BERYL A. HOWELL, Chief Judge.
The plaintiffs, a home improvement company and its sole owner, and a contractor and client of the company, initiated this suit alleging that the company's business profiles and associated ratings and reviews were unlawfully removed from the websites of two of the four defendants. See Defs. ANGI Homeservices, Inc. and Angie's List, Inc's Mot. to Dismiss Pls.' Compl. ("Corporate Defs.' Mot."), ECF No. 13; Def. Vogel's Mots. to Dismiss ("Vogel's Mots."), ECF Nos. 14, 15, 16;
Briefly reviewed below are the parties, factual allegations and claims asserted in this lawsuit, as well as relevant procedural background.
Plaintiff Precision Contracting Solutions, LP ("PCS") is a home improvement contractor currently licensed in the District of Columbia ("the District"). See Notice of Removal, Ex. 1, Compl. ¶ 1, ECF No. 1-1. PCS's sole proprietor is plaintiff Derrick Sieber, id. ¶ 2, and plaintiff Stephen Sieber is "a design consultant to PCS, with no ownership interest or administrative control over PCS," id. ¶ 3. The fourth plaintiff, Carolyn Torsell, is a District homeowner who hired PCS to perform "construction services on her home." Id. ¶ 60.
Defendants HomeAdvisor and Angie's List are web-based services that match consumers with service providers like PCS. See id. ¶¶ 5-6; see also www.homeadvisor.com; www.angieslist.com.
PCS allegedly "had an ongoing business relationship" with HomeAdvisor. Id. ¶ 14. Between 2013 and 2019, PCS "paid Home Advisor over $300,000 for leads, many of which led to consumer contracts for PCS with District consumers." Id. ¶ 15. Before entering this business relationship and "post[ing] a profile of [PCS] services, personnel, videos and photos of recent projects... on the Home Advisor website," id. ¶ 16, PCS "agree[d] to terms and conditions specified by Home Advisor," id. ¶ 17. These terms and conditions authorized HomeAdvisor to "remove or modify Content [on the HomeAdvisor website] for any reason." Id. ¶ 31 (quoting HomeAdvisor Service Provider Terms and Conditions, https://pro.homeadvisor.com/terms/terms-conditions/).
"Angie's List on its own initiative, created a PCS profile on its website and published ... `A' ratings and reviews from dozens of District consumers about PCS." Id. ¶ 44. This profile, the complaint alleges, "created a fundamental source of leads, business development and [a] reputation barometer for PCS during the period 2013 thr[ough] 2019." Id. ¶ 47; see also id. ¶ 45 (stating that the profile "created a highly visible reputation barometer for PCS."). Service providers are "permitted to use" Angie's List only "subject to the terms and conditions contained" in Angie's List's Service Provider's User Agreement.
On July 31, 2019, the District's Office of the Attorney General ("OAG") filed suit against PCS and Derrick and Stephen Sieber for ongoing violations of the District's Consumer Protection Procedures Act, D.C. Code § 23-3901, et seq., and the District's Construction Code, D.C. Code § 6-1401, et seq. See Complaint, District of Columbia v. Precision Contracting Solutions, L.P., et al., No. 2019 CA 005047 B (D.C. Super. Ct. filed July 31, 2019).
• "Defendants contracted with a consumer to remodel a basement. Defendants informed the consumer that no underpinning was required for the project as Defendants had a novel method to structurally reinforce the basement. Defendants continued the basement renovation without underpinning until water began seeping into the consumer's basement. When the consumer contacted [the District's Department of Consumer and Regulatory Affairs ("DCRA")], DCRA's inspection resulted in the issuance of a stop work order. The inspection revealed that Defendants had improperly cut the footers of the property around the perimeter of the basement and had attempted to use concrete on the walls to hide the infiltration of water. To remediate this dangerous condition, the basement had to be completely dug out, fully underpinned and re-poured, at significant cost to the consumer." Id. ¶ 10.
• "Defendants also enter into contracts with consumers with language indicating that the price will not exceed a certain amount. After consumers make payments to Defendants as required by the contract, Defendants refuse to finish the promised scope of work and demand additional sums to be paid or threaten to abandon the project altogether. In 2017, PCS entered into a contract with a homeowner for a full renovation of their property. Two years later, and after the full sums requested by PCS had been paid, the consumer was left with an unfinished property and PCS continued to demand sums far in excess of the initial contract to complete the project." Id. ¶ 17.
• "Defendants also mislead consumers regarding the identity and training of Defendant S. Sieber. Defendant S. Sieber's legal name is Stephen Charles Sieber, Derrick Sieber's father. He is introduced to consumers as `Stevie Marco,' PCS's designer, even though Defendant S. Sieber is not a licensed interior designer in the District. Defendant S. Sieber ... is able to negotiate the terms of agreements between PCS and customers, even though he is not licensed by DCRA as a home improvement specialist, in violation of D.C. Code §§ 47-2851.02; 47-2844; and 16 DCMR §§ 800-899." Id. ¶ 20 (internal citation omitted).
Shortly after the District filed its suit, "[o]n August 6, 2019, Home Advisor and Angie's List ... removed the PCS profile from their websites along with 54 ... consumer ratings and reviews of PCS that had been posted by District consumers." Compl. ¶ 49. The next day, Derrick Sieber "sent an e-mail[] to" HomeAdvisor asking "why the PCS profile and ratings and reviews about PCS had been removed," id. ¶ 56, and stating that "if such content were not reinstated, PCS and others would file a lawsuit, seek injunctive relief and damages resulting from various causes of action," id. ¶ 57.
Later in August, plaintiff Carolyn Torsell, a District homeowner, "sought to post a rating and review about her experiences with PCS," id. ¶ 61, but when she went to HomeAdvisor's and Angie's List's "websites to post her very positive rating and review of PCS, she could not do so because she found no profile or other information about PCS on those websites," id. ¶ 62.
Plaintiffs filed suit in the District's Superior Court in September 2019, and HomeAdvisor and Angie's List removed the case to federal court. See Notice of Removal at 2, ECF No. 1.
The defendants filed motions to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6).
To survive a motion to dismiss under Rule 12(b)(6), the "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Wood v. Moss, 572 U.S. 744, 757-58, 134 S.Ct. 2056, 188 L.Ed.2d 1039 (2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). A facially plausible claim pleads facts that are not "`merely consistent with' a defendant's liability," Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)), but that "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged," id.; see also Rudder v. Williams, 666 F.3d 790, 794 (D.C. Cir. 2012). Put differently, to survive a 12(b)(6) motion, a complaint must contain facts that "nudge[]" plaintiffs' claims "across the line from conceivable to plausible." Twombly, 550 U.S. at 569, 127 S.Ct. 1955.
In deciding a motion under 12(b)(6), the court must consider the whole complaint, accepting all well-pleaded factual allegations as true, "even if doubtful in fact," id. at 555, 127 S.Ct. 1955, and granting the plaintiff "the benefit of all inferences that can be derived from the facts alleged," Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)). The court need not accept as true, however, "a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955); see also id. at 681, 129 S.Ct. 1937 ("[A]llegations [that] are conclusory ... [are] not entitled to be assumed true.").
The four claims — under the CRFA, for tortious interference, for false light, and for conspiracy — are discussed in turn.
Count One of the complaint, brought by PCS alone, alleges that all four defendants violated the CRFA, which prohibits service providers from entering into form contracts barring consumers from publishing reviews of "the goods, services, or conduct" of the service provider that is party to the form contract. 15 U.S.C. § 45b(b). The CRFA, however, does not create a private right of action. Instead, the CRFA provides for enforcement only by the Federal Trade Commission ("FTC") and the states. See id. § 45b(d) ("Enforcement by Commission"); id. § 45b(e) ("Enforcement by States"); see also Quigley v. Yelp, Inc., No. 17-cv-3771-RS, 2018 WL 7204066, at *3 (N.D. Cal. Jan. 22, 2018) ("The CRFA is ... by its terms enforced only by the Federal Trade Commission or state attorneys general."); cf. Seibert v. Precision Contracting Solutions, LP, No. CV 18-818 (RMC), 2019 WL 935637, at *8 (D.D.C. Feb. 26, 2019) (recognizing, in evaluating a claim under the Federal Arbitration Act ("FAA"), that "[w]hile § 45b is subject to enforcement by the Federal Trade Commission or the States, no private right of action is suggested").
Plaintiffs contend that a private right of action under the CRFA can be inferred, see Pls.' Corporate Defs. Opp'n at 5; Pls.' D.C. Opp'n at 3-4, but the text and structure of the Act "reveal[] no congressional intent to create" one, Alexander v. Sandoval, 532 U.S. 275, 289, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). Most telling is that § 45b empowers the FTC and the states alone, as "[t]he express provision of one method of enforcing a substantive rule suggests that Congress intended to preclude others." Id. at 290, 121 S.Ct. 1511; see also Johnson v. Interstate Mgmt. Co., LLC, 849 F.3d 1093, 1098 (D.C. Cir. 2017) (declining to recognize an implied cause of action where the provision "specifically addresses who may sue."). Further, FTC enforcement of the CRFA runs parallel to FTC enforcement of the FTCA, see 15 U.S.C. § 45b(d)(2)(A) (granting the FTC the same powers in enforcing the CRFA as in enforcing the FTCA); id. § 45b(d)(2)(B) ("Any person who violates this section shall be subject to the penalties and entitled to the privileges and immunities provided in the [FTCA]."), suggesting that the FTCA is a useful guide here, and "[i]t is long-established that the FTC[A] does not provide a private cause of action," Hardaway v. Syneron, Inc., 928 F.Supp.2d 217, 218 (D.D.C. 2013); see also, e.g., Holloway v. Bristol-Myers Corp., 485 F.2d 986, 987 (D.C. Cir. 1973) ("[P]rivate actions to vindicate rights asserted under the [FTCA] may not be maintained."); In re SuperValu, Inc., 925 F.3d 955, 963 (8th Cir. 2019) ("The FTCA creates no private right of action.").
PCS's CRFA claims are dismissed with prejudice.
PCS's claims of tortious interference with existing and prospective business relationships are also dismissed.
To survive the motions to dismiss these claims, PCS must plead "(1) the existence of a valid business relationship or expectancy, (2) knowledge of the relationship or expectancy on the part of the interferer, (3) intentional interference
Count Two of the complaint, which pleads the claims of tortious interference, is devoid of allegations about the District or Vogel and, consequently, fails to state a claim against these two defendants. See Compl. ¶¶ 98-107. Plaintiffs now concede that these defendants are not directly liable for tortious interference or for false light, which is discussed next. See Pls.' Vogel Opp'n at 2 (stating that plaintiffs "have brought all counts against all Defendants... to underscore the vicarious liability of the District and Kenneth Vogel for such actions based on their conspiracy with the Corporate Defendants."); see also Pls.' D.C. Opp'n at 4 ("Plaintiffs, however, are not asserting liability against the District or Ken Vogel for any act or omission of their own in this matter."); Pls.' Vogel Opp'n at 2 ("None of the Plaintiffs in this proceeding is claiming that Mr. Vogel is personally liable to them for any acts or omissions he personally has brought about in connection with the counts they have pled in the Complaint."). The tortious interference claims against the District and Vogel are dismissed.
To start, PCS's theory of liability — that HomeAdvisor's and Angie's List's removal of a profile PCS used to drum up business amounts to tortious interference — is a novel one in the District. In other jurisdictions, analogous tortious interference claims have typically been dismissed because any interference was incidental and not intentional, or because the defendant's conduct was justified. See, e.g., Robin v. Bellsouth Advert. & Pub. Co., 221 Ga.App. 360, 471 S.E.2d 294, 296-97 (1996) (rejecting lawyer's claim that yellow pages company tortiously interfered with prospective client relationships by failing to include
For example, Robin v. Bellsouth Advertising & Publishing Co. dismissed a lawyer's claim of tortious interference against a yellow pages company that had allegedly denied the lawyer access to a particular advertising feature. 471 S.E.2d at 295. Robin observed that "[e]ven if the" feature at issue "may have been more effective in attracting clients" than other modes of promotion, the allegation that the defendant had prevented the plaintiff from accessing that feature did not "support the claim that [defendant] directly induced any clients to patronize attorneys other than [plaintiff]." Id. at 296. Further, the company's actions were not "malicious" or improper, id., but were "privileged," in part because the "directory is a private publication which may accept or reject advertising as it chooses." Id. at 297.
Here, too, the allegations that HomeAdvisor and Angie's List removed PCS's profile do not establish a "desire[] to bring [interference] about." Id. at 296 (quoting Restatement (Second) of Torts, § 766B cmt. d). The complaint does allege that "[t]he Corporate Defendants knew that District consumers who had posted glowing ratings and comments about PCS were likely to retain PCS in the future," Compl. ¶ 102, and that "[t]he Corporate Defendants knew of [other] prospective relationships because they knew that PCS was a prominent Service Provider in the District who responded well to leads generated by the Corporate Defendants," id. ¶ 104. Yet, such mere assertions that the relevant defendants had knowledge of PCS's prior positive reviews and previous customer leads fall short of well-pled facts showing intent to breach PCS's business relationships with prior, ongoing, or even future clients.
Even taking these allegations as enough, however, to plead knowledge that "interference [would be] certain or substantially certain to occur as a result of removing the profiles, Restatement (Second) of Torts § 766B, cmt d, PCS fails to state a claim for tortious interference because HomeAdvisor's and Angie's List's actions were justified, see Sorrells, 565 A.2d at 290 (defining "improper" based on Restatement (Second) of Torts § 767).
Plaintiffs counter that the removal was improper because it was "unlawful[]" under the CRFA, see Compl. ¶ 106, but, as already explained, the CRFA does not even regulate websites like HomeAdvisor and Angie's List in managing content posted by consumers about service providers like PCS. Further, although "claims of legal justification are `vitiated' if malice is proved," Havilah Real Prop. Servs., LLC, 108 A.3d at 346 (quoting Sorrells, 565 A.2d at 290), the complaint's assertions of malice are conclusory, see Compl. ¶ 119 (alleging that "Defendant[] Angie's List ... had a history of arrogant and illegal actions
The complaint's only well-pled allegations about the sites' motives link the removal of the profiles to the filing of the District's lawsuit. See Compl. ¶ 130-31; see also Defs. ANGI Homeservices and Angie's List, Inc.'s Mem. Supp. Mot. to Dismiss Pls.' Compl. ("Corporate Defs.' Mem.") at 4, ECF No. 13-1 (corroborating that HomeAdvisor and Angie's List "removed PCS from their websites" "[s]hortly after learning about the Attorney General's complaint"). The sole reasonable inference from the complaint, then, is that any interference with existing or prospective business relations was "a mere incidental result of conduct ... engag[ed] in for another purpose." Restatement (Second) of Torts § 766B, cmt d.
Removal of PCS's profiles due to the District's complaint was well-justified, and thus any interference was "not improper." Id. ("If he had no desire to effectuate the interference by his action but knew that it would be a mere incidental result of conduct he was engaging in for another purpose, the interference may be found to be not improper."); Mitchell Mach., Inc. v. Ford New Holland, Inc., 918 F.2d 1366, 1371 (8th Cir. 1990) (rejecting tortious interference claim when any interference was "an incidental result" of proper conduct). As HomeAdvisor and Angie's List argue, their conduct was privileged and justified first because the terms of use that PCS accepted granted Angie's List and HomeAdvisor total discretion to remove content from their websites, see Compl. ¶¶ 31, 42, and, second, because web marketplaces have a legitimate interest in controlling the businesses "feature[d] or include[d]" on their sites, Corporate Defs.' Mem. at 10 ("[P]ublic policy dictates that HomeAdvisor and Angie's List cannot be forced to feature or include PCS on their websites despite the outrageous violations identified by the Attorney General for the District of Columbia); see also Robin, 471 S.E.2d at 297 ("[The] directory is a private publication which may accept or reject advertising as it chooses."); cf. Audition Div., Ltd., 75 Ill.Dec. 947, 458 N.E.2d at 120 (deeming BBB's reports to consumers conditionally privileged advice because such reports are published "in conformance with BBB's public service goals" (citing Restatement (Second) of Torts § 772)).
This claim must be dismissed for an additional reason: generic allegations about the existing and prospective business relations affected are insufficient to plead plausibly tortious interference in the District. See Defs.' ANGI Homeservices, Inc. and Angie's List, Inc.'s Reply Supp. Mot. to Dismiss Pls.' Compl. ("Corporate Defs.' Reply") at 10, ECF No. 24 (developing this argument). Courts applying District law have regarded allegations of interference with "unspecified relationships," Williams v. Fed. Nat. Mortg. Ass'n, No. CIV 05-1483 (JDB), 2006 WL 1774252, at *8 (D.D.C. June 26, 2006), or with "hypothetical categories of business relationships" as inadequate to plead the existence of a business relationship or expectancy, MiMedx Grp., Inc. v. DBW Partners LLC, No. CV 17-1925 (JDB), 2018 WL 4681005, at *8 (D.D.C. Sept. 28, 2018); see also Sharpe v. Am. Acad. of Actuaries, 285 F.Supp.3d 285, 292 (D.D.C. 2018) (requiring the plaintiff to "plead the specific contracts or expectancies that the Plaintiff claims were interfered with"); Samuel v. Wells Fargo & Co., No. CV 17-2539 (CKK), 2018 WL
In sum, the complaint fails to state a claim of tortious interference against any defendant, requiring dismissal of Count Two.
Count Three, brought by all four plaintiffs against all four defendants, alleges that "removal by the Corporate Defendants of the PCS profile, ratings and reviews... gave the public a negative inference that PCS was not qualified to be on those websites for reasons that were so bad that they could not be explained to the public," Compl. ¶ 112, that "[s]uch an impression... was false insofar as PCS had done nothing to merit the removal of its profile, ratings and reviews from Defendants['] websites," id. ¶ 114, and that "removal of the PCS profiles, ratings and reviews from these websites therefore cast... in a false light," id. ¶ 115, PCS and "those associated with PCS who were mentioned in the ratings and reviews by District consumers such as Plaintiffs Derrick Sieber and Stephen Sieber," id. ¶ 116. Count Three fails to state a claim against any defendant.
To begin, Count Three is devoid of allegations about the District and Vogel, see Compl. ¶¶ 108-13, and, as already noted, plaintiffs now concede that those defendants are not directly liable for false light, see Pls.' D.C. Opp'n at 4; Pls.' Vogel Opp'n at 2. The false light claims against the District and Vogel are dismissed.
Next, plaintiff Torsell cannot maintain a false light claim against HomeAdvisor or Angie's List. To survive the motion to dismiss these claims, Torsell would have to plead: (1) publicity; (2) about a false statement, representation, or imputation; (3) understood to be of and concerning her; and (4) which places her in a false light that would be offensive to a reasonable person. See Doe v. Bernabei & Wachtel, PLLC, 116 A.3d 1262, 1267 (D.C. 2015). Removal of the PCS profiles, however, does not concern Torsell, a former customer who had yet to post a rating or review on either HomeAdvisor or Angie's List. See, e.g., Kitt v. Capital Concerts, Inc., 742 A.2d 856, 859-60 (D.C. 1999) (deeming orchestra's advertising featuring actor posing as an unidentified clarinetist to not be "of and concerning the plaintiff" who was one of four clarinetists in the orchestra). Indeed, the complaint does not attempt to allege otherwise. See Compl. ¶¶ 108-13.
All four plaintiffs bring a conspiracy claim against all four defendants. See Compl. ¶¶ 118-35. The complaint fails to state a claim for conspiracy first of all because "[l]iability for civil conspiracy depends on performance of some underlying tortious act," Saucier v. Countrywide Home Loans, 64 A.3d 428, 446 (D.C. 2013) (quoting Halberstam v. Welch, 705 F.2d 472, 479 (D.C. Cir.1983)), and no tort claim has been plausibly pled, see, e.g., Grimes v. Dist. of Columbia, Bus. Decisions Info., Inc., 89 A.3d 107, 115 (D.C. 2014) (upholding dismissal of a complaint on this ground). The complaint pleads that defendants conspired to "to blacken the reputation of PCS" and "prevent PCS from entering into future contracts with District consumers," Compl. ¶ 133, but, as already explained, fails to state a claim for either false light or tortious interference.
The other allegedly "tortious acts that were undertaken in tandem to harm PCS and the Siebers" mentioned in plaintiffs' opposition to the District's motion — "breach of contract" and filing a "fals[e]" claim in Superior Court by Vogel, Pls.' D.C. Opp'n at 6, "false and defamatory statements" by the District in its complaint,
The complaint's only non-conclusory allegations of coordination are that Vogel told the OAG that PCS had "plant[ed] false reviews on the Home Advisor website in September 2018 and caused the OAG to launch a fraud investigation," Compl. ¶ 124, and that the OAG then "issued a subpoena or otherwise discussed with Home Advisor the production of documents and or information pertaining to the PCS profile, ratings and reviews" id. ¶ 126; see also id. ¶ 127 (asserting that "[t]he OAG was in continuing communications thereafter with Home Advisor and Angie's List regarding information about PCS").
For the foregoing reasons, the defendants' motions to dismiss are granted. An order consistent with this Memorandum Opinion will be entered contemporaneously.