Wednesday, January 15, 2020

post-complaint changes prevent finding of irreparable harm

Pegasystems, Inc. v. Appian Corp., 2020 WL 137301, No. 19-11461-PBS (D. Mass. Jan. 13, 2020)

Following on its denial of a motion to dismiss, the court denied a motion for preliminary injunction in this false advertising case. Because the alleged falsity depended on a supposedly independent review being paid for and on overstating the number of responses to the survey, the motion had to be evaluated “in light of the post-complaint changes Appian has made to the challenged statements.” Specifically, Appian removed the phrase “Through approximately 500 responses” and added language regarding the Report’s sample size. Appian also added text on both pages of its website reading, “While all projects are different, we encourage you to read the report and assess what relevance [the surveyed] businesses’ experiences may have for your business” and acknowledged that “Appian commissioned” to conduct the survey contained in the Report. A “Preface from Appian” was inserted as the first page of the Report disclosing Appian’s commission.

Although the delightfully named Pegasystems alleged that other parts of the report were false or misleading, including flaws in methodology, the court didn’t find likely success on those other allegations. Appian admitted that it “reviewed and provided input on drafts” of the Report, but denied that the results were manipulated to favor Appian. Factual issues remained to be resolved.

Because of the post-report changes, Pegasystems couldn’t show continuing harm from the initial misrepresentations of independence and sample size.

No irreparable harm/likely success, no injunction.

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