Case 4:21-cv-03669 Document 42 Filed on 02/14/22 in TXSD Page 1 of 32

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

EASYKNOCK, INC. and EK REAL, §

ESTATE SERVICES OF NY, LLC §
§
Plaintiffs, §
§ CIVIL ACTION NO. 4:21-cv-03669
§
v. §
§
FELDMAN & FELDMAN, PC; CRISTEN, §
FELDMAN, INDIVIDUALLY; and §
DAVID FELDMAN, INDIVIDUALLY §
Defendants. §

DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM,

OR ALTERNATIVELY, TO STAY OR ABATE THIS PROCEEDING

Respectfully submitted,

JACKSON WALKER LLP

/S/ CHARLES L. BABCOCK________

Charles L. Babcock
Attorney-in-Charge
Texas State Bar No. 01479500
Federal ID No. 10982
[email protected]
John K. Edwards
Texas State Bar No. 24002040
Federal ID No. 21645
[email protected]
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Tel: 713-752-4210
Fax: 713-308-4110

DEFENDANTS’ MOTION TO DISMISS

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TABLE OF CONTENTS

I. INTRODUCTION..............................................................................................................1

II. STATEMENT OF NATURE AND STAGE OF PROCEEDING .................................3

III. STATEMENT OF ISSUES AND STANDARD OF REVIEW ......................................4

A. Issues Presented .......................................................................................................4

B. Standard of Review ..................................................................................................5

1. Motion to Dismiss .............................................................................. 5
2. Motion to Stay or Abate ..................................................................... 6

IV. SUMMARY OF ARGUMENT .........................................................................................7

V. FACTUAL BACKGROUND ............................................................................................8

A. The Complaint .........................................................................................................8

\
B. Matters of Public Record .........................................................................................9

VI. ARGUMENT AND AUTHORITIES .............................................................................11

A. EasyKnock Fails to State a Claim Against Cristen and David Feldman ...............11

B. EasyKnock Fails to Plead a Plausible Claim for Defamation................................11

1. No False Statement of Fact is Sufficiently or Plausibly Pleaded ..... 12
(a) Texas Law ............................................................................. 13
(b) Judge Rosenthal’s Findings .................................................. 14
2. Non-Actionable Opinion .................................................................. 18
3. Requisite Level of Fault Insufficiently Pleaded ............................... 19

C. EasyKnock Fails to Plead a Plausible Claim for Tortious Interference.................20

D. Request for Preliminary Injunctive Relief Should be Dismissed ..........................22

E. In the Alternative, the Court Should Stay or Abate this Proceeding .....................23

VII. CONCLUSION AND PRAYER .....................................................................................24

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TABLE OF AUTHORITIES

Page(s)

Cases

Adelson v. Harris, 973 F. Supp.2d 467 (S.D.N.Y. 2013), aff’d, 876 F.3d
413 (2nd Cir. 2017) ......................................................................................................... 6

Ashcroft v. Iqbal,
556 U.S. 662 (2009) ....................................................................................................... 5

Baskin v. EK Real Estate Services of NY, LLC et al.,

CA No. 4-21-CV-00727 (E.D. Tex. 2021) .................................................................. 10

Baty v. ProTech Ins. Agency,

63 S.W.3d 841 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) ................... 21, 22

Bedford v. Spassoff,
520 S.W.3d 901 (Tex. 2017) ........................................................................................ 12

Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007) ................................................................................................. 5, 21

Burch v. Coca-Cola Co., 119 F.3d 305, 325 (5th Cir. 1997) ........................................... 19

Carr v. Brasher, 776 S.W.2d 567, 570 (Tex. 1989) ................................................... 18, 19

Carter v. EK Real Estate Services of NY, LLC et al.,

CA No. 4:21-cv-0123 (N.D. Tex. 2021) ...................................................................... 10

Channel 4 KGBT v. Briggs,

759 S.W.2d (Tex. 1988) ............................................................................................... 21

Chlarson v. EK Real Estate Services of NY, LLC et al.,

CA No. 5-21-CV-010146 (W.D. Tex. 2021) ............................................................... 10

CIGNA Healthcare of St. Louis, Inc. v. Kaiser,

294 F.3d 849 (7th Cir. 2002)......................................................................................... 24

Citgo Petroleum Corp. v. M/T Bow Fighter,

No. H–07–2950, 2009 WL 960080 (S.D. Tex. Apr. 7, 2009) ..................................... 23

City Nat’l Bank v. United States,

907 F.2d 536 (5th Cir. 1990) ....................................................................................... 17

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Clinton v. Jones,
520 U.S. 681 (1997) ..................................................................................................... 23

Colorado River Water Conservation District v. United States,

424 U.S. 800 (1976) ..................................................................................................... 24

Cox Broadcasting Corp. v. Cohn,

420 U.S. 469 (1975) ............................................................................................... 15, 16

Dallas Morning News, Inc. v. Hall,

579 S.W.3d 370 (Tex. 2019) ........................................................................................ 18

Dallas Morning News v. Tatum, 554 S.W.3d 614, 638 (Tex. 2018) ................................ 19

Davis v. EK Real Estate Services of NY, LLC et al.,

CA No. 3-21-CV-01593 (N.D. Tex. 2021) .................................................................. 10

Fairbanks v. Roller,
314 F. Supp.3d 85 (D.D.C. 2018) .................................................................................. 6

Felix v. EK Real Estate Services of NY, LLC et al.,

CA No. 4:21-CV-00130 (N.D. Tex. 2021) .................................................................. 10

Ferrer v. Chevron Corp.,

484 F.3d 776 (5th Cir. 2007)........................................................................................... 5

Firefighters’ Retirement Sys. v. Eisneramper,

898 F.3d 553 (5th Cir. 2018)........................................................................................... 9

Florida Star v. B.J.F.,

491 U.S. 524 (1989) ..................................................................................................... 15

In re Great Lakes Dredge Dock Co. LLC,

624 F.3d 201 (5th Cir. 2010)........................................................................................... 5

Grogan v. EK Real Estate Services of NY, LLC et al.,

CA No. 4:21-cv-03618 (S.D. Tex. 2021)..................................................................... 10

Hayes v. EK Real Estate Services of NY, LLC, et al.,

CA No. 3:21-cv-02901 (N.D. Tex. 2021) .................................................................... 10

HDG, Ltd. v. Blaschke,

2020 WL 1809140 (Tex. App.—Houston [14th Dist.] Apr. 9, 2020, no
pet.) .............................................................................................................................. 20

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Heritage Pacific Fin., LLC v. Shelton Investigations, LLC,

No. 4:09cv580, 2009 WL 4983810 (E.D. Tex. Dec. 14, 2009) ................................... 23

Hustler Magazine, Inc. v. Falwell,

485 U.S. 46 (1988) ....................................................................................................... 20

Jackson v. EK Real Estate Services of NY, LLC,

Cause No. 4:20-cv-03867 (S.D. Tex. Mar. 26, 2021).................................. 8, 14, 15, 16

Johnson v. Cherry,
726 S.W.2d 4 (Tex. 1987) ............................................................................................ 13

Johnson v. Novastar Mortg. Inc.,

698 F. Supp. 2d 463 (D.N.J. 2010) .............................................................................. 16

Johnson v. Phillips,
526 S.W.3d 529 (Tex. App.—Houston [1st Dist.] 2017, pet. denied) ............. 17, 18, 19

Jones v. REES-MAX, LLC,

514 F. Supp.2d 1139 (D. Minn. 2007) ......................................................................... 16

Kahl v. Bureau of Nat’l Affairs, Inc.,

856 F.3d 106 (D.C. Cir. 2017) ....................................................................................... 6

Kinney v. Barnes,
443 S.W.3d 87 (Tex. 2014) .......................................................................................... 23

Landis v. N. Am. Co.,

299 U.S. 248 (1936) ................................................................................................. 6, 23

Leyendecker & Assoc., Inc. v. Wechter,

683 S.W.2d 369 (Tex. 1984) ........................................................................................ 11

McIlvain v. Jacobs,
794 S.W.2d 14 (Tex. 1990) .................................................................................... 12, 18

McKnight v. Blanchard,
667 F.2d 477 (5th Cir. 1982)......................................................................................... 23

Merco J.V. v. Kaufman,

923 F. Supp. 924 (W.D. Tex. 1996)............................................................................. 20

Morris v. Blanchette, 181 S.W.3d 422, 424 (Tex. App.–Waco 2005, no

pet.) ............................................................................................................................. 19

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Navarrette v. EK Real Estate Services of NY, LLC, et al.,

CA No. 3:21-cv-03082 (N.D. Tex. 2021) .................................................................... 10

Neely v. Wilson,
418 S.W.3d 52 (Tex. 2013) .......................................................................................... 12

Nelson v. EK Real Estate Services of NY, LLC, et al.,

CA No. 4:21-cv-03707 (S.D. Tex. 2021)..................................................................... 10

Phoenix Newspapers, Inc. v. U.S. Dist. Court for Dist. of Ariz.,

156 F.3d 940 (9th Cir. 1998)......................................................................................... 15

Plemmons v. EK Real Estate Servs. of NY, LLC,

No. 4:21-cv-04116 (S.D. Tex. 2021) ........................................................................... 10

Prangner v. EK Real Estate Services of NY, LLC et al.,

CA No. 4:21-CV-03406 (S.D. Tex. 2021) ................................................................... 10

Redco Corp. v. CBS, Inc.,

758 F.2d 970 (3rd Cir. 1985) ........................................................................................ 21

Reed v. EK Real Estate Services of NY LLC, et al.,

CA No. 4:21-CV-03713 (S.D. Tex. 2021) ................................................................... 10

Rogers v. Dallas Morning News, Inc.,

889 S.W.2d 467 (Tex. App.—Dallas 1994, writ denied) ............................................ 21

Shreffler v. EK Real Estate Services of NY, LLC et al.,

CA No. 4:21-CV-01189 (N.D. Tex. 2021) .................................................................. 10

Sitzman v. EK Real Estate Services of NY, LLC et al.,

CA No. 3:21-CV-02666 (N.D. Tex. 2021) .................................................................. 10

Texas Beef Group v. Winfrey,

11 F. Supp.2d 858 (N.D. Tex. 1998) ........................................................................... 21

Turner v. KTRK Television, Inc.,

38 S.W.3d 103 (Tex. 2000) .......................................................................................... 12

United States v. Colomb.,

419 F.3d 292 (5th Cir. 2005)..................................................................................... 6, 23

WFAA-TV, Inc. v. McLemore,

978 S.W.2d 568 (Tex. 1998) ........................................................................................ 19

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Statutes

Tex. Bus. & Com. Code § 17.46 ....................................................................................... 14

Tex. Civ. Prac. & Rem. Code § 73.005(b) ........................................................................ 18

Tex. Fin. Code § 301.002(a)(3) ......................................................................................... 17

Tex. Fin. Code § 305.006 .................................................................................................. 17

Tex. Fin. Code § 341.001(10) ........................................................................................... 13

Tex. Prop. Code § 41.006(a) ............................................................................................. 14

Tex. Prop. Code § 41.006(b) ............................................................................................. 14

Other Authorities

Fed. R. Civ. P. 12(b)(6) ....................................................................................... 1, 3, 4, 5, 6

Texas Constitution, Art. 16, Section 50 ............................................................................ 13

Texas Constitution Art.1, Section 8 ........................................................................ 3, 18, 19

United States Constitution, First Amendment ............................................... 3, 6, 15, 17, 18

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

EASYKNOCK, INC. and EK REAL §

ESTATE SERVICES OF NY, LLC §
§
Plaintiffs, §
§ CIVIL ACTION NO.4:21-cv-03669
§
v. §
§
FELDMAN & FELDMAN, PC; CRISTEN, §
FELDMAN, INDIVIDUALLY; and §
DAVID FELDMAN, INDIVIDUALLY §
§
Defendants. §

DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM,

OR ALTERNATIVELY, TO STAY OR ABATE THIS PROCEEDING

Defendants Feldman & Feldman, P.C., Cristen Feldman, Individually, and David

Feldman, Individually (together, “Feldman & Feldman”) timely move to dismiss all causes

of action asserted by Plaintiffs EasyKnock, Inc. and EK Real Estate Services of NY, LLC

(together, “EasyKnock”) for failure to state a claim under Fed. R. Civ. P. 12(b)(6), or

alternatively, to stay or abate this proceeding, and in support would show as follows.

I. INTRODUCTION

The law firm of Feldman & Feldman is being sued by EasyKnock for essentially

repeating a recent judicial finding made by Chief Judge Lee Rosenthal that EasyKnock’s

homestead sale-leaseback transactions in Texas are equitable mortgage loans subject to the

federal Truth-In-Lending Act. However, liability for defamation, the central claim here,

cannot be imposed for statements that are demonstrably not false, or alternatively, true or

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substantially true, as a matter of law. Even if Judge Rosenthal was wrong, Feldman &

Feldman cannot be held liable for repeating Judge Rosenthal’s judicial finding.

Alternatively, the speech at issue is a matter of non-actionable opinion, as this Court

previously determined when denying the request for a Temporary Restraining Order

(“TRO”). See Mem. Op. & Order at 8-9 (statements are “legal opinions”) [Doc. #39].

Further, EasyKnock only offers conclusory assertions that Feldman & Feldman

acted with “malice,” which in any event is not the proper standard for liability. Even under

the standard of “actual malice” – that is, acting with knowledge of falsity or entertaining

serious doubts as to truth – there is no claim or factual basis asserted to meet this standard.

And, under a negligence standard, it must be shown that Defendants knew or should have

known the speech was false. It is implausible to contend that speech consistent with judicial

findings shows either actual malice or negligence.

The critical undisputed fact fatal to EasyKnock’s claims is Judge Rosenthal’s

finding that the EasyKnock transaction constitutes a mortgage loan because the homeowner

believed she was only getting a loan, there was an option to repurchase the property, and the

homeowner only received $50,000 for what purported to be a “sale” of a $227,000 house.

See App. at Ex. B, at 8-9 (J. Rosenthal, Mem. Op.).1 EasyKnock admits that it does not

comply with obligations imposed by the Truth-in-Lending Act and, because it believes,

mistakenly, that the law does not apply because there is no mortgage loan and it is not a

lender. Judge Rosenthal disagreed. Tellingly, EasyKnock has now judicially admitted the

1
The Memorandum and Opinion was later vacated for settlement purposes, and the subsequent vacating
order stated that it did not impact the merits of the decision or the outcome.

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underlying truth of the statements at issue in several pending cases – it has claimed

“creditor” status under the Texas Finance Code to seek a stay of those proceedings.

EasyKnock’s defamation claim is irreconcilable with First Amendment protections

afforded speech under the U.S. Constitution and Article 1, Section 8 of the Texas

Constitution. So, too, is the derivative tortious interference claim. EasyKnock’s largely

conclusory allegations set forth in the skeletal Complaint [Doc. #1] cannot survive scrutiny

under a Rule 12(b)(6) pleading analysis to permit this case to continue and chill the speech

of Feldman & Feldman and others on an important matter of public concern. Accordingly,

EasyKnock’s claims should be dismissed under Fed. R. Civ. P. 12(b)(6), as well as the

request for preliminary injunctive relief, the entry of which would – consistent with this

Court’s prior TRO order – amount to an unconstitutional prior restraint before an

adjudication of defamation on the merits. See Mem. Op. & Order at 3, 8-9 [Doc. #39].

Alternatively, and subject to grounds for dismissal presented herein, the Court

should stay or abate this proceeding until senior-filed lawsuits against EasyKnock reach a

resolution with respect to the validity of the transactions at issue.

II. STATEMENT OF NATURE AND STAGE OF PROCEEDING

This is a defamation and tortious interference case based entirely on cherry-picked

statements from a single article posted to the Feldman & Feldman website. The specific

complained of statements are set forth at ¶ 19 (pp. 7-9) of the Complaint [Doc. #1]. The

statements are taken out of context and only partially quoted in the Complaint – a copy of

the full article is attached hereto as App. at Ex. A with the challenged statements

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highlighted. EasyKnock also alleges a claim of tortious interference, contending that this

same speech is interfering with EasyKnock’s contractual relations. (Compl. at ¶¶ 31-33).

This case was filed on November 8, 2021, and EasyKnock immediately sought a

TRO to force Feldman & Feldman to remove the complained of statements from their

website. A TRO hearing was held on November 18, 2021, and this Court denied the request

for a TRO by order signed on January 27, 2022. [Doc. #39].

III. STATEMENT OF ISSUES AND STANDARD OF REVIEW

A. Issues Presented

Under Fed. R. Civ. P. 12(b)(6), the issue presented is whether the Complaint

sufficiently states a claim for relief. It does not, and thus Feldman & Feldman seeks

dismissal of EasyKnock’s causes of action for defamation and tortious interference on the

following separate and independent grounds:

(1) insufficient legal theories and facts are pleaded to support any cause of action
against Defendants Cristen Feldman and/or David Feldman in their
individual capacity;

(2) the challenged statements are not verifiably provable as false, and
alternatively, are true or substantially true based on Texas and federal law
and a prior judicial finding by Chief Judge Lee Rosenthal;

(3) the challenged statements constitute non-actionable opinion;

(4) EasyKnock has not sufficiently pleaded that Feldman & Feldman published
the challenged statements with the requisite level of fault;

(5) the tortious interference claim is wholly derivative of the defamation claim
and, thus, fails for the same reasons the defamation claim fails; and

(6) insufficient conclusory allegations are provided as a basis for the tortious
interference claim, and no contract, client, or current or prospective business
relationship is identified to support such a claim.

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The request for preliminary injunctive relief should also be dismissed as a matter of

law because it seeks an unconstitutional prior restraint before an adjudication of

defamation, the same basis for this Court’s denial of the request for a TRO. See Mem. Op.

& Order at 3, 8-9 [Doc. # 39].

A secondary, alternative issue is whether this case should be stayed or abated in

deference to multiple senior-filed cases in federal courts throughout Texas against

EasyKnock, where the same sale-leaseback transactions are at issue.

B. Standard of Review

1. Motion to Dismiss. A pleading is deficient under Rule 12(b)(6) and should

be dismissed if a plaintiff fails “to state a claim upon which relief can be granted.” Fed. R.

Civ. P. 12(b)(6). A complaint must contain “enough facts to state a claim to relief that is

plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, (2007); Ashcroft

v. Iqbal, 556 U.S. 662 (2009). “A claim has facial plausibility when the plaintiff pleads

factual content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

That tenet, however, does not apply to legal conclusions. See Iqbal, 556 U.S. at 678.

Pleadings that offer only “labels and conclusions” or “a formulaic recitation of the elements

of a cause of action will not do.” Twombly, 550 U.S. at 555. As the Fifth Circuit has made

clear, “conclusory allegations, unwarranted factual inferences, [and] legal conclusions”

need not be accepted as true. Ferrer v. Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007)

(quoting Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005)); accord Iqbal, 556

U.S. at 662; In re Great Lakes Dredge Dock Co. LLC, 624 F.3d 201, 210 (5th Cir. 2010).

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This case also involves critical First Amendment protections that warrant close

scrutiny to ensure unmeritorious defamation claims are expeditiously weeded out:

The First Amendment guarantees freedom of speech and

freedom of the press. Costly and time-consuming defamation
litigation can threaten those essential freedoms. To preserve
First Amendment freedoms and give reporters, commentators,
bloggers, and tweeters (among others) the breathing room they
need to pursue the truth, the Supreme Court has directed courts
to expeditiously weed out unmeritorious defamation suits.

Kahl v. Bureau of Nat’l Affairs, Inc., 856 F.3d 106, 109 (D.C. Cir. 2017) (Kavanaugh, J.).

To that end, “[e]arly resolution of defamation cases under Federal Rule of Civil

Procedure 12(b)(6) ‘not only protects against the costs of meritless litigation, but provides

assurance to those exercising their First Amendment rights that doing so will not needlessly

become prohibitively expensive.’” Fairbanks v. Roller, 314 F. Supp.3d 85, 89 (D.D.C.

2018) (quoting Palin v. N.Y. Times Co., 264 F. Supp.3d 527, 533 (S.D.N.Y. 2017)).

“Because a defamation suit may be as chilling to the exercise of First Amendment freedoms

as fear of the outcome of the lawsuit itself, courts should, where possible, resolve

defamation actions at the pleading stage.” Adelson v. Harris, 973 F. Supp.2d 467, 481

(S.D.N.Y. 2013), (internal quotations omitted), aff’d, 876 F.3d 413 (2nd Cir. 2017).

2. Motion to Stay or Abate. This Court has inherent authority to stay or abate

this proceeding in favor of senior-filed federal lawsuits involving the same or similarly

aligned parties that address the same underlying legal or factual issue – here, the validity

of EasyKnock’s sale-leaseback transaction in Texas. Landis v. N. Am. Co., 299 U.S. 248,

254-255 (1936); United States v. Colomb., 419 F.3d 292, 299 (5th Cir. 2005).

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IV. SUMMARY OF ARGUMENT

EasyKnock’s cause of action for defamation must fail at this pleading stage for

multiple reasons. First, insufficient legal theories and facts are pleaded to support any

cause of action against Defendants Cristen Feldman and David Feldman in their individual

capacities. Second, the challenged statements are not verifiable false statements of fact, a

required element of a defamation claim; alternatively, Feldman & Feldman has established

the truth or substantial truth of the statements. Third, to the extent the challenged statements

are not verifiable statements of fact, they constitute non-actionable opinion, as this Court

has already held. Fourth, EasyKnock has not sufficiently pleaded, beyond speculation and

conclusory allegations, that Feldman & Feldman acted with the requisite level of fault.

Finally, the request for preliminary injunctive relief should be dismissed as a matter of law

because it seeks an unconstitutional prior restraint before an adjudication of defamation on

the merits, again as this Court has already held.

The claim for tortious interference is entirely premised upon, and derivative of, the

defamation claim, and to the extent the latter claim fails, so too does the tortious inference

claim. In any event, only insufficient conclusory allegations are offered in support of such

a claim. Thus, dismissal is appropriate.

Alternatively, the Court should stay or abate this proceeding in favor of multiple

previously-filed lawsuits pending in federal courts throughout Texas where the validity of

EasyKnock’s sale-leaseback transactions are already directly at issue.

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V. FACTUAL BACKGROUND

A. The Complaint

EasyKnock’s Complaint sets forth eight (8) partial statements alleged to be false

and defamatory from an article posted to the Feldman & Feldman website. (Compl. at ¶

19). These statements from the website, provided in the context of the article as a whole,

are highlighted for the Court’s benefit in App. at Ex. A. The Complaint alleges that the

statements were posted to the Feldman & Feldman website on July 27, 2021. (Id. at ¶ 19).

With respect to Defendants Cristen Feldman and David Feldman, the Complaint only

alleges that they are “named partners of Feldman & Feldman.” (Id. at ¶ 17)

The challenged statements, and their gist within the context of the article as a whole,

can be summarized as follows: Feldman & Feldman is investigating and pursuing litigation

related to sale-leaseback transactions of EasyKnock in Texas that reflect questionable

practices, jeopardizing constitutionally protected homesteads through a mortgage loan

arrangement that fails to comply with disclosure and related requirements imposed by the

federal Truth-in-Lending Act and Texas law. (Id. & App. at Ex. A).

These statements reflect, and are consistent with, the prior finding of Chief Judge

Lee Rosenthal in Jackson v. EK Real Estate Services of NY, LLC, Cause No. 4:20-cv-03867

(S.D. Tex. Mar. 26, 2021). See App. at Ex. B, at 8–9 (J. Rosenthal, Mem. Op.) (finding that

the EasyKnock transaction was a mortgage loan subject to the Truth-in-Lending Act); see

also App. at Ex. C, at 12 (Hearing Transcript) (stating that the agreement “effectively

extends credit in exchange for title to the dwelling and is a transaction that does put the cart

before the horse. It says you get title even before default.”); see id. at 13 (“You don’t have to

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wait for default. And you essentially set it up so that default is ensured.”) (emphasis added)).

The statements are also consistent with EasyKnock’s recent judicial admission that it is a

“creditor” under the Texas Finance Code. See App. at Ex. F.

Under “Count One – Defamation,” the Complaint only contains three substantive

paragraphs, where it is generally alleged, in conclusory fashion, that Feldman & Feldman

made false statements on their website regarding EasyKnock’s business, interactions with

customers, and compliance with the law, made without privilege or regard for truth or

falsity and with malice. (Id. at ¶¶ 26-28). Under “Count Two – Tortious Interference,” the

Complaint also only contains three substantive paragraphs, where it is generally alleged,

again in conclusory fashion, that EasyKnock has agreements – known to Feldman &

Feldman – that were the subject of “willful and intentional” interference. (Id. at ¶¶ 31-33).2

B. Matters of Public Record

Feldman & Feldman requests that the Court take judicial notice of the following

matters of public record.3

(1) Memorandum and Opinion of Chief Judge Lee Rosenthal in Jackson v. EK

Real Estate Servs. of NY, LLC et al. (signed March 26, 2021). App. at Ex.
B;

(2) Transcript of Hearing before Judge Rosenthal (March 21, 2021). App. at Ex.
C;

2
EasyKnock attaches the following as exhibits to the Complaint: (1) Declaration of Barry Feierstein (Ex.
A); (2) Sell & Stay Contract Summary (Ex. A-1); (3) Residential Lease Agreement (Ex. A-2); and (4)
Feldman & Feldman letter (Ex. A-3). The declaration adds no specific facts to those alleged in the
Complaint, and the Complaint identifies no allegedly defamatory statements in the Feldman & Feldman
letter attached as Ex. A-3.
3
Judicial notice may be taken of matters of public record. Firefighters’ Retirement Sys. v.
Eisneramper, 898 F.3d 553, 558 n.2 (5th Cir. 2018).

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(3) EasyKnock, Inc. and EK Real Estate Services of NY, LLC v. McGlinchey
Stafford, PLLC et al. App. at Ex. D;

(4) Excerpts of Finance Commission of Texas Department of Banking Savings

and Loan Department, Office of Consumer Credit Commissioner, Staff
Report 2000. App. at Ex. E;

(5) Defendants’ Verified Motion to Abate and Brief in Support, filed on Feb. 9,
2022 in Reed v. EK Real Estate Services of NY LLC, et al., CA No. 4:21-CV-
03713 (S.D. Tex. 2021). App. at Ex. F;

(6) Baskin v. EK Real Estate Services of NY, LLC et al., CA No. 4-21-CV-00727
(E.D. Tex. 2021);

(7) Chlarson v. EK Real Estate Services of NY, LLC et al., CA No. 5-21-CV-
010146 (W.D. Tex. 2021);

(8) Davis v. EK Real Estate Services of NY, LLC et al., CA No. 3-21-CV-01593
(N.D. Tex. 2021);

(9) Felix v. EK Real Estate Services of NY, LLC et al., CA No. 4:21-CV-00130
(N.D. Tex. 2021);

(10) Prangner v. EK Real Estate Services of NY, LLC et al., CA No. 4:21-CV-
03406 (S.D. Tex. 2021);

(11) Sitzman v. EK Real Estate Services of NY, LLC et al., CA No. 3:21-CV-
02666 (N.D. Tex. 2021);

(12) Shreffler v. EK Real Estate Services of NY, LLC et al., CA No. 4:21-CV-
01189 (N.D. Tex. 2021);

(13) Carter v. EK Real Estate Services of NY, LLC et al., CA No. 4:21-cv-0123
(N.D. Tex. 2021); and

(14) Grogan v. EK Real Estate Services of NY, LLC et al., CA No. 4:21-cv-03618
(S.D. Tex. 2021).4

4
The nine cases cited in (6)-(14) above were filed before this lawsuit and are thus senior-filed cases, while
nine lawsuits have subsequently been filed: Nelson v. EK Real Estate Services of NY, LLC, et al., CA No.
4:21-cv-03707 (S.D. Tex. 2021); Reed v. EK Real Estate Services of NY, LLC, et al., CA No. 4:21-cv-03713
(S.D. Tex. 2021); Hayes v. EK Real Estate Services of NY, LLC, et al., CA No. 3:21-cv-02901 (N.D. Tex.
2021); Navarrette v. EK Real Estate Services of NY, LLC, et al., CA No. 3:21-cv-03082 (N.D. Tex. 2021);
Plemmons v. EK Real Estate Servs. of NY, LLC, No. 4:21-cv-04116 (S.D. Tex. 2021); Owen v. EK Real
Estate Servs. of NY, LLC; No. 3:22-cv-00250-C (N.D. Tex. 2022); Sparrow v. EK Real Estate Servs. of NY,

DEFENDANTS’ MOTION TO DISMISS Page 10

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VI. ARGUMENT AND AUTHORITIES

A. EasyKnock Fails to State a Claim Against Cristen and David Feldman

While a corporation’s employee can be held personally liable for defamation if he

or she directed or participated in the defamatory acts during their employment.

Leyendecker & Assoc., Inc. v. Wechter, 683 S.W.2d 369, 375 (Tex. 1984), the Complaint

is devoid of any factual allegation that either Cristen Feldman or David Feldman,

individually, directed or participated in publication of the statements at issue. The only

substantive reference to either individual is in Paragraph 17 of the Complaint, where it is

alleged that both are “named partners of Feldman & Feldman.” Even assuming this is true,

EasyKnock fails to plead sufficient facts to support any cause of action against Cristen

Feldman and/or David Feldman in their individual capacity – that is, that either individual

directed or participated in publication of the complained of statements. Id. at 375.

No legal theory of vicarious liability, corporate disregard, or alter ego is alleged.

Even if it were, no underlying factual basis is pleaded that would impose such liability.

The Court should dismiss all claims against Cristen Feldman and David Feldman.

B. EasyKnock Fails to Plead a Plausible Claim for Defamation

For the multiple reasons set forth below, EasyKnock has failed to plead a plausible

claim for defamation. Accordingly, the claim should be dismissed. In any event, the

request for preliminary injunctive relief should be denied as a matter of law because a grant

of such relief would amount to an unconstitutional prior restraint.

LLC; No. 4-22-cv-00046 (E.D. Tex. 2022); Whitmore v. EK Real Estate Servs. of NY, LLC; No. 4:22-cv-
00371 (S.D. Tex. 2022); Bruce v. EK Real Estate Servs. Of NY, LLC; No. 4:22-cv-00101 (N.D. Tex. 2022).
.

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1. No False Statement of Fact is Sufficiently or Plausibly Pleaded

A central element of any claim for defamation is falsity – that is, the complained of

statement must be a false statement of fact. Bedford v. Spassoff, 520 S.W.3d 901, 904 (Tex.

2017). A corollary of this requirement is that a defendant may defeat this element of a

defamation claim by a showing of truth or substantial truth of the challenged statement.

See McIlvain v. Jacobs, 794 S.W.2d 14, 15-16 (Tex. 1990). The test of substantial truth is

“whether the alleged defamatory statement was more damaging to [plaintiff’s] reputation,

in the mind of the average listener, than a truthful statement would have been.” McIlvain,

794 S.W.2d at 16; Neely v. Wilson, 418 S.W.3d 52, 63 (Tex. 2013).

The substantial truth doctrine precludes recovery when a “publication . . . correctly

conveys a story’s ‘gist’ or ‘sting’ although erring in the details.” Turner v. KTRK

Television, Inc., 38 S.W.3d 103, 115 (Tex. 2000). This evaluation looks at the “gist,” or

meaning, of a broadcast [or article], which is determined “by examining how a person of

ordinary intelligence would view it.” Neely, 418 S.W.3d at 63-64, 66-67. Thus, the court

must determine if the publication taken as a whole is more damaging to the plaintiff’s

reputation than a truthful publication would have been in the mind of the average person.

Id. at 63; accord McIlvain, 794 S.W.2d at 16.

Here, the challenged statements, read in context of the entire article, are not

sufficiently pleaded to demonstrate falsity, or alternatively, the statements are true or

substantially true. EasyKnock merely claims that its own transaction documents show

falsity (Compl. at ¶¶11-16 & Ex. A thereto), when, as shown below, Texas law, Judge

Rosenthal’s prior findings, and EasyKnock’s own judicial admission show the opposite.

DEFENDANTS’ MOTION TO DISMISS Page 12

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(a) Texas Law

Texas provides strong constitutional protections for property designated as a

family’s homestead. See Tex. Const. art. 16 § 50 (prohibiting forced sale of homestead for

payment of debts unless specifically excepted; prohibiting valid lien on homestead unless

specifically permitted). Under Texas law, a document drafted as a deed is not entitled to a

presumption that it is, in fact, a deed. Johnson v. Cherry, 726 S.W.2d 4, 6 (Tex. 1987).

Instead, the issue of whether the deed is, instead, a mortgage is a question of fact and requires

the consideration of parol evidence. Id.

A sales-leaseback transaction, like those at issue here, occurs when a person sells his

residence and the buyer agrees to lease the property back to the seller. Tex. Fin. Code §

341.001(10). Under Texas law, a sale-leaseback, like EasyKnock’s sale-leaseback, is a loan.

See id. § 341.001(9) (defining “loan” to include sale-leaseback transactions). For sale-

leaseback transactions, Texas law deems the buyer, like EasyKnock, a creditor, and the

seller, like EasyKnock’s customers, an obligor on a credit transaction. Id. § 341.001(10).5

Texas law provides that when there is a sale of a Texas citizen’s homestead property

for less than the appraised market value and the buyer leases the property back to the seller at

greater than the fair rental value, the transaction is a loan “with all payments made from the

seller to the buyer in excess of the sale price considered to be interest subject to Title 4,

5
In a Staff Report issued by the Sunset Advisory Committee in 2000, the Texas Finance Code was changed
to define “sale-leaseback” transactions as a loan, and federal Truth-In-Lending disclosures are required to
bring the Texas Finance Code regarding sale-leaseback transactions of personal property in line with sale-
leaseback transactions pertaining to homesteads being defined as a loan by the Legislature in 1985.
See Finance Commission of Texas Department of Banking Savings and Loan Department, Office of
Consumer Credit Commissioner, Staff Report 2000, at pp. 65-70 (Excerpts in App. Ex. E).

DEFENDANTS’ MOTION TO DISMISS Page 13

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Finance Code.” Tex. Prop. Code § 41.006(a). Under the Texas Property Code, each such

transaction is de facto a deceptive trade practice. Id. § 41.006(b); see also Tex. Bus. & Com.

Code § 17.46. Additionally, the deed for such a transaction “is void and no lien attaches to

the homestead property as a result of the purported sale.” Tex. Prop. Code § 41.006(b).

All of this authority negates the alleged falsity of the challenged statements and

show affirmatively that the statements are true or substantially true.

(b) Judge Rosenthal’s Findings

Chief Judge Lee Rosenthal’s findings in Jackson v. EK Real Estate Services of NY,

LLC, Cause No. 4:20-cv-03867 (S.D. Tex. Mar. 26, 2021) directly support the truth or

substantial truth of the complained of statements – and negates falsity. See Mem. Op., App.

at Ex. B.

In Jackson, the plaintiff inherited her house from her parents, the property was her

homestead, there was no mortgage, and the property was worth $227,000. Id. at 11. Jackson

fell into financial hardship and looked for a way to get some money out of the house to fix her

financial matters. Id. at 2. She found EasyKnock, who told her she could “access [the] equity

in [her] home” through a “loan.” Id. After signing two documents, EasyKnock provided

her with only $50,000 on a house that had no mortgage against it. Id. She did not know that

she had sold EasyKnock her home instead of getting a home equity loan. Id. at 3.

After the sale, Jackson had to make monthly rent payments of $1,290, which increased

yearly by 2.5%. Id. at 2. No portion of the rent payments was applied towards the amount

Jackson would have to pay to repurchase her house. See id. at 2–3. Jackson could not afford

the rent payments and quickly fell behind, increasing her financial problems rather than

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solving them. Id. at 3. After seven months of missed rent, EasyKnock began eviction

proceedings. Id. Jackson filed suit to challenge the eviction. Id.

While the court’s opinion focused on whether to enforce the arbitration provision,

answering that question turned on whether the deed that Jackson signed was instead a

mortgage under Texas law. Id. at 6–8. The court held that the deed was actually a mortgage

because EasyKnock had allowed Jackson to believe she was only getting a loan, because of

the option to repurchase the property, and because Jackson only received $50,000 for what

purported to be a “sale” of a $227,000 house. Id. at 8–9.

At the hearing on the motion, the court further pointed out the problematic nature

of EasyKnock’s deal with Jackson. See App. at Ex. C. The court determined that the

agreement “effectively extends credit in exchange for title to the dwelling and is a transaction

that does put the cart before the horse. It says you get title even before default.” Id. at 12. The

court recognized that the deal was structured so that default not only might be possible, but

was probable. Id. at 13. “You don’t have to wait for default. And you essentially set it up so that

default is ensured.” Id. (emphasis added).

Judge Rosenthal’s findings in Jackson implicate an important First Amendment

protection that insulates liability for accurately commenting on documents, records, and

information within the public domain. Florida Star v. B.J.F., 491 U.S. 524, 535–38 (1989);

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 492–96 (1975). Once information or a

document becomes part of the public record, the public has access to it and may report on

its contents. See, e.g., Phoenix Newspapers, Inc. v. U.S. Dist. Court for Dist. of Ariz., 156

F.3d 940, 949 (9th Cir. 1998).

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Judge Rosenthal’s order preceded the alleged date of publication of the complained

of statements by several months – Judge Rosenthal’s order was entered on March 26, 2021,

and the Complaint alleges the challenged website speech was posted on July 27, 2021.

(Compl. at ¶ 19). The gist of the complained of statements is consistent with, and supported

by, Judge Rosenthal’s findings and, thus, cannot support liability for defamation.6

While EasyKnock disagrees with Judge Rosenthal, and questions its prior counsel’s

competency,7 once the government releases information, a person cannot be sanctioned for

publishing it. Cox Broadcasting, 420 U.S. at 495. Here, the gist of the challenged

statements merely restate Judge Rosenthal’s finding that the sale-leaseback transaction is

a mortgage loan. In EasyKnock’s malpractice lawsuit against its former counsel in the

Jackson case, it recognized that Judge Rosenthal’s findings would have “consequences”

outside that case: “If Chief Judge Rosenthal ruled the Jackson Transaction was a mortgage,

that ruling’s effect would have consequences beyond EasyKnock’s dispute with Jackson.”

See App. at Exh. D, at 12. EasyKnock even conceded that Judge Rosenthal’s ruling

“provides rationale” as to why the transaction is a loan. Id. at 16 (“More globally, Chief

Judge Rosenthal’s ruling, while eventually vacated, remains concerning to EasyKnock as

it still provides rationale as to why a Sell and Stay transaction is a loan instead of a true

6
The Jackson case is not an outlier. Courts in other states that have evaluated sale-leaseback transactions like
EasyKnock’s have found these sale-leaseback transactions to be equitable mortgages instead. See Jones v.
REES-MAX, LLC, 514 F. Supp.2d 1139, 1145 (D. Minn. 2007) (denying dismissal of Truth-in-Lending Act
claim for a sale-leaseback transaction after applying similar factors and finding an equitable mortgage existed
under Minnesota law); Johnson v. Novastar Mortg. Inc., 698 F. Supp. 2d 463, 469-471 (D.N.J. 2010) (denying
12(b)(6) dismissal after applying similar and additional factors such as the existence of an option to purchase,
the financial distress of the seller, the seller’s continued responsibility for repairs, and the imbalance of
bargaining power, and finding each weigh in favor of an equitable mortgage under New Jersey law).
7
EasyKnock has sued its prior counsel for malpractice. See App. at Ex. D.

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sale-leaseback transaction—rationale from the pen of a respected, chief judge of an

influential federal district court.”).

EasyKnock was right – there are consequences of Judge Rosenthal’s ruling, and it

absolutely provides a rationale for stating that the EasyKnock transactions in Texas are

mortgage loans. This is at the heart of the challenged speech, and the First Amendment

“protects [Feldman & Feldman’s] analysis, insight, and gloss on such events, because a

reasonable reader is able to make his own judgments about the evidence and would expect

[others] to have particular viewpoints.” Johnson v. Phillips, 526 S.W.3d 529, 537 (Tex.

App.—Houston [1st Dist.] 2017, pet. denied).

Finally, EasyKnock has judicially admitted that it is a “creditor” under the Texas

Finance Code by seeking a stay of a pending lawsuit as a “creditor” under certain notice

provisions of Tex. Fin. Code § 305.006 (requiring 60 days’ notice to creditors before filing

suit.) See App. at Ex. F. A creditor is defined as “a person who loans money or otherwise

extends credit.” Tex. Fin. Code § 301.002(a)(3). Just in the second week of February,

EasyKnock sought to abate four different cases brought by Defendant Feldman & Feldman

and its co-counsel pursuant to EasyKnock’s status as a “creditor” under Section 305.006.

Yet here, EasyKnock claims it is not a creditor or lender governed by lending statutes or

regulations. EasyKnock cannot have it both ways, and certainly cannot maintain a

defamation action against Defendants in view of this judicial admission. See City Nat’l

Bank v. United States, 907 F.2d 536, 544 (5th Cir. 1990).

In summary, EasyKnock has only asserted conclusory allegations of falsity – based

solely on its own transaction documents – and not a plausible claim that the statements at

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issue are, in fact, false. Feldman & Feldman have demonstrated truth or substantial truth,

and further the speech at issue accurately reflects the judicial finding by Judge Rosenthal,

a judge described by EasyKnock as a “respected, chief judge of an influential federal

district court.” See App. at Exh. D, at 16. Because the speech is entirely consistent with

Judge Rosenthal’s findings, and EasyKnock has judicially admitted the truth of the

statements at issue, they are true or substantially true as a matter of law and cannot support

liability. Tex. Civ. Prac. & Rem. Code § 73.005(b) (truth is a defense to an action for libel);

Dallas Morning News, Inc. v. Hall, 579 S.W.3d 370, 380 (Tex. 2019); McIlvain v. Jacobs,

794 S.W.2d 14, 16 (Tex. 1990).

2. Non-Actionable Opinion

Alternatively, the statements at issue are non-actionable opinion. Indeed, this Court

has already determined that the speech at issue constitutes opinion, and thus the speech is

non-actionable as a matter of law. See Mem. Op. & Order at 8-9 [Doc. #39].

To be defamatory, a statement must be of fact. Hall, 597 S.W.3d at 377. That is, it

must be “verifiable as false.” Dallas Morning News v. Tatum, 554 S.W.3d 614, 638 (Tex.

2018). Opinions cannot be defamatory. Johnson, 526 S.W.3d at 535. Rather, “[a]ll

assertions of opinion are protected by the First Amendment of the United States

Constitution and Article I, Section 8 of the Texas Constitution.” Carr v. Brasher, 776

S.W.2d 567, 570 (Tex. 1989). Thus, “whether a publication is an actionable statement of

fact or a constitutionally protected expression of opinion” depends on its “verifiability and

the context in which [it was] made.” Id. (quoting Bentley v. Bunton, 94 S.W.3d 561, 579,

583 (Tex. 2002)). “A statement is considered to be an opinion when, upon consideration

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of ‘the entire context in which it was made,’ it cannot be objectively verified.” Id. (quoting

Morris v. Blanchette, 181 S.W.3d 422, 424 (Tex. App.–Waco 2005, no pet.)). Texas case

law “plainly protects those communications that are not objectifiably verifiable.” Burch v.

Coca-Cola Co., 119 F.3d 305, 325 (5th Cir. 1997). “Whether a statement is a statement of

fact or opinion is a question of law to be decided by the court.” Johnson, 526 S.W.3d at

535.

Here, at a minimum, the alleged defamatory statements constitute an interpretation

of the sale-leaseback transactions engaged in by EasyKnock. Thus, if the gist of the

challenged statements is not shown to be true or substantially true (which it has been), it is

opinion whether the EasyKnock sale-leaseback transactions are, as Judge Rosenthal found,

a mortgage or whether, as EasyKnock contends, they are not. This question does not relate

to a verifiable fact to be gleaned simply by reviewing transactional documents, but involves

interpretation and opinion, as this Court has already found. See Mem. Op. & Order at 8-9

(“legal opinions”) [Doc. # 39]. Thus, to the extent the statements do not assert objectively

verifiable facts, they are protected opinions. Carr, 776 S.W.2d at 570.

3. Requisite Level of Fault Insufficiently Pleaded

EasyKnock must plead sufficient facts to support the requisite level of fault.

EasyKnock only asserts that Feldman & Feldman acted with “malice.” (Compl. ¶ 27).

However, there is no standard of liability in defamation based on simple malice. The

appropriate standard is either “actual malice,” meaning knowledge of falsity or reckless

disregard (that is, the speaker entertained serious doubt as to truth), or negligence. See

WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998). EasyKnock has not

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properly pleaded actual malice, nor could it – there is no basis to assert that Feldman &

Feldman knew its speech to be false, or entertained serious doubts as to truth. Judge

Rosenthal’s finding alone negates the existence of actual malice as a matter of law.

With respect to negligence, this standard of liability is not pleaded, but in any event,

requires a showing that the publisher knew or should have known that the defamatory

statement was false. HDG, Ltd. v. Blaschke, 2020 WL 1809140 (Tex. App.—Houston

[14th Dist.] Apr. 9, 2020, no pet.); see also Merco J.V. v. Kaufman, 923 F. Supp. 924, 926–

27 (W.D. Tex. 1996). Here, EasyKnock has not alleged sufficient facts to show that

Feldman & Feldman knew or should have known that the challenged statements were false.

The Complaint only alleges speculative and conclusory assertions that, based solely on

EasyKnock’s own self-serving transaction documents, the sale-leaseback is not a mortgage

loan. (Compl. at ¶¶ 12-15). But, the authority cited above, including Judge Rosenthal’s

express findings and EasyKnock’s own judicial admission, do not support this assertion

and make it implausible. Neither Feldman & Feldman nor others are required to accept at

face value EasyKnock’s characterizations of its own transactional documents.

No facts are pleaded to show Feldman & Feldman acted with actual malice or

negligence. Thus, the claim should be dismissed.

C. EasyKnock Fails to Plead a Plausible Claim for Tortious Interference

EasyKnock’s tortious interference claim fails for the same reasons as its defamation

claim – it is a claim entirely derivative and dependent on the defamation claim.

A party cannot recover on alternative tort theories based on the same speech that is

not actionable as defamation. See, e.g., Hustler Magazine, Inc. v. Falwell, 485 U.S. 46

DEFENDANTS’ MOTION TO DISMISS Page 20

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(1988) (intentional infliction of emotional distress claim fails); Redco Corp. v. CBS, Inc.,

758 F.2d 970, 973 (3rd Cir. 1985) (unless defendants “can be found liable for defamation,

the intentional interference with contractual relations count is not actionable”); Channel 4

KGBT v. Briggs, 759 S.W.2d (Tex. 1988) (negligent infliction of emotional distress claim

fails); Rogers v. Dallas Morning News, Inc., 889 S.W.2d 467 (Tex. App.—Dallas 1994,

writ denied) (substantial truth prevented civil conspiracy, intentional infliction and tortious

interference claims); see also Texas Beef Group v. Winfrey, 11 F. Supp.2d 858 (N.D. Tex.

1998) (holding that plaintiffs’ asserted negligence claims failed as “attempts to claim

additional tort recovery based on speech under less stringent standards than the defamation

claims”). Thus, since the defamation claim fails, so too does the tortious interference claim.

Even if the defamation claim survives, and it cannot, EasyKnock pleads no specific

facts concerning any contract or business relationship that was the subject of interference

by the challenged speech. Only entirely speculative and conclusory allegations are made.

It is well established that speculative conclusions are insufficient to survive a motion to

dismiss. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“Factual

allegations must be enough to raise a right to relief above the speculative level . . . .”).

For a tortious interference claim based on an existing contract, EasyKnock must

plead and ultimately prove the following elements: (1) the existence of a contract subject

to interference; (2) the occurrence of an act of interference that was willful and intentional;

(3) the act was a proximate cause of the plaintiff’s damage; and (4) actual damage or loss

occurred. Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 857 (Tex. App.—Houston [14th

Dist.] 2001, pet. denied). Here, EasyKnock fails to plead the existence of any specific

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contract or any act of interference that was willful and intentional by Feldman & Feldman,

and also fails to plead that any identifiable contract was lost as a result, causing actual

damage. See Compl. at ¶¶ 31-33 (asserting only conclusory elements of claim).

The same is true for any claim for tortious interference with a prospective business

relationship, which requires pleading of facts to support the following elements: (1) a

reasonable probability that the plaintiff would have entered into a business relationship; (2)

an independently tortious or unlawful act by the defendant that prevented the relationship

from occurring; (3) the defendant did such act with a conscious desire to prevent the

relationship from occurring or the defendant knew the interference was certain or

substantially certain to occur as a result of the conduct; and (4) the plaintiff suffered actual

harm or damages as a result of the defendant’s interference. Baty, 63 S.W.3d at 860.

EasyKnock pleads no facts concerning the identity of any specific business

relationship, any reasonable probability of such a relationship, or the remaining elements

including specific damages. EasyKnock only alleges in conclusory fashion that the

complained of statements “proximately caused injury,” nothing more. (Compl. at ¶ 33).

Nor are facts pleaded that any specific relationship was prevented from materializing, or

that Feldman & Feldman had a conscious desire to prevent the specific relationship from

occurring. Baty, 63 S.W.3d at 860. Absent pleading of such facts, the claim must fail.

D. Request for Preliminary Injunctive Relief Should be Dismissed

The request for preliminary injunctive relief should be denied as a matter of law.

Injunctive relief in a defamation case, before an adjudication of defamation on the merits,

would amount to an unconstitutional prior restraint, as this Court made clear in its order

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denying the request for a TRO. See Mem. Op. & Order at 3, 8-9 (“an order granting

injunctive relief would violate Feldman & Feldman’s free speech protections”) [Doc. #

39]; see also Heritage Pacific Fin., LLC v. Shelton Investigations, LLC, No. 4:09cv580,

2009 WL 4983810, at *3 (E.D. Tex. Dec. 14, 2009) (citing Davenport v. Garcia, 834

S.W.2d 4, 10 (Tex. 1993)); Kinney v. Barnes, 443 S.W.3d 87, 95 (Tex. 2014).

E. In the Alternative, the Court Should Stay or Abate this Proceeding

Alternatively, the Court should stay or abate this lawsuit until senior-filed federal

lawsuits addressing the same sale-leaseback transaction, where EasyKnock is a defendant

and Feldman & Feldman is counsel for the plaintiffs, are resolved. See supra Sec. V(B).

This Court has inherent authority to manage its own docket. See Landis v. N. Am.

Co., 299 U.S. 248, 254-255 (1936) (“The power to stay proceedings is incidental to the

power inherent in every court to control the disposition of the causes on its docket with

economy of time and effort for itself, for counsel, and for litigants. How this can best be

done calls for the exercise of judgment, which must weigh competing interests and

maintain an even balance.”) (citing Kansas City S. Ry. Co. v. United States, 282 U.S. 760,

763 (1931)); see also Clinton v. Jones, 520 U.S. 681, 706 (1997) (a district court “has broad

discretion to stay proceedings as incident to its power to control its own docket.”). The

Fifth Circuit agrees. See, e.g., United States v. Colomb, 419 F.3d 292, 299 (5th Cir. 2005)

(addressing scope of the court’s inherent powers to control its docket and giving numerous

illustrations of how courts exercise this power); McKnight v. Blanchard, 667 F.2d 477, 479

(5th Cir. 1982) (a district court has “discretionary power to stay proceedings before it in the

control of its docket and in the interests of justice.”); see also Citgo Petroleum Corp. v.

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M/T Bow Fighter, No. H–07–2950, 2009 WL 960080, at *5 (S.D. Tex. Apr. 7, 2009)

(Miller, J.) (a case may be stayed under the court’s inherent authority).

When related cases are pending in separate federal courts, a court may exercise that

inherent power to stay the proceedings before it in deference to the related action.

See Colorado River Water Conservation District v. United States, 424 U.S. 800, 817

(1976); see also CIGNA Healthcare of St. Louis, Inc. v. Kaiser, 294 F.3d 849, 851 (7th Cir.

2002) (“A federal court is authorized to stay proceedings in a lawsuit before it because

parallel proceedings are pending in another court, either federal or state.”).

EasyKnock is a party to nine senior-filed lawsuits, and Feldman & Feldman is

aligned with the plaintiffs suing EasyKnock as their counsel; thus, the interests of the

parties are properly represented in those cases. See supra Sec. V(B). A stay or abatement

would conserve party resources and avoid potential conflicting rulings. The validity of the

transactions are already directly at issue in multiple pending federal lawsuits; thus, this

case is nothing more than a thinly veiled attempt to forum shop the underlying dispute.

Accordingly, the Court should stay or abate this proceeding so that these previously-filed,

senior cases can be adjudicated on the merits.

VII. CONCLUSION AND PRAYER

The Court should dismiss all of EasyKnock’s claims against Feldman & Feldman

and Cristen and David Feldman, individually. Alternatively, the Court should stay or abate

this proceeding in deference to previously-filed, senior federal lawsuits.

DEFENDANTS’ MOTION TO DISMISS Page 24

 Case 4:21-cv-03669 Document 42 Filed on 02/14/22 in TXSD Page 32 of 32

Respectfully submitted,

JACKSON WALKER LLP

/S/ CHARLES L. BABCOCK________

Charles L. Babcock
Attorney-in-Charge
Texas State Bar No. 01479500
Federal ID No. 10982
[email protected]
John K. Edwards
Texas State Bar No. 24002040
Federal ID No. 21645
[email protected]
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Tel: 713-752-4210
Fax: 713-308-4110

CERTIFICATE OF SERVICE

I hereby certify that service of a true and correct copy of the above and foregoing
document will be accomplished through the notice of electronic filing in accordance with
the Federal Rules of Civil Procedure on this the 14th day of February, 2022, to the
following:

Christopher Trowbridge
[email protected]
R. Heath Cheek
[email protected]
Scott R. Larson
[email protected]
Bell Nunnally & Martin, LLP
2323 Ross Ave., Suite 1900
Dallas, TX 75201
Tel: 214-740-1400
Fax: 214-740-1499

/S/ JOHN K. EDWARDS

John K. Edwards

DEFENDANTS’ MOTION TO DISMISS Page 25