Journalism about investment isn't commercial speech

Crash Proof Retirement, LLC v. Price, 2021 WL 1387501, No. 2:20-cv-05906-JDW (E.D. Pa. Apr. 13, 2021)

Competing in the marketplace of ideas can ground a defamation claim, but not a false advertising claim. Crash Proof, which offers retirement planning counseling, alleged, inter alia, that Price violated the Lanham Act by writing an article that criticized Crash Proof’s investment strategy. “But the Lanham Act does not regulate critical speech. It regulates commercial speech, which Mr. Price’s article is not.”

Price is a former stockbroker who continues to write and give investment seminars. TheStreet published an article by Price titled, “If It Sounds Too Good to be True, It Will Probably Cost You.” About half the article criticizes Crash Proof and questioning how it could offer a risk-free investment opportunity with a 5% to 8% interest rates with “no fees whatsoever.” He wrote: “if you believe Crash Proof’s claims, there’s a bridge in Brooklyn I’d like to sell to you.” He challenged Crash Proof’s claims “that there are no fees attached to [its] services” because “[w]ho do you know who works for free?” He speculated “that Crash Proof was taking a huge cut of the principal for themselves right off the top.” In summary, he called Crash Proof a scam that preys on desperate people who plunge “huge pieces of their life savings into products with no chance of success.”

The other half of the article described an alternative investment strategy for those who “seek reasonable total returns while accepting a very small degree of risk....” He didn’t refer to any specific product. It is, in Crash Proof’s words, “an unoriginal, oft-written about, stock-based investment strategy of owning blue-chip stocks while selling in-the-money call options....”

Crash Proof sued Price for violations of the Lanham Act and the Pennsylvania Unfair Competition statute, as well as common law claims for commercial disparagement and tortious interference with business relations.

As the description of the article indicates, this is an easy case: the article doesn’t propose a commercial transation. It doesn’t promote any product or service. Nothing in the article, or in the complaint, suggested that Price was trying to get consumers to buy a service that he sold instead of Crash Proof’s. Under the allegations of the complaint, he was retired, and an unoriginal strategy disclosed in the article itself “could not even be a veiled attempt to steer customers to a single competitor.” It didn’t matter whether or not TheStreet paid Mr. Price for the article.

The court declined to exercise supplemental jurisdiction over the state claims (but I can’t imagine the statutory unfair competition claims do any better on a First Amendment analysis).