United States District Court, D. Utah, Central Division
RODNEY S. RATHEAL, Plaintiff,
LINDSAY McCARTHY, SEC; TOM HARVEY, THE SALT LAKE TRIBUNE, Defendants.
Dale A. Kimball
REPORT AND RECOMMENDATION: THE SALT LAKE TRIBUNE AND
TOM HARVEY'S MOTION TO DISMISS (ECF NO. 16)
J. FURSE, UNITED STATES MAGISTRATE JUDGE.
Plaintiff Rodney S. Ratheal initiated this case on September
5, 2017, (Compl., ECF No. 1), and subsequently filed two
Amended Complaints, which are substantially the same as the
original Complaint. (See Am. Compl., ECF No. 8; 2d
Am. Compl., ECF No. 39.)
Ratheal asserts a defamation claim against Defendants The
Salt Lake Tribune (“Tribune”) and Tom Harvey
(collectively, the “Tribune Defendants”) relating
to an article the Tribune published in December 2012. The
Complaint also includes misrepresentation claims against the
Securities & Exchange Commission (“SEC”) and
Lindsay McCarthy (collectively, the “SEC
Defendants”) arising out of an investigation the SEC
conducted into Mr. Ratheal and his company Premco Western,
Inc. (“Premco”) and the subsequent settled civil
action that the SEC initiated against Mr. Ratheal and Premco
in December 2012. The District Judge dismissed Mr.
Ratheal's claims against the SEC and Mr. McCarthy on Mr.
Ratheal's Motion. (ECF No. 61.)
Tribune Defendants move the Court to dismiss Mr. Ratheal's
defamation claim against them pursuant to Federal Rule of
Civil Procedure (“Rule”) 12(b)(6) on the grounds
that the statute of limitations bars the claim and that the
article at issue makes truthful and privileged statements.
(Mot. to Dismiss & Mem. in Supp. of Mot. (“Tribune
Mot.”), ECF No. 16.)
reasons addressed below, the undersigned RECOMMENDS the
District Judge GRANT the Tribune Defendants' Motion and
DISMISS Mr. Ratheal's claims as time-barred.
Complaint's allegations arise out of an SEC investigation
and civil suit filed against Mr. Ratheal and his company
Premco, Securities and Exchange Commission v. Premco
Western, Inc. et al. (“SEC v.
Premco”), 2:12-cv-01120-BSJ (D. Utah), as well as
online postings and an article published online regarding
that case. (See Compl., ECF No. 1.) In SEC v.
Premco, filed December 10, 2012, the SEC alleged that
from June 2001 to April 2012, Mr. Ratheal, the sole owner,
president, and CEO of Premco, raised $4.1 million from
investors through the fraudulent and unregistered sale of
undivided fractional working interests in two oil and gas
wells along the Utah/Arizona border. (Premco Compl.,
¶¶ 1, 2, 13 & 15, SEC v. Premco,
2:12-cv-01120-BSJ, ECF No. 2.) The SEC further alleged that
Mr. Ratheal made various misrepresentations and omissions to
investors, including failing to disclose that the wells were
“dry, ” or without oil and gas. (Id.,
¶¶ 3, 4, 64-85.) The SEC also asserted that Mr.
Ratheal misappropriated investor funds to cover his personal
living expenses. (Id., ¶¶ 5, 84-85.)
same day the SEC filed the complaint, Mr. Ratheal and Premco,
without admitting or denying the complaint's allegations,
consented to entry of final judgments enjoining them from
committing future securities violations, requiring them to
pay disgorgement and prejudgment interest totaling $7, 372,
259.16, and acknowledging that the court would not impose
civil penalties or require payment of the $7, 372, 259.16
given their sworn representations regarding their financial
conditions. (Premco Consent to Entry ¶ 2, SEC v.
Premco, 2:12-cv-01120-BSJ, ECF No. 4; Ratheal Consent to
Entry ¶ 2, SEC v. Premco, 2:12-cv-01120-BSJ,
ECF No. 5.) Mr. Ratheal and Premco further agreed to waive
factual findings and not to take any action challenging the
allegations in the SEC's complaint. (Premco Consent to
Entry ¶¶ 4, 11, SEC v. Premco,
2:12-cv-01120-BSJ, ECF No. 4; Ratheal Consent to Entry
¶¶ 4, 11, SEC v. Premco,
2:12-cv-01120-BSJ, ECF No. 5.) On December 17, 2012, the
court entered final judgments against Mr. Ratheal and Premco.
(Premco Final J., SEC v. Premco, 2:12-cv-01120-BSJ,
ECF No. 8; Ratheal Final J., SEC v. Premco,
2:12-cv-01120-BSJ, ECF No. 9.)
December 11, 2012, the SEC published on its website a
litigation release summarizing the allegations in the SEC
v. Premco complaint and the terms of the entry of final
judgment to which Mr. Ratheal and Premco agreed. (SEC Litig.
Release No. 22556 (Dec. 11, 2012), available at:
(last visited Aug. 29, 2018)). Also on December 11,
2012, the Tribune published an article written by Tom Harvey
that reported on the recently filed SEC v. Premco
case. (Salt Lake Tribune, “SEC Sues St. George company
for selling shares in dry oil wells” (Dec 11. 2012),
Ex. A, Tribune Mot., ECF No. 16.)
Complaint in this case, Mr. Ratheal asserts that the
SEC's online litigation release resulted in the December
11, 2012 Tribune article, that the Tribune and Mr. Harvey
failed to perform due diligence with respect to the article,
and that they failed to retract the defamatory article even
after he made a request that they do so. (Compl. ¶ 9,
ECF No. 1.)
Ratheal claims damages for lost earnings over the past seven
years and mental anguish over the loss of his personal and
professional reputations. (Compl. 3, ECF No. 1.) He seeks
monetary damages and injunctive relief from the Court,
including ordering the Tribune to remove the allegedly
defamatory statements from the internet. (Id.)
September 5 and 11, 2017, Mr. Ratheal filed returned
summonses indicating that he served all defendants, (ECF Nos.
2, 3 & 4), and filed an errata clarifying he sought $250,
000, 000.00 in damages. (Errata, ECF No. 5.) On September 13,
2017, the Court ordered Mr. Ratheal to effectuate proper
service since he cannot personally serve the defendants and
to file an amended complaint to correct the amount of damages
sought. (Order for Pl. to Effectuate Proper Service &
Abide by the Fed. R. Civ. P., ECF No. 7.) On September 22,
2017, Mr. Ratheal filed an Amended Complaint that corrected
the amount of damages sought to $250, 000, 000.00 and made a
few other typographical changes. (Am. Compl., ECF No. 8.) The
Defendants and substance of the Amended Complaint remained
unchanged from the original Complaint Mr. Ratheal filed.
(See id.) Mr. Ratheal also filed returned summonses
indicating that he had served the Tribune and Mr. Harvey.
(ECF Nos. 13.)
September 28, 2017, the Tribune Defendants filed a motion to
dismiss Mr. Ratheal's claims against them. (Tribune Mot.,
ECF No. 16.) Mr. Ratheal filed an opposition memorandum on
October 9, 2017,  (Mot. to Deny Defs.' Mot to Dismiss
Salt Lake Tribune & Tom Harvey (“Opp'n to
Tribune Mot.”), ECF No. 21), and the Tribune Defendants
filed a reply memorandum on October 23, 2017, (Reply Mem. in
Supp. of Mot. to Dismiss (“Tribune Reply”), ECF
No. 25). Without seeking leave of court, Mr. Ratheal
submitted an additional filing attempting to supplement the
briefing on the Motion to Dismiss, (Mot. to Deny Defs.'
Mot. to Dismiss (Re: Harvey, Salt Lake Tribune), ECF No. 28),
which the Court rejected in its November 3, 2017 Order.
(Order Denying Mot. to Deny Defs. Mot. to Dismiss (Re:
Harvey, Salt Lake Tribune), ECF No. 29.) In that Order, the
Court indicated that the briefing on the Tribune
Defendants' Motion to Dismiss was closed and that the
Court would consider the memoranda permitted under DUCivR 7-1
in deciding the Tribune Defendants' Motion to Dismiss.
December 29, 2017, without seeking leave of court, Mr.
Ratheal filed a second Amended Complaint. (2d Am. Compl., ECF
No. 39.) The second Amended Complaint makes minor
typographical changes, but again the Defendants and substance
remained unchanged from the prior iterations of the
complaint. (See id.) On January 2, 2018, the Tribune
Defendants filed a response to the second Amended Complaint
and renewal of their motion to dismiss. (Response to
Pl.'s Am. Compl. & Renewal of Mot. to Dismiss, ECF
No. 40.) The Tribune Defendants noted that Mr. Ratheal did
not obtain leave to file the second Amended Complaint and
that, in any event, the substance of the allegations against
them did not change. (Id. at 1-2.) Accordingly, they
renewed their previously filed Motion to Dismiss and
requested that the Court consider the Motion to Dismiss as
asserted against the second Amended Complaint, as well.
(Id. at 2.) On January 29, 2018, Mr. Ratheal filed a
renewal of his opposition to the Tribune Defendants'
Motion to Dismiss, acknowledging that the substance of the
second Amended Complaint remained the same and claiming that
he only made typographical changes to the SEC's name in
the second Amended Complaint to comply with the Clerk of
Court's December 29, 2017 Order. (Renewal of Mot. to Deny
Defs.' Harvey/Tribune Mot. to Dismiss, ECF No. 50.) The
Tribune Defendants responded to Mr. Ratheal's notice once
again stating that the second Amended Complaint does not
change substance of the allegations against them and
requesting that the Court consider their previously filed
Motion to Dismiss as asserted against Mr. Ratheal's
recent filings. (Resp. to Pl.'s Recent Filings on Mot. to
Dismiss, ECF No. 51.)