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Xcentric Ventures v. Lisa Borodkin - Order Granting Summary Judgment re Counterclaim

Xcentric Ventures v. Lisa Borodkin - Order Granting Summary Judgment re Counterclaim

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Published by David S. Gingras
Order granting summary judgment in favor of Ripoff Report on counterclaim accusing it of unlawfully recording incoming phone calls from California resident based on finding that Arizona rather than California law applied to Xcentric's conduct within Arizona.
Order granting summary judgment in favor of Ripoff Report on counterclaim accusing it of unlawfully recording incoming phone calls from California resident based on finding that Arizona rather than California law applied to Xcentric's conduct within Arizona.

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Published by: David S. Gingras on Jan 30, 2013
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Page 1Slip Copy, 2013 WL 105257 (D.Ariz.)
(Cite as: 2013 WL 105257 (D.Ariz.))
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
Only the Westlaw citation is currently available.
United States District Court,
D. Arizona.
XCENTRIC VENTURES, L.L.C., an Arizona lim-ited liability company, Plaintiff,
Lisa Jean
, et al.
Raymond Mobrez, Counterclaimant,
Xcentric Ventures, L.L.C.; and Edward Magedson,Counterdefendants.
 No. CV–11–01426–PHX–GMS.
Jan. 9, 2013.
David Scott Gingras, Gingras Law Office PLLC,Phoenix, AZ, for Plaintiff.
Raymond Mobrez, Santa Monica, CA, pro se.
Iliana Llaneras, Santa Monica, CA, pro se.
G. MURRAY SNOW, District Judge.
Plaintiff/Counterdefendant Xcentric Ventureshas filed a Motion for Summary Judgment on Defen-dant/Counterclaimant pro se Raymond Mobrez'scounterclaim. (Doc. 118.)
The Court grants themotion for the reasons stated below.
FN1.The Motion was filed on September 10, 2012, in response to the counterclaimcontained in Mobrez's Answer of Aurst 15(Doc. 109). That Answer, however, ad-dressed the original Complaint (Doc.and notXcentric's operative First Amended Com- plaint (“FAC”) that was filed on March 16,2012 (Doc. 55). Mobrez then filed another Answer that addressed the FAC on Novem- ber 15, 2012. (Doc. 147.) While Xcentric'sMotion for Summary Judgment addressesthe counterclaim raised in the first Answer,(Doc. 109), the Court construes it to apply tothe counterclaim contained in Mobrez's sec-ond Answer (Doc. 147) because the coun-terclaim is identical.
Xcentric is an Arizona company that operates thewebsitewww.ripoffreport.com (“Ripoff Report”).(Doc. 118–1 ¶¶ 1–2.)
It was founded by EdwardMagedson, an Arizona resident, in 1998. (
¶ 3.) Itsoperational base is in Arizona. (
 Id .
¶¶ 2–6.)
FN2.The Court cites to Xcentric's separatestatement of facts (Doc. 118–1) for thosefacts supported by evidence in the record.Mobrez filed a response to Xcentric s sepa-rate statement of facts that objects to eachstatement, but does not cite any countervail-ing evidence. While the Court recognizesthat Mobrez is proceeding pro se, ro se liti-gants “are bound by the rules of procedure.”
Ghazali v. Moran,
46 F.3d 52, 54 (9thCir.1995). Local Rule 56.1(a) states that
[a]ny party opposing a motion for sum-mary judgment must file a statement,separate from that party's. memorandumof law, setting forth: (1) for each para-graph of the moving party's separatestatement of facts, a correspondinglynumbered paragraph indicating whether the party disputes the statement of fact setforth in that paragraph and a reference tothe specific admissible portion of the re-cord supporting the party's position if thefact is disputed; and (2) any additionalfacts that establish a genuine issue of ma-terial fact or otherwise preclude judgmentin favor of the moving party. Each addi-tional fact must be set forth in a separatelynumbered paragraph and must refer to aspecific admissible portion of the recordwhere the fact finds support.
Mobrez's failure to comply with this ruleallows the Court to disregard its filing andaccept the facts as stated by Xcentric. Nevertheless, the Court has limited itsdiscussion of facts to those that are notsubject to reasonable dispute based on therecord.
Page 2Slip Copy, 2013 WL 105257 (D.Ariz.)
(Cite as: 2013 WL 105257 (D.Ariz.))
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
On January 27, 2010, a California entity calledAsia Economic Institute, LLC (“AEI”) and its princi- pals, Mobrez and his partner Iliana Llaneras, broughta lawsuit against Xcentric in California. Mobrez andLlaneras are California residents. The content of their lawsuit has been described in the Court's previousorders. All of the claims in that lawsuit were eventu-ally dismissed.
Critical to the instant motion, a series of tele- phone calls took place in 2009 between Mobrez andMagedson. (
¶ 7.) Mobrez called Magedson re-garding complaints that had been posted about AEIon the Ripoff Report. (
¶ 9.) Xcentric used anautomatic system for incoming calls, in which thecaller would press a certain number to reach a givendepartment identified by the system. (
¶ 10.) Tospeak with the editor, Magedson, the caller would press “5.” (
¶¶ 10–12.) As soon as the call wasconnected, Xcentric had a recording system thatautomatically began recording the call. (
¶ 13.)Mobrez placed several calls to Magedson duringApril and May of 2009. (
¶¶ 18–19.)
On July 18, 2011, Xcentric filed a Complaint inthis Court, bringing claims for malicious prosecutionand aiding and abetting tortious conduct against AEI,its attorneys, Mobrez, and Llaneras (Doc. 1). Xcen-tric then amended its Complaint on March 16, 2012.(Doc. 55.) Mobrez has counterclaimed against Xcen-tric for violating California's wiretapping law by se-cretly recording incoming calls. (Docs.109, 147.)
Summary judgment is appropriate if the evi-dence, viewed in the light most favorable to the non-moving party, demonstrates “that there is no genuinedispute as to any material fact and the movant is enti-tled to judgment as a matter of law.”Fed.R.Civ.P.56(a). Substantive law determines which facts arematerial and “[o]nly disputes over facts that mightaffect the outcome of the suit under the governinglaw will properly preclude the entry of summary judgment.”
 Anderson v. Liberty Lobby, Inc.,
477 U.S.242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Afact issue is genuine ‘if the evidence is such that areasonable jury could return a verdict for the non-moving party.’ “
Villiarimo v. Aloha Island Air, Inc.,
 281 F.3d 1054, 1061 (9th Cir.2002)(quoting
477 U.S. at 248).Thus, the nonmoving party must show that the genuine factual issues “ ‘can be resolved only by a finder of fact because they mayreasonably be resolved in favor of either party.’ “
Cal. Architectural Bldg. Prods., Inc. v. FranciscanCeramics, Inc.,
818 F.2d 1466, 1468 (9th Cir.1987) (quoting
477 U.S. at 250).
“A party opposing a properly supportedsummary judgment motion must set forth specificfacts demonstrating a genuine issue for trial.”
Whitaker v. Pima Cnty.,
640 F.Supp.2d 1095, 1100(D.Ariz.2009). This rule applies equally to pro selitigants, who are given significant leeway in other areas, but “are bound by the rules of procedure.”
Ghazali v. Moran,
46 F.3d 52, 54 (9th Cir.1995).Mere allegation and speculation are not sufficient tocreate a factual dispute for purposes of summary judgment.
Witherow v. Paff,
52 F.3d 264, 266 (9thCir.1995)(per curiam);
 see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586– 87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)(the non-moving party “ ‘must do more than simply show thatthere is some metaphysical doubt as to the materialfacts' ”).
There is no genuine dispute as to the factual ba-sis supporting Mobrez's counterclaim. Xcentricagrees that it recorded a series of calls without in-forming Mobrez. The remaining question is a legalone—does California or Arizona law apply to therecordings in question? On one hand,Section 632 of the California Penal Codemakes it a crime to “inten-tionally and without the consent of all parties to aconfidential communication, by means of any elec-tronic amplifying or recording device, eavesdrop[ ]upon or record[ ] the confidential communication.”Section 637.2 creates a civil action for a person in- jured by§ 632.
Assuming, therefore, that the Mo- brez intended his call to be confidential, the secretrecording of the call appears to violate§ 632.
See Kearney v. Salomon Smith Barney, Inc.,
39 Cal.4th95, 45 Cal.Rptr.3d 730, 137 P.3d 914, 936(Cal.2006).
FN3.“Any person who has been injured bya violation of this chapter may bring an ac-tion against the person who committed theviolation for the greater of the followingamounts: (1) Five thousand dollars ($5,000)
Page 3Slip Copy, 2013 WL 105257 (D.Ariz.)
(Cite as: 2013 WL 105257 (D.Ariz.))
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
[or] (2) Three times the amount of actualdamages, if any, sustained by the plaintiff.”U. Penal Code § 637.2.
On the other hand, neither the parties nor theCourt has identified any provision or case holdingthat undisclosed recording of calls violates Arizonalaw. Nothing in the Arizona statutes governingeavesdropping addresses one-sided recording of calls.
 Ariz.Rev.Stat. § 13–3001, et seq.Likewise, Ari-zona courts have allowed secret taping of calls whereone party has authorized the recordings in the crimi-nal context.
SeeState v. Stanley,
123 Ariz. 95, 597P.2d 998 (Ct.App.1979)(does not violate ArizonaConstitution). There is thus a choice of law issue.
A. Arizona Choice of Law Principles
“In a diversity case, the district court must applythe choice-of-law rules of the state in which it sits.”
 Abogados v. AT & T, Inc.,
223 F.3d 932, 934 (9thCir.2000)(citing
 Klaxon Co. v. Stentor Elec. Mfg.Co.,
313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477(1941)
 see Jorgensen v. Cassiday,
320 F.3d 906,913 (9th Cir.2003). Thus, because this Court sits inArizona, the Court must apply Arizona's choice-of-law rules to the question at issue. Arizona hasadopted the “most significant relationship” test setforth in the Restatement (Second) of Conflict of Laws.
See Bates v.Super. Ct.,
156 Ariz. 46, 48, 749P.2d 1367, 1369 (Ariz.1988);
Garcia v. General Mo-tors Corp.,
195 Ariz. 510, 990 P.2d 1069, 1075–76(Ct .App.1999). Under this test, the law of the statethat has the most significant relationship to an issuewill apply to that issue.
 Id .
Section 6(2) of the Restatement sets forthgeneral principles for deciding the applicable rule of law:
(a) the needs of the interstate and international sys-tems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested statesand the relative interests of those states in the de-termination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular fieldof law,
(f) certainty, predictability and uniformity of result,and
(g) ease in the determination and application of thelaw to be applied.
Section 145, in turn, gives specific guidance for actions—such as this—that sound in tort. Section 145 provides that the following four contacts are mostrelevant to determining which state has the most sig-nificant relationship to the occurrence: “(a) the placewhere the injury occurred, (b) the place where theconduct causing the injury occurred, (c) the domicile,residence, nationality, place of incorporation and place of business of the parties, and (d) the placewhere the relationship, if any, between the parties iscentered.” Examination of the contacts comes first,followed by the more general considerations.
See Bates,
749 P.2d at 1369–72; 
 Becker v. Computer Sci.Corp.,
541 F.Supp. 694, 703–06 (S.D.Tex.1982).
B. Application of the Restatement Factors
1. Section 145 Contacts
The first inquiry under the “most significant rela-tionship” test relates to the place of injury. The injuryin question is the alleged invasion of Mobrez's pri-vacy.
See Kearney,
45 Cal.Rptr.3d 730, 137 P.3d at930. (“The legislatively prescribed purpose of the1967 invasion-ofprivacy statute, however, is ‘to pro-tect the privacy of the people of this state.’ ”). Thatinvasion occurred in California, where Mobrez waslocated at the time the calls were recorded.
Second, the conduct that allegedly caused the in- jury occurred in Arizona. Xcentric is located in Ari-zona, Mobrez called an Arizona number, Magedsonwas in Arizona, and the recording took place in Ari-zona.
The third factor is inconclusive. The domicile,residence, nationality, place of incorporation, and place of business of the parties is mixed. Mobrez is acitizen of California, and Xcentric is an Arizona LLCwhose place of business is in Arizona.

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