Moving and Storage, Inc. et al v. Panayotov et al

Filing 71

Judge George A. OToole, Jr: OPINION AND ORDER entered granting in part and denying in part 41 Motion to Dismiss. (Danieli, Chris)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 12-12262-GAO
MOVING AND STORAGE, INC., d/b/a Neighbors Moving and Storage,
MBM MOVING SYSTEMS, LLC, COLONIAL VAN LINES, INC.,
FATHER & SON MOVING AND STORAGE, AMERICAN VAN LINES, INC.,
and NATIONWIDE RELOCATION SERVICES, INC.,
Plaintiffs,
v.
MARTIN PANAYOTOV, STOIL ANDREEV, XPRESS MOVERS, LLC,
ADVANCED INTERACTIVE, LLC, and WORLD MEDIA GROUP, LLC,
Defendants.

OPINION AND ORDER
March 12, 2014
O’TOOLE, D.J.
This case arises out of the defendants’ operation of the moving company review website
MyMovingReviews.com. The individual defendants, Martin Panayotov and Stoil Andreev, are
officers or owners of the corporate defendants, Xpress Movers, LLC, Advanced Interactive,
LLC, and World Media Group, LLC. The plaintiffs, all corporations providing moving services,
allege that the defendants deleted positive customer reviews of the plaintiffs and deleted negative
customer reviews of Xpress Movers in order to gain market share, all the while maintaining that
the website was neutral in its operation. The plaintiffs assert various tort and statutory claims
arising from the alleged conduct, and they also claim that the defendants committed copyright
and trademark infringement by using content and logo designs taken from the plaintiffs’ websites
on MyMovingReviews.com without permission.
Defendant Panayotov moves to dismiss the Amended Complaint pursuant to Federal Rule
of Civil Procedure 12(b)(6), arguing primarily that he is immune from suit under the

Communications Decency Act (“CDA”), 47 U.S.C. § 230. The remaining defendants have also
moved to dismiss, incorporating by reference Mr. Panayotov’s motion and memorandum in
support.
I.

Legal Standard
In evaluating a motion to dismiss, the Court must take “all the factual allegations in the

complaint as true.” Maldonado v. Fontanes, 568 F.3d 263, 266 (1st Cir. 2009) (quoting Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009)). However, “formulaic recitation of the elements of a cause of
action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Court need not
“accept as a true a legal conclusion couched as a factual allegation.” Id. (quoting Papasan v.
Allain, 478 U.S. 265, 286 (1986)). The Court may “begin by identifying allegations that, because
they are mere conclusions, are not entitled to the assumption of truth. While legal conclusions
can provide the complaint’s framework, they must be supported by factual allegations. When
there are well-pleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 664.
II.

Discussion
A.

Communications Decency Act

Defendant Panayotov contends that Counts I through IV 1 of the Amended Complaint are
barred by the Communications Decency Act (“CDA”). Section 230(c)(1) of the CDA states, in
relevant part:
(1) Treatment of publisher or speaker
No provider or user of an interactive computer service shall be treated as the
publisher or speaker of any information provided by another information content
provider.

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For false advertising and unfair competition, violation of M.G.L. Chapter 93A, and tortious
interference.
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Under the CDA, a defendant:
is immunized from a state law claim if: (1) [the defendant] is a “provider or user
of an interactive computer service”; (2) the claim is based on “information
provided by another information content provider”; and (3) the claim would treat
[the defendant] “as the publisher or speaker” of that information.
Universal Commc’n Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 418 (1st Cir. 2007).
There is no dispute that the defendants provide an “interactive computer service” via the
MyMovingReviews.com website. See id. at 419 (“[W]eb site operators . . . are providers of
interactive computer services within the meaning of Section 230.”).
As to the second element, the plaintiffs contend that their claims are not based on
information provided by “another information content provider,” which in this case would be
reviews by third-party customers. I agree. The plaintiffs’ claims do not arise from the content of
the reviews, whether they be disparaging, laudatory, or neither, but instead, the defendants’
alleged ill-intentioned deletion of positive reviews of the plaintiffs’ moving companies and
deletion of negative reviews of their own company, coupled with various representations – that
the website offers “accurate” data, that it is “serious about reviews quality,” and that readers “see
the most accurate and up to date rating information to base your decision on.” The manner in
which the information is presented, or withheld, is the conduct at issue, as well as the allegedly
misleading ratings which result from such alleged manipulations. Such conduct provides
substantial basis to find that the defendants were developers of the alleged misinformation. 2 Cf.
id. at 420 (holding that website operator was not responsible for the creation or development of
the alleged misinformation where the plaintiffs alleged only that the defendant “may have made
it marginally easier for others to develop and disseminate misinformation”).
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The Amended Complaint also alleges that the defendants posted “fictitious negative reviews”
concerning the plaintiffs’ companies. (Am. Compl. at ¶ 81.) Any claims based on such content
would be based on information provided by the defendants and therefore would not fall under
CDA immunity.
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Likewise, the plaintiffs do not seek to treat the defendants as the publisher or speaker of
the third-party reviews. Rather, the plaintiffs treat the third-party customers as the publishers or
speakers and bring “causes of action based not on [the defendants’] publishing conduct but on
[their] representations regarding such conduct, [which] would not be immunized under [the
CDA].” Levitt v. Yelp! Inc., 2011 WL 5079526, at *9 (N.D. Cal. 2011).
As the three elements giving rise to immunity under Section 230(c)(1) have not been
satisfied, the defendants are not immune from suit under that subsection of the CDA.
With regards to Mr. Panayotov’s contention that the website merely filtered out
inaccurate or otherwise suspect material, including reviews not submitted by real customers, the
applicable provision of the CDA is Section 230(c)(2), which states:
(2) Civil liability
(A) No provider or user of an interactive computer service shall be held liable
on account of—
any action voluntarily taken in good faith to restrict access to or
availability of material that the provider or user considers to be obscene,
lewd, lascivious, filthy, excessively violent, harassing, or otherwise
objectionable, whether or not such material is constitutionally protected.
47 U.S.C. § 230(c)(2). This subsection requires a showing of good faith. As the plaintiffs have
sufficiently alleged bad faith, the issue cannot be appropriately decided at this stage. It is better
resolved on a developed factual record.
For these reasons, the CDA does not mandate dismissal of any of the claims at this time.
B.

False Advertising and Unfair Competition; Chapter 93A (Counts I, II, III)

The plaintiffs bring claims for false advertising and unfair competition under the Lanham
Act, 15 U.S.C. § 1125(a), and state common law, as well as a claim for violation of M.G.L.
Chapter 93A. These claims arise from the allegations that the defendants made various
misrepresentations on the website MyMovingReviews.com, including the allegedly false claim

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that it was accredited by the Better Business Bureau and the alleged misrepresentations about the
accuracy and reliability of the customer reviews. Taking all factual allegations in the Amended
Complaint as true, I conclude that these claims are adequately pled.
C.

Tortious Interference (Count IV)

To prevail on a claim for tortious interference with business relationships under
Massachusetts law, a plaintiff must prove the following:
(1) a business relationship or contemplated contract of economic benefit;
(2) the defendant’s knowledge of such relationship;
(3) the defendant’s interference with the relationship through improper motive or
means; and,
(4) the plaintiff’s loss of advantage as a direct result of the defendant’s conduct.
Singh v. Blue Cross/Blue Shield of Mass., Inc., 308 F.3d 25, 47 (1st Cir. 2002) (citations
omitted). The plaintiffs here allege that their “customers and prospective customers are misled
into believing that Plaintiffs’ services are poorly rated and reviewed on Defendants’ website,
through Defendants’ conduct of removing negative reviews concerning Plaintiffs and posting
fictitious negative reviews,” and also “misled into believing that Defendants’ services are
positively rated and reviewed due to Defendants’ conduct in removing negative reviews posted
on MyMovingReviews.com, and that Defendants’ business [is] accredited by the BBB.” (Am.
Compl. at ¶¶ 81, 82.)
The plaintiffs have failed to allege with specificity any “business relationship or
contemplated contract of economic benefit.” They rely on Guest-Tek Interactive Entm’t, Inc. v.
Pullen, 731 F. Supp. 2d 80, 87 (D. Mass. 2010), for the proposition that it is sufficient to allege
generally that business relations with prospective customers have been affected. But the holding
in Guest-Tek is not so expansive. The court there noted that it was appropriate to draw the
reasonable inference that the party being sued had knowledge of the potential business

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relationships in light of other circumstances and factual allegations, e.g., the nature of the
business and the defendant’s alleged use of the plaintiff’s contact list. Id. at 87-88.
No such circumstances exist here, especially in this type of business where the class of
potential customers is not at all defined but could include any individual who may need moving
services in the future. As noted in a similar case in this district,
The plaintiff’s definition of “advantageous relations” for these purposes is too
expansive. It appears that the plaintiff’s theory is that the existence of a potential
market for a company’s product is sufficient to create a prospective advantageous
relationship with each potential customer in that market. Massachusetts does not
interpret this tort to reach so far. The plaintiff has not identified any case in which
a court applying Massachusetts law has allowed a claim for intentional
interference with advantageous business relations where the business relationship
said to have been interfered with was as inchoate as alleged here.
Katin v. Nat’l Real Estate Info. Servs., Inc., 2009 WL 929554, at *9 (D. Mass. Mar. 31, 2009)
(quoting Laser Lasbs, Inc. v. ETL Testing Labs., Inc., 29 F. Supp. 2d 21, 23-24 (D. Mass. 1998)).
The tortious interference claim is therefore dismissed.
D.

Trademark Infringement (Count V)

Plaintiffs Moving and Storage (d/b/a Neighbors Moving and Storage) and American Van
Lines allege that the defendants infringed their trademarks “Neighbors Moving & Storage” and
“American Van Lines” by using these marks without permission on their website and in
metatags.
“To establish trademark infringement under the Lanham Act, a plaintiff must prove that:
(1) it owns and uses the disputed marks; (2) the defendant(s) used similar or identical marks
without permission; and (3) that unauthorized use likely confused consumers, harming the
plaintiff.” Shelby v. Factory Five Racing, Inc., 684 F. Supp. 2d 205, 215 (D. Mass. 2010) (citing
Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d 56, 60 (1st Cir. 2008)). The First
Circuit has “interpreted ‘likely confusion’ to mean ‘more than the theoretical possibility of
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confusion.’” Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 12 (1st Cir. 2008)
(quoting Int’l Ass’n of Machinists and Aerospace Workers, AFL-CIO v. Winship Green Nursing
Ctr., 103 F.3d 196, 200 (1st Cir. 1996)). “In other words, the allegedly infringing conduct must
create a likelihood of confounding an appreciable number of reasonably prudent purchasers
exercising ordinary care.” Id. (internal quotation marks and citation omitted).
The plaintiffs’ allegations fail to support any inference that confusion by consumers is
likely. The defendants’ website, MyMovingReviews.com, is very clearly a review website, and it
is implausible that any reasonably prudent purchaser exercising ordinary care would be confused
by the use of the plaintiffs’ marks. The plaintiffs rely on the “initial interest confusion” doctrine,
which “refers to a type of pre-sale confusion that has not been fully explored or addressed by the
First Circuit.” Hearts on Fire Co., LLC v. Blue Nile, Inc., 603 F. Supp. 2d 274, 283 (D. Mass.
2009). The plaintiffs assert that the defendants’ use of metatags to divert consumers who search
for the plaintiffs’ companies online to the defendants’ website amounts to trademark
infringement under this doctrine. However, even if this doctrine were recognized in this Circuit,
which it has not been, “[m]ere diversion, without any hint of confusion, is not enough.” Id. at
286.
The plaintiffs claim that they specifically made allegations of consumer confusion at ¶¶ 4,
26, 32, 33 3, and 99 of the Amended Complaint. However, these are merely legal conclusions
couched as factual allegations, and even if they were taken as true, they only support the
inference that consumers are misled into believing allegedly inaccurate ratings, not that
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Here, the plaintiffs allege that the “unnecessary posting of Plaintiffs’ trademarks have confused
consumers about the nature of Plaintiff’s [sic] services.” But as the First Circuit noted in
Swarovski Aktiengesellschaft v. Bldg. No. 19, Inc., 704 F.3d 44, 52 (1st Cir. 2013), “a trademark
holder has no right to police ‘unnecessary’ use of its mark. Whether necessary or not, a
defendant’s use of a mark must be confusing in the relevant statutory sense for a plaintiff to raise
a viable infringement claim.”
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consumers were confused in the relevant sense, i.e., that they were confused about the source of
the service or about endorsement or affiliation. See Swarovski Aktiengesellschaft v. Bldg. No.
19, Inc., 704 F.3d 44, 49 (1st Cir. 2013). This claim is dismissed.
E.

Copyright Infringement (Count VI)

Plaintiff Father & Son Moving and Storage asserts that the defendants took copyrighted
content from Father & Son’s website (www.fandsmoving.com) without permission and
published it on their own website, in violation of Father & Son’s rights under the U.S. Copyright
Act. Father & Son alleges that it “holds a copyright in the language and literary work used on its
website” and that “the following language . . . appears on the Defendants’ Site”:
Father & Son means QUALITY LOW COST MOVING! We are a family-owned
business, dedicated to providing professional and personal service. Father & Son
specialized in local, statewide, long distance moving, Office relocation, truck
rentals, small moves, self services movers, and more. All moves are performed by
our quality trained professionals, who handle your moving needs from start to
finish. Address: 12435 E 42nd Avenue Unit 50 Denver, CO 80239 Phone: (303)
322-6562.
(Am. Compl. at ¶¶ 104, 106 (dkt. no. 37).)
“Registration of a copyright is a precondition to filing a copyright infringement claim.”
Latin Am. Music Co. Inc. v. Media Power Grp., Inc., 705 F.3d 34, 42 (1st Cir. 2013) (citing 17
U.S.C. § 411)). Here, Father & Son alleges that the Copyright Office received its registration
application on May 21, 2013, three days before the filing of the Amended Complaint. Further,
according to a Notice (dkt. no. 70) filed by the plaintiffs on February 20, 2014, the Copyright
Office issued a certificate of registration, attached to the Notice as Exhibit A, effective May 21,
2013, but the plaintiffs did not receive the certificate until several months thereafter. Under these
circumstances, the registration requirement has been satisfied, and the claim will not be
dismissed for the reason asserted by the defendants.

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III.

Conclusion
For the foregoing reasons, defendant Panayotov’s Motion to Dismiss (dkt. no. 41) is

GRANTED in part and DENIED in part. Counts IV and V of the Amended Complaint are
DISMISSED. The other counts remain.
It is SO ORDERED.
/s/ George A. O’Toole, Jr.
United States District Judge

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