PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 21-1655

SVETLANA LOKHOVA,

Plaintiff - Appellant,

v.

STEFAN A. HALPER,

Defendant - Appellee.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (1:20-cv-01603-LMB-MSN)

Argued: January 26, 2022 Decided: April 5, 2022

Before NIEMEYER, AGEE, and DIAZ, Circuit Judges.

Reversed and remanded by published opinion. Judge Niemeyer wrote the opinion, in which Judge Agee and Judge Diaz joined.

ARGUED: Steven Scott Biss, LAW OFFICE OF STEVEN S. BISS, Charlottesville, Virginia, for Appellant. Terrance Gilroy Reed, LANKFORD & REED, PLLC, Alexandria, Virginia, for Appellee. ON BRIEF: Robert D. Luskin, PAUL HASTINGS LLP, Washington, D.C.; Robert K. Moir, LANKFORD & REED, PLLC, Alexandria, Virginia, for Appellee. USCA4 Appeal: 21-1655 Doc: 42 Filed: 04/05/2022 Pg: 2 of 18

NIEMEYER, Circuit Judge:

This appeal arises from the imposition of sanctions under Federal Rule of Civil

Procedure 11 for the filing of a complaint alleging state law torts of defamation and tortious

interference with contract that the district court found to be frivolous.

Svetlana Lokhova, a Russian-born author and academic, first sued Stefan A. Halper

and others in May 2019, alleging acrimoniously and unprofessionally in an excessively

long complaint that Halper was the source for news stories accusing her of being a Russian

spy and of having an affair with General Michael Flynn in furtherance of her mission. On

Halper’s motion, the district court dismissed the action, primarily because it was facially

untimely. Halper also filed a motion for sanctions, asserting that Lokhova and her attorney,

Steven Biss, had brought the action in bad faith. The court denied that motion but warned

Biss that should he “file further inappropriate pleadings or pursue frivolous post-judgment

litigation against any of these defendants, sanctions might well be justified.”

Roughly ten months later, Lokhova, again with Biss as her attorney, commenced

this action based on facts that arose after the district court’s warning, alleging that Halper

and his attorney contacted the publishers of Lokhova’s then-forthcoming book with the

sole purpose of causing her book contract to be cancelled. The complaint alleged that in

doing so, Halper and his counsel defamed Lokhova and tortiously interfered with her

contract, causing its cancellation. She demanded $5 million in compensatory damages.

Before filing a motion to dismiss, motion for summary judgment, or any other

response to the complaint, Halper filed a motion for sanctions. The district court granted

the motion and imposed sanctions on Lokhova and Biss, jointly and severally, dismissing

2 USCA4 Appeal: 21-1655 Doc: 42 Filed: 04/05/2022 Pg: 3 of 18

the action and awarding Halper attorney’s fees. The court found that two letters that Halper

had sent to the publishers were protected by an absolute litigation privilege under Virginia

law, rendering the complaint “frivolous and without merit.” Accordingly, it concluded that

Lokhova and Biss “violated both Rule 11 [of the Federal Rules of Civil Procedure] and the

Court’s admonition in [the earlier litigation]” in commencing this action.

While t

Click Here to Read the rest of this document