Thursday, September 20, 2018

Accurate statement that SPLC called a group a "hate group" isn't plausibly misleading without more

Liberty Counsel, Inc. v. GuideStar USA, Inc., --- Fed.Appx. ----, 2018 WL 4339716 (Mem), No. 18-1157 (4th Cir. Sept. 11, 2018)

Who controls procedure controls substance.  The district court granted GuideStar’s motion to dismiss Liberty’s Lanham Act false advertising claim against it.  GuideStar is a nonprofit organization that maintains an online directory of profiles on other nonprofits, including Liberty, an organization dedicated to advancing Christian causes. After the Southern Poverty Law Center designated Liberty as a hate group, GuideStar added a banner to Liberty’s profile revealing this designation.  Liberty sued and the district court determined that there was no commercial speech.

The court of appeals affirmed on alternate grounds: failure to properly allege misleadingness. Liberty conceded that the SPLC had in fact designated it as a hate group. Liberty alleged that this designation was misleading, but “a complaint must state facts demonstrating that the defendant’s liability is plausible, not merely possible.” “Here, other than identifying a broad swath of people whom the banner allegedly deceived, Liberty baldly alleged customer confusion without providing ‘further factual enhancement.’”  But what additional facts would demonstrate misleadingness?  The court doesn’t say, probably because to say would get require explaining what it would take for “designated as hate group” to be false (since misleadingness ultimately depends on consumers reaching false, that is falsifiable/verifiable and untrue, conclusions from non-facially false statements).  How could the implication of this truthful statement about the designation be anything other than opinion?  The court might be suggesting that it’s not impossible that some story could be told about this, but it would require a lot more in the way of detailed allegations.  I have to say it’s a bit weird to me that the same court that refused to recognize a claim in the GNC case is less decisive about hate groups.

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