LLC v. William Adams et al. (2014)

MEMORANDUM OF DECISION RE MOTION TO STRIKE # 107

Whether the court should grant the defendants' motion to strike counts two and three of the amended complaint, brought pursuant to General Statutes § 42–110b and alleging unfair trade practices, on the ground that the complaint fails to state a claim upon which relief may be granted.

FACTS

On January 4, 2013, the plaintiffs, Shehu, LLC, and Mr. Karl David Shehu, commenced this action by filing a four-count complaint against the defendants, Mr. William Adams (Mr. Adams), Norton, Moore & Adams, LLP (NMA), and John Doe Entities 1–10.¹  In the five-count amended complaint filed on June 17, 2013, the plaintiff alleges the following facts.   Mr. Shehu is an attorney licensed by and practicing in Connecticut, and is the managing member of Shehu, LLC, whose principal place of business is in Waterbury, Connecticut.   Mr. Adams is an attorney licensed by the state of California and is a partner at the law firm, NMA, whose principal place of business is in San Diego, California.   On October 6, 2012, Mr. Adams used his firm address to send an email to Shehu, LLC, and two employees of the Connecticut Bar Association, Alice Bruno and Bill Chapman, in which he stated that the plaintiffs “commented on an article with a mass produced, mechanically generated, irrelevant comment,” “spammed [his] site with the message,” and “used a dishonest ruse.”   The email also stated that the plaintiffs engaged in unethical conduct and violated the ABA rules of professional responsibility.   Mr. Shehu responded to Mr. Adams and Mr. Adams sent a second message to Shehu, LLC, Ms. Bruno, and Mr. Chapman on October 7, 2012, with the same allegations as the original email.   In both the October 6 and the October 7 emails, the subject line read:  “Your Spam is a professional ethics violation.”   On October 11, 2012, Mr. Adams sent a third email to Ms. Bruno and Mr. Chapman drawing further attention to comments in his previous emails and pointing out that he had “no evidence” that Mr. Shehu or anyone at the Shehu law firm “had personal knowledge of the comments.”   The plaintiffs claim that the emails are libelous per se as an attempt to attack Mr. Shehu's character, competence as an attorney, and reputation among members of the Connecticut bar.   Because of these emails and the allegations contained within, the plaintiffs claim they suffered actual damages for which they should be compensated and seek punitive damages.   Count one is an action for libel per se against the defendants.²  Counts two and three assert unfair trade practices claims against Mr. Adams and NMA respectively.   Count four asserts negligence against all defendants ³ and count five alleges negligent supervision against NMA and John Doe Entities 1–10.

On August 23, 2013, the defendants filed a motion to strike counts two and three, supported by a memorandum of law.   On November 11, 2013, the plaintiffs filed an objection to the motion to strike, and, on December 4, 2013, the plaintiffs filed a memorandum in opposition to the motion to strike.   The matter was heard at short calendar on December 9, 2013.

DISCUSSION

“The purpose of a motion to strike is to contest ․ the legal sufficiency of the allegations of any complaint ․ to state a claim upon which relief can be granted.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).  “A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court.”  (Internal quotation marks omitted.)   Simms v. Seaman, 308 Conn. 523, 529, 69 A.3d 880 (2013).  “In ruling on a motion to strike, the court is limited to the facts alleged in the complaint.”  (Internal quotation marks omitted.)  Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).

“[I]t is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted ․ The role of the trial court in ruling on a motion to strike is to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action ․” (Citations omitted;  internal quotation marks omitted.)  Coe v. Board of Education, 301 Conn. 112, 116–17, 19 A.3d 640 (2011).  “[P]leadings are to be construed broadly and realistically, rather than narrowly and technically ․” (Internal quotation marks omitted.)  Downs v. Trias, 306 Conn. 81, 92, 49 A.3d 180 (2012).   Nevertheless, a motion to strike “does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings.”   (Emphasis omitted;  internal quotation marks omitted.)  Faulkner v. United Technologies Corp., supra, 240 Conn. 588.

The defendants argue that counts two and three ⁴ fail to state a cause of action upon which relief may be granted because the plaintiffs fail to allege a consumer, commercial or any other kind of business relationship with the defendants.   The plaintiffs argue in opposition that counts two and three, which state causes of action under the Connecticut Unfair Trade Practices Act, General Statutes § 42–110b, plead sufficient facts to show a competitive, commercial or other business relationship with the defendants.

In § 42–110b(a), CUTPA provides:  “No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  “Such a cause of action is available to [a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a [prohibited] method, act or practice.”   (Internal quotation marks omitted.)   Rizzo v. Rizzo's Garage, LLC, Superior Court, judicial district of Danbury, Docket No. CV–12–6009507–S (April 11, 2013, Pavia, J.);   see also General Statutes § 42–110g(a).   The Supreme Court has “adopted the criteria set out in the cigarette rule by the [F]ederal [T]rade [C]ommission for determining when a practice is unfair:  (1)[W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise—in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness;  (2) whether it is immoral, unethical, oppressive, or unscrupulous;  (3) whether it causes substantial injury to consumers [competitors or other businesspersons].”  (Internal quotation marks omitted.)  Ulbrich v. Groth, 310 Conn. 375, 409, 78 A.3d 76 (2013).  “[A]ll three criteria do not need to be satisfied to support a finding of unfairness.   A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three ․ Thus a violation of CUTPA may be established by showing either an actual deceptive practice ․ or a practice amounting to a violation of public policy ․ Furthermore, a party need not prove an intent to deceive to prevail under CUTPA.”  (Internal quotation marks omitted.)  Associated Investment Co. Ltd. Partnership v. Williams Associates IV, 230 Conn. 148, 156, 645 A.2d 505 (1994).

“[B]ecause CUTPA is a self-avowed ‘remedial’ measure, General Statutes § 42–110b(d), it is construed liberally in an effort to effectuate its public policy goals.”  (Internal quotation marks omitted.)  Associated Investment Co. Ltd. Partnership v. Williams Associates IV, supra, 230 Conn. 158.   Moreover, the Supreme Court has previously held that “CUTPA is not limited to conduct involving consumer injury and ․ a competitor or other business person can maintain a CUTPA cause of action without showing consumer injury.”   (Internal quotation marks omitted.)  Ventres v. Goodspeed Airport, LLC, 275 Conn. 105, 155, 881 A.2d 937 (2005), cert. denied, 547 U.S. 1111, 126 S.Ct. 1913 (2006).  “[A] plaintiff must have at least some business relationship with the defendant in order to state a cause of action under CUTPA.”  (Emphasis omitted.)  Pinette v. McLaughlin, 96 Conn.App. 769, 778, 901 A.2d 1269, cert. denied, 280 Conn. 929, 909 A.2d 958 (2006).

“[CUTPA] was designed to protect two classes or deal with two sets of problems.   First, there is the protection of consumers from unfair or deceptive acts or practices.   Then there is a concern with ensuring fair competition and in order to accomplish that end, competitors and other business people can bring a CUTPA action.   But at the very least, other business people, who are not direct competitors, must have some type of commercial relationship with the alleged wrongdoer—commercial relationship not being so much a business relationship but some kind of relationship in the marketplace so that the particular acts of wrongdoing alleged will interfere with fair and open competition in that particular marketplace.”  (Internal quotation marks omitted.)  Larese v. Pollack, Superior Court, judicial district of Ansonia–Milford, Docket No. CV–13–6011985–S (May 28, 2013, Matasavage, J.) [56 Conn. L. Rptr. 184].

In the present case, the plaintiffs argue that the CUTPA counts “each allege at least three different competitive relationships” between the plaintiffs and the defendants.   These alleged relationships include:  (1) Mr. Shehu and Mr. Adams are both attorneys;  (2) Shehu, LLC, and the defendants engage in internet marketing efforts;  and (3) Shehu, LLC, and the defendants utilize “blogs” to share information on legal and non-legal topics with the internet community.   The defendants argue that these allegations are insufficient to maintain a cause of action sounding in CUTPA.

“[I]n describing the business relationship necessary for a plaintiff to have standing to assert a CUTPA claim, the cases indicate that a business person must have a direct commercial relationship with the defendant, or some other relationship with the defendant in a commercial marketplace, so that a nexus exists between this relationship and an ascertainable loss caused by the defendant's unfair or deceptive practices.”  (Internal quotation marks omitted.)   Golden v. Hamer, Superior Court, judicial district of Stamford–Norwalk, Docket No. CV–08–5008396–S (August 25, 2009, Pavia, J.).   The court cannot characterize the relationship between the plaintiffs and the defendants in the present case as “competitive” in any ordinary business sense;  see Ventres v. Goodspeed Airport, LLC, supra, 275 Conn. 157;  nor can the court consider the relationship “direct” or “in a commercial marketplace.”   Before the alleged internet posting, the plaintiffs and the defendants most likely did not know of the other parties' existence.   The plaintiffs cannot now claim that there is a competitive relationship between them merely because both entities engage in the practice of law and use the internet for a marketing purpose or to “blog.”

Mr. Adams' license to practice law allows him to practice exclusively in California.   Mr. Shehu's license, in the same way, allows him to practice law exclusively in Connecticut.   If the alleged conduct of the defendants in fact “diminish[es] the number of websites competing for keywords desirable to the [d]efendants” such that it would result in less competition for the defendants' websites “to appear at the top of search engine results for those desirable keywords,” this is still insufficient for a relationship in the marketplace.   The parties practice law in their respective states and potential clients or customers searching for a lawyer using the internet would not necessarily make that decision based on the first firm listed on a search engine's results.   Rather, any decision a potential client would make between Shehu, LLC, and NMA will be more likely based on the location of the required services.   The alleged commercial relationship is too tenuous for this court to conclude that the “particular acts of wrongdoing alleged will interfere with fair and open competition in that particular marketplace.”  Larese v. Pollack, supra, Superior Court, Docket No. CV–13–6011985–S.

Mr. Shehu argues that the present case is similar to Larese v. Pollack, supra, Superior Court, Docket No. CV–13–6011985–S, and should be decided in a similar manner.   That case, however, can be distinguished.   In Larese, the plaintiff alleged that she was an associate attorney working for the defendants, and that during her employment, the defendants made representations in advertisements and on the firm's website that were false.  Larese v. Pollack, supra.   These representations resulted in a grievance against the plaintiff and harm to her reputation.  Id. The court found that these allegations were “sufficient to demonstrate that the plaintiff shared a relationship in the same marketplace, specifically, the provision of legal services, which was negatively impacted by the defendants' actions.”  Id. In his memorandum in opposition to the motion to strike, Mr. Shehu cites this case to show that attorneys licensed in different states share a relationship in the same marketplace, namely the providing of legal services.   However, what Mr. Shehu fails to acknowledge is that the firm the plaintiff worked for in Larese had offices in both Massachusetts and Connecticut.   The plaintiff was licensed to practice in Connecticut and the defendant was licensed to practice in both Connecticut and Massachusetts.   Therefore, the overlap in their licensure is sufficient to conclude that the parties shared a relationship in the marketplace of the provision of legal services in Connecticut.   In the present case, the plaintiff and the defendant are licensed in different states and there is no overlap in licensure.   Their relationship, therefore, is much more tenuous than that in Larese.   Thus, Larese is distinguishable from the present case and provides limited guidance for the court in deciding this motion.

CONCLUSION

For the foregoing reasons, the court grants the defendants' motion to strike counts two and three of the plaintiffs' amended complaint.

BY THE COURT

V. ROCHE, J.

FOOTNOTES

FN1. John Doe Entities 1–10 are not relevant to this memorandum of decision.   Therefore, for the purposes of this memorandum, the “defendants” will refer only to Mr. Adams and NMA..  FN1. John Doe Entities 1–10 are not relevant to this memorandum of decision.   Therefore, for the purposes of this memorandum, the “defendants” will refer only to Mr. Adams and NMA.

FN2. Count one includes a cause of action against John Doe Entities 1–10..  FN2. Count one includes a cause of action against John Doe Entities 1–10.

FN3. Count four includes a cause of action against John Doe Entities 1–10..  FN3. Count four includes a cause of action against John Doe Entities 1–10.

FN4. Count 2 is directed at Defendant Adams and Count 3 is directed at Defendant NMA..  FN4. Count 2 is directed at Defendant Adams and Count 3 is directed at Defendant NMA.

Roche, Vincent E., J.