Nevada’s anti-SLAPP Statute Evaluated Against Intelli-Heart Services

Nevada’s anti-SLAPP Statute Evaluated Against Intelli-Heart Services March 26, 2020
Commercial litigation law firm

Terrance Walker filed a complaint in U.S. District Court for the District of Nevada alleging that Intelli-Heart Services, Inc. (IHS) and other employees with a leadership role at IHS, Danny Weisburg, Vanessa Parsons, and Daniel Germain, interfered with his contract with a non-party, James Winters.  The Defendants’ filed a motion to dismiss Mr. Walker’s claims under the Nevada anti-SLAPP statute. 

Background

Mr. Walker provides a variety of professional services that include consulting, market research, registering companies to qualify for federal contracts, preparing bids, and contract dispute resolution for U.S. government procurements.  IHS provides outpatient, remote heart monitoring services to hospitals so they can monitor their patients’ hearts while they are at home.

IHS entered into contract with James Winters whereby he would act as the regional sales distributor for IHS.  Mr. Winters also entered into a contract with Mr. Walker to help him win government contracts for HIS. The contract provided that Mr. Winters would pay Mr. Walker 50% of the commission Winters made on any federal government contracts. However, according to the Distributor Agreement with IHS, Mr. Winters was prohibited from entering into contracts on its behalf. 

 Mr. Walker claimed he helped Mr. Winters win “about a dozen” contracts with the U.S. Department of Veterans Affairs (VA) hospitals on behalf of IHS for remote heart-monitoring services. Mr. Walker alleged that IHS paid Mr. Winters the commission he earned from contracts with the VA hospitals too slowly.  Mr. Walker informed VA employees that IHS was violating federal regulations by not paying Winters quickly enough.

This led to IHS terminating its agreement with Mr. Winters in February of 2018.  HIS leaders Parsons, Weisburg, and Germain claimed Mr. Winters never worked for, or represented IHS in any capacity. IHS terminated its contract with Mr. Winters once it learned that he subcontracted with Mr. Walker.

Mr. Walker’s Complaint alleged that the Defendants interfered with his contract with Mr. Winters by “terminating the Distributor Agreement once they learned Mr. Winters entered into the impermissible side contract with the Plaintiff.”  He also alleged claims of tortious interference and unjust enrichment against the Defendants.

Anti-SLAPP Statute

                  A Strategic Lawsuit against Public Participation (SLAPP) is a lawsuit that a plaintiff files pursuant to Nevada state law that a defendant alleges “chill[s] a defendant’s freedom of speech and right to petition under the First Amendment.”  Defendants file motions to dismiss SLAPP lawsuits for the purpose of dismissing unmeritorious claims, protecting taxpayers from the expense of responding to unmeritorious claims, and to avoid costly retaliatory lawsuits.

                  The Nevada anti-SLAPP statute allows defendants to obtain  early dismissal of civil claims.  According to the statute, parties that engage in communication are “immunized from any civil action for claims based upon the communication.”  The U.S. District Court cites the case Pope v. Fellhauer, 437 P.3d 171 (Nev. 2019), which provides a two-step process for anti-SLAPP motions.  In an anti-SLAPP motion, the party that filed the motion bears the initial burden to establish by preponderance of the evidence that the claim is based upon good faith communication in furtherance of the right to petition or to free speech in direct connection with an issue of public concern.

Protected Activity

                  The Defendants claimed their communications with the VA qualified as protected activity.  They argued their communications fell under the anti-SLAPP statute because “they were aimed at procuring a governmental result or outcome.”  They claimed the statements they made were either true or made without knowing they were false and made in the public interest because they were of a concern with a government agency.  Mr. Walker claimed the Defendants were not engaged in a protected activity, but the court found he did not explain his assertion clearly.

                  The Court found the Defendants met their initial burden to show they engaged in a protected activity when they communicated with VA employees and officials regarding allegations against them.  It noted the Defendants met their burden to show they were engaged in a protected activity by acknowledging the Plaintiff’s own allegations.  The allegations establish that the Defendants’ communications were conducted to procure a governmental outcome.  The Court concluded the Defendants’ communications were made without knowledge they contained any false statements.  It also found the communications were made in connection with an issue of public concern.  This was whether IHS violate federal regulations while receiving payment on government contracts with the VA.  The U.S. District Court in Nevada concluded the Defendants’ met their burden of showing they engaged in a protected activity. 

Tortious Interference

                  To establish a claim for tortious interference with contractual relations, the plaintiff or counter-claimant must establish that he/she/it had a valid contract, that the defendant(s) knew about the contract, that the defendant committed intentional acts intended to disrupt the contractual relationship; that there was actual disruption of the contract; and that plaintiff has suffered damages proximately caused by the defendant’s actions.

The U.S. District Court held that Mr. Walker failed to prove the elements of tortious interference because he was unable to show he entered into a valid contract with Mr. Winters.  The court also held that the plaintiff provided no evidence that HIS consented to Winters’ agreement with Mr. Walker. 

Unjust Enrichment

Plaintiffs claim unjust enrichment when the result or effect of a failure to pay for benefits received may give rise to a legal or equitable obligation.    The U.S. District Court cites Certified Fire Prot. Inc. v. Precision Constr., 128 Nev. 371, 380, 283 P.3d 250, 257 (2012), for the holding that unjust enrichment occurs when a plaintiff confers a benefit onto the defendant, “which would be inequitable for him to retain without payment of the value thereof.”

                  The Court concluded that Mr. Walker did not confer any benefits upon IHS.  The court found that Mr. Walker had no contract with Mr. Winters, and that IHS did not know about a purported contract between Mr. Walker and Mr. Winters.  The U.S. District Court concluded that IHS had “no equitable obligation to Plaintiff under a contract it was not a party to, was unaware of, and that purported to impose obligations upon IHS.   It held that Mr. Walker’s complaint was a SLAPP complaint, and that it was barred by the anti-SLAPP statute.

Conclusion

                  The U.S. District Court in Nevada entered an order to dismiss all three of Mr. Walker’s claims in favor of the Defendants.  The case was dismissed with prejudice, which means that Mr. Walker cannot file another complaint that makes the same allegations.  For more information on this case, or if you have similar concerns for contracts with the government, contact Whitcomb Selinsky PC.

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