Allegedly defamatory claims in e-recycling report weren’t commercial speech despite some economic incentive

Electronic Recycling Ass’n v. Basel Action Network, 2019 WL
1453575, No. C18-1601-MJP (W.D. Wash. Apr. 2, 2019)
Plaintiff ERA is a Canadian non-profit corporation that
specializes in recovering, refurbishing, and reusing discarded electronic
equipment or “e-waste.” When it determines that equipment is no longer
reusable, it allegedly transfers that equipment to “regulated and approved
facilities to be recycled.” These entities, not ERA, allegedly then ship
dismantled components to further destinations.
Defendant BAN is a non-profit environmental advocacy
organization based in Seattle that investigates and reports on e-waste,
including whether its exportation violates the Basel Convention governing such waste.
In October 2018, BAN published “Export of e-Waste from Canada: A Story as Told
by GPS Trackers” along with a press release titled “GPS Trackers Reveal More
Canadian e-Waste Exported to Developing Countries.” It said that BAN affixed
GPS trackers to 43 “non-functional and economically unrepairable” electronic
devices, which it then delivered to “various electronics recyclers or recycler
collection sites” in Canada, including ERA. The report said that ERA (1)
shipped three of the tracked devices to China and Pakistan, “showing
substantial evidence of likely illegal exportation”; (2) is a “repeat offender”
with “a history of making similar exports in the past”; and (3) failed to
remove “sensitive and private residual corporate data” from computers that it
allegedly refurbished and re-sold to BAN. In addition, the report said that
ERA’s founder “threatened BAN volunteers photographing his property and later
sent people to confront and intimidate the volunteers with large dogs.” The press
release said that ERA was “in likely violation of the Basel Convention.”
ERA sued for defamation and false advertising, alleging that
(1) it has “no record of ever selling BAN any electronic devices and has no
record of receiving any GPS-tracked devices from BAN or anyone else”; (2) it
has “extensive policies and procedures to ensure [residual corporate data] is
not retained on items that are reused or result”; (3) it did not export any of
the shipping containers identified in BAN’s Report’ and (4) its founder “did
not threaten BAN volunteers photographing his property and did not send anyone
to ‘confront and intimidate the volunteers with large dogs.’ ”
On defamation, BAN challenged the sufficiency of the
pleadings.  “While it is not sufficient
to plead falsity in vague, conclusory terms,” it wasn’t always necessary to plead
“specific facts proving the falsity of the statements in dispute.” Here, it was
enough to allege the facts above, and that it “does not ship hazardous e-waste
material within or outside of Canada.”  [Question
about defamatory gist/sting, though: if ERA’s contracted facilities did the shipping,
does it matter that ERA didn’t technically do the shipping? Causing them to be
shipped—or even not ensuring that its partners didn’t ship them to China and Pakistan—would
seem to be enough to blame ERA for the behavior BAN criticizes.  The court noted BAN’s point that the
allegations “artfully avoid an actual denial” of the statements in the report
and press release, but still thought that the court shouldn’t determine falsity
at this stage as long as the complaint gave rise to a plausible inference of
falsity.]
Statements about whether the founder threatened or
intimidated BAN volunteers were factual enough to be falsifiable.  Even if the size of the dogs/perceived threat
were subjective matters, on the whole the statements implied an assertion of
objective fact.
However, statements about the “likely illegal[ity]” or legal
implications of ERA’s conduct under the Basel Convention were nonactionable
opinion made by laypersons in the context of an ongoing public debate, as well
as being based entirely upon “disclosed or assumed nondefamatory facts” (i.e.,
the data set forth in the Report) and ddin’t “impl[y] that there are undisclosed
facts on which the opinion is based.” “Arguments for actionability disappear
when the audience members know the facts underlying an assertion and can judge
the truthfulness of the allegedly defamatory statement themselves.”
Tortious interference claims also survived. ERA alleged that
a specific customer ended its relationship with ERA based upon BAN’s report and
press release.
Lanham Act claims, however, failed.  ERA alleged that BAN advertised commercial
services including (1) its e-Stewards certification program and (2) its EarthEye GPS tracking technology for companies in the e-waste industry,
giving BAN an economic interest in encouraging consumers to use e-Stewards
certified companies over those not so certified.
That didn’t make the report and press release into
commercial speech, under the Bolger
factors.  The report wasn’t a typical
ad.  There was no evidence that the
editorial content was a mere sham added to advertising. Instead, references to
e-Stewards and EarthEye were minimal—in approximately 13,000 words in the
Report, “e-Stewards” appeared five times and “EarthEye” appeared twice.  As for references to specific products or
services, the reference to e-Stewards was in connection to comparing other
recycling standards, e.g.: ERA does not “operate under any certified
environmental management systems such as ISO14001, nor do they possess
recycling or data security certifications (e.g., e-Stewards, R2, NAID) – that
are expected of responsible electronics recyclers.” The report did say that
e-Stewards is comparatively “stricter with respect to exports, occupational
safety and health, and downstream due diligence” and is “the only North
American standard that audits and rewards companies for upholding the Basel
Convention and the Ban Amendment.” But it also suggested that the apparently competing
R2 standard should be amended to do the same.  Likewise, it recommended some form of GPS
tracking to enforce the Basel Convention, but didn’t suggest that EarthEye was
the only solution.  “[T]he overall
impression left by these statements is not that readers should use any specific
product or service, but rather that the e-waste industry is rife with
violations of the Basel Convention, and e-Stewards and EarthEye are but one
means of encouraging compliance.” Finally, BAN did stand to benefit economically
from convincing corporations and governments to pay for its products and
services. But “economic motive in itself is insufficient to characterize a
publication as commercial…”
Just as a matter of common sense, this was not commercial speech.  The Lanham Act didn’t apply. Still, BAN wasn’t
entitled to attorneys’ fees.  The report’s
status was “somewhat of a close question, and ERA’s false advertising claim is
not groundless or unreasonable as a matter of law,” at least on the current
record.

from Blogger http://bit.ly/2VBrqxX

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