Sock puppet reviews aren’t literally false absent additional non-identity literal falsity, court rules

Nunes v. Rushton, No. 2:14-cv-00627, — F.Supp.3d —-,
2018 WL 1271446 (D. Utah Mar. 9. 2018)
Every time I think I’ve seen it all, I’m reminded that
humans are not only stranger than we imagine, they are stranger than we can
imagine. Rachel Nunes sued Tiffanie Rushton for copyright infringement,
defamation, etc., mostly unsuccessfully except for the copyright claims,
leaving for trial only the amount of the statutory damages award for copyright
infringement.
Nunes published her novel A Bid for Love in 1998 and
registered the copyright the same year. Rushton published a novel, The Auction
Deal, between May and July 2014 by distributing between 80 and 90 free copies
to reviewers and bloggers for promotional purposes. “With the exception of the
addition of sex scenes, The Auction Deal is substantially similar to A Bid for
Love and shares the same dialog, scenes, characters, themes, settings, and
plot.”
In May 2014, Rushton also created about fifteen “sock
puppet” accounts on Google, Yahoo, Goodreads, and Facebook to post positive
reviews of her previous two novels and negative reviews of Nunes’s book. She
also posted two negative Amazon reviews of A Bid for Love under her own name
and two under sock puppet names.
“After Nunes learned of The Auction Deal, she attempted to
obtain a copy by requesting it from one of Rushton’s sock puppet accounts.” In
response, Rushton sent Nunes a series of disparaging comments, then pulled The
Auction Deal from sale on Amazon after Nunes contacted her. Other than copies
she bought for herself, no other copies of the novel were ever sold.  Then Rushton posted another negative review
of A Bid for Love under her own name and nine more negative reviews of Nunes’s
books from sock puppet accounts. She also used sock puppets to give multiple
one-star ratings of Nunes’s books on Goodreads. On Facebook, her public
comments about Nunes accused her of “harassment,” e.g., “I have been harassed
by Nunes and her assistant for not supplying her with an ARC [advance review
copy].”
After Nunes discovered Rushton’s identity, she decided to
sue and started a GoFundMe fundraiser to finance her lawsuit. Rushton posted
several comments on Nunes’s GoFundMe page using sock puppets, calling the
solicitation a “fraud,” “hoax,” and/or “scam,” e.g., “This ‘fund me’ has got to
be a hoax or scam. A publisher would be backing this if it were a real claim.”
In deposition, Rushton conceded that her novel was
substantially similar to Nunes’s novel. 
There was no factual dispute on her liability for copyright
infringement, though there was enough to go to a jury on whether the
infringement was willful, given that there was only circumstantial evidence of
Rushton’s state of mind when she infringed Nunes’s copyright.  “In an email to Nunes, Rushton insisted that
she could not be held liable for infringement because, in her mind, she never
published The Auction Deal by selling copies to the public.”  [Well, ok. 
Seems kind of Trumpian to me, if she sent out review copies, but
apparently Rushton may argue that she was in a manic phase due to her bipolar
disorder, so she lacked willfulness.]
Nunes’ claim for actual damages failed. Nunes didn’t argue
that the infringement caused the sales of her existing novels to suffer, and Rushton
never sold any copies of her infringing novel to the public for disgorgement
purposes. Nunes instead alleged that Rushton’s copyright infringement caused
her mental anguish and prevented her from writing two novels that she would
have otherwise written during this timeframe. The court determined that “actual
damages” as used in the statute didn’t include damages caused by the copyright
owner’s emotional response to the infringement of a published work. “[T]he
explicit provision for the recovery of the infringer’s economic profits in the
Act strongly suggests that the copyright owner’s ‘actual damages’ must
similarly be economic in nature,” and the case law agrees.  Thus, only statutory damages remained for
trial.
The defamation/defamation per se claims failed because the
online comments and emails were opinion about Nunes’s books and personality
traits, hyperbolic claims of “harassment,” “scam” or “fraud,” or unpublished
communications sent only to Nunes.  For
example, in context, “readers would understand the use of the terms ‘fraud’ and
‘scam’ as exaggerated language expressing strong disapproval of Nunes’s efforts
to raise money online, not as a charge of criminally fraudulent activity.”  As for “Ask your attorneys if in your quest
to investigate and have people rally around you if you are guilty of
harassment. I think the answer is yes,” that could be read to express a legal
opinion, but even questionable opinions about the legal significance of Nunes’s
actions aren’t actionable as defamation.
Some of Rushton’s statements did contain false statements of
fact, such as messages to book reviewers and bloggers claiming that Nunes had
given her permission to use elements of A Bid for Love or that Nunes had
co-written The Auction Deal with her. She also posted: “[Nunes] feels
threatened because I told her I would be contacting my aunt, [the CEO of
Deseret Book], and letting her know how she is handling the situation—through
reviewers and not through the author. Deseret Book and Seagull Book are
appalled at the way she is handling the situation.”  But the asserted facts weren’t defamatory:
false claims about permission or collaboration don’t have a “tendency to injure
a reputation in the eyes of its audience.” False claims about her aunt and of
the bookstores’ alleged disapproval weren’t defamatory, even though they were
likely intended to intimidate Nunes; the statements weren’t about her, and “a
falsehood concerning an opinion held by a third party is not sufficient to
expose an individual to public hatred or ridicule.”
False light claims failed for the same reasons as the
defamation claims.
Business disparagement/injurious falsehood: A business
disparagement claim “concerns statements regarding the quality of the
plaintiff’s product or the character of the plaintiff’s business,” and not
“statements about an individual’s reputation.” Rushton disparaged the quality
of Nunes’s novels, giving them numerous one-star reviews and criticizing them
for being “out of date” and “ridiculous.” These wer constitutionally protected
opinions, and Rushton’s other online comments couldn’t be used to support her
claim for the same reason the defamation claims failed.
Tortious interference: Rushton allegedly interfered with Nunes’
economic relations with the readers who purchase her books by way of two
improper means: (1) posting defamatory comments on the internet and (2)
infringing Nunes’s copyright to A Bid for Love. 
But the first wasn’t an improper means, given the result on the
defamation claims, and the second was preempted by the Copyright Act.
Nunes also alleged a violation of Utah’s electronic
communication harassment statute. But the statute didn’t expressly create a
civil cause of action, and the court wouldn’t imply one.
Lanham Act false advertising: Nunes alleged that the use of multiple
sock puppet accounts to post positive reviews of her books and negative reviews
of Nunes’s books constituted false advertising. First, Rushton pretended to be
an independent reader, not the author herself/the author’s competitor. Second, by
using multiple sock puppet accounts, Rushton allegedly created the false
impression that multiple individuals liked her books and disliked Nunes’s books.  Nunes didn’t submit evidence of actual
deception, so she needed to show literal falsity. 
The court relied on Romeo & Juliette Laser Hair Removal,
Inc. v. Assara I LLC, 2016 WL 815205 (S.D.N.Y. Feb. 29, 2016), another case
involving fake reviews.  There, the court
found that fake bad experiences of non-existent customers were literally false
because they described events that never occurred and fictitious customers that
did not exist. But reviews posted under three separate pseudonyms by an owner
of a competing business who was an actual customer of the plaintiff, claiming
that the services was slow and that the plaintiff’s employees were rude,
weren’t literally false because they were “largely matters of opinion and the
plaintiff [had] not shown that they are actionable as false statements of
fact.” But that’s not really the literal falsity part: the literal falsity is
the misrepresentation about being someone else (and about having three separate
experiences instead of one).  Whether
that literal falsity is material is a separate matter, but it might well be so,
and the FTC’s Endorsement Guidelines follow the principle that falsity/failure
to disclose in these matters violates the FTCA even without other specific
factual claims, because of the materiality of endorsers’ connections to the
endorsee.  I certainly would find it
highly material that the author of a review was a direct competitor, or was
also the provider of the reviewed good/service.
However, the court here found that the sock puppet reviews
were just opinions: “Rushton did not misrepresent the essential characteristics
of the books she reviewed. Instead, she claimed that her books were good while
Nunes’s books were boring and outdated. Such statements are a matter of opinion
and cannot be proven true or false.” 
Also, the Lanham Act claim failed separately because Nunes
didn’t show any damages or injury. Nunes offered the testimony of her expert that
negative online reviews generally negatively affect book sales, and the lay
opinion of a representative of Amazon, as evidence that she had been harmed. But
Moore didn’t analyze Nunes’s book sales and didn’t know whether her sales went
up or down after Rushton posted her reviews, nor could she assign a monetary
value to the effect online reviews may have; her opinion was based on common
sense. The Amazon rep also provided his lay testimony that bad reviews
generally discourage sales.  [My
understanding is that there is some research out there trying to quantify this,
for those of you thinking about the future of these claims.]  Without evidence as to the specific effect
that Rushton’s online reviews had on Nunes’ books, or about sales during the
relevant period of time, or customer surveys or customer testimony, there was
no proof to support Nunes’s damages claim for lost sales. Damages caused by mental
anguish also weren’t covered by the Lanham Act.  
Utah Truth in Advertising Act claims also failed; the law
provides that a defendant who’s violated the law “shall” be enjoined, but also
requires prior notice and an opportunity to correct the allegedly unlawful ad
by the same media before injunctive relief is allowed.  Nunes’ prelitigation emails and a blog post
complained about plagiarism and copyright infringement, not about the alleged violation
of the Utah Truth in Advertising Act, and it didn’t provide Rushton an
opportunity to correct the record in order to avoid an injunctive relief action.  Damages failed for the same reason as they
did for the Lanham Act claims.

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