CALHOUN v. INVENTION SUBMISSION CORPORATION et al
Filing
90
MEMORANDUM OPINION re 75 MOTION for Sanctions filed by UNIVERSAL PAYMENT CORPORATION, INTROMARK INCORPORATED, TECHNOSYSTEMS CONSOLIDATED CORP., ROBERT J. SUSA, WESTERN INVENTION SUBMISSION CORP., TECHNOSYSTEMS SERVICE CORP., and INVENTION SUBMISSION CORPORATION. An appropriate Order follows. Signed by Magistrate Judge Patricia L. Dodge on 2/10/2020. (mqe)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
ETTA CALHOUN, SHERRY PORTER,
CYNTHIA ORA Y, ON BEHALF OF
THEMSEL YES AND ALL OTHER
PERSONS SIMILARLY SITU A TED,
Plaintiffs,
vs.
INVE TION SUBMISSION
CORPORATION et al.,
Defendants.
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2: 18-CV-0 I 022-CB-PLD
MEMORANDUM OPINION
Defendants Invention Submission Corporation d/b/a lnventHelp ("lnventHelp"),
Western
Invention
InventHelp"),
Submission
Technosystems
Corporation
Consolidated
d/b/a
Western
Corporation,
InventHel.p
Technosystems
("Western
Service
Corporation , U niversal Payment Corporation, Intromark Incorporated (lntromark) and Robert
J. Susa (the president of these companies) (collectively referred to as the "InventHelp
Defendants") have filed a Motion for Sanctions (ECF No. 75) in which they seek an order
compelling Plaintiffs' counsel to remove from the website "inventhelpclaims.com" certain
language and links to appearances by Plaintiffs' counsel in various news media, as well as the
imposition of the fees and costs associated with preparing and filing this motion.
Because the Court finds that sanctions are not appropriate under the circumstances
presented here, Defendants' Motion will be denied .
I.
Relevant Factual Background
Plaintiffs Etta Calhoun, Sherry Porter and Cynthia Gray, on their own behalf and on
behalf of all others similarly situated, allege in their Second Amended Complaint that the
[nventHelp Defendants, while purporting to act as invention promoters and patent attorneys,
are engaged in a deceptive and fraudulent invention promotion scam that has bilked them
and thousands of other aspiring inventors and entrepreneurs out of millions of dollars for
services that the defendants do not provide and never intend to provide.
[tis undisputed that Plaintiffs counsel, the Oxman Law Group, maintains a website,
"inventhelpclaims.com," (the "Website") which they characterize as a website "seeking to
obtain clients and/or information relating to this lawsuit." (ECF No. 86 at 2). It is similarly
uncontested that Ms. Plitt, counsel for Plaintiffs, has appeared in several news media reports
regarding the instant lawsuit.
The Website inc ludes a page entitled "Invent Help Scam Lawsuit'" which sets forth
various information and statements. (ECF No. 76, Ex. A). Separate pages on the Website
include links to various media stories, including a story broadcast on November 25, 2019 on
the KDKA television station, a CBS affi liate in Pittsburgh, Pennsylvania. (ECF No. 86 at 2).
There is a brief interview of Ms. P litt as part of this broadcast.
The InventHelp Defendants contend that the Website page titled "Invent Help Scam
Lawsuit" embellishes various allegations in the .lawsuit and inte1jects " damaging hyperbole
and editorial." (ECF No. 76 at 2). They high light several statements on this page:
•
•
··JnventHelp has neither the desire nor infrastructme to actually he lp
inventors."
''These are lies-there are no such ' specials' ... "
2
•
' These are all shams.
without a trace."
After getting what it wants lnventHelp disappears
•
" Universal Payment Corporation is neither independent nor legitimate-it is an
integral part oflnventHelp ' s scheme to defraud consumers .. . "
Further, the lnventHelp Defendants assert that in Ms . Pl.itt's KDKA interview, she stated that
their business model is "fraud, pure and simple from start to finish . False promises, false
companies, false licensing agreements. Everything about it is fraudulent." (Id. at 1-2). 1
According to the InventHelp Defendants, these statements violate Rule 3.6 of the
Pennsy lvania Rules of Professional Conduct. Plaintiffs disagree that their statements are improper
in any way and contend that they represent protected speech because these statements recite their
allegations and claims.
The parties engaged in multiple efforts to meet and confer regarding this issue but were
unable to resolve the concerns expressed by lnventHelp. The lnventHelp Defendant's motion for
sanctions fol lowed. ·
II.
Standard of Review
The InventHelp Defendants rely upon Rule 3.6 of the Pennsylvania Rules of Professional
Conduct in support of their motion for sanctions. Rule 3.6 provides, in relevant part, that:
(a) A lawyer who is participating or has participated in the investigation or
liti gation of a matter shall not make an extrajudicial statement that the lawyer
knows or reasonably should know will be disseminated by means of public
communi cati on and will have a substantial li kelihood of materi ally prej udi cing
an adjudicati ve proceeding in the matter.
(b) Notwithstanding paragraph (a), a lawyer may state:
(1 ) the claim, offe nse or defense involved and, except when prohibited by law,
the identity of the persons invo lved;
1
The fu ll quotation is "I would say is thi s fraud, pure and simple from start to finish. False
promi ses, false companies, false licen sing agreements. Everything about it is fraudulent. "
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(2) information contained in a public record ;
(3 ) that an investigation of the matter is in progress;
(4) the scheduling or result of any step in liti gation ;
(5) a request fo r assistance in obtaining evidence and information necessary
thereto;
(6) a warning of danger concerning the behavior of a person involved, when
there is reason to believe that there exists the likelihood of substantial harm to an
individual or to the public interest. ..
The Cow-t's Local Rules adopt the Pennsylvan ia Rules of Professional Conduct and
provide that acts or omissions by attorneys admitted to practice before the Court that violate these
rul es shall constitute misconduct and be gro unds for discipline. Local Rule 83.3A.
In resol ving Defendants ' motion , given their request that certain statements made by
Plainti ffs' counsel be removed from public view, the Comt must also balance counsel ' s right to
free speech with the Court's interest in a fair and impaitial jud icial proceeding. See United States
v. Sca,fo, 262 F.3d 80 (3d Cir. 2001). As noted in Constand v. Cosby, 229 F.R.D. 472 (E.D. Pa.
2005):
[L]imiting speech by parties and witnesses, particularly in a civil case and this early
in the proceeding, is not to be like ly undertaken. Neither should the Court
unde11ake to limit counsels· extrajudicial statements without great care. Rather, the
Court must be convinced, not merely suspect, that there is a substantial likelihood
that extrajudicial statements by counsel, in .light of the circumstances of the case,
will materially prejudice the pending proceedings. The Supreme Court has held that
this ·· ' substantial likelihood of material prejudice ' standard constitutes a
constitutionally pennissible balance between the First Amendment rights of
attorneys in pending cases and the State·s interest in fair trials.
Id. at 475 (quoting Gentile v. State Bar ofNev., 50 1 U.S. 1030, 1075 (1991) (other citations
omitted).
III.
Discussion
The "TnventHelp Scam Lawsuit" Link on the Website
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The InventHelp Defendants assert that vanous statements on the "InventHelp Scam
Lawsuit" page go beyond restating the allegations of the Second Amended Complaint or directing
the public to the record.
Instead, they contend, the statements improperly represent the
conclusions, summaries and analyses of Plaintiff,;;' counsel and created a likelihood of material
prejudice to this litigation.
Citing to the Second Amended Complaint, Plaintiffs argue that the Website statements
mirror various allegations in that pleading and are sometimes prefaced by phrases such as "the
lawsuit alleges" or the " lawsuit points out." Thus, Plaintiffs represent that these statements are
protected speech pursuant to Rule 3.6(b)(l) and (2) (cit ing Coleman-Hill v. Governor lvl[fflin
School Dist. , 20 10 WL 5014352 (E.D. Pa. 2010)). (ECF No. 86 at 5 ).
As noted in the comments to Rule 3.6, it is difficult to strike a balance between protecting
the ri ght to a fair trial and safeguarding the right to free expression. Rules of Prof l Conduct, R.
3.6, Pa. C.S., cmt. 1 (Supp. 2005). "The Rule sets forth a basic general prohibition against a
lawyer's maki ng statements that the lawyer knows or should know will have a substantial
likelihood of materially prejudicing an adjudi cati ve proceeding." Id. cmt. 3.
The Court does not agree that the statements in the Website must be removed. The heading
of the Webpage explici tly states that the topic is the instant lawsui t. As such, the reader is informed
that the content that fo ll ows relates to that lawsui t. It is not necessary that every sentence must be
a verbatim allegation fro m the Second Amended Complaint or include prefatory language
confirming that the info rmation conveyed is a claim in the lawsui t. The Court also disagrees that
the summary of various allegations is materially different than the content of the pleading itself.
Moreover, this info rmation is already in the public record by virtue of the commencement of this
action and the availability of the Second Amended Complaint and other pleadings on the docket.
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The InventHelp Defendants argue that these statements create a likelihood of material
prejudice in the on-going litigation. The Court disagrees. This case is at an early stage: a motion
to dismiss the Second Amended Complaint is pending at this time, discovery has not yet
commenced, and no trial date is scheduled, let alone on the horizon. Given what is available in
the public domain, InventHelp has failed to demonstrate that it has sustained substantial prejudice
based upon the content of this page of the Website. Simply put, there is no current basis to
conclude that this information has a "substantial likelihood of materially prejudicing an
adjudicative proceeding in the matter" as required in order to implicate Rule 3.6.
The KDKA Interview
The Court has reviewed the KDKA news story in its entirety. It mentions the lawsuit at
the outset, displays and reviews some of the allegations of the Second Amended Complaint and
includes a written statement from lnventHelp. It also includes Ms. Plitt' s statement regarding
fraud.
Reviewing these statements against the backdrop of the underlying theme of the KDKA
report (the existence of the lawsuit), the fact that the KDKA story is readily accessible via the
Internet, the current status of this litigation, the information that is publicly available, and the
allegations of fraud in the Second Amended Complaint, the Court concludes that Ms. Plitt's
statements have not created a substantial likelihood of materially pre:judicing this action.
Therefore, she has not violated Rule 3.6 and no sanctions are warranted. See Rule 3.6(2). The
Court anticipates that all counsel will comply with the Pennsylvania Rules of Professional Conduct
throughout the course of this action.
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For these reasons, the InventHelp Defendants' Motion for Sanctions is DENIED. 2 An
appropriate Order follows.
February 10, 2020
2
Plaintiffs' request in their Memorandum of Law in Opposition for leave to file an application
for fees and expenses is also denied. Plaintiffs have not demonstrated that Defendants' Motion
for Sanctions was unreasonable or filed in bad faith.
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