regulatory law. See,

e.g., Herzfeld & Stern, 572 N.Y.S.2d at 685 (proceedings before

the New York Stock Exchange were quasi-judicial because Federal

law “established a comprehensive system of oversight and self-

regulation”); Wiener v. Weintraub, 22 N.Y.2d 330, 331–32 (1968)

(proceedings before the Grievance Committee of the bar

association because the bar association in its disciplinary

capacity acted “as an arm of the Appellate Division.”).

The FAC does not allege that the Amazon Complaint process

has any such characteristics. It is not designed to administer

highly regulated activity, and was not implemented to perform

any governmental function. Accordingly, the FAC does not allege

facts which allow Amazon’s complaint process to be construed as

a “quasi-judicial” proceeding to which the absolute litigation

privilege would apply.

The defendants also argue that the Amazon Complaints were

protected pre-litigation statements, because they were prepared

in connection with anticipated litigation. The FAC, however,

contains no allegations suggesting that the defendants were

anticipating litigation at the time they filed the Amazon

Complaints. New York courts have generally applied the pre-

litigation privilege to statements made in demand letters or

other communications between parties and attorneys threatening

litigation. See, e.g., Front, Inc., 24 N.Y.3d at 720; Schwartz

v. Chan, 75 N.Y.S.3d 31, 162 A.D.3d 408, 409 (1st Dep’t 2018).

No similar demands or threats of litigation have been alleged

here. Accordingly, the defendants have not shown at this stage

of proceedings that their statements were made in anticipation

of litigation.

III. Noerr-Pennington Doctrine

The defendants argue that the Noerr-Pennington doctrine

immunizes them from liability for statements made in the Amazon

Complaints. The Noerr-Pennington doctrine shields defendants

from liability “for engaging in conduct (including litigation)

aimed at influencing decisionmaking by the government.” Octane

Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 556

(2014) (citing E. R.R. Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961) and United Mine Workers v.

Pennington, 381 U.S. 657 (1965)).1 The doctrine also applies to

“concerted efforts incident to litigation, such as prelitigation

‘threat letters.’” Primetime 24 Joint Venture v. Nat’l

Broadcasting, Co., 219 F.3d 92, 100 (2d Cir. 2000).

The Noerr-Pennington doctrine does not protect the

statements at issue here. The doctrine protects “conduct . . .

aimed at influencing decisionmaking by the government.” Octane

1 Although the Noerr-Pennington is potentially applicable to

various forms of private litigation, it usually immunizes

defendants from antitrust liability. See E. R. R. Presidents

Conference, 365 U.S. at 127; but see, e.g., T.F.T.F. Capital

Corp v. Marcus Dairy, Inc., 312 F.3d 90, 93–94 (2d Cir. 2002)

(finding that the “sham litigation” exception to the Noerr-

Pennington doctrine could apply when the original action

involved a dispute over debt payments). Because the doctrine

regardless does not apply here, it is unnecessary to consider

whether the Noerr-Pennington doctrine could, under some

circumstances, be extended to prevent liability for defamation.

For the same reason, it is not necessary to consider whether the

“sham litigation” exception to the Noerr-Pennington doctrine

applies.

Fitness, LLC, 572 U.S. at 556. It is derived from the “First

Amendment right to petition the government for a redress of

grievances.” Id. Amazon, of course, is not a governmental

entity, and the defendants’ attempts to influence Amazon’s

decisionmaking cannot reasonably be characterized as an attempt

to influence the government’s decisionmaking.

Nevertheless, the defendants argue that the Noerr-

Pennington doctrine applies because it has been extended to

“prelitigation threat letters” and statutorily prescribed

prelitigation dispute processes. See Primetime 24 Joint

Venture, 219 F.3d at 100 (holding that the Noerr-Pennington

doctrine protects challenges to a satellite television

provider’s signal strength made pursuant to the satellite Home

Viewer Act, 17 U.S.C. § 119). As alleged in the FAC, however,

Amazon’s complaint process is not analogous to such activity.

The process is not prescribed by statute as a necessary prelude

to a legal action, and the FAC does not allege that the parties

used it as a precursor to litigation. Accordingly, Noerr-

Pennington’s protection of petitioning activity does not extend

to the filing of the Amazon Complaints.

Conclusion

cr Espresso’s October 12 motion for reconsideration is

granted, and its claim for defamation is reinstated.

Dated: New York, New York

November 22, 2022

DENISE COTE

United States District Judge

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