THE RODGERS GROUP, LLC v. LEWIS
3:22-cv-00482
D.N.J.Apr 30, 2025Check TreatmentDocket
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
THE RODGERS GROUP, LLC, et al.,
Plaintiffs,
Civil Action No. 22-482 (MAS) (TJB)
° MEMORANDUM OPINION
MADELINE LEWIS, et ail.,
Defendants.
SHIPP, District Judge
This matter comes before the Court upon The Rodgers Group, LLC (“Rodgers Group”)
and Lexipol, LLC’s (“Lexipol”) (collectively, “Counterclaim Defendants”) Motion to Dismiss
(ECF No. 79) the Second Amended Counterclaims of Madeline Lewis (“Lewis”), John String
(“String”), and Aspirant Consulting Group LLC (“Aspirant”) (collectively, “Counterclaim
Plaintiffs”) (ECF No. 78). Counterclaim Plaintiffs opposed (ECF No. 80), and Counterclaim
Defendants replied (ECF No. 81). The Court has carefully considered the parties’ submissions and
reaches its decision without oral argument under Local Civil Rule 78.1(b). For the reasons outlined
below, Counterclaim Defendants’ Motion to Dismiss is denied.
L BACKGROUND!
The Court has thoroughly described the facts underlying this dispute on multiple occasions,
most recently in its August 13, 2024 Opinion (“August 2024 Opinion”), and thus will only
summarize them here. (See Aug. Op. 1-6, ECF No. 71.) Lewis and String left Rodgers Group to
' For the purpose of considering the instant motion, the Court accepts all factual allegations
underlying the Counterclaims as true. See Phillips v. County of Allegheny, 515 F.3d 224, 228 (3d
Cir. 2008).
start Aspirant—a competing consulting business premised on the same business model as Rodgers
Group. (/d. at 2.) Rodgers Group filed suit against Lewis and String, alleging that they stole
confidential information from Rodgers Group and used the confidential information to poach its
clients. (id. at 3) This Court issued a Stipulated Consent Order for a preliminary injunction
requiring Lewis and String, in part, to refrain from accessing data acquired from Rodgers Group
and to restore Rodgers Group’s access to certain software accounts. (/d. at 3.)
Counterclaim Plaintiffs originally filed two Amended Counterclaims: (1) tortious
interference with contractual and prospective contractual relationships; and (2) commercial
disparagement.” (/d. at 3-4.) Counterclaim Defendants moved to dismiss the two Amended
Counterclaims for failure to state a claim. (ECF No. 64.) The Court granted Counterclaim
Defendants’ motion to dismiss as it pertained to Counterclaim Plaintiffs’ commercial
disparagement claim and denied it as it pertained to their tortious interference claim. (Aug.
Op. 10-11.) Shortly after, Counterclaim Plaintiffs filed their Second Amended Counterclaims.
(Second Am. Countercls., ECF No. 78.) The Court now considers Counterclaim Plaintiffs’ Second
Amended Counterclaims.
Counterclaim Plaintiffs’ Second Amended Counterclaims, again, allege the
following claims: (1) tortious interference with contractual and prospective contractual
relationships; and (2) commercial disparagement. (See id.) In this Memorandum Opinion today,
the Court focuses only on the additional allegations brought in the Second Amended Counterclaims
and whether such additions render Counterclaim Plaintiffs’ Second Amended Counterclaims
capable of surviving Counterclaim Defendants’ Motion to Dismiss. That said, Counterclaim
When answering the Counterclaim Defendants’ Amended Complaint, Counterclaim Plaintiffs
filed two Amended Counterclaims. (ECF No. 62.)
Plaintiffs’ allegations underpinning their tortious interference with contractual and prospective
contractual relationships claim remain unchanged.?
The Court cannot say the same for the allegations underpinning Counterclaim Plaintiffs’
commercial disparagement claim. Counterclaim Plaintiffs allege that after leaving Rodgers Group,
eight police departments engaged them to provide services. (/d. J 2.) An employee of Counterclaim
Defendants, however, allegedly terminated Counterclaim Plaintiffs’ access to certain client
software sites without client permission. Ud. § 3.) The General Counsel of Lexipol (“General
Counsel”), which acquired Rodgers Group and was joined in this litigation, also allegedly sent the
Stipulated Consent Order to other police departments. (/d. { 4.) General Counsel then told those
police departments that Counterclaim Plaintiffs admitted to committing unlawful conduct and that
the police departments would be subject to litigation if they did business with Counterclaim
Plaintiffs. (/@.) Counterclaim Plaintiffs further allege that Lexipol’s co-founder, Gordon Graham,
“preached” to members of the Pennsylvania Law Enforcement Accreditation Commission (the
“PLEAC”) that having commission members working as paid consultants (some of whom are
employed by Counterclaim Plaintiffs) will ultimately harm the integrity of the PLEAC, which was
purportedly a negative reference to Counterclaim Plaintiffs’ business and services. (fd. § 24.)
Ultimately, because of Counterclaim Defendants’ alleged actions, at least one police department
(“Police Department 9”) decided not to finalize a contract with Counterclaim Plaintiffs worth at
least $72,000. (/d. {§ 9-11.)
its August 2024 Opinion, the Court found that the allegations were sufficient to state a claim.
(Aug. Op. 7-10.)
IL. LEGAL STANDARD
Courts evaluate a motion to dismiss a counterclaim under the same standard as a motion to
dismiss a complaint. See, e.g., Barefoot Architect, Inc. v. Bunge, 632 F.3d 822, 826 (3d Cir. 2011).
A district court conducts a three-part analysis when considering a motion to dismiss pursuant to
Federal Rule of Civil Procedure* 12(b)(6). Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).
“First, the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.’” Jd.
(alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009)). Second, the court
must accept as true all of the plaintiff’s well-pleaded factual allegations and “construe the
complaint in the light most favorable to the plaintiff’ Fowler vy. UPMC Shadyside, 578 F.3d 203,
210 (3d Cir. 2009) (citation omitted), The court, however, may ignore legal conclusions or
factually unsupported accusations that merely state that the defendant unlawfully harmed the
plaintiff. Igbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007).
Finally, the court must determine whether “the facts alleged in the complaint are sufficient to show
that the plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d at 211 (quoting Iqbal, 556
U.S. at 679). A facially plausible claim “allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Jd. at 210 (quoting Igbal, 556 U.S. at 678). On a
Rule 12(b)(6) motion, the “defendant bears the burden of showing that no claim has been
presented.” Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005) (citing Kehr Packages, Inc.
v. Fidelcor, Inc., 926 F.2d 1406, 1409 Gd Cir. 1991)).
* All references to “Rule” or “Rules” hereafter refer to the Federal Rules of Civil Procedure.
Ill. DISCUSSIONS
The Court considers Counterclaim Plaintiffs’ two claims in turn.
A. Tortious Interference with Contractual and Prospective Contractual
Relationship
Because Counterclaim Plaintiffs’ allegations in the Second Amended Counterclaims
underlying their tortious interference claim remain the same as in their Amended Counterclaims
(see Redlined Changes to Second Am. Countercls., ECF No. 78-1), the Court finds no reason to
deviate from its finding in its August 2024 Opinion “that Counterclaim Plaintiffs adequately state
a claim for tortious interference with respect to Police Department 9” (Aug. Op. 10).
B. Commercial Disparagement
To state a claim for commercial disparagement, Counterclaim Plaintiffs must plead four
elements: “(1) [a] publication[;] (2) with malice[;] (3) of false allegations concerning plaintiff’s
property or product|;| (4) causing special damages, i.e., pecuniary harm.” Jnfervet, Inc. v. Mileutis,
Ltd., No. 15-1371, 2016 WL 740267, at *6 (D.N.J. Feb. 24, 2016) (citing Sys. Operations, Inc. v.
Sci. Games Dev. Corp., 555 F.2d 1131, 1140 Gd Cir. 1977)).
In its August 2024 Opinion, the Court dismissed Counterclaim Plaintiffs’ commercial
disparagement claim because their pleading alleged that the misrepresentations “were about
Counterclaim Plaintiffs themselves, not Counterclaim Plaintiffs’ products, services, or goods.”
(Aug. Op. 10-11.) That was fatal to their claim because, in New Jersey, “no action for commercial
disparagement will lie [where] the statements are directed at the vendor, not his goods
[or services].” U.S. Healthcare, Inc. v. Blue Cross of Greater Phila., 898 F.2d 914, 927 (3d Cir.
1990).
> The Court incorporates its discussion from the August 2024 Opinion here by reference. (Aug.
Op. 7-11.)
Here, the Court finds that Counterclaim Plaintiffs’ allegations in the Second Amended
Counterclaim underlying their disparagement claim cure the deficiencies identified in the Court’s
August 2024 Opinion. That is, Counterclaim Plaintiffs’ Second Amended Counterclaims now
contain allegations that Counterclaim Defendants made false statements about Counterclaim
Plaintiffs’ services. (Second Am. Countercls. {ff 15-25.) More specifically, Counterclaim Plaintiffs
allege that Counterclaim Defendants told prospective clients that Counterclaim Plaintiffs were
“severely restricted in their ability to provide the services they claim to offer” and that
Counterclaim Plaintiffs would be unable to provide the services they claim to offer. (/d. § 16.)
Because the Court found that Counterclaim Plaintiffs failed to allege that the purported statements
were about Counterclaim Plaintiffs’ services, the Court did not reach the remaining elements of a
disparagement claim in its August 2024 Opinion.
In moving to dismiss the Second Amended Counterclaims, Counterclaim Defendants now
make three arguments, which, according to them, require Counterclaim Plaintiffs’ commercial □
disparagement claim to be dismissed for failure to state a claim. (See generally Countercl. Defs.’
Mot. Dismiss Second Am. Countercls., ECF No. 79.) First, Counterclaim Defendants argue that
Counterclaim Plaintiffs have not adequately alleged malice. Ud. at 3.) Second, Counterclaim
Defendants argue that Counterclaim Plaintiffs have not adequately alleged special damages. (/d.)
Lastly, Counterclaim Defendants argue that New Jersey’s anti-SLAPP statute, the Uniform Public
Expression Protection Act, protects all of Counterclaim Defendants’ alleged statements. (/d.) The
Court will consider each of these arguments in turn.
1. Malice
First up is Counterclaim Defendants’ argument that Counterclaim Plaintiffs have not
adequately alleged malice—an element of a commercial disparagement claim under New Jersey
law. Ud. at 5.)
“To allege malice in a trade libel or commercial disparagement claim, [Counterclaim
Plaintiffs] must allege facts to suggest that the accused knew the statements were false or that they
were ‘published with reckless disregard for their falsity.’” Pactiv Corp. v. Perk-Up, Inc.,
No. 08-5072, 2009 WL 2568105, at *10 (D.N.J. Aug. 18, 2009) (quoting Floorgraphics, Inc. v.
New Am. Mktg. In-Store Serv. Inc., No. 04-3500, 2006 WL 2846268, at *6 (D.N.J. Sept. 29,
2006)).
In its August 2024 Opinion, the Court found that Counterclaim Plaintiffs adequately
alleged malice as to their tortious interference claim, based on the same underlying facts, because
Counterclaim Plaintiffs alleged Counterclaim Defendants made false statements about a
competitor to their prospective customers. (Aug. Op. 9.) Here, the same logic applies.
Counterclaim Plaintiffs directly allege that “[Counterclaim Defendants] knowingly and recklessly
disseminated . . . false and disparaging statements .. . about [Counterclaim Plaintiffs] and their
services to [Counterclaim Plaintiffs’] customers[.]” (Second Am. Countercls. § 15.) Specifically,
Counterclaim Plaintiffs allege that Counterclaim Defendants told Counterclaim Plaintiffs’
potential clients that they were “‘severely restricted’ in their ability to provide the services they
claim to offer,’ (Second Am. Countercls. { 16), which, according to Counterclaim Plaintiffs, was
known to be false by Counterclaim Defendants (id. J 15). At the pleading stage, these allegations
are sufficient to “suggest that the accused knew the statements were false or that they were
‘published with reckless disregard for their falsity.’” Pactiv Corp., 2009 WL 2568105, at *10
(quoting Floorgraphics, Inc., 2006 WL 2846268, at *6). The Court, therefore, is satisfied that
Counterclaim Plaintiffs have adequately alleged malice.
2 Special Damages
Next up is Counterclaim Defendants’ argument that Counterclaim Plaintiffs fail to
adequately allege special damages.
To adequately plead special damages, Counterclaim Plaintiffs must “allege either the loss
of particular customers by name, or a general diminution in [their] business, and extrinsic facts
showing that such special damages were the natural and direct result of the false publication.”
Mayflower Transit, LLC v. Prince, 314 F. Supp. 2d 362, 378 (D.N.J. 2004) (quoting Juliano v. ITT
Corp., No. 90-1575, 1991 WL 10023, at *6 (D.N.J. Jan. 22, 1991)).
Counterclaim Defendants concede that Counterclaim Plaintiffs have alleged specific loss
of particular customers but contend that they fail to allege any facts suggesting that the lost
business was the result of Counterclaim Defendants’ statements. (Countercl. Defs.” Mot. Dismiss
Second Am. Countercls. 4-5.) Counterclaim Plaintiffs, however, allege that Police Department 9,
which decided not to finalize a $72,000 contract, sought legal advice about the risk of litigation
based on Counterclaim Defendants’ statements. (Second Am. Countercls. [J 9-11.) Because Police
Department 9 sought legal advice based on those statements, it is plausible that the lost business
was “the natural and direct result of the false publication.” Mayflower Transit, 314 F. Supp. 2d at
378 (citation and quotation marks omitted). The Court, therefore, finds that Counterclaim Plaintiffs
have adequately alleged special damages.
3. New Jersey’s Anti-SLAPP Statute
Last up is Counterclaim Defendants’ argument that New Jersey’s anti-SLAPP statute
precludes Counterclaim Plaintiffs’ commercial disparagement claim.
Here, the Court finds that New Jersey’s anti-SLAPP statute does not apply to this case. See
N.J. Stat. Ann. § 2A:53A-50(c). Subsection (c) of New Jersey’s anti-SLAPP statute provides that
the statute “does not apply to a cause of action asserted . . . against a person primarily engaged in
the business of selling or leasing goods or services if the cause of action arises out of a
communication related to the person’s sale or lease of the goods or services” /d. For purposes of
the statute, the definition of “person” includes businesses. N.J. Stat. Ann. § 2A:53A-50(a)(3).
Because this cause of action “arises out of a communication related to [Counterclaim Defendants’ ]
sale... of... services[,]” specifically communications between Counterclaim Defendants and
potential clients, New Jersey’s anti-SLAPP statute does not apply. See N.J. Stat. Ann.
§ 2A:53A-50(c).
Having found that Counterclaim Plaintiffs have sufficiently alleged malice, special
damages, and a false statement about Counterclaim Plaintiffs’ services, the Court finds that they
have adequately pled a commercial disparagement claim. See Intervet, Inc., 2016 WL 740267, at
*6 (citation omitted).
Counterclaim Defendants do not dispute that Counterclaim Plaintiffs have sufficiently pled the
first element of commercial disparagement, publication. (See generally Countercl. Defs.’ Mot.
Dismiss Second Am. Countercls.)
IV. CONCLUSION
For the reasons set forth above, Counterclaim Defendants’ Motion to Dismiss is denied.
The Court will issue an Order consistent with this Memorandum Opinion.
MICHAEL A. SHIPP ] 2
UNITED STATES DISTRICT JUDGE
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