Howard v. Goodman, Civil Action No. 2020-2187

Plaintiff Nga Thi Howard and defendant Peter Goodman co-founded Kazoo LLC (D.C. LLC) and executed an Operating Agreement in May 2019.
Howard alleges Goodman misappropriated Kazoo source code, shared it with Helen Ruan/CA Solutions, diverted crowdfunding funds to third-party accounts, removed Howard as manager, and blocked her access to company records.
Howard asserts ten claims (seven derivative on behalf of Kazoo and three direct against Goodman), including breach of fiduciary duty, conversion, DTSA and D.C. trade-secrets claims, and breaches of the operating agreement.
Goodman asserted a single-count defamation counterclaim, alleging Howard sent false communications to Kazoo voting members to oust him.
The defendants moved to dismiss (or for summary judgment); Howard moved to dismiss Goodman’s counterclaim. The court: (1) granted Howard’s motion to dismiss the defamation counterclaim; (2) held Kazoo LLC is a necessary party under Rule 19 and ordered joinder; and (3) denied the defendants’ motions without prejudice pending joinder.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Howard’s communications are protected by the judicial‑proceedings privilege	Howard: emails to voting members were preliminary to litigation and related to the dispute; recipients had an interest in litigation resolution	Goodman: statements not sufficiently related; recipients lacked requisite interest	Court: privilege applies as a matter of law at the 12(b)(6) stage; communications were related and recipients had an interest
Whether Kazoo LLC must be joined under Rule 19 for Howard’s derivative claims	Howard: joinder would destroy diversity and should not be compelled in good conscience	Defendants: derivative claims are brought on Kazoo’s behalf; the LLC is a real party in interest and must be joined	Court: Kazoo LLC is a necessary/indispensable party and must be joined under Rule 19(a)
Viability of Goodman’s defamation counterclaim	Howard: moved to dismiss the counterclaim (privilege and other defenses)	Goodman: alleged false statements and special harm from publication to voting members	Court: granted Howard’s motion and dismissed the amended counterclaim
Disposition of defendants’ motions to dismiss / summary judgment	N/A (defendants sought dismissal/SJ of Howard’s claims)	N/A	Court: denied defendants’ motions without prejudice because Kazoo must be joined first

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (jurisdictional presumptions and limits)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading plausibility standard)
Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard and treatment of legal conclusions)
Koster v. (Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518 (corporation is indispensable in shareholder derivative suits)
Knop v. Mackall, 640 F. Supp. 2d 58 (D.D.C. 2009) (applying Koster to derivative suits; corporation as real party in interest)
Martin v. Santorini Capital, LLC, 236 A.3d 386 (D.C. 2020) (LLC member is not the real party in interest for derivative claims)
Blodgett v. Univ. Club, 930 A.2d 210 (D.C. 2007) (elements of defamation in D.C.)
Oparaugo v. Watts, 884 A.2d 63 (D.C. 2005) (judicial‑proceedings absolute privilege scope)
Messina v. Krakower, 439 F.3d 755 (D.C. Cir. 2006) (privilege extends to statements to third parties involved in settlement/derivative contexts)
Cherokee Nation of Okla. v. Babbitt, 117 F.3d 1489 (D.C. Cir. 1997) (Rule 19(b) factors and indispensable‑party analysis)