Court: District Court, D. Colorado; September 15, 2015; Federal District Court
The Court addresses the motions for summary judgment filed by Defendants Atlantic Building Systems, Inc. and Mr. Chumley, as well as various objections and responses related to these motions. General, a company selling prefabricated steel buildings, employed Chumley until his termination in July 2005. Following this, he founded Atlantic Building Systems, which competes with General. In June 2011, Chumley registered the domain generalsteelscam.com, which General claims hosted defamatory content about it. After General successfully obtained a ruling to reclaim this domain, Chumley created a new site, steelbuildingcomplaints.com, utilizing a technique called 'back-linking' to manipulate search engine rankings and direct negative attention towards General. He also allegedly engaged in deceptive practices, posing as a government investigator to solicit complaints against General. As a result of these actions, General brings six claims against the Defendants, including false advertising, violation of the Anti-Cybersquatting Consumer Protection Act, common-law libel, unjust enrichment, civil conspiracy, and misappropriation of trade secrets.
Armstrong filed an Answer asserting counterclaims against General and third-party claims against Jeffrey Knight, General’s principal. Armstrong alleges that General operates a network of misleading websites with false advertisements and representations, including claims that General manufactures steel buildings, was founded in 1928, and supplies steel to the U.S. military and auto industry. Armstrong contends that these misrepresentations appropriate the history and identity of General Steel Industries, Inc., misleading customers to prefer General over competitors.
Additionally, Armstrong claims that General's website contains false promotional information, such as nonexistent awards and misleading customer identifications. Armstrong asserts that General has misappropriated its trademarked logo by altering it in electronic brochures and using it in advertisements that redirect to General's site. Armstrong holds a copyright on the logo and claims General's use constitutes copyright infringement. Armstrong's two legal claims are for copyright infringement under 17 U.S.C. § 501 et seq. and false advertising under 15 U.S.C. § 1125(a)(1)(B) against General and Knight.
The Court will address both parties' motions for summary judgment on these claims. There is also an outstanding discovery dispute, where Armstrong filed objections to a Magistrate Judge's order denying its motions to compel responses to three interrogatories directed at General. These interrogatories seek information about General's employees from 2009 to 2013, details of customers who complained about General, and requests for information regarding misleading advertising, customer testimonials, and related communications.
General Steel declined to answer an interrogatory regarding its employees, citing relevance, and produced some customer complaint records while opposing additional production as irrelevant and overly burdensome. The third interrogatory was also contested as vague, overbroad, unduly burdensome, and compound. Armstrong filed a motion to compel responses, which was heard by the Magistrate Judge on July 30, 2014. The Magistrate denied motions related to Interrogatory 1 without argument, stating it was overbroad and not requiring plaintiffs to sift through irrelevant documents. Similarly, Interrogatories 2 and 10 were denied based on them being overbroad, irrelevant, and an attempt to gather competitor information unrelated to the case.
Armstrong's objections to the ruling were noted, with the court indicating that it would review the Magistrate's non-dispositive rulings for clear errors or misapplications of law under Fed. R. Civ. P. 72(a). The court found no such errors, agreeing that Armstrong's request for employee information was overly broad and constituted a fishing expedition. Armstrong's justification for seeking employee identities was deemed insufficient, as it was merely an exploratory request rather than targeted discovery. Interrogatory 10, while more pertinent to Armstrong's claims of false advertising, was limited to specific complaints about misrepresentations or fraud, which had already been partially addressed in previous discovery requests regarding price complaints.
The Court upheld the Magistrate Judge's decision to deny Armstrong's motion to compel information related to customer satisfaction claims made by General. Armstrong's request was based on General's marketing assertions of '100% customer satisfaction' and 'zero unresolved customer issues,' which the Court interpreted as indicating customer satisfaction with the products and services, rather than with the advertising itself. The Court reasoned that customer complaints relevant to General's claims would primarily relate to the quality of its products or services, not dissatisfaction with advertising. Given the low probative value of complaints about advertising and the significant burden on General to search over 2,000 paper files, the denial of the motion to compel was deemed appropriate.
Additionally, the Court agreed with the Magistrate Judge's conclusion that no response to Interrogatory 1 was necessary due to its compound nature and overbreadth, as it sought information on nearly 10,000 documents. The request was considered excessively broad, and while specific inquiries about certain articles might be valid, the request for authorship of thousands of similar documents was not. The Court affirmed the Magistrate Judge's discretion in denying the motion to compel, citing the overbroad and burdensome nature of the requests. Armstrong's objections were overruled, and the Magistrate Judge's decisions were affirmed. The excerpt also mentions the standard for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, emphasizing that judgment is appropriate only when no trial is necessary.
Summary adjudication is permissible when no genuine dispute exists regarding any material fact, allowing a party to secure judgment as a matter of law, as outlined in Fed. R. Civ. P. 56(a). The determination of material facts and necessary issues is governed by substantive law, which also establishes the elements required for a claim or defense, the applicable standard of proof, and the party responsible for proving it. A factual dispute is considered 'genuine' if evidence is sufficiently contradictory to potentially result in a favorable judgment for either party at trial. Courts must view all evidence favorably towards the non-moving party, prioritizing the right to a trial.
If the moving party bears the burden of proof, they must demonstrate every element of their claim with adequate evidence. To avoid summary judgment, the opposing party must present sufficient evidence to create a genuine factual dispute. A trial is mandated if such a dispute exists; conversely, if no genuine dispute is found, the court applies the law to the undisputed facts and issues judgment.
For instances where the moving party does not carry the burden at trial, they must highlight the lack of sufficient evidence from the nonmovant. If the nonmovant presents adequate evidence for a prima facie claim or defense, a trial is necessary; if they fail to do so, judgment favors the movant.
In General’s motion for summary judgment against Armstrong’s counterclaims, Armstrong claims false advertising under the Lanham Act, 15 U.S.C. 1125(a)(1)(B). The statute prohibits the use of false or misleading descriptions in commercial promotion. Armstrong alleges that General made numerous false claims, including misrepresenting itself as a manufacturer of steel buildings, falsely asserting its operational history and involvement in military supply, and disseminating misleading advertising materials and testimonials.
To establish a claim under the Lanham Act, Armstrong must demonstrate five elements: 1) General made materially false or misleading representations of fact; 2) these representations were in connection with commercial advertising; 3) they occurred in commerce; 4) they were likely to cause confusion regarding the characteristics of General's goods or services; and 5) the use of such representations caused injury to Armstrong.
It is undisputed that the allegedly false content, including blog posts and pay-per-click ads, was created by JEMSU, an independent contractor hired by General for search engine optimization (SEO) purposes, aimed at improving General’s visibility online. JEMSU produced numerous articles with false claims about General, including assertions about its manufacturing capabilities and history that do not pertain to General but to another entity. General contends it cannot be liable for these misrepresentations since JEMSU acted as an independent contractor without any control or direction from General.
The legal principle states that a master is generally liable for torts committed by a servant within the scope of their authority, but not for those committed outside that scope. The determination of whether JEMSU was an independent contractor or an agent of General involves examining factors such as the extent of control General exercised over JEMSU's work, the nature of the work performed, and whether it was done under General's direction. The right to control is the key factor in this analysis. The court finds that there is a genuine dispute of fact regarding whether JEMSU acted as an agent of General when publishing the false content.
General asserts that it did not control JEMSU's creation and publication of web content, except for instructing JEMSU not to label General as a 'manufacturer.' However, evidence indicates that General had the ability to direct JEMSU's activities and exercised this control. JEMSU’s principal, Troy Olson, confirmed that JEMSU could have implemented restrictions based on General’s requests and acknowledged that JEMSU currently submits content for General's approval before posting. Following counterclaims filed in October 2013, General directed JEMSU to remove specific content. Testimony from Travis McCain, a General official, supports the claim that General directed JEMSU to evaluate and revise content after discovering false statements about General manufacturing steel rims.
The relationship between General and JEMSU is likened to the example of a master and a cook from the Restatement, illustrating that while General did not manage JEMSU’s daily tasks, it maintained the authority to direct the overall work. There is a dispute regarding whether JEMSU acted as General’s agent or as an independent contractor when publishing false advertisements. General claimed it instructed JEMSU to produce truthful content and warned against referring to General as a manufacturer, while JEMSU's past co-founder stated that General had not set limitations on JEMSU’s content creation until the counterclaims were filed.
Mr. Olson testified that he did not recall being instructed by General Steel about any limitations on content creation, specifically regarding the claim of being a manufacturer of steel buildings, until October 2013. His testimony indicates that General Steel retained JEMSU for content creation and allowed them broad authority to post content without specific instructions or restrictions. This raises a genuine issue of fact regarding whether JEMSU's posting of potentially false information was within the scope of their delegated authority, implying that General Steel cannot claim a lack of agency for the content produced.
Regarding the false statements made by JEMSU, General Steel argues these do not constitute "false advertising" under the Lanham Act because they were not intended for human audiences but rather to influence search engine algorithms. The Lanham Act requires that representations must be commercial speech, made by a competitor, aimed at influencing consumers, and widely disseminated. The court finds General Steel's argument unconvincing, noting that the content was not irrelevant and was crafted to appear as legitimate promotional materials about General, thereby meeting the criteria for commercial advertising.
General Steel is praised for its durable products, with testimonials highlighting the longevity and quality of its grain silos, automotive steel, and ship hulls. Customers express satisfaction with their purchases, noting the aesthetic appeal of the rims and the confidence brought by the strength of the ship's hull. The text also discusses the growing use of General Steel's buildings for various purposes, including aircraft hangars at regional airports.
Additionally, the articles aim to create positive associations between General Steel and its quality offerings, suggesting they serve a promotional function potentially relevant under the Lanham Act. The challenge exists in determining whether this information reached the broader consumer base, as it was primarily intended for search engine algorithms, not human readers. General Steel argues that the content was not meant for public consumption, and while some internet traffic accessed the JEMSU pages, there is insufficient evidence about the nature or intent of these visitors. The reference to the case Sports Unlimited, Inc. v. Lankford Enterprises, Inc. emphasizes this legal context.
Plaintiff and defendant both offered gym floor sales and installation services. After the plaintiff installed a gym floor, the customer expressed dissatisfaction and contacted the defendant for clarification. Subsequently, the defendant compiled and distributed a document listing alleged complaints from the plaintiff's customers to the contractor and architect involved in the project. The customer ultimately terminated their contract with the plaintiff and engaged the defendant for a replacement floor, leading the plaintiff to sue the defendant for false advertising under the Lanham Act.
The trial court granted summary judgment to the defendant, ruling that the distribution of the document to two or possibly seven individuals did not constitute 'advertising or promotion in the industry' as required by the Act, especially given the plaintiff's potential bidding on approximately 150 jobs annually. The 10th Circuit upheld this decision, noting that while informal promotion could support a Lanham Act claim, the plaintiff must demonstrate a level of public dissemination. The court found that sharing the document with two individuals did not reach the relevant purchasing public and therefore did not meet the criteria for commercial advertising or promotion.
Furthermore, the court highlighted that actionable advertising must reach a significant number of actual or potential customers. The record lacked clarity on how many people encountered the document, with references to the audience being described as “incidental.” The nature of this incidental traffic was unclear, leaving it uncertain whether these visitors were genuinely interested in the plaintiff's or defendant's products. Armstrong's argument centered on the premise that a false advertising claim could be substantiated if an advertisement was proven "literally false," as opposed to merely implying falsehoods.
Plaintiffs are not required to demonstrate actual or potential deception from advertisements, as courts presume deception has occurred. However, the classification of web content as “advertising” hinges on whether it has reached a sufficiently large audience, a point emphasized in cases like Sports Unlimited. In this instance, Armstrong failed to provide evidence that JEMSU's posts reached enough customers to be considered advertising, leading to General being entitled to summary judgment on false advertising claims related to JEMSU’s blog posts.
Regarding pay-per-click advertisements, General hired JEMSU for search engine optimization and direct advertising, including purchasing pay-per-click ads that falsely claimed General as a "steel building manufacturer." General argues it cannot be held liable for these false advertisements since JEMSU created them without General's knowledge or approval. However, testimony from Mr. McCain indicates he reviewed and approved the content of these advertisements, contradicting General's defense. Consequently, a Lanham Act false advertising claim based on these ads may proceed.
Additionally, General's own website contains potentially false statements, including an unverified award claim, a declaration of no unresolved customer issues, and a claim of 100% customer satisfaction, all of which Armstrong contests.
Armstrong highlights that General has faced multiple complaints to the Better Business Bureau and has been sued approximately 20 times by customers. General argues that claims regarding customer satisfaction are either mere puffery or too vague to be considered false, asserting that without a commonly accepted definition of "customer satisfaction," the veracity of such statements cannot be determined. Puffery refers to exaggerated claims that no reasonable buyer would rely upon, as established in Hall v. Bed Bath and Beyond, Inc. General posits that the claim "Awarded Best in the Industry" is puffery, as consumers would require additional context regarding the awarding entity's credibility. However, Armstrong contends that claims like "zero unresolved customer issues" and "a history of 100% customer satisfaction" are specific and measurable, making them actionable. The court agrees that such statements can be assessed for truthfulness by verifying the existence of any dissatisfied customers or unresolved issues. General's argument that the terms can be interpreted in various ways to support their claims is rejected, as it undermines the ordinary meanings of these terms. The court concludes that a reasonable consumer would interpret "a history of 100% customer satisfaction" to imply that General strives for total customer satisfaction in all aspects of their products or services.
A consumer interpreting the phrase “zero unresolved customer issues” would reasonably conclude that any issues with General's performance were resolved satisfactorily. Evidence presented by Armstrong suggests this claim is false, as some customers had unresolved complaints, and others filed lawsuits against General. Consequently, the Court denies General’s motion for summary judgment regarding the false advertising claim.
Regarding damages, General contends that Armstrong cannot prove specific customers were influenced by General's false advertising in their purchasing decisions. Under the Lanham Act, a plaintiff must demonstrate that false advertising led consumers to avoid purchasing from them. Armstrong concedes it cannot show actual damages linked to General’s false advertising and instead seeks to invoke a presumption of injury, which may arise if the defendant intentionally deceived the public. However, such presumption typically applies only when there is direct comparison of products between competitors. Armstrong argues for a broader application in the 10th Circuit, citing Hutchinson v. Pfeil, where it was stated that the presumption applies when injury likely results from the defendant's statements, particularly in cases of explicit product comparison. However, Hutchinson also noted that the plaintiff lacked standing as there was no direct competition. Thus, the presumption of injury is inapplicable here. Additionally, the 10th Circuit's references to other cases reinforce that the presumption is limited to situations involving comparative advertising, with a more flexible approach to showing injury in the Lanham Act claims, allowing for a less rigid demonstration of direct competition or loss of sales.
The excerpt outlines the legal standards regarding injury and causation in Lanham Act claims, emphasizing that plaintiffs must demonstrate, rather than presume, injury and causation. The required proof can vary based on specific case circumstances, with a more substantial showing needed when the plaintiff's products are not in direct competition with the defendant's. For direct competitors, while a presumption of injury may exist, the plaintiff must still present some evidence of causation and injury, rather than relying solely on competition status. The excerpt cites cases like Coca-Cola Co. v. Tropicana Products Inc. and Merck Eprova AG v. Gnosis S.p.A. to illustrate that market studies can serve as evidence linking advertising to potential lost sales. The court rejects the argument that competitors can obtain damages based solely on injury presumptions, highlighting that without proof of actual harm, multiple competitors could unjustly benefit from a false advertising claim without evidence of specific injury. Consequently, summary judgment is granted in favor of General against Armstrong’s Lanham Act counterclaim for false advertising, as Armstrong failed to provide non-speculative proof of harm. Additionally, Armstrong's copyright infringement claim is described as narrower, focusing on its logo, which features a shield with the words "ARMSTRONG STEEL" and a yellow-to-orange gradient background.
General is accused of copyright infringement in two key ways. Firstly, General's website features a link to an "e-brochure" that includes provocative text questioning the reliability of competitors and displaying an image with the phrase "FRAUDULENT STEEL." Secondly, there's at least one instance of a JEMSU-created blog advertising "Buy an Armstrong Steel Building," which includes Armstrong's shield logo and directs readers to General’s website instead of Armstrong’s. Armstrong claims this use of its logo constitutes copyright infringement under 17 U.S.C. § 501 et seq.
General counters by asserting that Armstrong does not own the copyright to the logo, citing the creation of the logo by The Unleaded Group in 2007. While both parties understood that Armstrong would own the copyright, they did not document this agreement. General argues that copyright ownership should reside with The Unleaded Group, the logo's creator. However, it is acknowledged that Armstrong and The Unleaded Group intended for the rights to be assigned to Armstrong upon completion of the work, and Armstrong paid for the logo as agreed. Although the assignment was not formally documented until recently, the Copyright Act does not mandate that such transfers be in writing, as per 17 U.S.C. § 204(a), which allows for the transfer of copyright ownership without written form.
An instrument of conveyance or a written note signed by the rights owner is typically required for validity of copyright transfers. However, effective oral assignments of copyrights can occur if subsequently ratified in writing. In Barefoot Architect, Inc. v. Bunge, the court affirmed that a written confirmation executed years later validated an earlier oral assignment. Armstrong and The Unleaded Group executed a Copyright Assignment Agreement on February 26, 2015, which confirmed an earlier 2007 oral assignment of rights in a logo, satisfying legal requirements.
General disputes Armstrong's ownership, claiming the logo was a "work for hire" according to its Certificate of Registration. However, errors in registration do not invalidate rights unless there is intent to defraud, which General did not demonstrate. Thus, the court supports Armstrong's ownership of the copyright.
General also contends that its use of the "FRAUDULENT STEEL" logo falls under the "fair use" doctrine for purposes of comment and criticism, as outlined in 17 U.S.C. § 107. Four factors are considered to evaluate fair use: the purpose of the use, the nature of the copyrighted work, the amount used, and the effect on market value. The court determined that General's use was not fair use, as it closely replicated Armstrong's logo for commercial advantage rather than for critique. Finally, General argued that an advertisement using Armstrong's logo but linking to General's website was beyond its control, but this claim was not substantiated.
The Court denies General's motion for summary judgment concerning copyright counterclaims, rejecting General's argument that it cannot be held liable for tortious acts by JEMSU. Armstrong, in turn, seeks summary judgment against all claims General has made against it, specifically addressing General's Lanham Act false advertising claim linked to the website www.steelbuildingcomplaints.com. General alleges that the site, which criticizes its products and practices, misrepresents itself as consumer-generated when it is primarily created by Armstrong. Specific false claims include: the assertion that the site features actual customer statements, misrepresentation of resolved complaints as current, accusations of General ignoring court orders, mentions of ongoing investigations and lawsuits, and allegations of conspiracy with arbitrators. Additionally, General claims Armstrong sends misleading letters under the name “Consumer Advocacy Alliance” and that Armstrong's sales employees impersonate government officials during calls to General’s customers. Armstrong counters that none of the website's content is false. The Court notes that evidence exists suggesting Mr. Chumley is a significant contributor to the website, which could lead a reasonable factfinder to infer the misrepresentation of the site's origin. General's arguments regarding other allegations are less coherent, relying on an affidavit discussing a different website not pertinent to this case.
Mr. Knight's affidavit regarding statements on steelbuildingcomplaints.com primarily quotes the website and claims the material is "false and outrageous," without providing specific reasons or evidence for these assertions. For instance, Knight disputes claims about General Steel employees expressing frustration with lies and the existence of numerous lawsuits against General Steel, but he lacks the personal knowledge required to categorically deem these statements false. The court notes that both parties have failed to clearly identify which specific statements are allegedly false or the nature of the false representations related to General’s false advertising claim. Nonetheless, there is sufficient evidence suggesting that some statements may be false, allowing the case to proceed to trial.
The court mandates that in the Proposed Pretrial Order, both parties must precisely identify each allegedly false statement they intend to rely upon, along with the evidence supporting their claims. The court will not permit any statement not included in the Pretrial Order to be argued at trial.
Armstrong contends that even if the website's content, which it describes as a "gripe site," is factually incorrect, it should not be liable for false advertising because the content is non-commercial speech. However, the court finds that Armstrong's role as a direct competitor to General Steel, alongside its clear commercial interest in diverting customers, subjects it to liability for false advertising due to misrepresentations on the website. The case is compared to a precedent where a competitor's false claims were deemed advertising due to their commercial intent, reinforcing that Armstrong’s actions can be subject to liability under false advertising laws.
Gamble filed a lawsuit against Haugen for false advertising under the Lanham Act. Haugen contended that the message did not qualify as commercial speech; however, the 10th Circuit ruled otherwise, highlighting that the economic intent behind the message, its targeting of a specific competing brand, and its implicit encouragement of a boycott indicated its commercial nature. The court found that the website in question aimed at consumers of General and sought to dissuade them from choosing General while subtly promoting a different seller, thus meeting the definition of commercial advertising under the Lanham Act.
Armstrong claimed that General could not prove that the website's false representations actually deceived customers or were likely to do so. The court, however, determined that the website's content, presented as customer complaints but actually posted by a competitor, could likely mislead customers. The complaints characterized General's services as a “scam,” potentially driving customers away based on these falsehoods. The court noted that the misleading nature of the representations was directly relevant to consumer purchasing decisions, countering Armstrong's argument.
Additionally, Armstrong argued that General's claim was barred by res judicata due to a prior case where General sued Armstrong for false advertising related to online keyword use and misrepresentations about its business. Although the previous lawsuit did not directly address the specific websites in question, evidence was presented regarding generalsteelscam.com, and the judge had made findings related to that site during the trial.
Mr. Chumley denied operating the website in question but acknowledged submitting substantial content to it. Evidence presented at trial did not prove that the site's content was false. However, it indicated that Chumley was intent on damaging General Steel's reputation by authoring articles under false names associated with General's officers. The legal principle of res judicata was examined, which prevents litigation of issues already decided or that could have been decided in prior actions. The court found that the claims related to false advertising on steelbuildingcomplaints.com were not part of the same transaction as those previously adjudicated before Judge Brimmer, which dealt with misrepresentations on Armstrong's own website. The steelbuildingcomplaints.com site emerged only months before the trial and did not exist prior to the deadline for amending claims in that suit. Although General presented evidence of generalsteelscam.com during the trial, it was not essential to their claims but rather to illustrate Chumley's intent to harm. Consequently, the court ruled that General's current false advertising claim was not barred by res judicata and denied Armstrong's motion for summary judgment on that claim.
Under the Anti-cybersquatting Consumer Protection Act, General must prove that generalsteelscam.com is confusingly similar to its trademark, that Armstrong used the domain, and that he did so with bad faith intent to profit. Armstrong contended that General could not demonstrate his use of the domain or its similarity to General's mark. The court dismissed the argument regarding usage, asserting there was adequate evidence to conclude that Mr. Chumley was the beneficial owner of the domain, despite it being registered to PRQ and Mr. Swartholm.
Generalsteelscam.com is not deemed “confusingly similar” to the GENERAL STEEL mark based on established court precedents, which typically find that domain names with disparaging suffixes do not meet this standard. Although the World Intellectual Property Organization (WIPO) ruled in favor of General in 2012 regarding the domain, U.S. courts do not defer to WIPO findings, viewing them as lacking rigorous legal standards. Consequently, the court grants Armstrong summary judgment on General’s Anti-cybersquatting Act claim.
Regarding the libel claim, Armstrong's request for summary judgment is denied as the court has rejected its arguments about the absence of false statements and the applicability of the Communications Decency Act’s safe harbor. On unjust enrichment, Armstrong's argument is overly vague and fails to meet the burden of providing specific evidence, leading the court to disregard it. Lastly, for the civil conspiracy claim, Armstrong's brief assertion that no evidence of a conspiratorial agreement exists is insufficient, as is General's claim about Mr. Swartholm being a “notorious computer pirate,” failing to show a meeting of the minds necessary for conspiracy.
Mr. Swartholm's liability for civil conspiracy is negated as General failed to demonstrate that he knew or should have known the contents of steelbuildingcomplaints.com were false and defamatory at the time he agreed to host it. Consequently, Armstrong is granted summary judgment on the civil conspiracy claim. Regarding the misappropriation of trade secrets, General alleges that Mr. Chumley accessed a supplier's computers to obtain General's customer database, potentially aided by former employee Lisa Chavez. However, General's only support consists of speculative testimony, lacking direct evidence such as possession of the database or confirmed assistance from Chavez. Thus, Armstrong is also entitled to summary judgment on this claim. Armstrong's motion for summary judgment is granted for the claims of Anti-cybersquatting Act, civil conspiracy, and misappropriation of trade secrets, while denied for false advertising, libel, and unjust enrichment claims. Additionally, Armstrong's motion to restrict access to Exhibits 29 through 33 is unopposed. The Supreme Court acknowledges a common law right to access judicial records, which fosters public respect for the legal system. However, documents may be sealed if the interests favoring nondisclosure outweigh public access. D.C. Colo. L. Civ. R. 7.2(B) requires specific showings for restricting access, including that the protective interest outweighs public access and that serious injury would result without restriction.
Restricted access to five exhibits is sought by General, necessitating an explanation as to why alternatives like redaction or summarization are inadequate. Local Rule 7.2(B)(2) stipulates that mere stipulations or protective orders do not justify restricted access. The exhibits include: Exhibit 29, a partially redacted contract with JEMSU for SEO services; Exhibit 30, a 13-page excerpt from Mr. McCain’s deposition; Exhibit 31, a one-page excerpt from Mr. Knight’s deposition; Exhibit 32, a letter from Mr. McCain to Mr. Olson regarding JEMSU’s website materials; and Exhibit 33, another excerpt from Mr. McCain’s deposition.
General claims restricted access is justified for the deposition excerpts due to their previous designation as "Attorney’s Eyes Only" or "Confidential." However, the court emphasizes that such designations alone do not suffice for restricted access. General fails to specify sensitive portions of the depositions, potential harm from public disclosure, or why alternatives like redaction are insufficient. The court independently reviews the excerpts and finds no justification for restricted access, denying General’s motion for these exhibits.
Regarding the JEMSU contract and the letter, General argues restricted access is necessary to prevent Armstrong from learning about its advertising strategies, despite having ceased operations with JEMSU. General fears potential misuse of the information by Armstrong but does not elaborate on this concern. The court finds that the contract does not disclose any significant confidential information, as it mainly outlines standard SEO services without revealing proprietary strategies or sensitive details. Similarly, the letter’s contents are recapped in the court’s order, and public disclosure does not appear harmful to General.
The Court emphasizes the public's strong interest in access to judicial records, denying a motion to restrict access and ordering the public filing of certain documents. Armstrong's objections to prior rulings have been overruled, and the Court affirms the Magistrate Judge’s July 30, 2014, Minute Order that partially denied Armstrong’s motions to compel. The General's motions for summary judgment and Armstrong's motion for summary judgment are granted in part and denied in part. The motion to restrict access is denied, and restrictions on specific docket entries are lifted. The case is now set for trial preparation, with parties required to draft a Proposed Pretrial Order and schedule a Pretrial Conference within 14 days.
Armstrong contends that the Magistrate Judge’s ruling lacked sufficient rationale, warranting de novo review; however, the Court finds this unpersuasive and concludes that it would reach the same outcome even under de novo review. Armstrong also claims it provided a list of its employees in response to a request from General, arguing for reciprocal disclosure. The Court dismisses this argument as meritless. The Court clarifies that General's motion does not include seeking summary judgment on third-party claims against Mr. Knight.
Several of Armstrong's contentions are summarily disposed of, particularly regarding customer testimonials and directory listings. The Court finds Armstrong's references to customer testimonials insufficiently specific and thus will not consider them further. As for the directory listings, the Court determines that they do not falsely represent General as a manufacturer but merely indicate that General offers prefab steel buildings from leading manufacturers. The Court also distinguishes between vague recollections and affirmative statements regarding events in question, emphasizing the importance of clarity in testimonial assertions.
Mr. Olson’s statements are interpreted by the Court as reflecting a particular viewpoint, akin to a metaphor about overextending oneself, illustrated by an article titled “Hand in the Cookie Jar.” This article recounts the history of General Steel, founded in 1928 after acquiring Commonwealth Steel Company, detailing its expansion during World War II and subsequent struggles in the 1970s due to overreach. The Court notes the article's publication context on a family-oriented website, which adds a layer of irony.
General Steel argues that if a dissatisfied customer sues, the suit's outcome serves as a “resolution” of their complaint; an unfavorable ruling indicates the complaint was unfounded, while a favorable ruling and damages paid resolve the matter. The Court finds that the phrase “zero unresolved customer issues” suggests a different meaning than simply paying damages. Additionally, it raises the possibility that a lower burden of proof for causation could apply in cases seeking only injunctive relief, referencing legal precedent.
The Court is uncertain if Armstrong would pursue its false advertising counterclaim against General if the sole remedy available were an injunction against misleading claims in advertisements and on its website. Armstrong is ordered to notify the Court within 14 days if it intends to continue with the false advertising counterclaim for injunctive relief or if it is withdrawing that request.
The Ninth Circuit holds a minority view that a written agreement must be executed contemporaneously with the oral agreement, as seen in Konigsberg, Intl. v. Rice. However, this position is not universally adopted within the circuit, as indicated in Magnuson v. Video Yesteryear, where a 14-year delay between the oral and written assignment was deemed sufficient. General's false advertising claim is specifically tied to Armstrong's steelbuildingcomplaints.com website, with no assertion of false advertising based on the earlier generalsteelscam.com website; references to the latter serve only for historical context. The Court's analysis of General’s Amended Complaint reveals that allegations of false advertising focus solely on the steelbuildingcomplaints.com website, with no mention of the generalsteelscam.com site.
The Court criticizes both parties for unhelpful presentations of facts and arguments. Armstrong's claims of false representations stem directly from General’s Complaint without clarification through discovery. Armstrong's assertion that the website contains materially false information lacks specificity, as does its claim regarding the portrayal of old complaints. General's responses do not clarify or specify the representations relied upon, often merely referencing affidavits that do not address the allegations directly.
The Court concludes that Armstrong cannot claim the safe harbor protections of the Communications Decency Act, as the applicability depends on whether Armstrong published content on the website. A genuine dispute exists regarding whether Mr. Chumley posted content, preventing summary judgment for Armstrong on this defense. The Court does not determine if prior proceedings could invoke collateral estoppel but rejects Armstrong's argument for res judicata based on previous rulings.
