LegalZoom.com Inc v. Rocket Lawyer Incorporated

Filing 66

NOTICE OF LODGING filed re Notice of Manual Filing (G-92), 65 (Attachments: # 1 ROCKET LAWYER INCORPORATED'S REDACTED SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT AND/OR ADJUDICATION)(Jones, Michael)

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Forrest A. Hainline III (SBN 64166)
[e-mail]
Hong-An Vu (SBN 266268)
[e-mail]
GOODWIN PROCTER LLP
Three Embarcadero Center
24th Floor
San Francisco, California 94111
Tel.: [phone]
Fax.: [phone]
Michael T. Jones (SBN 290660)
[e-mail]
GOODWIN PROCTER LLP
135 Commonwealth Drive
Menlo Park, California 94025-1105
Tel.: [phone]
Fax.: [phone]
Brian W. Cook (Pro Hac Vice)
[e-mail]
GOODWIN PROCTER LLP
53 State Street
Boston, MA 02109-2802
Tel.: [phone]
Fax.: [phone]
Attorneys for Defendant
ROCKET LAWYER INCORPORATED
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
LEGALZOOM.COM, INC., a Delaware Case No. 2:12-cv-09942-GAF-AGR
corporation,
ROCKET LAWYER
Plaintiff,
INCORPORATED’S REDACTED
SEPARATE STATEMENT OF
v.
UNDISPUTED FACTS IN SUPPORT
OF ITS MOTION FOR SUMMARY
ROCKET LAWYER
JUDGMENT AND/OR
INCORPORATED, a Delaware
ADJUDICATION
corporation,
Date:
August 18, 2014
Defendant.
Time:
9:30 a.m.
Judge:
Judge Gary A. Feess
Courtroom: 740
Action Filed: November 20, 2012

1

Pursuant to Rule 56 of the Federal Rules of Civil Procedure and Local Rule

2

56-1 of the Central District of California, Defendant Rocket Lawyer Incorporated

3

(“Rocket Lawyer”) hereby submits the following Separate Statement of Undisputed

4

Facts in support of its motion for summary judgment:
UNDISPUTED FACTS

5
6

UNDISPUTED FACT

EVIDENTIARY SUPPORT
Order Re: Plaintiff’s Motion for

7

1.

Rocket Lawyer and LegalZoom

8

are competitors in the online legal

Summary Judgment (“Order”), ECF No.

9

services market, which consists of

44, at 1; Rocket Lawyer’s Amended

10

companies offering access to legal

Counterclaims, ECF No. 17, at 12:2-3.

11

forms, subscription plans, independent

12

attorney consultation time, and other

13

legal services at affordable prices.

14

2.

15

like other competitors in this market,

Nguyen in Support of LegalZoom’s

16

advertise their services on search

Motion for Summary Judgment,

17

engines such as Google and Bing, and

(“Nguyen Decl. I”), ECF No. 28, ¶ 4, Ex.

18

on their own websites.

B (screen shots of Rocket Lawyer’s

Order, ECF No. 44, at 2; Mary Ann

Rocket Lawyer and LegalZoom,

19

advertisements); Vu Decl. I, ECF No. 38,

20

¶ 4, Ex. 14.

21

3.

22

businesses to advertise on search results

Rocket Lawyer Incorporated’s Motion for

23

by bidding on terms—“keywords”—

Summary Judgment and/or Summary

24

that users may enter into the search

Adjudication (“Vu Decl. II”), ¶ 15, Ex.

25

field. For example, when a user searches N; see also Google Instructions

26

for “incorporation,” immediately above

Regarding Keyword Advertisements

27

or along the side of the search results

(http://www.google.com/adwords/how-it-

Declaration of Hong-An Vu In Support of

Google and Bing allow

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ACTIVE/73885497.2

1

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

are ads for businesses that have bid on

3

that term—LegalZoom, Rocket Lawyer, Bing Instructions Regarding Keyword

4

LawDepot, IncforFree, etc.

works/target-your-ads.html)

Advertisements

5

(http://advertise.bingads.microsoft.com/e

6

n-us/reachyournextcustomer)

7

Google “Incorporation” Keyword Results

8

(https://www.google.com/#q=incorporati

9

on)

10

Bing “Incorporation” Keyword Results

11

(http://www.bing.com/search?q=incorpor

12

ation)

13

4.

14

engine marketing for Yahoo since

http://yahoobingnetwork.com/en-

15

August 2010.

apac/home.

16

5.

Order, ECF No. 44, at 10; Vu Decl. II, ¶

17

in the Order, Rocket Lawyer’s expert

2, Ex. A (Expert Report of Professor

18

conducted a survey to test the RLI Free

Jerry Wind Regarding Consumer

19

Ads in context (the “Wind Survey”).

Perceptions of Rocket Lawyer’s

Bing.com has provided the search Vu Decl. II, ¶ 6, Ex. E, at 7; see also

Following the Court’s instruction

20

Advertisement and Website).

21

6.

22

a professor at the Wharton School of

23

Business at the University of

24

Pennsylvania.

25

7.

26

marketing and has served as an expert

27

witness in over thirty cases since 2007

Vu Decl. II, ¶ 3, Ex. B, App. B (Professor

Professor Jerry (Yoram) Wind is

Wind’s resume).

He is one of the leading experts in Vu Decl. II, ¶ 3, Ex. B, Apps. B and C
(list of cases in which Wind has testified).

28
ACTIVE/73885497.2

2

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

alone.

3

8.

4

respondents through the typical

(declaration of David Baga attesting to

5

consumer journey from the

consumer journey reflected in Wind’s

6

advertisement to the point of purchase.

stimuli) and E (stimuli used in Wind’s

Vu Decl. II, ¶ 3, Ex. B, Apps. A

The Wind Survey took

7

survey).

8

9.

9

results, consumers’ understanding of

Vu Decl. II, ¶ 3, Ex. A, at 62-64.

According to the Wind Survey

10

Rocket Lawyer’s services would be the

11

same whether Rocket Lawyer had

12

continued its advertising practices or

13

had changed them to address

14

LegalZoom’s allegations.

15

10.

16

Lawyer has offered to new users free

of Paul Hollerbach in Support of Rocket

17

business formation (i.e., incorporation,

Lawyer’s Opposition to Motion for

18

LLC formation) with enrollment in a

Summary Judgment (“Hollerbach Decl.

19

free trial of its Pro Legal Plan (or

I”), ECF No. 37-3, ¶ 20; Vu Decl. II, ¶ 3,

20

currently, its Complete Plan).

Ex. B, App. A (declaration of David Baga

Order, ECF No. 44, at 2-3; Declaration

Since October 2008, Rocket

21

attesting to consumer journey reflected in

22

Wind’s stimuli).

23

11.

24

mandated fees which passed through

25

entirely to the government.

26

12.

27

September 2013, Rocket Lawyer

Hollerbach Decl. I, ECF No. 37-3, ¶ 20.

Users only had to pay state-

Between October 2008 and

Vu Decl. II, ¶ 7, Ex. F; ¶ 13, Ex. L;
Declaration of Paul Hollerbach in

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ACTIVE/73885497.2

3

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

published approximately

Support of Rocket Lawyer’s Motion for

3

business formation ads that contained

Summary Judgment (“Hollerbach Decl.

4

the word “free” on search engines, and

II”), ¶¶ 3, 5.

5

approximately

6

formed through RocketLawyer.com.

7

13.

8

to RocketLawyer.com where consumers Order, ECF No. 44, at 2-3; Nguyen Decl.

9

are required to click through multiple

businesses were

Each of these ads contained a link Vu Decl. II, ¶ 3, Ex. B, Apps. A and E.

10

disclosures of state fees before they can

11

make a purchasing decision.

12

14.

I, ECF. No. 28, ¶ 4, Ex. B.

Of these

13

ads, only

Vu Decl. II, ¶ 6, Ex. E, at 8; ¶ 7, Ex. F;

— %—were Free Business

Hollerbach Decl. II, ¶ 3.

14

Formation Ads that did not expressly

15

disclose state fees.

16

15.

17

conversions from these Free Business

18

Formation Ads at a very low conversion

19

rate of

20

16.

21

means that a consumer clicked on a Free Hollerbach Decl. II, ¶ 3.

22

Business Formation Ad and thereafter,

23

reached the account registration page,

24

credit card billing page and/or

25

successfully formed a business entity by

26

completing the credit card billing page.

27

17.

Rocket Lawyer received

Vu Decl. II, ¶ 6, Ex. E, at 8; ¶ 7, Ex. F;
Hollerbach Decl. II, ¶ 3.

%.

“Conversion” as used herein

Vu Decl. II, ¶ 6, Ex. E, at 8; ¶ 7, Ex. F;

“Click(s)” means the number of

See Vu Decl. II, ¶ 7, Ex. F; ¶ 12, Ex. K;

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1

UNDISPUTED FACT

2

clicks on the ad (i.e. number of visits to

3

RL.com from that ad). Conversion rate

4

is the number of conversions per clicks.

5

18.

6

respect may not actually mean a

7

business was formed or that a customer

8

paid any fees to Rocket Lawyer or a

9

governmental entity.

EVIDENTIARY SUPPORT
Hollerbach Decl. II, ¶¶ 3-4.

A “conversion” used in this

See Vu Decl. II, ¶ 6, Ex. E, at 8; ¶ 7, Ex.
F; Hollerbach Decl. II, ¶ 3.

10

19.

11

Lawyer’s Free Business Formation Ads

12

were false and/or misleading, less than

Thus, even if all of Rocket

Vu Decl. II, ¶ 6, Ex. E, at 8; ¶ 7, Ex. F;

13

% of consumers who encountered

14

these ads could have arguably been

15

misled and decided to do business with

16

Rocket Lawyer.

17

20.

18

Rocket Lawyer’s Free Business

19

Formation Ads were placed on

20

LegalZoom keywords—meaning that

21

Rocket Lawyer’s ad would likely appear

22

when a consumer searched for a

23

combination of “legal” and “zoom”

24

(“Free LZ Triggered Business

25

Formation Ads”).

26

21.

27

on these ads with a similarly low

Hollerbach Decl. II, ¶ 3.

In addition, less than % of

There were only

Vu Decl. II, ¶ 6, Ex. E, at 11; ¶ 7, Ex. F;
Hollerbach Decl. II, ¶ 3.

conversions

Vu Decl. II, ¶ 6, Ex. E, at 15; ¶ 7, Ex. F;

%

Hollerbach Decl. II, ¶ 3.

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ACTIVE/73885497.2

5

1

UNDISPUTED FACT

2

conversion rate.

3

22.

4

of 104 actual and potential consumers of

5

legal services viewed a Free Business

6

Formation Ad that disclosed state fees,

7

and a control group of 103 similar

8

consumers viewed an ad that did not

9

EVIDENTIARY SUPPORT

disclose state fees.

Vu Decl. II, ¶ 2, Ex. A, at 17.

In the Wind Survey, a test group

10

23.

11

placed in the same place, in the same

12

position amongst other ads that

13

appeared in a real search for

14

“incorporation.”

15

24.

16

same path consumers follow on

17

RocketLawyer.com (the “consumer

18

journey”).

19

25.

20

images from the search engine ad

21

through successive webpages on

22

RocketLawyer.com to the point of

23

purchase.

24

26.

25

to determine whether (i) more

26

consumers in the control group were

27

drawn to Rocket Lawyer’s website than

Vu Decl. II, ¶ 2, Ex. A, at 10; ¶ 3, Ex. B,

The test and control ads were

App. E (Wind Survey stimuli).

Vu Decl. II, ¶ 2, Ex. A, ¶ 3; Ex. B, App.

Respondents then followed the

E.

Vu Decl. II, ¶ 3, Ex. B, App. E.

Stimuli showed respondents

Vu Decl. II, ¶ 2, Ex. A, at 2.

The Wind Survey was designed

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ACTIVE/73885497.2

6

1

UNDISPUTED FACT

2

in the test group, and (ii) consumers in

3

the test group were more likely to

4

understand that they must pay state fees

5

even if Rocket Lawyer’s services were

6

free than in the control group.

7

27.

8

results and ads, respondents were asked

9

EVIDENTIARY SUPPORT

which of the companies advertised did

Vu Decl. II, ¶ 2, Ex. A, at 19; ¶ 3, Ex. B,

After viewing the search engine

App. G (Wind Survey questionnaire).

10

the user want to explore further.

11

28.

12

did not choose Rocket Lawyer more

13

than in the test group: the survey

14

established that there is no statistically

15

significant difference between the test

16

and control groups with respect to

17

choosing Rocket Lawyer or LegalZoom

18

among the many competitors in the

19

market at the search engine stage.

20

29.

21

chose LegalZoom in the control group

22

(where the Rocket Lawyer

23

advertisement did not disclose state fees

24

in its text).

25

30.

26

there is a portion of the relevant

Ex. C, at 7 (acknowledging skeptical

27

population that is skeptical about free

population in the Isaacson survey and

Vu Decl. II, ¶ 2, Ex. A, at 3-4; 25-26.

Respondents in the control group

Vu Decl. II, ¶ 2, Ex. A, at 25.

In fact, slightly more respondents

Vu Decl. II, ¶ 2, Ex. A at 66; see also ¶ 4,

The Wind Survey also found that

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ACTIVE/73885497.2

7

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

offers and that such ads decrease the

significant research supporting increase

3

likelihood that these consumers would

in skeptical consumers).

4

chose to explore Rocket Lawyer and/or

5

actually provide business to Rocket

6

Lawyer.

7

31.

8

Survey analyzed whether there was any

Question 2, Online Legal Services

9

difference between the test and control

Companies Chosen Initially).

Vu Decl. II, ¶ 3, Ex. B, App. L (Table 6,

Note that although the Wind

10

groups in their decision to choose

11

Rocket Lawyer or LegalZoom, many

12

respondents chose other competitors

13

whose ads appeared on the search

14

engine results, as would occur in the

15

real world.

16

32.

17

not exhibit any better understanding that

18

they must pay state fees even if Rocket

19

Lawyer’s services were free than in the

20

control group: the test and control

21

groups were equally likely to

22

understand the state fees issue at the

23

decision-making point.

24

33.

25

understood that they were required to

26

pay state fees regardless of whether they

27

were in the test or control group.

Vu Decl. II, ¶ 2, Ex. A, at 31, 62-63.

In addition, test respondents did

Vu Decl. II, ¶ 2, Ex. A, at 31.

Nearly 70% of all test subjects

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ACTIVE/73885497.2

8

1

UNDISPUTED FACT

2

34.

3

significant difference between the test

4

and control respondents in deciding to

5

do business with Rocket Lawyer.

6

35.

7

respondents in the control group, who

8

did not receive the state fees disclosure

9

EVIDENTIARY SUPPORT

in the search engine ad, were more

Vu Decl. II, ¶ 2, Ex. A, at 37.

Furthermore, there was no

Vu Decl. II, ¶ 2, Ex. A at 36-37.

However, slightly more

10

likely to continue searching for other

11

online legal services.

12

36.

13

to the ad copy itself, to address

14

LegalZoom’s allegations, would have

15

no effect on consumers’ decision to

16

provide Rocket Lawyer with business or

17

benefit to Rocket Lawyer.

18

37.

19

Wind Survey also identified the

20

advertisement as the least important

21

factor in their decision making.

22

38.

23

and price of the service provider were

24

among the top factors affecting

25

purchasing decisions in both

26

experiments.

27

39.

Vu Decl. II, ¶ 2, Ex. A, at 36, 62-63.

Thus, adding state fee disclosures

Vu Decl. II, ¶ 2, Ex. A, at 4, 40, 57.

Moreover, respondents in the

Vu Decl. II, ¶ 2, Ex. A, at 4, 40, 57.

Rather, other customers’ reviews

LegalZoom’s survey, or the

Vu Decl. II, ¶ 4, Ex. C, at 7, 29; ¶ 5, Ex.

28
ACTIVE/73885497.2

9

1

UNDISPUTED FACT

2

“Isaacson Survey,” did not test whether

3

consumers were diverted from

4

LegalZoom to Rocket Lawyer. Instead

5

of allowing respondents to view the ads

6

in the context of a search engine result

7

page and choose Rocket Lawyer or

8

LegalZoom, the Isaacson Survey’s

9

stimuli failed to replicate market

EVIDENTIARY SUPPORT
D at Exs. 2 and 3 (Isaacson stimuli).

10

conditions and merely directed

11

respondents to focus only on an isolated

12

Rocket Lawyer advertisement, blurring

13

out all other ads and circling Rocket

14

Lawyer’s.

15

40.

16

provide any context.

D, at Exs. 2 and 3 (Isaacson stimuli).

17

41.

Vu Decl. II, ¶ 4, Ex. C, at 7; ¶ 5, Ex. D, at

18

allow respondents to view the

19

competitor ads that any real world

20

consumer would encounter.

21

42.

22

provide respondents with access to the

Hong-An Vu in Support of Rocket

23

information and disclosures on

Lawyer’s Opposition to Motion for

24

RocketLawyer.com regarding state fees, Summary Judgment, (“Vu Decl. I”), ECF

25

which every consumer must view before No. 38, ¶ 3(d)-(j), Exs. 5-11; Vu Decl. II,

26

making a purchasing decision, contrary

¶ 4, Ex. C, at 6; ¶ 5, Ex. D, at Exs. 2 and

27

to this Court’s instruction.

3 (Isaacson stimuli).

The Isaacson Survey did not

The Isaacson Survey did not

The Isaacson Survey also did not

Vu Decl. II, ¶ 4, Ex. C, at 6, 29; ¶ 5, Ex.

Exs. 2 and 3 (Isaacson stimuli).

Order, ECF No. 44, at 7; Declaration of

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10

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

43.

3

respondents’ understanding. The

4

Isaacson Survey was a reading test that

5

did not test consumers’ comprehension

6

and perceptions of the advertisements

7

because respondents had access to the

8

advertisements at all times, thus

9

rendering the survey an open book test

10

where respondents could merely copy

11

the advertisements in response to open

12

ended questions.

13

44.

14

LegalZoom’s allegations in the FAC.

C, at 18-19; ¶ 5, Ex. D at Ex. 3 (Isaacson

15

The Isaacson Survey stimuli entirely

control stimuli).

16

removed “free” from the control ad

17

instead of testing “free” with additional

18

disclosure of state fees.

19

45.

20

Rocket Lawyer’s Free Business

21

Formation Ads would not affect

22

consumer understanding or decision to

23

provide Rocket Lawyer with business,

24

and would have no effect on

25

LegalZoom.

26

46.

27

is no significant difference between the

The Isaacson Survey did not test

The Isaacson Survey did not test

Further disclosure of state fees in

In Rocket Lawyer’s survey, there

Vu Decl. II, ¶ 4, Ex. C, at 9-10; ¶ 5, Ex.
D, at 19, ¶ 50.

FAC, ECF No. 14; Vu Decl. II, ¶ 4, Ex.

Vu Decl. II, ¶ 2, Ex. A, at 25, 37, Ex. C,
at 12.

Vu Decl. II, ¶ 2, Ex. A, at 42-43, 59-60.

28
ACTIVE/73885497.2

11

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

test and control groups with respect to

3

those who: (i) chose Rocket Lawyer

4

after seeing just the search engine

5

advertisements, (ii) recalled the free

6

offer, (iii) perceived the free offer as

7

valuable (iv) exhibited or demonstrated

8

some confusion as to the free offer, and

9

(v) accepted the free trial or bought

10

other products from Rocket Lawyer.

11

47.

12

confused respondents who would have

13

given Rocket Lawyer business in the

14

test groups that viewed the ads as

15

LegalZoom demands.

16

48.

17

viewed Rocket Lawyer’s ads as they

18

were published—less than 5% of

19

respondents exhibited some confusion

20

about Rocket Lawyer’s services.

21

49.

22

that after reviewing Rocket Lawyer’s

(incorporation service), 54 (other legal

23

advertisements and websites, most

services).

24

consumers continue to search for other

25

online legal services providers.

26

50.

27

between the test and control groups with (incorporation service), 54 (other legal

There were slightly more

In the control groups—those who

The Wind Survey demonstrates

There is no significant difference

Vu Decl. II, ¶ 2, Ex. A, at 36; 42-43, 5960.

Vu Decl. II, ¶ 2, Ex. A, at 42-43, 59-60.

See Vu Decl. II, ¶ 2, Ex. A, at 37

See Vu Decl. II, ¶ 2, Ex. A, at 37

28
ACTIVE/73885497.2

12

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

respect to this decision.

services).

3

51.

See Vu Decl. II, ¶ 2, Ex. A, at 37

4

stated that they were not going to buy

(incorporation service), 54 (other legal

5

online legal services at all—meaning

services).

6

that 94.5% of all respondents were open

7

to using online legal services after their

8

experience with RocketLawyer.com

9

52.

Only 5.5% of all respondents

Rocket Lawyer utilizes a

Hollerbach Decl. I, ECF No. 37-3, ¶ 4.

10

“freemium” business model and has

11

offered a free trial of its subscription

12

plans since inception.

13

53.

14

registered users have not paid Rocket

15

Lawyer (or a government entity) for use

16

of its services.

17

54.

18

trial advertisements are “intrawebsite,”

13-17, Ex. C; Vu Decl. II ¶ 12, Ex. K;

19

meaning that the free trial is advertised

Hollerbach Decl. II, ¶ 4; FAC, ECF No.

20

and offered primarily on

14, Ex. C and D.

21

Rocketlawyer.com.

22

55.

23

September 2013, Rocket Lawyer

24

published a total of

25

advertisements on LegalZoom

26

keywords, but Rocket Lawyer

Over 90% of Rocket Lawyer’s

Most of Rocket Lawyer’s free

Between November 2008 and

27

Hollerbach Decl. I, ECF No. 37-3, ¶ 8.

See Hollerbach Decl. I, ECF No. 37-3, ¶

Vu Decl. II ¶ 12, Ex. K; Hollerbach Decl.
II, ¶ 4.

free trial

on these

28
ACTIVE/73885497.2

13

1

UNDISPUTED FACT

2

advertisements.

3

56.

4

Rocket Lawyer Free Trial Offer by first

5

searching for a document on Google or

6

Bing.

7

57.

8

the user would be taken to

9

EVIDENTIARY SUPPORT

RocketLawyer.com and responding to

A typical user would encounter a

After clicking on a link in the ad,

10

user to complete the searched-for

12

document.

13

58.

14

user could enroll in a free trial, a

15

monthly plan, or an annual plan.

16

59.

17

Free Trial Offer, the user would then be

18

taken to a page presenting the terms of

19

the free trial and various other terms of

20

use, where he or she could enter credit

21

card information and accept the terms

22

—or not.

23

60.

24

credit card form, Rocket Lawyer

25

provided information relating to the free

26

trial, including cost, length of the free

27

Hollerbach Decl. I, ECF No. 37-3, ¶ 14.

an interactive interview that enabled the

11

Hollerbach Decl. I, ECF No. 37-3, ¶ 13.

trial period, and the need to cancel:

At the end of the interview, the

If the user elected to accept the

On the right-hand side of the

Hollerbach Decl. I, ECF No. 37-3, ¶ 15.

Hollerbach Decl. I, ECF No. 37-3, ¶¶ 1618; Vu Decl. I, ECF No. 38, ¶ 3.

Order, ECF No. 44, at 2; Vu Decl. I, ECF
No. 38, ¶¶ 3(d)-(e), Exs. 5, 6.

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ACTIVE/73885497.2

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UNDISPUTED FACT
Your free trial entitles you to the
Pro [or Basic] Legal plan for oneweek. After your free trial ends, a
Rocket Lawyer Monthly plan with
unlimited free documents, esignatures, sharing and other
premium features will start and this
credit card will be charged $39.95
[or $19.95 for Basic Legal
Plan]/month. . . If you decide that
you don’t want to keep your
membership, simply downgrade
the service to a free membership to
discontinue the Legal Plan and
$39.95 [or $19.95 for basic Legal
Plan]/month billing. The legal
documents created and saved
during your trial are free, which
means they are yours to keep, and
you can access them at any time.

16

61.

The toll free phone number to

17

cancel a free trial was, and still is, at the

18

62.

20

customers have answers to questions

21

about the free trial, Rocket Lawyer has

22

an FAQ section which details the

23

different ways a customer can cancel

24

any plan.

25

63.

26

format of Rocket Lawyer’s disclosures

27

Order, ECF No. 44, at 2; Vu Decl. I ¶¶

top of every registration page.

19

EVIDENTIARY SUPPORT

and not their substance.

In addition, to ensure that

LegalZoom only challenges the

3(d)-(e), Exs. 5, 6.

Order, ECF No. 44, at 2; Vu Decl. I, ECF
No. 38, ¶¶ 3(d)-(e) at Exs. 5, 6.

FAC, ECF No. 14, at 18-40.

28
ACTIVE/73885497.2

15

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

Rocket Lawyer conducted a

Vu Decl. II, ¶ 2, Ex. A, at 7, 13-15; ¶ 14,

2

64.

3

survey where one group received the

4

disclosures as Rocket Lawyer has

5

disclosed them (control group) and a

6

second group received the disclosures as

7

LegalZoom displays its own free trial

8

information (test group), to determine if

9

either the test or control group better

10

understood the nature of a free trial.

11

65.

12

LegalZoom’s formatting for its free trial B, App. E (Wind Survey stimuli); ¶ 14,

13

offer and disclosures on

14

LegalZoom.com.

15

66.

16

that there is no significant difference in

17

consumer understanding of the free trial

18

between the test and control groups.

19

67.

20

knew that the free trial had a time limit

21

compared to 67.3% in the test group.

22

68.

23

understood that they would be charged

24

after the free trial period ended

25

compared to 54 of 67 control

26

respondents.

27

69.

The test stimuli mirrored

The survey results demonstrate

66.3% of the control respondents

52 of 70 test respondents

There was also no significant

Ex. M.

Vu Decl. II, ¶ 2, Ex. A, at 13-15; ¶ 3, Ex.

Ex. M.

Vu Decl. II, ¶ 2, Ex. A, at 50-51.

Vu Decl. II, ¶ 2, Ex. A, at 50.

Vu Decl. II, ¶ 2, Ex. A, at 51.

Vu Decl. II, ¶ 2, Ex. A, at 54.

28
ACTIVE/73885497.2

16

1

UNDISPUTED FACT

2

difference in respondents’ decision to

3

do business with Rocket Lawyer

4

between the test and control groups

5

(compare 41.7% test with 38.3%

6

control).

7

70.

8

trial disclosure format, even to directly

9

EVIDENTIARY SUPPORT

conform with LegalZoom’s own

Revising Rocket Lawyer’s free

Vu Decl. II, ¶ 2, Ex. A, at 63-64.

10

practices, would not affect consumer

11

understanding or decision making.

12

71.

13

sufficient to dispute the Wind Survey

14

results and conclusions because it did

15

not test the Free Trial Ads in the

16

Isaacson Survey.

17

72.

18

plans include access to Rocket Lawyer’s No. 38, ¶ 3(k)-(l), Exs. 12-13; Hollerbach

19

On Call attorneys who can provide legal Decl. I, ¶ 22.

20

advice or live consultations, answer

21

written questions, and/or review legal

22

documents.

23

73.

24

consumers have been misled because

25

Rocket Lawyer does not adequately

26

disclose that not all members have

27

access to these On Call services.

LegalZoom has no evidence

Rocket Lawyer’s subscription

LegalZoom alleges that

Vu Decl. II, ¶ 4, Ex. C, at 19; ¶ 5, Ex. D.

Order, ECF No. 44, at 3; Vu Decl. I, ECF

FAC, ECF 14, ¶ 20-21, 28-31.

28
ACTIVE/73885497.2

17

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

74.

Between October 2008 and

See Vu Decl. I, ECF No. 38, ¶¶ 3(k)-(l),

3

November 2012, “legal review,” having

Exs. 12-13; Hollerbach Decl. I, ¶ 22; Ex.

4

an attorney review a document drafted

C.

5

on Rocketlawyer.com, was provided

6

only to annual plan members

7

immediately and to monthly plan

8

members after 90 days.

9

75.

Rocket Lawyer now allows all

Order, ECF 44, at 3; Vu Decl. I, ECF No.

10

members access to Legal Review.

38, ¶¶ 3(k)-(l), Exs. 12 and 13.

11

76.

Hollerbach Decl. I, ECF No. 37-3, ¶ 23.

12

Rocket Lawyer’s opposition to

13

LegalZoom’s summary judgment

14

motion, free help from local attorneys is

15

and has been available to all registered

16

users, even free trial members, in the

17

form of consultations with Rocket

18

Lawyer’s On Call attorneys.

19

77.

20

“free help from local attorneys” or “free

21

legal review” on Google or Bing.

22

78.

23

encounter information relating to Free

24

Legal Review at the end of the

25

consumer journey that results from

26

searching for and completing a form.

27

79.

By contrast, as disclosed in

Rocket Lawyer does not advertise Vu Decl. II, ¶¶ 8-11, Exs. G-J;

Instead, consumers typically

On the same screen as the Free

Hollerbach Decl. II, ¶ 5.

Hollerbach Decl. I, ECF No. 37-3, ¶ 15,
Ex. C.

Hollerbach Decl. I, ECF No. 37-3, ¶ 15,

28
ACTIVE/73885497.2

18

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

Trial Offer, Rocket Lawyer disclosed

3

that free document review was available

4

immediately in the annual plan, after 90

5

days for the monthly plan, and not

6

included in the free trial.

7

80.

8

provided for “free help from local

9

attorneys” because all Rocket Lawyer

10

registered users, whether on a free trial

11

or a paid legal plan, can contact an

12

attorney for a free consultation at any

13

time.

14

81.

15

from local attorneys is available to all

D at 20, 28, at Exs. 2 and 3 (Isaacson

16

registered users, the Isaacson Survey

Stimuli).

17

tested “limitations” on Free Help Ads

18

instead of Free Legal Review.

19

82.

20

Survey stimuli to test whether

D at 20, 28, at Exs. 2 and 3 (Isaacson

21

consumers understood when they could

Stimuli).

22

get “free help from a local attorney.”

23

83.

24

LegalZoom tested do not apply to help

25

from local attorneys, and thus,

26

LegalZoom’s survey does not test

27

Rocket Lawyer’s actual practices.

No additional disclosures were

Despite knowledge that free help

Ex. C.

Hollerbach Decl. I, ECF No. 37-3, ¶ 2223.

Vu Decl. II, ¶ 4, Ex. C, at 17-19; ¶ 5, Ex.

LegalZoom designed the Isaacson Vu Decl. II, ¶ 4, Ex. C, at 17-19; ¶ 5, Ex.

But the limitations that

Vu Decl. II, ¶ 4, Ex. C, at 18-19.

28
ACTIVE/73885497.2

19

1

UNDISPUTED FACT

EVIDENTIARY SUPPORT

2

84.

3

reveals that a high majority of both test

4

and control respondents understood that

5

they were required to be on some kind

6

of Rocket Lawyer plan to receive free

7

help from local attorneys.

8

85.

9

not to test Free Legal Review Ads in the D at 28, at Exs. 2 and 3 (Isaacson

In addition, LegalZoom’s survey

Furthermore, LegalZoom chose

Vu Decl. II, ¶ 4, Ex. C, at 24-25; ¶ 5, Ex.
D, at 28.

Vu Decl. II, ¶ 4, Ex. C, at 30-31; ¶ 5, Ex.

10

Isaacson Survey, and therefore, has no

11

evidence to suggest that Rocket

12

Lawyer’s disclosures are inadequate.

13

86.

14

one comparative ad—“Zoom costs $99,

15

We’re Free.”

16

87.

17

charge $99 plus state fees, whereas

23; Order at 8 (“it is true that a customer

18

Rocket Lawyer’s service is $0 plus state

can save the $99 charged by

19

fees.

[LegalZoom] for its processing and filing

LegalZoom complains of only

However, LegalZoom does

Stimuli).

Nguyen Decl. I, ¶ 4, Ex. B, ECF No. 282.

Vu Decl. I, ECF No. 38, ¶ 7, Ex. 22 and

20

fee by enrolling in the free trial offered

21

by [Rocket Lawyer]”).

22

88.

23

Rocket Lawyer advertised that it offered

24

a Basic and Pro Legal plan, but that

25

only a free trial of the Basic Plan was

26

available to users.

27

89.

LegalZoom also alleged that

Rocket Lawyer offered free trials

FAC, ECF No. 14, at ¶ 14.

Vu Decl. I, ECF No. 38, ¶¶ 3(d)-(e), Exs.

28
ACTIVE/73885497.2

20

1

UNDISPUTED FACT

2

of its Basic and Pro Legal Plans.

4-5.

3

90.

See FAC, ECF No. 14, at 7-13.

4

Lawyer’s registration of two domain

5

names—www.legalzoomer.com and

6

www.legalzoomgadget.com—but does

7

not allege a cause of action based on

8

registration of these names.

9

91.

LegalZoom alleges that Rocket

EVIDENTIARY SUPPORT

Rocket Lawyer has not used these Answer to First Amended Complaint and

10

domain names as they have been and

11

continue to be error webpages with no

12

content.

Counterclaim, ECF No. 17, Ex. 6.

13
14

92.

15

August 12, 2014.

The discovery cut-off date is

Order Granting Ex Parte Application to
Continue Trial and Related Dates Set in

16

the Court’s January 22, 2014 Order for

17

Good Cause, ECF No. 56, at 3.

18

93.

19

Lawyer’s motion for summary

20

judgment, Rocket Lawyer has produced

21

over 22,000 documents in response to

22

LegalZoom’s discovery requests,

23

including at least 10 spreadsheets of

24

generated advertisement and conversion

25

data.

26

94.

27

consumer reaction to ads that said “Free

As of the date of Rocket

LegalZoom should have tested

Vu Decl. II, ¶ 17.

Vu Decl. II, ¶ 4, Ex. C, at 8-9.

28
ACTIVE/73885497.2

21

1

UNDISPUTED FACT

2

Incorporation – Pay only state fees” or

3

similar language instead of removing

4

the word “free” entirely.

5

95.

6

the control stimuli, LegalZoom made it

7

far less likely that a consumer would

8

actually type “free” when answering an

9

EVIDENTIARY SUPPORT

open ended question about what they

Vu Decl. II, ¶ 4, Ex. C, at 9.

By removing “free” entirely from

10

saw from the ad, especially where the ad

11

was available at all times.

12
13

Dated: June 30, 2014

14

GOODWIN PROCTER LLP
By: /s/ Michael T. Jones
Forrest A. Hainline III (SBN 64166)
[e-mail]
Hong-An Vu (SBN 266268)
[e-mail]
Michael T. Jones (SBN 290660)
[e-mail]
Brian W. Cook (Pro Hac Vice)
[e-mail]
GOODWIN PROCTER LLP

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20

Attorneys for Defendant
ROCKET LAWYER INCORPORATED

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ACTIVE/73885497.2

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