United States District Court, D. Rhode Island
RAINSOFT, a division of Aquion, Inc., a Delaware corporation, Plaintiff,
v.
BRIAN MACFARLAND, d/b/a “Lazy Man & Money, ” Defendant.
OPINION AND ORDER
WILLIAM E. SMITH, CHIEF JUDGE.
Brian
MacFarland is the author of a series of blog posts
criticizing the water-treatment company RainSoft. RainSoft
has sued over these posts, alleging defamation and violation
of the Lanham Act. MacFarland argues his posts are shielded
by the First Amendment, and indeed successfully executes a
“rolled-up plea”: when not protected opinion,
they are substantially true. See Black's Law
Dictionary 1270 (9th ed. 2009).
I.
Background
MacFarland
runs the website lazymanandmoney.com, where he blogs about
companies who provide consumer products and services, with an
eye toward saving his readers money. (See Def.'s
Statement of Undisputed Facts (“DSUF”)
¶¶ 1-3, ECF No. 88.) MacFarland set his sights on
RainSoft starting in summer 2013, after he and his wife sat
through an in-home demonstration of RainSoft's
water-treatment products. (Id. ¶¶ 9, 19,
24.) The demonstration was conducted by Gus Oster.
(Id. ¶¶ 24-25.) Employed by Basement
Technologies, a local RainSoft-products dealer, Oster pitched
the MacFarlands according to a script written by RainSoft.
(Id. ¶¶ 24-27.) The script repeatedly
touted RainSoft as a maker of premier water-treatment
products, without mention of Basement Technologies, a
priority that tracked the companies' business plan.
(See, e.g., id. ¶ 27; DSUF Ex. G at
25-27, ECF No. 88-7.)
Their
arrangement was, broadly, to make sales by foregrounding
RainSoft's brand name and reputation. (See DSUF
Ex. U at 2-7, ECF No. 88-21.) The preface to the
companies' dealership agreement stated, “[I]t is
expected that [Basement Technologies] will protect and
embrace the RainSoft®-brand as we all make a living based
on its reputation in the marketplace.” (Id. at
2.) RainSoft trusted Basement Technologies to
“[p]romot[e] the RainSoft®-brand in every customer
facing opportunity, ” so that eventually “every
person in the world [would] recognize the RainSoft®
trademark.” (Id. at 2; DSUF Ex. V at 26, ECF
No. 88-22.) RainSoft and Basement Technologies also agreed
that “all consumers who purchase RainSoft®-brand
products . . . from [Basement Technologies] shall be
considered the shared customers of AQUION,
INC[.][1] and [Basement Technologies] . . . and that
neither . . . has . . . any . . . superior right, interest[,
] or ownership in, or control of, such customers . . .
.” (DSUF Ex. U at 6.)
The
agreement went on to stipulate that Basement Technologies
could not “sell, service, rent, promote, lease[, ] or
install products” other than RainSoft's without
RainSoft's permission, (id.), which was never
granted, (Pl.'s Statement of Disputed Facts
(“PSDF”) ¶ 143, ECF No. 109.) It also
defined “[t]he proper way for a[] [dealership] employee
to greet customers when answering the phone”:
“Hello, ABC Water Company, your local RainSoft
Dealer.” (DSUF Ex. V at 24 (emphasis omitted).)
Ultimately, the “spirit of this agreement” was
for Basement Technologies to operate under RainSoft's
aegis, and as closely as possible without merging into a
single entity. (DSUF Ex. U at 2.) In other words, as the
agreement's preface provided, addressing Basement
Technologies, “You are becoming part of an organization
that expects and counts on your participation and support . .
. .” (Id.)
Though
MacFarland was not privy to the companies' agreement, his
first RainSoft post, regarding the in-home presentation,
showed that Oster had accurately conveyed its essence. Titled
“Is Home Depot's Water Test from RainSoft a
Scam?” the post mixed narration - “The salesman
was super nice, and very friendly with our dog.” - and
critique of Oster's presentation. (Pl.'s Statement of
Undisputed Facts (“PSUF”) Ex. A at 2-5, ECF No.
106-1.) The latter consisted of calling the in-home
presentation a “magic show” and accusing RainSoft
of making “false promises, ” using
“high-pressure sales tactics, ” and other
“slightly deceptive practices.” (Id.)
MacFarland referred by “magic show” to various
acts Oster performed ostensibly showing RainSoft's
products purifying the tap water in MacFarland's home.
(Id. at 2-3.) MacFarland wondered if Oster had
something up his sleeve: “I love to think about how, if
I wanted to be devious, I could pull it off. For example, the
bottles he brought with him that were labeled for our water
could have been laced with contaminants. I'm not saying
they were, but it's possible.” (Id.)
“As you can tell, ” MacFarland wrote,
“I'm a skeptical person by nature.”
(Id. at 2.)
The
“false promises” MacFarland attributed to Oster
included that RainSoft's filtration system would save him
$20, 000 in appliance-replacement costs over 20 years - this
MacFarland “highly doubt[ed], exclaiming, “Wholy
[sic] statistics gone wrong, Batman.” (Id. at
3.) MacFarland took Oster to task too for what he considered
“high-pressure sales tactics, ” such as offering
five years of free soap if MacFarland purchased a RainSoft
system on the spot. (Id. at 4.) Because it did not
include the cost of labor, MacFarland also found
RainSoft's lifetime warranty deceptive: “[i]f I
have a lifetime warranty and it costs me $80 a month for
repeated maintenance, ” he reasoned, “what is the
warranty actually giving me?” (Id.)
In this
first post, MacFarland concluded not that RainSoft was a
scam, but that its products were not worth their price:
“I don't want to say that the RainSoft EC4 product
doesn't work. . . . From what I'm reading though, the
quality is closer to mid-level, but it is really high-priced
. . . .” (Id. at 5.) He ended the post by
asking his readers if they had “ever installed a water
purification system? . . . Was it RainSoft?”
(Id.) Despite his skepticism, however, MacFarland
and his wife - who MacFarland “recognized . . . was
impressed by the product” - gave Oster a $100 check to
keep the free-soap option open.[2] (Id.)
Published
eight days later, MacFarland's second RainSoft post -
“RainSoft Scam? (Part 2)” - updated readers on
his “ongoing efforts to get healthy water in [his]
home.” (PSUF Ex. B at 1, ECF No. 106-2.) MacFarland
relayed a conversation he had had with a “RainSoft
representative” in which MacFarland haggled $1, 000 off
the price Oster quoted him. (Id.) He also told of a
trip he made to Lowes where a “representative in
plumbing was shocked” that Home Depot - who had
introduced MacFarland to RainSoft's products - would
“only connect [MacFarland] to this shady RainSoft
company, ” rather than show him “a range of
filtration systems from various manufacturers.”
(Id.) MacFarland again mentioned Oster's
“magic tricks” and “bad logic, ”
before answering the titular question - “RainSoft
Scam?” - by saying he was “leaning towards yes,
but you are free to make your own decisions.”
(Id. at 3.)
MacFarland
was less equivocal in his next post, “Yep. RainSoft
Scammed Me Out of $100.” (PSUF Ex. C at 2-3, ECF No.
106-3.) There MacFarland reported that Oster cashed the $100
check that had held open the free-soap option, contrary to
MacFarland's expectations of their agreement, which was
that MacFarland would be able to cancel the check any time.
(Id.) MacFarland warned his readership that
“if you suspect a company to be a scammer, don't
even give them an inch, they'll take a mile.”
(Id. at 3.) He later added an update to the top of
this post, reporting that “RainSoft's parent
company, Aquion, saw this and . . . sent me a $100 check to
make it right.” (Id. at 2.)
The
fourth of MacFarland's posts panning RainSoft was
published over a year later, on December 9, 2014. (PSUF
¶ 148, ECF No. 110; PSUF Ex. D at 1, ECF No. 106-4.)
“How to Get Clean, Purified Water (at [t]he Best
Price)” recounted a spat MacFarland had, in the
comments section of one of his other RainSoft posts, with
someone he suspected was, though who denied being, a RainSoft
dealer; MacFarland discounted the commenter's glowing
RainSoft review because of this supposed bias, accusing the
supposed dealer of engaging in a “comment scam.”
(Id. at 2, 4.) The post also rehearsed
MacFarland's previous complaints about RainSoft and added
another about the vagueness of RainSoft's guarantee that
if a customer finds a better-performing product, the customer
keeps the RainSoft system gratis. (Id. at 2-4
(“There's no real fine print[, ] . . . and the
terms are ambiguous . . . .”).) MacFarland then
summoned “a little common sense” to piece
together a “formidable water purification system”
- hyperlinking to other companies' products -
“[t]hat's less than 1/6th the cost of what RainSoft
was going to charge.” (Id. at 4-5.)
“I'm not a water purification expert, ”
MacFarland wrote, “but I know basic problem solving,
scientific process, and consumer scams . . . .”
(Id. at 5.)
Readers
were able to comment on each of MacFarland's four
RainSoft posts. (See, e.g., id. at 8-19.)
And MacFarland commented back, dozens of times, usually to
agree with those who agreed with him. (See, e.g.,
PSUF Ex. O at 33, ECF No. 106-15 (“Thanks[, ] Josh.
Your story is exactly the point I've been trying to
make.”).) Or to trade barbs with those who did not.
(See, e.g., id. at 2, 7, 34 (“Clearly
paying $5, 000 or $10, 000 for soft water is going to lead to
soap savings that will help you retire 20 years
early.”; “Doug, [w]ith all due respect, I believe
your intentions were slimy.”; “No I hadn't
heard of ‘Kratt foods.' If you are going to be
sarcastic about it, at least get the spelling right.”).
MacFarland also reiterated in the comments his position that
“RainSoft salesmen” were “selling
fear” via “scammy sales tactics” and
“magic shows.” (Id. at 2, 9, 20.)
After
RainSoft initiated this lawsuit in April 2015, MacFarland
posted “What is a Scam Anyway?” in which he
explained that when he uses the word ‘scam' he does
not necessarily mean to connote illegal activity, but
instead, more colloquially, a “confidence trick.”
(PSUF Ex. F at 2-4, ECF No. 106-6.) He argued this
interpretation was consistent with the “conversational
tone” he uses on his site, “a reflection of what
[he]'d say to a friend, a colleague, or anyone else if
they asked [him] about [his] opinion on something.”
(Id. at 2.) MacFarland's reluctance to make
legal claims stems, he said, from the fact that he does not
“possess a 100% understanding of all laws.”
(Id. at 3.) “I don't even think judges
know ALL laws, ” he ventured.[3] (Id.)
MacFarland's
etymological foray was not happenstance, it turned out.
Discovery turned up the fact that MacFarland penned
“What is a Scam Anyway?” to “cover [his]
ass.” (PSUF Ex. R at 29, ECF No. 110-2.) That is, to
circumvent precedent, as MacFarland saw it, in Illinois -
where this case was originally brought - that treated the
word ‘scam' as “libel per
se.”[4] (Id.) Discovery also made
manifest that MacFarland knew by the end of August 2013 -
after he had written the first three RainSoft posts, but
before publishing “Yep. RainSoft Scammed Me Out of
$100.” - that Basement Technologies and RainSoft were
distinct entities, and that Oster worked for the former.
(PSUF Ex. P at 15, ECF No. 110-1 (“Q. [Y]ou
underst[ood] based on this [August 29, 2013, ] email that
RainSoft's dealers are independently owned, right? A. . .
. yes.”).)
And, in
fact, when viewed in the light most favorable to RainSoft,
the evidence shows MacFarland understood this to be true from
the very beginning: the aforementioned $100 option check was
made out to Basement Technologies - though its memo section
read, “deposit-rainsoft” - (DSUF Ex. H at 2, ECF
No. 88-8), and MacFarland had written in an April 29, 2015,
email that “[t]he reason why I didn't mention the
local dealer [is] it gives away the fact that I'm in
Rhode Island and I try to hide that a bit due to the MLM
stuff.”[5] (PSUF Ex. R at 9.) He continued, “I
try to write for a national audience and from what I've
read online my experience [with in-home demonstrations of
RainSoft products] happens across the country.”
(Id.) MacFarland admitted that RainSoft had “a
...