Friday, March 04, 2022

competitor's alleged hijacking of Facebook page could violate 43(a)

Pan 4 America, LLC v. Tito & Tita Food Truck, LLC, 2022 WL 622234, No. DLB-21-401 (D. Md. Mar. 3, 2022)

Plaintiffs alleged that they employed the individual defendants in part to manage social media advertising and promotion for plaintiffs’ baking businesses, aka La Baguette. They then allegedly “hijacked” plaintiffs’ Facebook page—their main online platform—to promote Tito & Tita, a competing business. The FB page had “photographs and prices of La Baguette’s products, the street address of the retail bakery, and a phone number to place orders for pick-up or delivery.” In spring 2020, the page allegedly had over 4,000 followers.

One individual defendant allegedly changed the name of the Facebook page to “Tito & Tita Langley” and replaced the address and phone number listed on the page. This meant that past events and posts by La Baguette now appeared to have been posted by “Tito & Tita Langley.” He allegedly “preserved some descriptions, prices and photos of La Baguette’s products, as well as other content relating to plaintiffs’ business.” In addition, “many consumer posts and responses thereto” that predated the change allegedly remained under the new name, alongside “empty posts” where the content has been deleted but the posting date remains, reinforcing “the misimpression that Tito & merely a continuation of or successor to the La Baguette business.”

Unable to access the Facebook page, plaintiffs shifted to an alternate Facebook page created by another employee, but it does not have a large following (only about 260 followers). Plaintiffs allegedly faced a “precipitous drop” in call-in orders that coincided with the early months of the pandemic. They allegedly received complaints from customers about poor quality products that had in fact been ordered from and prepared by Tito & Tita.

Section 43(a) claims: The court rejected defendants’ argument that plaintiffs didn’t identify “any actual or affirmative” misleading statement or “any representation that was literally false or otherwise implied that ‘Tito & Tita’ was a successor or continuation of [La Baguette].” It sufficed to allege that (i) two historic events held by La Baguette now appear to have been held by Tito & Tita, (ii) old posts and communications on the page and interactions with La Baguette’s followers now appear to have originated from Tito & Tita, and (iii) Tito & Tita has passed off its products as La Baguette’s, including by leaving “descriptions, prices, and photos of Plaintiffs’ baked good offerings...on the page,” id. ¶ 45, and mimicking distinctive product offerings. “Additionally, due to the nature of Facebook, Facebook users who followed La Baguette before the name change would now appear to have followed Tito & Tita instead.” Thus, Tito & Tita allegedly “represented it was associated with all the historic La Baguette content it failed to delete, associated with or endorsed by La Baguette as a successor, and endorsed by all La Baguette’s existing Facebook followers…. Tito & Tita allegedly modified content, rendering it false or misleading, then used that content to kick start its competing business.” Plaintiffs sufficiently alleged likely confusion and statutory standing. The possible alternative cause of business losses—the pandemic—didn’t “undermine the reasonable inference that the alleged drop could be the result of Tito & Tita’s changes to the Facebook page, as it does not account for the confused and disappointed customers.”

This could also be unfair competition under Maryland law.  Tito & Tita argued plaintiffs never owned the Facebook page and have no right to it, but that was a novel question. “The law on the ownership of a social media pages created by employees for employers is evolving rapidly and varies between jurisdictions. If this litigation continues and defendants wish to repeat this argument, they should support their assertion that they own the Facebook page with authority.”

And it could be tortious interference with prospective business or economic relations.

It was not, however, conversion, which does not extend to intangible property not associated with the transfer of some document (either physical or digital) embodying the right to that property. In Maryland, the Court of Appeals has warned against “expand[ing] conversion so much that it could essentially swallow other torts, such as unfair competition and wrongful interference with contractual or business relations....” The Facebook page was an “online advertising and promotional platform,” not a digital document. The same problem defeated the detinue claim (“detinue lies for the recovery of personal chattels unjustly detained by one who acquired possession of them either lawfully or unlawfully, or the value of them if they cannot be regained in specie”).

But breach of fiduciary duty and contract claims survived, as did unjust enrichment and civil conspiracy.


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