Henry v. Cisco Systems, Inc. , 106 F. App'x 235 ( 2004 )


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  •                                                      United States Court of Appeals
    Fifth Circuit
    F I L E D
    UNITED STATES COURT OF APPEALS
    For the Fifth Circuit                 July 23, 2004
    No. 02-30940               Charles R. Fulbruge III
    Clerk
    MICHAEL HENRY,
    Plaintiff - Appellant,
    VERSUS
    CISCO SYSTEMS, INC.; CISCO SYSTEMS CAPITAL CORPORATION
    Defendants - Appellees
    Appeal from the United States District Court
    For the Eastern District of Louisiana
    (00-CV-3519)
    Before EMILIO M. GARZA and DENNIS, Circuit Judges, and HEAD*,
    District Judge.
    DENNIS, Circuit Judge:**
    Plaintiff-appellant Michael Henry appeals the district court’s
    rulings regarding his fraudulent inducement claim and his four
    defamation claims against defendants-appellees Cisco Systems, Inc.
    *
    District Judge of the Southern District of Texas, sitting by
    designation.
    **
    Pursuant to 5TH CIR. R. 47.5, the court has determined that
    this opinion should not be published and is not precedent except
    under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
    1
    and Cisco Systems Capital Corporation (“Cisco”). The court granted
    summary   judgment   on     Henry’s    fraudulent     inducement      claim   on
    prescriptive grounds.       As for the defamation claims, the district
    court dismissed one claim1 and granted summary judgment in favor of
    Cisco on the others because Cisco’s alleged defamatory statements
    were protected by an absolute litigation privilege.              We affirm.
    I.     Background
    Henry, a Louisiana citizen, is a successful businessmen in the
    telecommunications       industry.     He    built   Megasnet,   an   Internet
    Service Provider, which he sold in 1999 for $100 million.                Cisco
    provides hardware and software products and services used to
    support, among other things, telecommunications equipment.               Cisco
    was in a strategic alliance with American MetroComm Corporation
    (“AMC”), to whom it had sold $20 million of VCO/4K equipment, a
    programmable phone switch intended to allow unlimited long distance
    phone calls over the Internet.
    In   June   1999,    shortly    after   Henry    sold   Megasnet,   Cisco
    recruited Henry to become CEO of AMC because AMC was experiencing
    delays in deployment of its network and needed Henry’s expertise.
    After negotiations, Henry accepted the CEO position on July 1, 1999
    and agreed to invest $2 million in AMC.              While Henry was CEO of
    AMC, he encountered a number of difficulties with the VCO/4K
    1
    Cisco did not file a motion to dismiss the remaining
    defamation claims based on an absolute litigation privilege.
    2
    equipment, which could not be properly installed because it was not
    NEBS compliant,2   and AMC’s financial solvency.   Despite attempts
    to fix the equipment and become more financially stable, AMC was
    unable to do so.
    On August 16, 2000, AMC filed a bankruptcy petition in the
    United States Bankruptcy Court for the District of Delaware. Among
    AMC’s creditors was Cisco.     In connection with the bankruptcy
    proceeding, Cisco filed a motion to appoint a trustee to conduct
    and oversee the affairs of AMC’s bankruptcy along with a memorandum
    in support.   In the memorandum, Cisco 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.”   Allegedly, a copy of
    this pleading was given to a Dow Jones reporter, Jeffrey St. Onge,
    who published an article in The Daily Bankruptcy Review on the AMC
    bankruptcy.
    On October 5, 2000, in Dallas, Texas, counsel for Cisco, Kent
    Roger and Larry Engel, met with a number of AMC investors and their
    counsel to discuss AMC’s bankruptcy.    Roger and Engel allegedly
    distributed the bankruptcy memorandum discussed above and accused
    Henry of accepting “kickbacks.”
    2
    NEBS is an acronym for “Network Equipment Building Systems”
    and if equipment is certified as NEBS compliant then it can
    interface directly with other equipment that forms the world’s
    telecommunications “backbone.” Henry Original Brief, at 5 n.4.
    3
    In addition to the above, on May 20, 2000, Thomas Papson, a
    Washington, D.C. attorney acting as counsel for Cisco, participated
    in   a    phone   conference   with    Chip   Cooper,   an   Ohio   attorney
    representing Kevin Bennett, a former Cisco employee.           Bennett and
    Cisco were involved in litigation pending in federal court in Ohio
    and in an arbitration proceeding in California. The purpose of the
    call was to discuss settlement possibilities. According to Henry’s
    Amended Complaint, Papson told Cooper that “Cisco believed Mr.
    Henry, Kevin Bennett, and Vince Rotundo were involved in a kickback
    scheme as part of the arrangement between [Worldwide Web Systems,
    Inc., the software provider for the VCO/4K] and AMC.”
    On November 29, 2000, Henry filed a diversity jurisdiction
    suit in the United States District Court for the Eastern District
    of Louisiana asserting state law claims against Cisco.                Henry
    alleged that Cisco fraudulently induced him to accept the AMC CEO
    position and to invest $2 million in AMC by falsely telling him
    that the equipment Cisco sold AMC had been tested as NEBS compliant
    and worked properly and that AMC was financially solvent. He also
    alleged that he was defamed by statements made in the pleading
    Cisco filed in AMC’s bankruptcy.
    On February 12, 2001, Henry amended his complaint to add three
    additional defamation claims.         These claims contend that Henry was
    defamed: (1) when a copy of the Cisco bankruptcy pleading was
    distributed to the Dow Jones reporter; (2) when Roger and Engel
    4
    accused Henry of accepting kickbacks in the Dallas meeting; and (3)
    when Papson      told   Cooper    during      a   phone   conversation      that   he
    believed Henry accepted kickbacks.
    In response, Cisco filed a motion to dismiss.               On September
    19, 2001, the district court granted Cisco’s motion and dismissed
    Henry’s initial defamation claim concerning the statements in the
    bankruptcy pleading, finding that an absolute litigation privilege
    applied.       Cisco    also   sought    summary     judgment    as    to   Henry’s
    remaining claims, which the district court granted.                   The district
    court held that the remaining defamation claims were also subject
    to   an    absolute    litigation      privilege    and   that   the   fraudulent
    inducement claim was barred by prescription.                On August 28, 2002,
    the district court rendered a final judgment and Henry timely
    appealed.
    II.    Analysis
    A.    Standard of Review
    We review both the grant of a motion to dismiss and the grant
    of summary judgment de novo, applying the same standards applicable
    to the district court.3           In deciding a motion to dismiss, the
    district court must take the facts as alleged in the complaint as
    true, and may not dismiss the complaint unless it appears that the
    3
    Kennedy v. Chase Manhattan Bank USA, NA, 
    369 F.3d 833
    , 839
    (5th Cir. 2004); Morris v. Covan World Wide Moving, Inc., 
    144 F.3d 377
    , 380 (5th Cir. 1998).
    5
    plaintiff can prove no set of facts in support of his claim that
    would entitle him to relief.3     Summary judgment is properly granted
    if there is “no genuine issue as to any material fact and [] the
    moving party is entitled to judgment as a matter of law.”4
    B.   Fraudulent Inducement Claim
    Henry argues that the district court erred in holding that his
    fraudulent   inducement   claim   was   barred   by   prescription.   He
    maintains that two exceptions to the general rules of prescription,
    contra non valentum and continuing tort, made his claim timely.
    Cisco disagrees, arguing that Henry was fully aware of his cause of
    action more than one year prior to filing to suit and that neither
    exception delayed the commencement of the prescriptive period for
    Henry’s claim.
    Because Henry’s fraudulent inducement claim is a Louisiana
    state law claim, Louisiana law will determine the applicable
    statute of limitations period.5         Under Louisiana law, delictual
    actions, such as Henry’s fraudulent inducement claim, have a
    prescriptive period that commence one year “from the date injury or
    3
    
    Kennedy, 369 F.3d at 839
    .
    4
    Fed. R. Civ. P. 56(c).
    5
    U.S. ex rel. Mathews v. HealthSouth Corp., 
    332 F.3d 293
    ,
    295 (5th Cir. 2003).
    6
    damage is sustained.”6    Moreover, “[t]he defendant has the initial
    burden of proving that a tort claim has prescribed.”7 “[B]ut if the
    defendant shows that one year has passed between the tortious acts
    and the filing of the suit, then the burden shifts to the plaintiff
    to prove an exception to prescription.”8     
    Id. Here, Henry
    alleges that he was fraudulently induced into
    accepting the AMC CEO position and investing $2 million in AMC.
    “Fraud exists if it can be shown that material misrepresentations
    have been made by one party designed to deceive another, and to
    obtain some unjust advantage or to cause loss or inconvenience to
    the other.”9    Thus, the general elements of a fraudulent inducement
    claim are: “(1) a misrepresentation of a material fact, (2) made
    with an intent to deceive, and (3) causing justifiable reliance
    with resulting injury.”10    Here, Henry claims that Cisco knowingly
    
    6 La. Civ
    . Code art. 3492; Bell v. Demax Management Inc., 
    824 So. 2d 490
    , 492 (La. Ct. App. 2002); Griffin v. BSFI Western E & P,
    Inc., 
    812 So. 2d 726
    , 734 (La. Ct. App. 2002).
    7
    Terrebonne Parish Sch. Bd. v. Columbia Gulf Transmission
    Co., 
    290 F.3d 303
    , 320 (5th Cir. 2002)(citing Miley v. Consol.
    Gravity Drainage Dist. No. 1, 
    642 So. 2d 693
    , 696 (La. Ct. App.
    1994); Dixon v. Houck, 
    466 So. 2d 57
    , 59 (La. Ct. App. 1985)).
    8
    
    Id. 9 La.
    Civ. Code art. 1953; Altex Ready-Mixed Concrete Corp. v.
    Employers Commercial Union Ins., 
    308 So. 2d 889
    , 892 (La. Ct. App.
    1975).
    10
    Kendall Co. v. Southern Med. Supplies, Inc., 
    913 F. Supp. 483
    , 487 (E.D. La. 1996); Silver v. Nelson, 
    610 F. Supp. 505
    , 517
    7
    made false assurances in June 1999 that the equipment Cisco sold
    AMC was NEBS compliant and worked properly and that AMC was
    financially solvent.    He further claims that these fraudulent
    misrepresentations induced him to accept the AMC CEO position and
    to invest $2 million in AMC.   Because he did not file suit until
    November 29, 2000, Cisco’s alleged tortious acts occurred more than
    one year prior to Henry filing suit.     Therefore, Henry has the
    burden of proving an exception to prescription that would delay the
    commencement of the prescriptive period to after November 28, 1999.
    1.   Contra Non Valentum
    Henry first contends that contra non valentum protects his
    fraudulent inducement claim. This doctrine is “a limited exception
    where in fact and for good cause a plaintiff is unable to exercise
    his cause of action when it accrues,” for example if a defendant
    “has done some act to effectually prevent the [plaintiff] from
    availing himself of the cause of action” or if “the cause of action
    is not known or reasonably knowable by the plaintiff.”11     Henry
    argues that he was unable to exercise his fraudulent inducement
    claim until at least January 2000 because Cisco attempted to
    conceal the fact that the VCO/4K equipment was not NEBS compliant
    and told him that it would fix the equipment problem and maintain
    (E.D. La. 1985).
    11
    Corsey v. State Dep’t of Corrections, 
    375 So. 2d 1319
    , 1321-
    22 (La. 1979).
    8
    its alliance with AMC.
    Cisco,   however,   has   provided   documents,   affidavits,   and
    deposition testimony to support its contention that Henry was fully
    aware, or at least reasonably should have been aware, prior to
    November 28, 1999, that the equipment was not NEBS compliant and
    that Cisco’s representations to the contrary were false.12 Further,
    Cisco maintains that Henry, as a sophisticated businessman who was
    CEO of the company of which he claimed to be ignorant, was aware of
    AMC’s financial problems.13
    12
    Cisco’s proof that Henry knew before November 28, 1999 that
    the VCO/4K switch was not NEBS compliant, and that it was not
    forthcoming with Henry about it, includes: (1) a June 27, 2000
    affidavit, in which Henry stated “[t]hat when he took over as AMC’s
    CEO [in July 1999], the company ... was experiencing serious and
    continuous problems with crucial network equipment it had purchased
    from” Cisco; (2) a third party demand filed by Henry against Cisco
    in another lawsuit in which Henry admitted that “AMC had discovered
    during September [1999] that the Cisco equipment was not NEBBS
    compliant”; (3) a January 4, 2002 affidavit in which Henry stated
    that “[a]s of the first week of November 1999, AMC discovered that
    the equipment Cisco had delivered was not NEBBS compliant”; (4) an
    AMC Position Paper, prepared under Henry’s supervision and
    authorship, which states that between August and September 1999,
    AMC learned that the VCO/4K switch was not NEBS compliant and that
    a Cisco employee had told Henry that Cisco had “lied” about the
    switch being compliant; and (5) a January 4, 2001 deposition in
    which Henry testified that he was told by a Cisco employee in
    October 1999 that the equipment was not NEBS compliant and that
    Cisco had been “less than truthful.”
    13
    Cisco’s proof as to Henry’s knowledge of AMC’s financial
    circumstances prior to November 28, 1999, includes: (1) a June 26,
    1999 AMC internal memo, which states that “Henry has been briefed
    on the Company’s financial circumstances” and that Henry “stated
    that he does not want to become an officer of the Company unless
    [there is] at least $1Million in the bank, to address huge
    financial issues before us”; (2) a June 27, 2000 affidavit in which
    9
    Henry does not contest the veracity of Cisco’s evidence
    proving that Henry should have known of his fraudulent inducement
    claim prior to November 28, 1999.         Instead Henry contends that
    Cisco’s attempts at concealment, such as failing to provide timely
    discovery after his suit was filed and Cisco’s attempts to fix the
    equipment problems, delayed the commencement of the prescriptive
    period.     Henry’s failure to contest Cisco’s evidence and Henry’s
    argument itself reveal that he was aware of the facts necessary to
    establish his cause of action prior to November 28, 1999.             Thus,
    his argument that Cisco still attempted to conceal information from
    and   mislead   him   are   irrelevant   because   those   attempts    were
    ineffectual. When considering the doctrine of contra non valentum,
    we focus on whether the plaintiff was able to bring his cause of
    action.14    If, as here, the plaintiff knew of his cause of action
    and the defendant’s attempts at concealment were ineffectual, the
    plaintiff was not prevented from bringing his claim; he just chose
    not to do so.    “Contra non valentum does not suspend prescription
    when a litigant is perfectly able to bring its claim, but fails or
    refuses to do so.”15        Therefore, the district court properly
    Henry states “[t]hat when he took over as AMC’s CEO, the company
    was unable to service its debt”; and (3) a July 23, 1999 e-mail
    from Henry acknowledging that “[w]e are 4.7 million in the hole.”
    14
    
    Corsey, 375 So. 2d at 1321-22
    .
    15
    Terrebonne Parish Sch. Bd. v. Mobil Oil Corp., 
    310 F.3d 870
    , 885 (5th Cir. 2002). This is also applicable to Henry’s other
    argument, that he was lulled into inaction because Cisco issued a
    10
    concluded that contra non valentum did not extend the commencement
    of the prescriptive period past November 28, 1999.
    2.   Continuing Tort
    Henry next argues that because his claim alleges a continuing
    tort, his prescriptive period commenced late enough to make his
    claim timely.    Under the continuing tort doctrine, “continuing and
    repeated wrongful acts are to be regarded as a single wrong which
    gives rise to and is cognizable in a single action, rather than a
    series of successive actions.”16         Multiple acts will constitute a
    continuing tort “when the acts are continuous on an almost daily
    basis, by the same actor, of the same nature, and the conduct
    becomes    tortious   and    actionable    because   of    its   continuous,
    cumulative,    synergistic    nature.”17     If   the     plaintiff’s   claim
    involves a continuing tort, “then prescription does not commence
    until the last act occurs or the conduct is abated.”18
    Although Henry asserts that because Cisco’s fraudulent conduct
    press release on October 12, 1999 announcing a $60 million
    investment in AMC and because Cisco and AMC discussed fixing the
    NEBS problem.   These actions did not affect Henry’s ability to
    bring his claim; at most they just affected his desire to do so.
    
    16 Wilson v
    . Hartzman, 
    373 So. 2d 204
    , 207 (La. Ct. App. 1979).
    17
    Bustamento v. Tucker, 
    607 So. 2d 532
    , 542 (La. 1992); see
    also Crump v. Sabine River Authority, 
    737 So. 2d 720
    , 728 (La.
    1999)(“A continuing tort is occasioned by unlawful acts, not the
    continuation of the ill effects of an original, wrongful act.”).
    18
    
    Bustamento, 607 So. 2d at 542
    .
    11
    did not abate until after November 28, 1999, the prescriptive
    period did not commence until that time, his argument is not
    persuasive.    In his complaint, Henry contended only that Cisco’s
    misrepresentations made prior to his accepting the CEO position and
    investing $2 million in AMC induced him to take these actions.
    Henry now contends that Cisco’s supposed fraudulent actions that
    occurred after Henry became CEO and invested in AMC are actions
    that constitute part of the same continuing tort.   But there is a
    clear delineation between Cisco’s actions that took place prior to
    Henry acting and those that took place after, namely that the
    latter actions could not have induced Henry to take the actions he
    now regrets.    They thus cannot form the basis for a claim of
    fraudulent inducement. Therefore, these two sets of activities are
    not of a “continuous, cumulative, synergistic nature” and thus
    cannot constitute a continuing tort.
    Henry’s argument that prescription should not begin to run
    until his damages ceased is also without merit.   Even if Henry did
    suffer damages after November 28, 1999, this will not affect when
    prescription commences.   “When a defendant’s damage-causing act is
    completed, the existence of continuing damages to a plaintiff, even
    progressively worsening damages, does not present successive causes
    of action accruing because of a continuing tort.”19       Instead,
    19
    In re Med. Panel Review for the Claim of Moses, 
    788 So. 2d 1173
    , 1183 (La. 2001).
    12
    prescription commences when the last tortious act occurs or the
    defendant’s tortious conduct is abated.20             Because, as discussed
    above, the last tortious acts, i.e., those that induced Henry to
    act, committed by Cisco related to Henry’s fraudulent inducement
    claim took place well before November 28, 1999, prescription began
    to run prior to that date.             Accordingly, the district court
    correctly held that Henry’s fraudulent inducement claim was barred
    by prescription.
    B.     Defamation Claims
    Henry claims that the district court erred in holding that his
    defamation claims were barred by an absolute privilege afforded to
    statements     by   parties   and   counsel    made   during   the   course   of
    judicial proceedings. Henry’s four defamation claims were for: (1)
    the statements made in a motion to appoint trustee in AMC’s
    Delaware bankruptcy; (2) the copy of that motion distributed to a
    Dow Jones reporter; (3) Cisco counsel’s statements accusing Henry
    of accepting kickbacks in a meeting to discuss the AMC bankruptcy
    with    investors;    and     (4)   Cisco     counsel’s   statements    during
    settlement negotiations for an Ohio lawsuit and a California
    arbitration that he believed Henry accepted kickbacks.
    Henry disagrees with the district court’s decision to apply
    Delaware law to the first three claims and Ohio law to the fourth
    claim. Delaware and Ohio law provide an absolute privilege against
    20
    
    Bustamento, 607 So. 2d at 542
    .
    13
    defamation    claims     to   parties        and   attorneys   over       otherwise
    defamatory     statements     made    during       the    course     of    judicial
    proceedings that are relevant to the case.21                    “In Louisiana,
    however, the [litigation] privilege is a qualified one, and in
    order for the privilege to apply, the statement must be material
    and must be made with probable cause and without malice.”22
    A federal court sitting in diversity applies the law of the
    forum state,      including   its    choice-of-law        provisions.23         Under
    Louisiana’s choice-of-law provisions, delictual obligations such as
    fraud are generally controlled by Louisiana Civil Code Article
    3542, which provides that issues involving delictual obligations
    are “governed by the law of the state whose policies would be most
    seriously impaired if its law were not applied to that issue.”24
    The district court concluded that the purpose of 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
    21
    Barker v. Huang, 
    610 A.2d 1341
    , 1345 (Del. 1992); Willitzer
    v. McCloud, 
    453 N.E.2d 693
    , 695 (Ohio 1983).
    22
    Freeman v. Cooper, 
    414 So. 2d 355
    , 359 (La. 1982)(quoting
    Waldo v. Morrison, 
    220 La. 1006
    , 
    58 So. 2d 210
    (La.1952)).
    23
    Klaxon Co. v. Stentor Electric Mfg., 
    313 U.S. 487
    , 496
    (1941)(citing Erie R.R. v. Tompkins,304 U.S. 64 (1938)).
    
    24 La. Civ
    . Code art. 3542.
    14
    adjudication.”25   After balancing this with Louisiana’s policy of
    protecting its citizens from tortious conduct, the court held that
    “Delaware would be the state whose policies would be most seriously
    impaired if its laws were not applied.”26 Thus, the court concluded
    that the first three claims, which all concerned statements made as
    part of the AMC bankruptcy proceeding in Delaware, were subject to
    Delaware law.   For the same reason, the court concluded that Ohio
    law applied to Henry’s fourth defamation claim.
    Henry contends that the district court erred and should have
    applied either Louisiana or federal common law regarding the
    litigation privilege.   But Henry’s arguments are not persuasive.
    First, Henry makes no cognizable argument as to why Louisiana law
    should apply.   Instead he only makes the conclusory assertion that
    the district court was wrong in failing to apply Louisiana law.
    Because this issue was inadequately briefed, we consider it waived
    and will not reassess the district court’s analysis of Louisiana’s
    choice-of-law provisions.27
    25
    Sept. 20, 2001 District Court Order, at 13 (quoting 
    Barker, 610 A.2d at 1341
    ).
    26
    
    Id. at 14.
         27
    Raven Servs. Corp. v. NLRB, 
    315 F.3d 504
    n.7 (5th Cir.
    2002). At most, Henry cites to Louisiana Civil Code Article 3543
    when stating that “[u]nder the Louisiana choice of law provisions,
    the test is whether the defendants would have foreseen where the
    injury would occur.” Henry Original Brief, at 18. Article 3543 is
    not applicable to our situation. Article 3543 regulates choice of
    law analysis for tort issues relating to standards of conduct and
    safety.   
    Id. However, issues
    of immunity, such as an absolute
    15
    Second, Henry contends that we should not apply an absolute
    privilege   because   it    encourages   retaliatory   actions   against
    whistleblowers in violation of federal common law principles and
    the Sarbanes-Oxley Act.     Therefore, Henry, relying on the Seventh
    Circuit decision in Steffes v. Stepan & Co.,28 urges the court to
    adopt a qualified privilege similar to that of Louisiana under
    federal common law.
    But Henry’s reliance on Steffes is misplaced. In Steffes, the
    Seventh Circuit declined to apply a state law absolute litigation
    privilege to a plaintiff’s retaliation claims under Title VII and
    the Americans with Disabilities Act (“ADA”), instead affirming the
    district court’s dismissal on other grounds.29         In addition, the
    court also decided not to adopt a specific federal common law
    privilege, are considered “rules of loss distribution and financial
    protection,” which are not covered by Article 3543. La. Civ. Code
    art. 3543 rev. cmt. a (“This Article applies to “‘issues pertaining
    to standards of conduct and safety’ as distinguished from ‘issues
    of loss distribution and financial protection’ which are governed
    by Article 3544 .... By way of illustration, so-called ‘rules of
    the road’ establish or pertain to ‘standards of conduct and
    safety’, whereas rules that impose a ceiling on the amount of
    compensatory damages or provide immunity from suit are ‘rules of
    loss distribution and financial protection.’”); Rigdon v. Tank &
    Tower Co., 
    682 So. 2d 1303
    , 1306 (La. Ct. App. 1996) (holding that
    “whether defendants are immune from tort liability, is an issue of
    loss distribution and financial protection.”). Henry does not cite
    Article 3544 and does not argue that the application of that
    Article would affect the outcome.
    28
    
    144 F.3d 1070
    (7th Cir. 1998).
    29
    
    Id. at 1074-76.
    16
    litigation privilege, either qualified or absolute.30
    In any event, Steffes is inapposite because it concerns
    whether a federal court should apply a state law privilege to
    federal claims.        Here, Henry has not asserted any federal law
    claims, instead bringing only state law defamation claims. Sitting
    as an Erie court, we must employ the forum state’s choice-of-law
    provisions       to   determine   which    state’s   law   applies   to   the
    plaintiff’s state law claims, including its privileges.31 Here, the
    district    court,     applying   Louisiana    choice-of-law    provisions,
    concluded that the appropriate state laws for Henry’s defamation
    claims are those of Delaware and Ohio,32 both of which preclude
    causes of action against counsel and parties for defamation when a
    statement is made during the course of a legal proceeding. Because
    Henry has not argued on appeal that any of the alleged defamatory
    statements occurred outside the context of a judicial proceeding,
    we must apply the appropriate state law privilege to Henry’s
    defamation claims.33       Accordingly, the district court’s decision
    30
    
    Id. 31 Shanks
    v. AlliedSignal, Inc., 
    169 F.3d 988
    , 993 (5th Cir.
    1999)(applying Texas state law absolute litigation privilege in a
    diversity jurisdiction suit to plaintiff’s Texas state law claims).
    32
    The settlement negotiations in the fourth claim also
    concerned a pending California arbitration. But even if we applied
    California law, California law recognizes an absolute litigation
    privilege. Albertson v. Raboff, 
    295 P.2d 405
    , 408 (Cal. 1956).
    33
    Any argument that the Sarbanes-Oxley Act applies to our
    case is also misplaced.   This Act, passed in 2002, makes it a
    17
    dismissing Henry’s first defamation claim and granting summary
    judgment in favor of Cisco on the others is affirmed.
    III.   Conclusion
    Because Henry’s fraudulent inducement claim is barred by
    prescription and because an absolute litigation privilege applies
    to each of Henry’s defamation claims, we affirm the decision of the
    district court dismissing one defamation claim and granting summary
    judgment as to Henry’s remaining claims.
    AFFIRMED.
    criminal act for a person to retaliate against another who provided
    truthful information to a law enforcement officer about the
    commission or possible commission of a federal offense. 18 U.S.C.
    § 1513(e). Henry contends that if we apply the state law absolute
    litigation privilege to Henry’s state law claims, we will be
    subverting the objectives of this Act and “[c]orporations would
    have the freedom to retaliate against the whistle blower by
    unleashing a legion of lawyers with absolute immunity from alleging
    false statements without the fear of reprisal in the form of a
    defamation lawsuit of the harmed plaintiff.” Henry Original Brief,
    at 16.
    But Henry’s argument is completely without merit. Even if we
    could ignore our Erie mandate to apply state law, there has never
    been any accusation that Cisco committed a federal offense that
    would even implicate the Act.
    18