Tuesday, December 31, 2019

Competitor's Google review accusing P of "scam" was nondefamatory opinion

Creditors Relief LLC v. United Debt Settlement LLC, 2019 WL 7288978, No. 17-7474 (D.N.J. Dec. 30, 2019)

Plaintiff CR is a New Jersey-based debt settlement company that has allegedly “received significant publicity and an A+ rating from the Better Business Bureau.” Defendant Marcel Bluvstein, a New York resident, is a principal of New York-based Defendant United Settlement and New Jersey-based Defendant EIIS. He contacted CR, stating that he was looking for debt relief services, and received a standard client agreement. This call was allegedly a sham – intended only to learn about Plaintiff’s business and gain access to this Creditors Relief Agreement. Shortly thereafter, Bluvstein allegedly founded United Settlement as a competing debt relief services business and allegedly copied content from the CR website, including a “Recent Results” graphic showing results obtained by CR. It also allegedly misrepresented statistics regarding the total and average savings obtained by its clients.

After CR’s attorneys sent a letter to United Settlement and Bluvstein alleging copyright infringement and false advertising, defendants allegedly attacked CR online, e.g., with a Google review stating, “Beware of this company! I called them to get advice on my business debt, after speaking with my creditor I decided to deal with the matter myself. After the company learned 1 settled my own debt they sent me a cease and desist and threatened to sue.” Also: “This company is a scam! Read the reviews on the CEO Michael Lupolover. Beware collects ridiculous fees and does NOT get the job done!” A similar review on the BBB’s website allegedly caused Plaintiff’s BBB rating to slip below A+. Initially posted by a “Marcel B.,” the poster’s name allegedly later changed to “Ruth A.”

After finding that it couldn’t exercise personal jurisdiction over Bluvstein or United Settlement, the court dismissed the remaining claims against EIIS.

First, competitor plaintiffs who didn’t suffer injury as consumers don’t have standing under the New Jersey Consumer Fraud Act. There aren’t definitive state cases, but the DNJ has come to this conclusion; here the court rejects the specious argument that Citizens United bars such discrimination against the corporate form, which isn’t even relevant because corporations who are consumers of falsely advertised products/services have standing under the NJCFA.

Defamation: Nothing defamatory here, just opinion. [The court does not have to deal with the allegedly false pretense of being a consumer, rather than a competitor. It is not opinion to say that “I called them to get advice on my business debt”—it still might be a nondefamatory falsehood, but defamation is not required for Lanham Act liability.] The BBB review:

Beware of this company, they are un-American! I contacted Plaintiff in search for help with my business cash advance loan. After getting the contract emailed to me ... [I] did not sign the contract .... When Michael L[upolover, member of Plaintiff] learned I opened my own company and settled my own debt he sent me cease and desist letter and is now threatening to sue. This company is un-American and feels entitled. Just because I spoke to them they feel they own me and I have no rights, think again Michael L[upolover]! This company is greedy and unfair .... Beware of this company!!

In the first statement above, the only plausibly defamatory part was: “Beware of this company!” That’s opinion. In the second statement, “This company is a scam!”; “Beware collects ridiculous fees”; and “does NOT get the job done,” were possibilities. In the context of an online review, “scam” was opinion, and the words surrounding the “scam” epithet were non-factual: “Read the reviews on the CEO Michael Lupolover. Beware collects ridiculous fees and does NOT get the job done!” “This does not imply fraud, which is provably true or false, but instead suggests the speaker’s opinion as to the value of Plaintiff’s services.” A reasonable reader would not understand an accusation of crime or fraud, but would see name-calling and hyperbole. The third statement: “Beware of this company, they are un-American!”; “This company is un-American and feels entitled”; and “This company is greedy and unfair” were also non-actionable opinions.

Tortious interference: failed for want of identification of specific lost contracts/opportunities.

Lanham Act and copyright claims: failed because not alleged against the remaining defendant, EIIS. Only Bluvstein and United Settlement allegedly copied the Creditors Relief agreement and website.

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