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Icon Health & Fitness, Inc. v. Consumer Affairs.com

United States District Court, D. Utah, Northern Division

March 6, 2018

ICON HEALTH & FITNESS, INC., a Delaware corporation, Plaintiff,
v.
CONSUMER AFFAIRS.COM, a Nevada corporation, CONSUMERS UNIFIED, LLC, a Nevada limited liability company; and DAVID ZACHARY CARMAN, an individual, Defendants.

          MEMORANDUM DECISION

          DUSTIN B. PEAD MAGISTRATE JUDGE

         BACKGROUND

         Subsequent to the court's order dismissing Plaintiff Icon Health and Fitness, Inc.'s (“Plaintiff”) Complaint without prejudice, it filed an Amended Complaint. (See ECF Nos. 29, 34). In the Amended Complaint, Plaintiff again alleges that ConsumerAffairs.com (“ConsumerAffairs”), Consumers Unified, LLC, and David Zachary Carman (collectively “Defendants”) defamed Plaintiff, violated Utah statutes, interfered with Plaintiff's prospective economic relations, and violated the Racketeering Influenced Corrupt Organizations Act (“RICO”). (ECF No. 34). The matter is presently before the court on Defendants' “Motion to Dismiss Plaintiff's Amended Complaint with Prejudice.” (ECF No. 36). For the reasons set forth below the court will grant Defendants' motion, in part.

         STANDARD OF REVIEW

         To survive, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The court accepts factual allegations “as true and construe[s] those allegations, and any reasonable inferences that might be drawn from them” in a plaintiff's favor. Gaines v. Stenseng, 292 F.3d 1222, 1224 (10th Cir. 2002). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Nonetheless, conclusory allegations without supporting factual allegations are insufficient to state a claim for relief. See Id. (“Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'”).

         ANALYSIS

         I. Plaintiff's defamation claim

         a. Parties' Arguments

         Defendants argue they are entitled to immunity under Section 230 of the Communications Decency Act (“CDA”) as the court found in its June 22 Order dismissing Plaintiff's original complaint (“June 22 Order”). (ECF No. 29 at 9-13). Defendants contend that Plaintiff has not added any allegations that change the applicability of CDA immunity to Defendants' efforts taken to develop and publish their star rating. (Id.) Defendants also argue Plaintiff's bare assertion about contrived reviews on ConsumerAffairs' website fails to meet the pleading standard because Plaintiff only concludes the reviews are contrived without alleging facts to support that allegation. Next, Defendants argue that, even assuming CDA immunity does not apply, the star rating represents a protected opinion for the reasons the court discussed in its June 22 Order, and as other federal courts have found in similar circumstances. (Id. at 13-15).

         Plaintiff argues that ConsumerAffairs acts as a “data analyst” rather than a publisher based on Wikipedia definitions of those terms. (ECF No. 44 at 2). Plaintiff contends ConsumerAffairs should be treated as a content provider (rather than mere publisher) under the CDA because ConsumerAffairs purports to create “Buyers Guides” that contain the star ratings. (ECF No. 44 at 4-7). Plaintiff concludes that ConsumerAffairs creates the star rating because it chooses a subset of consumer reviews to include when calculating the rating. (Id.) Also, Plaintiff urges that regardless of the third-party reviews involved here, ConsumerAffairs is still responsible for its own statements. (Id. at 9-14). Finally, Plaintiff contends that the brand rating is not a protected opinion, but rather a statement capable of defamatory meaning based on its intended audience and because it impacts Plaintiff's “brand” as that term is defined in an online article. (Id.at 7-9).

         b. Analysis

         Plaintiff's briefing begins with a misstatement of the law that the court must correct to avoid any future misunderstandings. Plaintiff's first heading states: “The Court's Prior Decision no Longer Applies in Light of Plaintiff's First Amended Complaint and Jury Demand.” (ECF No. 44 at 1). Plaintiff is incorrect. The court's earlier order still applies. While the court examines the Amended Complaint on its own merits, the June 22 Order represents the legal framework under which this case proceeds. Additionally, to the extent Plaintiff intended this heading as a request for the court to reconsider its earlier order, the court denies that request.

         Next, the parties discuss a number of issues that need not be resolved for the court to decide Defendants' motion as it pertains to the Defamation claim. Likewise, Plaintiff's response is not organized in a way that facilitates meaningful comparison of the parties' positions regarding the defamation claim. Accordingly, to orient the reader, the court's analysis will be organized as follows: (1) determining whether the star rating is a matter of protected opinion; (2) examining whether Plaintiff identifies any other allegedly-defamatory statement; and (3) briefly reminding the parties of the court's earlier ruling regarding CDA immunity.

         1. As stated in the court's June 22 Order, the star rating represents a protected opinion, regardless of who created it

         Plaintiff's defamation claim will be dismissed because ConsumerAffairs' star rating represents a protected opinion and Plaintiff has not identified any other allegedly-defamatory statement. As it did in the June 22 Order, the court finds the star rating represents an opinion entitled to protection under the Utah Constitution. (See ECF No. 29 at 17-20). Defendants argue the allegations in the Amended Complaint do not contain facts that bring the star rating outside the protection provided by the Utah Constitution. (ECF No. 36 at 13-17). The court agrees. Plaintiff does not point to any newly-alleged facts that suggest the star rating is anything other than a protected opinion.

         Rather than contend with court's earlier analysis in the June 22 Order, Plaintiff simply argues the court should focus exclusively on ConsumerAffairs' intended audience. (ECF No. 44 at 7). Yet the court already considered the audience in its earlier order when the court discussed the context of the alleged statements. The court found: “A reader understands [star] ratings to represent the subjective satisfaction felt by a product user or group of users” (or, crediting Plaintiff's arguments, as representing ConsumerAffairs' subjective satisfaction). (ECF No. 29 at 19). Plaintiff does not cite to, let alone make any attempt to distinguish, the court's earlier order.

         Next, Plaintiff argues that an unflattering star rating will be harmful to its business. This argument is quite beside the point. The court does not doubt that negative opinions of a brand or its product will impact a company and its sales. Nonetheless, individuals and companies are entitled to have opinions, including negative opinions, of a product or company. The Utah Constitution protects these opinions from defamation suits even if they cause economic harm.

         Finally, Plaintiff attempts to recast the star rating as an “expert buyers guide.” (E.g. ECF No. 44 at 1). While this recasting creates superficial confusion, the court finds the distinction makes no difference. The Amended Complaint alleges that the “expert buyers guide” contains only the star rating and links to consumer reviews. (See ECF No. 34 at 4-5). As discussed in the June 22 Order, the star rating is a matter of opinion and Defendants enjoy CDA immunity for third-party reviews. (See ECF No. 29). Based on the foregoing and for the reasons set forth in the court's June 22 Order, the court concludes the star rating represents an expression of protected opinion.

         2. Plaintiff does not identify any allegedly-defamatory statement in any review whether it was posted by Defendants or a third party

         Plaintiff's Amended Complaint does not identify any defamatory statement made by a third party. Instead, Plaintiff vaguely references 87 reviews it characterizes at “pervasively negative.” (ECF No. 34 at 34). The court earlier warned Plaintiff that it must provide notice to Defendants and the court of any allegedly-defamatory statements. (See ECF No. 29 at 16-17). Plaintiff does not describe any allegedly-defamatory statement, aside from the star rating already discussed. Accordingly, Plaintiff has fails identify any alleged defamation.[1]

         3. Even if Plaintiff had identified other defamatory statements, Defendants are immune under the CDA for third-party reviews and Defendants' efforts to edit and publish those reviews.

         The court's June 22 Order found Defendants are immune under the CDA for any third-party information Defendants publish as well as their exercise of editorial discretion related to third-party information. (See ECF No. 29). The court need not deeply examine this issue in the context of Plaintiff's defamation claim because Plaintiff identifies no defamatory statement, as discussed above. Nonetheless, the court reminds Plaintiff of its earlier order to guide Plaintiff in the event later attempts to resurrect any defamation claim. Additionally, as stated earlier, the court declines Plaintiff's implicit invitation to reconsider the June 22 Order.

         Based on the foregoing, and for the reasons discussed in the court's June 22 Order, Plaintiff's Fourth Claim for ...


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