Plaintiff RLI is “the world’s leading provider of computer-based assessment technology for pre-K-12 schools.” Its Accelerated Reader (AR) is a software program first introduced in 1986. Metiri offers educational consulting services. One of its products is Technology Solutions That Work (TSW), which offers a database of research studies on educational software.
RLI alleged that the TSW database contains false statements about AR and that Metiri has made other false statements about AR. The allegedly false statements include: (1) statements touting TSW’s quality and lack of bias; (2) statements that the evidence didn’t support claims that AR is effective, despite its popularity; (3) statements that most of the research on AR was done by RLI and that most was not of sufficient technical quality to be worth reviewing; and (4) statements that AR’s use of rewards is increasingly controversial.
RLI’s first claim was for commercial disparagement, which requires (1) that the person making a statement intend, recognize, or should recognize that the statement is likely to harm another’s pecuniary interest and (2) knowledge or reckless disregard of falsity. The court found genuine issues of material fact sufficient to deny Metiri's motion for summary judgment.
For example, comparing TSW’s evaluations of AR and Little Planet Early Learning Series permitted an inference that Metiri isn’t unbiased. (I have to admit discomfort with treating the term “unbiased” as falsifiable rather than opinion-based, at least when we’re out of the realm of quantitative studies.) The statements “We feel we are being generous with a rating of ‘Inconclusive Evidence’ with respect to Accelerated Reader” and “Despite its predominance in American schools, the research base on Accelerated Reader is weak, idiosyncratic, and contradictory. It seems odd that with tens of thousands of American schools using the program, that most oft-quoted study was conducted on two classrooms in a socio-economically disadvantaged area of Scotland” arguably was evidence of some bias. (Why? The statements are evaluative, but I don’t see why that shows bias. It’s not biased, I would have thought, to come to a conclusion after evaluation. But see next statement.) The court thought that Metiri’s highest recommendation for Read 180 was “generous” in comparison to its analysis of AR, because Read 180’s research was also pretty limited, as was the research behind the Little Planet Early Learning Series, another Metiri-recommended program. Moreover, one of the people Metiri assigned to review AR worked extensively in the place where Little Planet and Read 180 originated while those programs were being developed.
By contrast, in the Department of Education’s What Works Clearinghouse, only 24 of 153 beginning reading programs met the evidence standards; AR was one, receiving a rating of “Potentially positive effects: evidence of a positive effect with no overriding contrary evidence,” so the court could infer that there is scientifically based research to support AR. Moreover, peer reviewed, significant studies of AR were not included in Metiri’s analysis while studies that weren’t peer reviewed or weren’t significant were included, raising an inference that Metiri didn’t include the highest quality research. Worse, Metiri’s practice of updating TSW at least every two years, plus its failure to include a study suggested by RLI representatives (the study cited by What Works Clearinghouse) “raises an inference that TSW is not an up-to-date resource and that Metiri is not always on the look-out for high quality research to update its database.” (Okay, perhaps these claims should have been run through a puffery filter before assessing their truth?)
Finally, there was a factual dispute about what percentage of the “mountains of research” on AR was completed by RLI; a “good bit” are case studies in which data are collected by individual schools and then submitted to and summarized by RLI, allowing an inference that the individual schools rather than RLI “completed” this research. (Really? Just being picky, how could it be recklessly false to say that RLI’s summarization didn’t count as “completion”? And anyway, could anyone reasonably think that the schools that already adopted AR would have interests not aligned with RLI in reporting success?)
In fact, the court didn’t assess the evidence on state of mind—I guess it must have implicitly held that, given these facts in the light most favorable to RLI, it would have been reckless for Metiri to make the statements.
On the false advertising claims, Metiri argued that the allegedly false statements weren’t in ads and that RLI suffered no competitive injury. The court also found material issues of fact. As to ads: many of the statements at issue were in TSW videos or PowerPoints, available on Metiri’s site without a membership, allowing an inference that these statements are commercial ads; other statements were made at conferences where Metiri was promoting its services.
There was a factual dispute over whether Metiri and RLI are business competitors—not in the sale of educational software, but in the areas of policy consulting, professional development, and research and evaluation services. If Metiri discredited one of RLI’s major products, customers might question its other services. Moreover, there was a factual dispute over whether Metiri used ads to discredit AR to spark interest and sales in TSW and divert business that otherwise would have gone to RLI to a TSW subscription which recommends alternative products. (While that first rationale for competition makes sense to me, this second doesn’t—it’s just a restatement of the claim that Metiri cost RLI business, which might be commercial disparagement but is not competition. Compare: “Consumer Reports ran ads for its vacuum cleaner comparisons touting its surprising findings, diverting consumers from vacuum cleaner purchases towards CR, at which point the consumers changed their initial vacuum purchase intentions to buy the CR-recommended product.”)
RLI’s claims for tortious interference also survived. TSW says AR is currently in place in almost half of all American schools, allowing an inference that Metiri knew of RLI’s contracts/business expectancies with schools. (I thought the knowledge about the contract and the interference with same had to be specific to particular clients, though; otherwise any dominant market participant can easily win this tort.) RLI also provided an expert report claiming lost sales from AR when customers subscribed to Metiri’s services. Metiri ads such as “Click here for a special offer and finally settle that argument about Accelerated Reader” allowed an inference that Metiri was motivated to discredit AR to spark interest in TSW.
Anybody looking for evidence that business torts are used to suppress critics could, it seems to me, reasonably cite this case. A little First Amendment defamation medicine would not have been out of place here. It's not that Metiri's motives seem pure from the facts as alleged, but competition in the marketplace might be a better way to sort it out than litigation.