Donald Trump wins smackdown victory in defamation and tortious interference lawsuit over domain name dispute

Donald Trump filed a UDRP action against plaintiff Stevens over plaintiff’s registration of the domain name TrumpEstates.com. While that action was pending, plaintiff filed a lawsuit against Trump, his organization, and his lawyers, asserting claims of defamation, tortious interference with business relations, and also seeking a declaratory judgment concerning cybersquatting.

Trump moved to dismiss for failure to state a claim upon which relief may be granted. The court granted the motion and dismissed the action with prejudice.

The defamation claim failed because plaintiff had established a website at the disputed domain name that provided a link to a New York Post article that republished the report of the defamatory allegations, namely, that plaintiff had violated the law and had committed cybersquatting by registering the disputed domain name. This claim failed under New York law because words voluntarily disseminated to the world by the party allegedly aggrieved cannot, by definition, be found defamatory.

The tortious interference claim failed because plaintiff did not identify any third party with which it had a business relationship, let alone one with which the Trump defendants interfered and injured.

Plaintiff’s claim for declaratory judgment sought an order from the court holding that plaintiff had not improperly registered the domain name. The court found that plaintiff did not offer any factual allegations of he acted in good faith when he registered the disputed domain name. Instead, plaintiff actually admitted that his business centered around the reselling of domain names. Federal law recognizes it to be an indication of bad faith when it offers to transfer, sell, or otherwise assign a domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in a bona fide offering of any goods or services. (In this case, the disputed domain name had been advertised as being for sale for $400,000.)

The case can be properly characterized as a “smackdown” because the court dismissed the action with prejudice, meaning that plaintiff does not have the opportunity to refile the deficient complaint. The court added some gloss on the part of the opinion where it determined that leave to amend it would be improper. It noted that the “network of regulations” that protect trademark owners’ interests in domain names makes “crystal clear that, even in cyberspace, the TRUMP mark is entitled to regulatory protection fair and square.” The court went on to note that it was inconceivable that plaintiff could, as the silence of his papers emphasized, plead any facts that would entitle him to co-opt the Trump name.

Stephens v. Trump, 2016 WL 4702437 (E.D.N.Y., September 7, 2016)

Evan_BrownAbout the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Website operator was too involved with development of content to be immune under Section 230

Defendant started up a website to — in her own words — provide a place for others to have a dialogue and post information about their experiences at Plaintiff’s youth drug rehab facilities. Plaintiff found the content of Defendant’s website offensive, and sued for defamation and intentional interference with prospective economic advantage. Defendant filed a motion to strike under California’s Anti-SLAPP law. The court denied the motion.

In denying the Anti-SLAPP motion, the court found, among other things, that Plaintiff had established a probability of prevailing on most of its claims. This chance of prevailing withstood Defendant’s argument that she was shielded from liability by the Communications Decency Act.

This Act provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1).

Defendant acknowledged that her defense was relevant only to the extent that she was alleging that comments by third parties on her website were defamatory.

She quoted Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2008) to assert that “the exclusion of ‘publisher’ liability necessarily precludes liability for exercising the usual prerogative of publishers to choose among proffered material and to edit the material published while retaining its basic form and message.” She argued that she was entitled to Section 230 immunity because she was an exempt publisher — she either simply posted others’ statements or made minor edits to those statements before posting.

The court did not agree with Defendant’s characterization of her publishing activities.

It found that her posts would not lead a visitor to believe that she was quoting third parties. Rather, in the court’s view, Defendant adopted the statements of others and used them to create her comments on the website. She posted her own articles, and summarized the statements of others.

Moreover, Defendant did more than simply post whatever information third parties provided. She elicited statements through two surveys that contained specific questions to gather information about specific issues. The court found this to disqualify Defendant from Section 230 immunity under the holding of Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008) (wherein the website operator was not immune under the Communications Decency Act because it created discriminatory questions and choice of answers).

Diamond Ranch Academy, Inc. v. Filer, 2016 WL 633351 (D. Utah, February 17, 2016)

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

Newspaper not liable for alleged defamatory letter to editor published online

The Appellate Court of Illinois has sided in favor of a local newspaper in a defamation lawsuit brought against the paper over a reader’s allegedly defamatory letter to the editor. The court held that the Communciations Decency Act (at 47 U.S.C. 230) “absolved” the newspaper of liability over this appearance of third party content on the newspaper’s website.

Plaintiff — a lawyer and self-identified civil rights advocate — sent several letters to local businesses claiming those businesses did not have enough handicapped parking spaces. Instead of merely asking the businesses to create those parking spaces, he demanded each one pay him $5,000 or face a lawsuit.

One local resident thought plaintiff’s demands were greedy and extortionate, and wrote a letter to the editor of the local newspaper covering the story. The newspaper posted the letter online. Both the newspaper and the letter’s author found themselves as defendants in plaintiff’s defamation lawsuit.

The letter-writer settled with plaintiff, but the newspaper stayed in as a defendant and moved to dismiss, arguing that federal law immunized it from liability for content provided by the third party letter-writer.

The lower court dismissed the defamation claim against the newspaper, holding that the Communications Decency Act (at 47 U.S.C. §230) protected the newspaper from liability for the third party letter-writer’s comments posted on the newspaper’s website.

Plaintiff sought review with the Appellate Court of Illinois. On appeal, the court affirmed the dismissal.

The Communications Decency Act (at 47 U.S.C §230(c)(1)) says that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The appellate court found that the leter-writer was another information content provider that placed comments on the newspaper’s website. Therefore, it held that the Communications Decency Act “absolved” the newspaper from responsibility.

Straw v. Streamwood Chamber of Commerce, 2015 IL App (1st) 143094-U (September 29, 2015)

Evan Brown is an attorney in Chicago helping clients manage issues involving technology and new media.

Complaint site does not have to identify its users

Petitioner filed an action in New York state court seeking to compel PissedConsumer.com to disclose the identity of the person or persons who posted certain statements to the site. These statements criticized petitioner for allegedly failing to fulfill an advertising promise to give the user a $500 gas card. The anonymous user went on to complain that petitioner “will forget about you and … all the promises they made to you” once “you sign on the dotted line.”

The trial court denied the petition to compel PissedConsumer.com to turn over the names of its users. Petitioner sought review with the Appellate Division. On appeal, the court affirmed.

It held that the lower court properly denied the petition since petitioner failed to demonstrate that it had a meritorious cause of action as required to obtain pre-action discovery:

Nothing in the petition identifies specific facts that are false and when the statements complained of are viewed in context, they suggest to a reasonable reader that the writer was a dissatisfied customer who utilized respondent’s consumers’ grievance website to express an opinion. Although some of the statements are based on undisclosed, unfavorable facts known to the writer, the disgruntled tone, anonymous posting, and predominant use of statements that cannot be definitively proven true or false, supports the finding that the challenged statements are only susceptible of a non-defamatory meaning, grounded in opinion.

The court seemed to recognize the importance of anonymous speech, and that one must not lightly cast aside its protections. If you’re going to go after an online critic, best have a cause of action that you can actually plead.

Woodbridge Structured Funding, LLC v. Pissed Consumer, — N.Y.S.2d —, 2015 WL 686383, (February 19, 2015)

Evan Brown is an attorney in Chicago helping clients with technology, intellectual property and new media issues.

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