Kylin Network (Beijing) Movie & Culture Media Co, LTD v. Fidlow
3:16-cv-00999
E.D. Va.Jun 1, 2017Background
- Kylin Network (Beijing) and Bliss Media partnered to obtain movie rights to "Birth of the Dragon"; Bennett Fidlow, Bliss's attorney, negotiated and drafted agreements.
- Kylin paid $1M to QED Pictures and $1M to Bliss; later discovered QED Pictures lacked rights, and Kylin separately obtained the rights from QED Holdings.
- Fidlow filed UCC-1 financing statements claiming a security interest in the film after disputes arose.
- Kylin sued Fidlow for malpractice, breach of fiduciary duty, and fraud in California; the case was stayed and refiled in the Eastern District of Virginia.
- Fidlow filed a counterclaim alleging Kylin (through manager James Pang) published defamatory statements that were republished by Chinese publisher Yiyu in an online article; he pleaded defamation, "insulting words" under Va. Code § 8.01-45, and business conspiracy under Va. Code § 18.2-499 (alternative).
- Kylin moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court found Fidlow failed to plead facts attributing the alleged defamatory statements to Kylin and dismissed the counterclaim with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fidlow adequately pleaded Kylin published the alleged defamatory statements | Yiyu republished statements that originated from Kylin (via managers); the article republished Kylin statements and harmed Fidlow's reputation | The article chiefly relied on court filings and the author’s own conclusions; Fidlow pleaded only conclusory attribution to Kylin | Dismissed — Fidlow failed to plead factual basis attributing the defamatory statements to Kylin |
| Whether Fidlow stated a claim for "insulting words" under Va. Code § 8.01-45 | Statutory claim parallels defamation and applies to the insulting published words | Because defamation fails for lack of attribution, the insulting-words claim also fails | Dismissed — claim rises or falls with defamation |
| Whether Fidlow sufficiently pleaded business conspiracy under Va. Code §§ 18.2-499–500 | Alternative claim that Kylin and others conspired to injure Fidlow by publishing defamatory statements | Conspiracy claim depends on the same unattributed statements and lacks particularized facts and concerted-action allegations required by Rule 9(b) and Virginia law | Dismissed — pleadings lack particularity and factual basis for concerted action |
| Whether dismissal should be with prejudice or leave to amend | Fidlow argued the complaint states claims and could be cured | Kylin argued the face of the Yiyu article shows statements are not attributable to Kylin and amendment could not fix attribution | With prejudice — court held no set of facts could resurrect claims based on that article |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely speculative)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to assumption of truth)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (federal diversity court applies forum state choice-of-law rules)
- Capital City Real Estate, LLC v. Certain Underwriters at Lloyd's London, 788 F.3d 375 (4th Cir. 2015) (apply state choice-of-law principles in diversity cases)
- Dreher v. Budget Rent‑A‑Car Sys., Inc., 634 S.E.2d 324 (Va. 2006) (lex loci delicti governs torts; choice-of-law concerns for multistate publication)
- Potomac Valve & Fitting, Inc. v. Crawford Fitting Co., 829 F.2d 1280 (4th Cir. 1987) (Va. "insulting words" action is virtually coextensive with defamation)