A water-treatment company could not sue a blogger for defamation over allegedly inflammatory posts he wrote about the company on his website, a U.S. District Court judge in Rhode Island has ruled.
Defendant Brian MacFarland, who blogs about companies that provide consumer products and services, criticized RainSoft and its allegedly high-pressure sales tactics — describing the company as engaging in a “scam” and being “shady” — without distinguishing between RainSoft itself and a local product dealer that purportedly engaged in the tactics in question.
In moving for summary judgment, MacFarland argued that RainSoft could not show he had engaged in the type of material falsehoods necessary to render his comments unprotected defamatory speech.
Judge William E. Smith agreed.
“MacFarland’s name-calling — ‘scam,’ ‘shady,’ ‘magic show,’ ‘bad logic’ — is protected by the First Amendment as ‘imaginative expression’ or ‘rhetorical hyperbole,’” Smith wrote, pointing out that any reasonable reader would understand MacFarland’s language as metaphor.
As for MacFarland’s failure to distinguish between RainSoft and its dealer, Smith said the “difference between a company and its outsourced foot soldiers — who were ‘expect[ed] and count[ed] on … [to] support’ the ‘organization’ they had ‘become part of’ — is just too fine to have piqued public concern.”
The 27-page decision is RainSoft v. MacFarland.
Mark W. Freel of Locke Lord in Providence and John M. Touhy of Baker & Hostetler in Chicago represented the plaintiff company. Joseph V. Cavanagh Jr. of Blish & Cavanagh in Providence was counsel for the defendant blogger. Neither of the local attorneys could be reached for comment prior to deadline.
Defendant MacFarland runs the website lazymanandmoney.com, blogging about companies that provide consumer products and services. The website’s goal is to save readers money.
In summer 2013, MacFarland and his wife sat through an in-home demonstration of plaintiff RainSoft’s water-treatment products. The demonstration was conducted by Gus Oster, a salesperson with RainSoft’s local products dealer, Basement Technologies.
Oster used a script that was apparently written by RainSoft and touted the company as a maker of premier water-treatment products. The script also apparently never mentioned Basement Technologies.
The dealership agreement between RainSoft and Basement Technologies stated that the dealer would “protect and embrace” the RainSoft brand “as we all make a living based on its reputation in the marketplace” and that the dealer was expected to promote the RainSoft brand “in every customer facing opportunity.” It also stated that all customers purchasing RainSoft products would be considered shared customers of RainSoft’s parent company and the dealer.
The agreement further stated that the dealer would promote RainSoft products exclusively unless RainSoft gave it permission to do otherwise, which apparently it never did.
In blogging about the demonstration, MacFarland described Oster as “super nice” but called the presentation a “magic show” that made “false promises” and used “high-pressure sales tactics” and other “slightly deceptive practices.”
For example, Oster performed certain acts to show RainSoft techniques purifying the tap water in MacFarland’s home. MacFarland, in a blog post, speculated on ways a “devious” salesperson might have been deceiving him with falsely labeled bottles.
Meanwhile, MacFarland blogged his skepticism that RainSoft’s filtration system would actually save him $20,000 in appliance-related costs over 20 years as Oster claimed.
In his original post, MacFarland concluded that while RainSoft might not be a “scam,” its products were not worth the price.
Eight days later, MacFarland put up a second post describing a conversation with a RainSoft representative in which he haggled $1,000 off the originally quoted price. He also told of a trip to home-improvement superstore Lowe’s, where a plumbing rep was “shocked” that Lowe’s rival Home Depot, which had introduced MacFarland to RainSoft products, would only connect him with RainSoft rather than showing him a range of options.
Judge William E. Smith observed that many of the defendant’s allegedly defamatory statements fell under the broad category of “epithet,” which could not be shown as both defamatory and false.
Then, before answering his rhetorical question as to whether RainSoft was a “scam” he said he was “leaning toward yes.” In a subsequent post, MacFarland definitively defined RainSoft as a scam. And in a fourth post, published a year later, he recounted a spat he had had in the comments section of an earlier RainSoft post on his blog with someone he suspected of, but who had denied, being a RainSoft dealer.
In the exchange, MacFarland discounted the commenter’s glowing RainSoft review due to bias, accusing the commenter of engaging in a “comment scam” while rehashing his previous complaints about the company.
Meanwhile, the comments section on each of MacFarland’s four RainSoft posts showed him commenting back dozens of times, usually to concur with those who agreed with him while trading barbs with those who did not agree.
In April 2015, RainSoft sued MacFarland in U.S. District Court for defamation. RainSoft also claimed violations of the federal Lanham Act for false advertising. Specifically, RainSoft alleged that MacFarland was unfairly competing with the company by relying on false statements of “scams” and “magic tricks.”
After the suit was filed, MacFarland put up a fifth blog post entitled “What is a Scam Anyway?” In it, he explained that when he used the term “scam” he was not necessarily suggesting illegal activity but rather a “confidence trick.”
Discovery allegedly revealed that he wrote that post to cover himself against potential libel claims. Additionally, discovery revealed that he had known that the dealer and RainSoft were different companies, and that Oster worked for the dealer and not RainSoft, before he had written a couple of the posts in question.
Not materially false
Smith found that RainSoft had no actionable defamation claim.
The judge observed that many of MacFarland’s allegedly defamatory statements — such as his characterization of RainSoft being a “scam” and “shady” and engaging in “magic tricks” — fell under the broad category of “epithet” that could not be shown as both defamatory and false.
Instead, he said, such statements, based on loose, figurative language that no reasonable person would see as factual, could not be proscribed under the First Amendment.
“Even before glimpsing Internet poetics in full bloom — the Facebook rants, Twitter meltdowns and Instagram shade — the First Circuit recognized ‘the reality that exaggeration and non-literal commentary have become an integral part of social discourse,’” Smith wrote, quoting the 1st U.S. Circuit Court of Appeals’ 1997 ruling in Levinsky’s, Inc. v. Wal-Mart Stores, Inc. “‘[T]his category of speech,’ these ‘[c]asually used words,’ are not actionable … ‘no matter how tastefully couched.’”
Other statements MacFarland made were protected by other First Amendment “overlays,” the judge said.
For example, he said, the First Amendment protects “statements of public concern” that would cover issues such as water safety, sales tactics, and the efficacy of various filtration systems.
“And MacFarland’s opinions to which RainSoft objects here — including the charge of ‘false promises,’ ‘high-pressure sales tactics,’ and ‘slightly deceptive practices’ — are all accompanied by their factual bases,” Smith said.
As for RainSoft’s argument that MacFarland should be held liable for failing to distinguish between RainSoft and its dealer in his posts, Smith said the dealer was “basically a “de facto arm of RainSoft” and the fact that the two were legally separate entities was meaningless to the “web-surfing public.”
Finally the judge rejected RainSoft’s claims that MacFarland should be held liable for false advertising under the Lanham Act.
“RainSoft’s Lanham Act claim fails because … the only product MacFarland can be said to have sold readers is his advice, which they got for free,” Smith said. “Not only is there no evidence to support a finding of the requisite intent to sell, it is not at all clear that MacFarland’s posts even constitute commercial speech.”
Accordingly, the judge granted summary judgment on all counts.