Wilson et al v. AdvisorLaw LLC et al

Filing 55

ORDER: The Defendants' 18 Motion to Dismiss is GRANTED IN PART. The Plaintiffs' COCCA claims are DISMISSED. The Motion is DENIED in all other respects. By Chief Judge Marcia S. Krieger on 2/14/2018. (msklc3)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Marcia S. Krieger
Civil Action No. 17-CV-1525-MSK
MARK WILSON, and
WILSON LAW LTD.,
Plaintiffs,
v.
ADVISORLAW LLC,
DOCHTOR DANIEL KENNEDY, and
STACY SANTMYER,
Defendants.

OPINION AND ORDER GRANTING IN PART MOTION TO DISMISS

THIS MATTER comes before the Court on the Defendants’ Motion to Dismiss (# 18),
the Plaintiffs’ responses (## 21, 22), and the Defendants’ reply (# 24). For the reasons that
follow, the Motion is granted, in part.
I. JURISDICTION
The Court has jurisdiction to hear this case under 28 U.S.C. § 1331.
II. BACKGROUND1
According to the Amended Complaint, Plaintiff Mark Wilson and Defendant Dochtor
Kennedy had a business relationship through their corporate entities, Wilson Law Ltd. and
AdvisorLaw LLC. AdvisorLaw elected to terminate this business relationship in October 2016.

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The Court recounts and accepts as true the well-pled facts alleged in the Amended Complaint
(# 11). See Dudnikov v. Chalk & Vermilion Fine Arts Inc., 514 F.3d 1063, 1069–70 (10th Cir.
2008).
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Thereafter, Mr. Kennedy emailed Mr. Wilson expressing disappointment that Mr. Wilson
was “competing with my business.” # 11 at 6. In another email, Mr. Kennedy asserted that Mr.
Wilson was using AdvisorLaw without authorization and to its detriment. That same day, posing
as “Patrick Erickson,” Mr. Kennedy posted the following review of Wilson Law on the website
ripoffreport.com (Review):
Mark H. Wilson sounds very trustworthy and experienced. He lied to me with
no reservations. He made claims of his experience, affiliations, credentials, and
acumen [sic] which were complete fabrications. He conned me into hiring his
sham of a company (operating out of his home in Denver, CO) to save my
career.
I desperately needed an experienced lawyer to navigate FINRA and the IRS issues
which resulted from a recent divorce. Mark portrayed himself as an expert with
vast experience. Only after paying him upwards of $15,000 did I begin to have
concern over the lack of progress. After paying additional money to a
professional investigator, I learned that Mark had flat out lied to me about all of
it.
When I confronted Mark, he refused to admit that he had taken advantage of me.
Even when hard evidence of his lies sent by email and recorded conversations
proven to be lies were provided, he told me candidly “good luck getting any
money back.” He said, “I am very good at hiding from judgments and
collections.” That may have been the ONLY true thing he said.
Ex. 3 to Am. Compl., # 11-3 at 2 (emphases in original). After authoring the Review, Mr.
Kennedy told his employees at AdvisorLaw that he had done so. He offered employee Jason
Bacher $2,000 to tell others that he had written the Review, and then told Mr. Wilson that Mr.
Bacher had written the Review. Stacy Santmyer, another employee, encouraged Mr. Kennedy
to blame the Review on Mr. Bacher.
On these and other allegations, the Amended Complaint (# 11) makes the following
claims: (1) false advertising under the Lanham Act, (2) four claims of racketeering activity
under the Colorado Organized Crime Control Act (COCCA), (3) deceptive trade practices under
the Colorado Consumer Protection Act (CCPA), (4) defamation, and (5) civil conspiracy. In
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addition to compensatory relief, the Plaintiffs request injunctive relief in the following forms: an
order enjoining the Defendants from publishing defamatory statements about the Plaintiffs, an
order requiring the Defendants to have the Review deleted from the Internet or removed from
Internet search engines, an order enjoining third parties from republishing the Review, and an
order requiring AdvisorLaw to report Mr. Kennedy’s and Mr. Santmyer’s criminal violations to
law enforcement. The Defendants have moved to dismiss the Lanham Act, COCCA, and CCPA
claims (# 18).
III. LEGAL STANDARD
In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all
well-pleaded allegations in the complaint as true and view those allegations in the light most
favorable to the nonmoving party. Stidham v. Peace Officer Standards & Training, 265 F.3d
1144, 1149 (10th Cir. 2001) (quoting Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d
1226, 1236 (10th Cir. 1999)). The Court must limit its consideration to the four corners of the
complaint, any exhibits attached thereto, and any external documents that are incorporated by
reference. See Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009). However, a court
may consider documents referred to in the complaint if the documents are central to the
plaintiff’s claim and the parties do not dispute the documents’ authenticity. Alvarado v. KOB-TV
LLC, 493 F.3d 1210, 1215 (10th Cir. 2007).
A claim is subject to dismissal if it fails to state a claim for relief that is “plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To make such an assessment, the Court first
discards those averments in the complaint that are merely legal conclusions or threadbare recitals
of the elements of a cause of action, supported by mere conclusory statements. The Court then
takes the remaining, well-pleaded factual contentions, treats them as true, and ascertains whether

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those facts (coupled, of course, with the law establishing the requisite elements of the claim)
support a “plausible” as compared to a “conceivable” claim. See: Khalik v. United Air Lines, 671
F.3d 1188, 1191 (10th Cir. 2012).
IV. DISCUSSION
The Defendants move to dismiss the Plaintiffs’ false-advertising claim under the Lanham
Act, COCCA claims, and CCPA claim. They do not move to dismiss the defamation or civil
conspiracy claims. The Court discusses each claim in turn.
A. False Advertising Under the Lanham Act
The Lanham Act prohibits a person from using, in commercial advertising or promotion,
any “false or misleading description of fact” that “misrepresents the nature, characteristics,
qualities, or geographic origin” of another person’s services or commercial activities. 15 U.S.C.
§ 1125(a). To establish a prima facie claim for false advertising, the Plaintiffs must show that:
(1) the Defendants made a materially false or misleading representation of fact (2) in connection
with their commercial advertising or promotion (3) in commerce; (4) such representation
misrepresents the nature of the Plaintiffs’ services or commercial activities; and (5) the Plaintiffs
have been or are likely to be injured as a result. See World Wide Ass’n of Specialty Programs v.
Pure Inc., 450 F.3d 1132, 1140 (10th Cir. 2006); J. Thomas McCarthy, McCarthy on
Trademarks § 27:24 (5th ed. 2017).2

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In Pure, the Tenth Circuit’s conception of the elements of a false-advertising claim includes
the likelihood of confusion or mistake over product characteristics, which is clearly derived from
§ 1125(a)(1)(A). Subsection (A) pertains to trademark infringement claims. Tracing Tenth
Circuit precedent, Pure’s conception of the false-advertising elements originated from a treatise.
See Cottrell Ltd. v. Biotrol Int’l Inc., 191 F.3d 1248, 1252 (10th Cir. 1999) (citing Charles E.
McKenney & George F. Long III, Federal Unfair Competition: Lanham Act § 43(a) § 6 (11th
ed. 1998)). Section 6 of this treatise does not cover subsection (A); indeed, the entire section
covers subsection (B). Its conception of the false-advertising elements makes no reference to the
likelihood of confusion. McKenney & Long, supra, § 6.3. For these reasons, the Court has
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To constitute “commercial advertising or promotion”, a factual representation must have
four characteristics: (1) it must be commercial speech, (2) it must be made by (or on behalf of) a
defendant who is in commercial competition with the plaintiff, (3) it must be for the purpose of
influencing consumers to obtain the defendant’s services, and (4) it must be disseminated
sufficiently to the relevant purchasing public to constitute advertising or promotion within the
relevant industry. See Proctor & Gamble Co. v. Haugen, 222 F.3d 1262, 1273–74 (10th Cir.
2000).
The Defendants first argue that the Lanham Act requires the Plaintiffs to have a
registered trademark to sustain a cause of action and to have a famous mark to obtain injunctive
relief, which is not alleged in the Amended Complaint. That is not so.
Although the Lanham Act deals with federal registration and related matters, the falseadvertising provisions in § 1125(a)(1)(B) are not connected by reference to any trademark rights,
either registered or not. Subsection (A) deals with confusion between marks or “designations”.
Often it is invoked as a vehicle for relief where there is a claim of trademark infringement, but in
that context, Subsection (A) does not require registration to sustain a cause of action.
McCarthy, supra, § 27:13. Subsection (B) has nothing to do with a mark of any kind.3 It
concerns a false representation of fact. Similarly, there is no requirement under the Lanham Act
that a false-advertising claim be based on a famous mark to impose injunctive relief. Thus, a
Subsection (A) claim is premised upon a mark or designation that causes confusion and a
Subsection (B) claim is premised upon a false representation of fact. In addition, Courts have
routinely allowed injunctive relief for false-advertising claims on a strong showing of irreparable

modified the false-advertising elements to remove any reference to likelihood of confusion in
accordance with McCarthy’s treatise.
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Subsection (B) also has nothing to do with the Anticybersquatting Consumer Protection Act
(15 U.S.C. § 1125(d)(1)(A)), which the Defendants invoke in the Motion to Dismiss.
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harm. See, e.g., Highmark Inc. v. UPMC Health Plan Inc., 276 F.3d 160, 171–74 (3d Cir. 2001);
accord McCarthy, supra, § 27:37. The Defendants’ citation to § 1125(c)(1) is entirely
inapposite.
Their second argument is that that the Review does not constitute “commercial
advertising or promotion”. In specific, they argue that the Review cannot be an advertisement
because (1) it did not refer to the Plaintiffs’ domain name or misuse such name, (2) it did not
make any direct or indirect reference to any of the Defendants, and (3) it was not disseminated
sufficiently to the public. The Defendants maintain that if the Review is hurting the Plaintiffs’
business, the Amended Complaint must state exactly how such injuries occur.
Taking the alleged facts as true, Mr. Kennedy authored the review on a widely-read
website with the intent to dissuade the public from using Mr. Wilson’s services, resulting in
harm to Mr. Wilson’s reputation. To the extent that the Defendants’ real argument is that a
negative statement designed to discourage a consumer from transacting business does not
constitute commercial advertising or promotion, the Defendants fail to cite to any legal authority
and the Court has found none for the proposition. Because the burden is on the Defendants to
develop the argument, and they have not done so, dismissal is denied at this time.
Accordingly, the Court finds that the Plaintiffs have stated a claim for false advertising
under the Lanham Act.
B. Racketeering Under COCCA
The first two COCCA claims allege an enterprise under Subsection (3) and conspiracy
under Subsection (4) between Mr. Kennedy and AdvisorLaw, and the second two claims allege
an enterprise under Subsection (3) and conspiracy under Subsection (4) between Mr. Kennedy,
AdvisorLaw, and Mr. Santmyer. These claims come under two provisions of the same statute:

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(3) It is unlawful for any person employed by, or associated with, any enterprise
to knowingly conduct or participate, directly or indirectly, in such enterprise
through a pattern of racketeering activity . . . .
(4) It is unlawful for any person to conspire or endeavor to violate any of the
provisions of subsection (1), (2), or (3) of this section.
C.R.S. § 18-17-104(3)–(4). For both types of claims, pattern of racketeering activity “means
engaging in at least two acts of racketeering activity which are related to the conduct of the
enterprise”. C.R.S. § 18-17-103(3). In turn, racketeering activity means to commit, attempt to
commit, or conspire to commit offenses involving fraud, such as criminal impersonation under
Section 18-5-113, or offenses involving governmental operations, such as tampering with a
witness or victim under Section 18-8-707.4 C.R.S. § 18-17-103(5)(IV), (VII).
The Defendants argue that the Amended Complaint only alleges a single act that
constitutes racketeering, and thus fails to state a claim. The Court agrees. Here, the only alleged
activity was the posting of the Review. This act occurred on one occasion, and so there is only
one act. Accordingly, both claims are dismissed.
C. Deceptive Trade Practices under the CCPA
To establish a CCPA violation, a plaintiff must show that (1) the defendant engaged in an
unfair or deceptive trade practice, (2) the practice occurred in the course of the defendant’s
business, vocation, or occupation; (3) it significantly impacts the public as actual or potential
consumers of the defendant’s services; (4) the plaintiff’s legally protected interest suffered an
injury in fact; and (5) the practice caused such injury. Hall v. Walter, 969 P.2d 224, 235 (Colo.
1998). A person engages in a deceptive trade practice when she “disparages the goods, services,

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Section 18-8-707 provides that a person commits tampering with a witness if she intentionally
attempts to induce a witness or a person she believes is to be called to testify as a witness in any
official proceeding or who may be called to testify as a witness to testify falsely or unlawfully
withhold any testimony. C.R.S. § 18-8-707(1)(a).
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property, or business of another by false or misleading representation of fact.” C.R.S. § 6-1105(1)(g). To determine whether a practice significantly impacts the public, courts consider
“(1) the number of consumers directly affected by the challenged practice, (2) the relative
sophistication and bargaining power of the consumers affected by the challenged practice, and
(3) evidence that the challenged practice has previously impacted other consumers or has the
significant potential to do so in the future.” Rhino Linings USA Inc. v. Rocky Mountain Rhino
Lining Inc., 62 P.3d 142, 149 (Colo. 2003).
The Defendants argue that the Amended Compliant fails to state a claim because there
are insufficient facts alleged, particularly with regard the Review’s public impact. The Court
disagrees.
Taking the allegations in the Amended Complaint as true, Mr. Kennedy posted a false
review on ripoffreport.com, the espoused purpose of which was to provide information “from
consumers, to consumers”. The Review clearly seeks to disparage Wilson Law’s services to
current and potential customers and is comprised of false facts. The Plaintiffs also allege that
they have suffered injuries to their reputations and brand value. Although it is true that the
Plaintiffs will eventually have to present evidence of the impact of the Review on the public and
on Mr. Wilson, taking the plausible allegations in the Amended Complaint as true, as the Court
must at this stage, the pleading in the Amended Complaint is sufficient to proceed with this
claim.
V. CONCLUSION
For the foregoing reasons, the Defendants’ Motion to Dismiss (# 18) is GRANTED IN
PART. The Plaintiffs’ COCCA claims are DISMISSED. The Motion is DENIED in all other
respects.

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Dated this 14th day of February, 2018.
BY THE COURT:

Marcia S. Krieger
Chief United States District Judge

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