HENRY v. CISCO SYSTEMS, INC. (E.D.La. 2001)

G. THOMAS PORTEOUS, JR., Judge

Plaintiff, Michael Henry, is the former Chief Executive Officer ("CEO") of American MetroComm Corporation ("AMC"). He has filed suit alleging defamation and fraudulent inducement against Cisco Systems, Inc. and Cisco Systems Capital Corporation (hereinafter "Cisco defendants"). Namely, Henry contends that he was "recruited" for the CEO position with AMC by the employees of the Cisco defendants and that he accepted the position at their urging. He alleges that the "recruiting" included misrepresentations about Cisco equipment and AMC's financial standing. Henry argues that he relied on the statements made by Cisco employees in accepting the CEO position and investing two million dollars in AMC. AMC filed bankruptcy in August 2000, which Henry claims was due to the failure of equipment provided by the Cisco defendants. As such, the fraudulent inducement claim is based on the reliance of the alleged misrepresentations to invest in, and become CEO of AMC.

Henry submits four separate instances to support his defamation claim. The first allegation of defamation is based upon contents of the Cisco defendants' "Motion to Appoint a Trustee Pursuant to 11 U.S.C. § 1104 (a), or in the alternative, an Examiner pursuant to 11 U.S.C. § 1104 (c) and Memorandum of Points and Authorities in Support Thereof' filed in the AMC bankruptcy proceeding. The memorandum called into question Henry's ability to successfully and effectively protect the interests of AMC, its creditors, and its equity holders during the bankruptcy, given his "volatile and contentious" nature. The second allegation involves the alleged distribution of a copy of that memorandum to a reporter for Dow Jones. Henry's third assertion regards alleged defamatory remarks made in a meeting held in Dallas, Texas. While the final allegation involves defamatory remarks allegedly made by Cisco defendants at a meeting in Ohio. Henry contends that these defamatory statements have damaged his reputation in the telecommunications industry.

After the original complaint was filed asserting claims of defamation and fraudulent inducement, the Cisco defendants filed a Motion to Strike and a Motion to Dismiss which were set for hearing on January 31, 2001. Instead of filing an opposition, Henry amended the complaint. Again, in response, defendants filed a Motion to Strike and a separate Motion to Dismiss and for More Definite Statement relating to the amended complaint which is the subject matter of this hearing.

As the second round of motions supercede those filed and set for hearing in January 2001, the Court will consider the first filed motions moot and proceed on the motions filed following the amended complaint.

MOTION TO STRIKE ON AMENDED COMPLAINT

II. ARGUMENTS OF THE RESPECTIVE PARTIES:

A. Arguments of the Cisco Defendants in Support of the Motion to Strike:

The defendants contend that paragraphs 39-43, as well as Exhibit C, relating to the "ILD Lawsuit" should be stricken from the amended complaint as immaterial and impertiment matter pursuant to Federal Rule of Civil Procedure ("Fed.R.Civ.P.") 12(f). It is asserted that these paragraphs have no bearing on Henry's claims. Henry does not assert a contract or redhibition claim against the Cisco defendants regarding the allegedly defective equipment sold to AMC, as AMC owns such a claim and asserted it prior to filing bankruptcy. Instead, Henry claims that Cisco employees made knowingly false statements regarding the qualities of Cisco equipment to induce him to invest in AMC and become its CEO. The fact that ILD filed a suit claiming that certain Cisco equipment sold to ILD was defective is completely immaterial to Henry's fraudulent inducement claim.

ILD Telecommunications, Inc. ("ILD") is another customer of the Cisco defendants who filed a lawsuit alleging problems with Cisco equipment similar to that experienced by AMC.

Moreover, a fraud claim can exist only with respect to then existing or past facts; it cannot be asserted with respect to promises or predictions of the future. Henry contends that the fraudulent statements made to him were in June 1999. The ILD Lawsuit allegations could have no possible relation to his fraud claim as the contract between Cisco and ILD and subsequent schedules for leased equipment were executed on June 21 and September 28, 1999 — Exhibit C. The alleged failures that ILD had with the Cisco equipment occurred after August 1999. ILD's allegations establish that any defects in the leased equipment became known after June 1999, after the time of the alleged statements at issue in Henry's fraud claim. As such, the ILD Lawsuit allegations have no bearing on whether the alleged statements regarding the workings of Cisco equipment were false when made in June 1999.

Additionally, these allegations should be stricken for prejudice. These allegations would unduly broaden the scope of discovery and require litigation of unrelated and impertiment issues of third parties. Striking these allegations would allow the parties to focus squarely on the claims of Henry without the distraction of prejudicial allegations.

B. Arguments of the Plaintiff in Opposition to the Motion to Strike:

Plaintiff contends that these allegations are very material and relevant, as the Cisco defendants repeatedly assured Henry, beginning in June 1999, that the Cisco equipment was not only viable, but that no other Cisco customers were experiencing problems with the Cisco equipment. Plaintiff argues that the ILD Lawsuit shows that during the same period that Henry and AMC were experiencing problems with Cisco equipment, another customer of Cisco, ILD, was likewise having identical or nearly identical problems as those experienced by AMC. These allegations contained in the ILD lawsuit establish that the Cisco defendants knew of very serious defects in the equipment at the very time Cisco employees were assuring Henry of the viability of its equipment. As such, these allegations are relevant in demonstrating Cisco's state of mind.

Additionally, the ILD lawsuit is relevant in regards to Henry's defamation claim. With the filing of the ILD lawsuit, Henry's outspoken criticism of Cisco's equipment was then corroborated by the fact that two, wholly unrelated providers, AMC and ILD, were experiencing identical, or nearly identical, problems with the same Cisco equipment. This provides a legitimate and reasonable explanation for the motivation of defendants for defaming Henry.

Finally, Henry contends that the Cisco defendants will suffer no prejudice should this Court deny defendants' request to strike the ILD lawsuit allegations from the pleadings. Henry would conduct discovery on who, what, and when, the Cisco defendants knew of the equipment failure with or without the ILD lawsuit allegations. As such, these paragraphs should not be stricken.

III. LAW AND ANALYSIS:

A. Law on Motion to Strike pursuant to Rule 12(f):

Rule 12(f) allows a court to order stricken from any pleading, "any insufficient defense or any redundant, immaterial, impertiment, or scandalous matter." Fed.R.Civ.P. 12(f). Motions to strike matter from the pleadings are viewed with disfavor and are infrequently granted, both because striking portions of pleadings is a drastic remedy and because it often is sought by a movant simply as a dilatory tactic. FDIC v. Niblo, 821 F. Supp. 441 (N.D. Tex. 1993). The Court possesses considerable discretion in ruling on a Motion to Strike. Id. Portions of a complaint generally will not be stricken from a pleading unless "the allegations are prejudicial to the defendant or immaterial to the lawsuit." Veazie v. Southern Greyhound Lines, 374 F. Supp. 811 (E.D. La. 1974). As stated in Sadler v. Benson Motors Corp., 1997 WL 266735 (E.D.La. 1997), "[t]he standard of materiality in a Motion to Strike pursuant to Fed.R.Civ.P. 12 (f) is a loose one: defendants must show that the challenged allegations "can have no possible bearing upon the subject matter of the litigation."' (internal citations omitted).

B. The Court's Analysis:

In light of the fact that said motions are highly disfavored, it is the opinion of this Court that defendants have failed to show that the paragraphs and exhibit related to the ILD Lawsuit have "no possible bearing upon the subject matter of the litigation." With respect to the allegations of misrepresentations and fraudulent inducement, any problems similar to those of AMC experienced by ILD, or any other customer for that matter, will be relevant to the plaintiff in his attempt to establish fraud. As such, it cannot be said that these paragraphs have no possible bearing on the subject matter of the litigation. Therefore, the Motion to Strike is hereby DENIED.

MOTION TO DISMISS AND FOR MORE DEFINITE STATEMENT

IV. ARGUMENTS OF THE RESPECTIVE PARTIES:

A. Arguments of the Cisco Defendants in Support:

Pursuant to Fed.R.Civ.P. 12(b)(6), the Cisco defendants seek the dismissal of the Count I defamation claim of the Amended Complaint as it relates to the Delaware Bankruptcy Memorandum and the related allegations of Paragraph 68 involving statements made at a meeting in Ohio, as well as, the Count II fraudulent inducement claim in toto. Moreover, the Cisco defendants seek a more definite statement pursuant to Fed.R.Civ.P. 12(f) with respect to the defamation claims as alleged in Paragraphs 54 and 67.

The Cisco defendants argue first that a conflict between the defamation laws of Louisiana and Delaware exist requiring a choice of law analysis. It is their contention that upon performing such an analysis, Delaware law prevails. Accordingly, an absolute privilege exists against any claims of defamation relative to any and all statements made in connection with judicial proceedings upon a showing that the alleged defamation was relevant to the matter at issue in the case. As such, the Cisco defendants submit that the allegations that Henry had a "propensity for violence" and possessed a "vitriolic temperament," and other related statements, contained within the bankruptcy memorandum were relevant and pertinent to that proceeding, in which the plaintiffs fitness to serve as the CEO of a Chapter 11 debtor was in question. Therefore, this Court should dismiss this defamation claim pursuant to Fed.R.Civ.P. 12(b)(6) to the extent that it is based upon statements contained within the memorandum.

Next, it is argued that the allegations contained in Paragraph 68 of the Amended Complaint should likewise be dismissed. This allegation states that at a meeting in Ohio, an attorney of the Cisco defendants, Tom Papson, told an attorney for Kevin Bennett, an adversary of Cisco Systems n an Ohio lawsuit, that he believed Mr. Henry, along with Mr. Bennett, to be involved in a kickback scheme. Defendants assert that pursuant to Ohio law, statements of opinion or belief are not defamatory. Accordingly, the Cisco defendants seek the dismissal of this allegation from the pleadings.

Moreover, the Cisco defendants seek the dismissal of the fraudulent inducement claims in toto pursuant to Fed.R.Civ.P. 12(b)(6). It is submitted that the plaintiffs claims sound in tort, thus in accordance with Louisiana law there is a one-year prescriptive period governing said claims. The pleadings assert that the alleged misrepresentations occurred in June 1999, resulting in Henry's investment and employment with AMC in July 1999. Moreover, Henry was CEO of AMC when AMC filed suit on May 9, 2000 against the Cisco defendants. As such, the Cisco defendants contend that Henry had at least constructive knowledge of his fraud claim before November 28, 1999, yet did not file suit until November 28, 2000. Accordingly, the Cisco defendants argue that the Amended Complaint demonstrates that Henry waited more than one year after he knew or should have known of the facts underlying his fraud claim before filing this action; therefore, the fraud claims should be dismissed as prescribed on the face of the Amended Complaint.

Additionally, it is asserted that Henry cannot rely on a continuing tort theory to escape prescription since all of the actions taken on the alleged misrepresentations occurred in July 1999. The Amended Complaint is devoid of any action taken by Henry after July 1999 in reliance on those alleged misrepresentations. In Louisiana, a fraud claim cannot be based upon a promise of future performance or a prediction of a future fact. The Amended Complaint contains no allegations of problems existing in June 1999, but only alleges problems arising after that time. As a matter of law, any problems AMC may have experienced with the equipment after July 1, 1999, cannot serve as the basis for a — fraud claim as the problems do not relate to the facts in existence in June 1999 when the alleged statements were made.

Finally, the Cisco defendants submit that there was no duty on their part to provide Henry with accurate information in connection with his decisions to invest in, or take a job with AMC. There is nothing in the relationship between Henry and the Cisco defendants that would create such a duty. There is no contractual or fiduciary duty between Henry and any Cisco defendant or that any Cisco defendant and AMC had any special relationship. Moreover, Henry had his own duty to verify any fact relating to AMC before he decided to take a job or invest money. Henry cannot impose responsibility for his lack of diligence upon a third party with respect to both the investment and employment decisions. It is for these reasons that the Cisco defendants seek a dismissal of the fraudulent misrepresentation claims.

Finally, the Cisco defendants request a more definite statement with respect to the defamation allegations found in Paragraphs 54 and 67. It is asserted that these allegations contain no details concerning the alleged incidents. Specifically, with respect to the allegation regarding the Dow Jones reports, it is submitted that without further infonnation, the Cisco defendants cannot determine whether the person acted or was authorized to act on behalf of the Cisco defendants and further whether they can be held responsible for this person's alleged actions. Moreover, where the alleged communication took place maybe crucial to determining which state's law is applicable to the claim. Similarly, with respect to the allegations of Paragraph 67 relative to a meeting in Texas, without further factual detail the Cisco defendants cannot properly formulate a response to the Amended Complaint.

B. Arguments of the Plaintiff in Opposition:

First, plaintiff contends that a conflicts of law analysis reveals that Louisiana law, rather than Delaware law, should be applied to the defamation claim regarding the bankruptcy memorandum. However, should this Court decide that Delaware law does apply, the plaintiffs claim falls within an exception to the absolute privilege rule under Delaware law. When the defamatory statements are made to third parties, the absolute privilege afforded by Delaware is waived. As such, dismissal of said claim is not warranted under either Louisiana or Delaware law.

Next, with regard to the statements alleged to have been made at a meeting in Ohio involving Henry's participation in a kick-back scheme, it is asserted that they are statements of fact and not belief pursuant to Ohio law. It is asserted that Mr. Papson's statements used specific language which are verifiable and made to discredit Mr. Henry with a potential witness in this case. As such, these statements are not merely of opinion but of fact and therefore said claim should not be dismissed.

With respect to the fraudulent inducement claims, plaintiff contends that prescription has not run. Prescription does not begin to run until a reasonable person would have been aware of the fraud. Moreover, Louisiana recognizes a continuing tort theory under which prescription does not begin to run until the last act related to the tort occurs. Likewise, prescription is tolled when the defendants have engaged in fraud or misrepresentations to delay the plaintiff. Henry contends that all of these exceptions apply in this case. No reasonable person would have known by November 29, 1999, that the Cisco defendants had misrepresented that its equipment would function in an ATM network. Next, plaintiff submits that he has sufficiently pled an ongoing fraud based upon assurances and misrepresentations made with regard to the equipment from August 1999 to March 2000 to withstand a motion to dismiss.

The plaintiff further submits that a more definite statement pursuant to Fed.R.Civ.P. 12(f) is not warranted in this case. The defendants have adequately been put on notice of the circumstances related to the release of the memorandum to a Dow Jones reporter and the defamatory statements made to a group of people at a meeting in Dallas, Texas. As such, this portion of the motion should be denied.

V. LAW AND ANALYSIS:

A. Law on Motion to Dismiss pursuant to Rule 12(b)(6):

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure "is viewed with disfavor and is rarely granted." Lowery v. Texas AM University System, 117 F.3d 242, 247 (5th Cir. 1997); Kaiser Aluminum Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982). The complaint must be liberally construed in favor of the plaintiff, and all facts pleaded in the original complaint must be taken as true. Campbell v. Wells Fargo Bank, 781 F.2d 440, 442 (5th Cir. 1980). A district court may not dismiss a complaint under Fed.R.Civ.P. 12 (b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); Blackburn v. Marshall, 42 F.3d 925, 931 (5th Cir. 1995). The Fifth Circuit defines this strict standard as, "[t]he question therefore is whether in the light most favorable to the plaintiff and with every doubt resolved in his behalf the complaint states any valid claim for relief." Lowrey, 117 F.3d at 247, citing 5 Charles A. Wright Arthur R. Miller, Federal Practice and Procedure, § 1357, at 601 (1969).

B. Law on Motion for More Definite Statement pursuant to Rule 12(e):

Fed.RICiv.P. 12(e) provides that where a pleading is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, the Court may order a more definite statement. Motions for More Definite Statement are generally disfavored, discovery is the correct vehicle to obtain information necessary for trial.Erickson v. Hunter, 932 F. Supp. 1380 (M.D. Fla. 1996).

C. The Court's Analysis:

Defamation Claim relative to the Delaware Bankruptcy Memorandum

In this case, the first defamation claim at issue (Count I) regards alleged defamatory statements made in a legal pleading filed in the Delaware Bankruptcy Court. The memorandum calls into question Henry's ability to successfully and effectively protect the interest of AMC during the bankruptcy. For example, it is alleged that the memorandum describes Henry's behavior as "aberrant and vitriolic" and urges the Bankruptcy Court to free AMC of the "dysfunctional and irrational baggage" of Michael Henry. Amended Complaint Paragraph 56. The Memorandum is further alleged to characterize Henry as having a propensity for violence and states that Henry was twice convicted of assault and battery. Amended Complaint Paragraph 57. As these alleged defamatory statements were made in a legal document filed in the Delaware Bankruptcy Court, a conflict of law analysis must be performed with regard to this defamation claim. Pursuant to Delaware law, an absolute privilege is afforded to judges, parties, witnesses and attorneys over otherwise defamatory statements made during the course of judicial proceedings and may not give rise to a cognizable legal claim. Hoover v. Van Stone, 540 F. Supp. 1118 (D.Del. 1982). There is only one limitation to this absolute privilege, that being that the privileged statements must be relevant or pertinent to the case. Id. Louisiana, however, provides a qualified privilege for otherwise defamatory statements made in the course of judicial proceedings provided that the statement is material and made with probable cause and without malice. In re: New York Life Ins. Co., 92 F. Supp.2d 564 (E.D. La. 1997).

Federal courts sitting in diversity must apply the conflict-of-law rules of the state in which they are situated. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Louisiana Civil Code article 3542 provides the general rule for tort claims, which states:

[e]xcept as otherwise provided in this Title, an issue of delictual or quasidelictual obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue. That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of the state to the parties and the events giving rise to the dispute including the place of conduct and injury, the domicile, habitual residence, or place of business of the parties, and the state in which the relationship, if any, between the parties was centered; and (2) the policies referred to in Article 3515, as well as the policies of deterring wrongful conduct and of repairing the consequences of injurious acts.

C.C. 3542. In determining which state's policies would most seriously be impaired, the Court looks first to the policy supporting Delaware's absolute privilege. The purpose cited "for the absolute privilege is to "facilitate the flow of communication between persons involved in judicial proceedings and, thus, to aid in the complete and full disclosure of facts necessary to a fair adjudication." Barker v. Huang, 610 A.2d 1341 (Del. 1992). As such, it is the finding of this Court that Delaware has a strong interest in having its law applied to the statements at issue in this case, as those statements were made in pleadings submitted to a court in Delaware, in connection with a proceeding initiated by a Delaware corporation seeking bankruptcy relief in Delaware. To refuse to uphold this absolute privilege would undermine the policies of Delaware in protecting open disclosure.

Next, this Court considers the pertinent contacts of each state to the parties and events. The plaintiff is a domiciliary of Louisiana. As such, Louisiana has an interest in protecting its citizens from tortious conduct. The defendants to this litigation, Cisco Systems, Inc. is a California corporation with its principal place of business in San Jose, California, while Cisco Systems Capital Corp. is a Nevada corporation with its principal place of business in San Jose, California. While not a party to these proceedings, AMC is a Delaware corporation with its principal place of business in New Orleans, Louisiana. Turning to the conduct in question, the tortious conduct giving rise to this cause of action occurred in Delaware, namely the submission of a legal pleading containing alleged defamatory statements relative to a Bankruptcy proceeding of a Delaware corporation in a Delaware Court. Whereas the damage is alleged to have resulted in Louisiana, plaintiffs domicile.

Having balanced the different considerations, it is the finding of this Court that Delaware would be the state whose policies would be most seriously impaired if its law would not be applied. As such, the law applied to this defamation claim is the law of Delaware. Moreover, it is the opinion of this Court that it would be the expectation of the parties that the law of Delaware, including its absolute privilege, would be applied to statements made in a pleading filed with the Delaware Bankruptcy Court. Accordingly, an absolute privilege is afforded the statements made in the Bankruptcy Memorandum as those statements were relevant and pertinent to the judicial proceedings at hand. Therefore, it is the finding of this Court that the defamation claim of Count I, insofar as said claim is predicated on statements contained within the Motion to Appoint a Trustee Pursuant to 11 U.S.C. § 1104 (a) or, in the alternative an Examiner pursuant to 11 U.S.C. § 1104 (c) and Memorandum of Points and Authorities in Support Thereof; be and the same is hereby DISMISSED WITH PREJUDICE pursuant to Fed.R.Civ.P. 12(b)(6).

The plaintiff argued that the more specific Civil Code Article 3543 pertaining to "issues of conduct and safety" should be applied rather than the general rule stated in Article 3542. It is the opinion of the Court that any action sounding in tort could potentially be categorized as pertaining to an issue of conduct. The Court finds no reason under the circumstances presented in this instance for the application of Article 3543 over the general rule enunciated in Article 3542. As such, this Court finds that the choice of law rule appropriate for this one defamation claim at issue is the more general provision, Civil Code Article 3542. Likewise, in the case of In re: New York Life Ins. Co., supra, Judge Sear performed a choice of law analysis using Civil Code Article 3542 in determining whether Louisiana or Texas law governed the claims of defamation and invasion of privacy.

Defamation Claim asserted in Paragraph 68

Paragraph 68 of the Amended Complaint reads:

On or about May 20, 2000, the Cisco Defendants' attorney, Tom Papson, told Chip Cooper in Columbus, Ohio that Cisco believed Mr. Henry, Kevin Bennett, and Vince Rotondo were involved in a kickback scheme as part of the arrangement between WWW and AMC.

Amended Complaint Paragraph 68. The Cisco defendants argue that this allegation does not support a defamation claim as it asserts what Cisco defendants allegedly believed. Pursuant to Ohio law, statements of opinion or belief are not defamatory. As such, the defendants contend that this paragraph fails to state a claim upon which relief may be granted. The plaintiff counters that this is not protected opinion under Ohio law as the statement made by Tom Papson used specific language accusing Henry of participating in a kick-back scheme; the statements are verifiable; and, the statements were not made in a broad context or as commentary, but instead to discredit Henry with a potential witness in this case. The Ohio Constitution provides a separate and independent guarantee of protection for opinion ancillary to freedom of press. Vail v. The Plain Dealer Publishing Co., 649 N.E.2d 182 (Ohio 1995). In determining whether statements are opinion and thus protected, a totality of the circumstances test is employed considering the specific language used, whether the statement is verifiable, the general context of the statement, and finally, the broader context in which the statement appeared. Id. As this allegation is subject to a motion to dismiss, versus a motion for summary judgment, whereupon there has been no evidence presented, this Court must accept the allegations of the complaint as true and is not in a posture to make a factual finding on whether the statement is an opinion or not. While the phraseology of the complaint is that Mr. Papson believed Henry to be involved in a kick-back scheme, it is the finding of this Court that this alone cannot support a ruling that the statement is constitutionally protected opinion under Ohio law. While this Court may revisit the issue of dismissal of this claim upon further discovery and submission of evidence, it is the finding of the Court that plaintiff has adequately stated a cause of action to withstand a Fed.R.Civ.P. 12(b)(6) motion. Accordingly, the defendants' motion as it relates to the defamation claim asserted in Paragraph 68 be and the same is hereby DENIED.

Defendants assert and plaintiff assumes for purposes of this motion that Ohio law is applicable. As such, this Court will analyze said arguments pursuant to the law of Ohio.

Fraudulent Inducement Claim

As the allegations of the Amended Complaint appear to trigger no conflict between the law of Louisiana and any other state, Louisiana substantive law is applicable to said claims. Henry alleges that he was fraudulently induced to accept a position as CEO of AMC and to invest two million dollars into said company based upon the misrepresentations of Cisco defendants. Amended Complaint Paragraph 17. The misrepresentations, starting in June 1999, are alleged to have included:

* That all of the Cisco ATM equipment worked properly; * That the equipment had been fully tested; and, * That AMC was in good standing on its line of credit, and that AMC had an available credit line with Cisco capital of $250 million.

Amended Complaint Paragraph 18. It is further alleged that later in June 1999 at a trade show, the previous misrepresentations were renewed. Henry accepted the position as CEO of AMC on July 1, 1999. Thereafter, it is asserted that the equipment supplied by Cisco failed.

The Court notes first that a large portion of the Complaint asserts causes of action which would be vested in AMC and not Mr. Henry. For example, it is asserted that based upon certain representations to AMC concerning the Cisco Systems' Equipment and the architecture of the ATM Network, AMC entered into a Purchase Agreement with Cisco Systems to build an advanced telecommunications network. Amended Complaint Paragraph 21. When problems arose with this equipment, AMC then had a cause of action against the Cisco defendants, and acted on it by filing a lawsuit on May 9, 2000. Amended Complaint Paragraph 37. Moreover, the Complaint alleges that "[t]he failure of equipment provided by Cisco, and the failure to deliver functioning VCO/4Ks caused loss of customers, lost revenue, inability to add new customers to the network, lost employees, increased repair costs, and the loss of good will." Amended Complaint Paragraph 36. It is this Court's finding that these are all damages of the corporate entity, AMC, not Mr. Henry personally.

Paragraph 80 of the Amended Complaint sets forth that the false representations were made to Mr. Henry in June 1999 regarding Cisco's commitment to AMC, and the functionality of the Cisco equipment. It is alleged that these representations were made with full knowledge of their falsity and with intent to deceive Mr. Henry. Amended Complaint Paragraph 81. Mr. Henry is alleged to have relied on these statements and but for these statements and representations he would neither have taken the AMC CEO position nor invested one million dollars in cash in AMC. Amended Complaint Paragraph 82. — It is further alleged that the defendants hid and continued the fraud when they reassured AMC that no other customer was experiencing similar problems and that functioning equipment and software would be delivered. Amended Complaint Paragraphs 83-84, 27, 31, 35. Accordingly, it is alleged that Henry suffered a serious financial loss as a result of his investment in AMC. Amended Complaint Paragraph 85.

In light of the fact that this matter is before the Court on a Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6), this Court must accept all facts pled as true and must construe said allegations in a way most favorable to the plaintiff. As motions to dismiss are viewed by our jurisprudence with disfavor and are rarely to be granted, this Court is not inclined to dismiss plaintiffs fraudulent inducement claims at this time. The Court however fully anticipates to revisit the issue upon additional motions and presentation of evidence and proof of said allegations.

However, to the extent that the fraudulent inducement claims are based upon negligent misrepresentations, the Court is mindful that the plaintiff will be required to prove that the defendants had a duty to supply correct information, that the defendant breached that duty, and that the defendant's breach caused damages to the plaintiff See, National Council on Compensation Ins. v. Ouixx Temporary Services, Inc., 665 So.2d 120 (La.App. 4 Cir. 1995). Moreover, this Court notes that plaintiff will be required to establish either a continuing tort, that the allegations have not prescribed, or that their was some interruption in prescription. Regardless, taking the allegations of the complaint as true, this Court does not believe dismissal of said claims is warranted at this time. Accordingly, defendants' motion as it relates to the fraudulent inducement claims is hereby DENIED.

More Definite Statement as to Paragraphs 54 and 67

Paragraph 54 of the Amended Complaint reads as follows:

On information and belief; the Cisco Defendants distributed a copy of the Memorandum to a reporter for Dow Jones, on or about the same time as they filed the Memorandum.

Paragraph 67 of the Amended Complaint provides: On information and belief; on or about October 10, 2000, Cisco representatives attended a meeting in Dallas with Al Donovan, Dr. John Fritchie, Dr. Bud Bono, and Deborah Dietch Perez. Shortly after that meeting, Mr. Donovan reported to Mr. Henry that the Cisco representatives made many of the same accusations against Mr. Henry, including accusing Mr. Henry of accepting kick backs.

Defendants argue that these allegations do not provide sufficient information in order to properly formulate a response. This Court does not agree. In Paragraph 67, the date, the time, the place, and the attendees are all listed along with the alleged defamatory information. Any additional information defendants seek in relation to this incident can be obtained through the course of discovery. Moreover with respect to the allegations of Paragraph 54, while this Court agrees that this allegation is rather vague, more specific details may be obtained through normal discovery in order to properly defend against these allegations. Accordingly, the defendants' motion for more definite statement with respect to Paragraphs 54 and 67 of the Amended Complaint are hereby DENIED.

Accordingly,

IT IS ORDERED that the Motion to Strike Portions of Plaintiffs Complaint (Doe. #6) and FRCP 12(b)(6) Motion to Dismiss the Defamation and Fraudulent Inducement Claims asserted by Plaintiff (Doc. #7) filed on behalf of the defendants, Cisco Systems, Inc. and Cisco Systems Capital Corporation, be and the same are hereby rendered MOOT.

IT IS FURTHER ORDERED that the "FRCP 12(f) Motion to Strike on Amended Complaint" (Doc. #15) filed on behalf of defendants, Cisco Systems, Inc. and Cisco Systems Capital Corporation, be and the same is hereby DENIED.

IT IS FURTHER ORDERED that defendants', Cisco Systems, Inc. and Cisco Systems Capital Corporation, "Motion to Dismiss and for More Definite Statement" (Doc. #16) be and the same is hereby GRANTED as it relates to the Count One Defamation Claim relative to statements contained within the "Motion to Appoint a Trustee Pursuant to 11 U.S.C. § 1104 (a) or, in the alternative an Examiner pursuant to 11 U.S.C. § 1104 (c) and Memorandum of Points and Authorities in Support Thereof', and DENIED in all other respects.

IT IS FURTHER ORDERED that the defamation claim of Count I insofar as said claim is predicated on statements contained within the Motion to Appoint a Trustee Pursuant to 11 U.S.C. § l104(a) or, in the alternative an Examiner pursuant to 11 U.S.C. § 1104(c) and Memorandum of Points and Authorities in Support Thereof; be and the same is hereby DISMISSED WITH PREJUDICE pursuant to Fed.R.Civ.P. 12(b) (6