Nemet Chevrolet LTD. et al v. Consumeraffairs.Com, Inc.

Filing 1

Nemet Chevrolet LTD. et al v. Consumeraffairs.Com, Inc.

Doc. 1

Fl! Fn
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OI^RiQJNIA p 3. Q 3
Alexandria Division
ALh..:%

153-12 Hillside Avenue Jamaica, NY 11423
and

NEMET CHEVROLET LTD.

) )
)

)

THOMAS NEMET, d/b/a NEMET MOTORS,
Plaintiffs,

)
)

vCONSUMERAFFAIRS.COM, INC,

) Civil Action No. \>0$ Crf
)

11350 Random Hills Road Suite 800 Fairfax, VA 22030

) ) )

Defendant.

)

)

COMPLAINT

Plaintiffs, NEMET CHEVROLET LTD. and THOMAS NEMET d/b/a NEMET MOTORS (collectively, "Plaintiffs" or "Nemet") by and through their undersigned counsel, hereby

bring their action against Defendant CONSUMERAFFAIRS.COM, INC (the "Defendant" or
"Consumeraffairs.com") for defamation, tortious interference with a business expectancy and
violations of the Lanham Act.

Dockets.Justia.com

The Patties, Jurisdiction anH Vphhp

1.

This is an action for injunctive and monetary relief based upon Defendant's

defamatory and deceptive practices of preparing and publishing false, malicious and libelous articles
of and concerning Plaintiffs' business. Since at least January 20,2000, including several times since
April 2007; Defendant has published over the World Wide Web multiple unverified and false
complaints about the Plaintiffs1 business resulting in irreparable and continuous damage to the
Plaintiffs.

2.

This Court pursuant to 15 US.C § 1121(a) and diversity jurisdiction per 28 US.C

SS 1331 and 1338(a). This Court further has supplemental jurisdiction over the state law causes of action pursuant to 28 US.C § 1367(a) in that the parties are citizens of different states and the
amount of controversy exceeds $75,000, exclusive of interest and costs.

3.

Personal jurisdiction exists pursuant to Va. Code §§ 8.01-328 to -330, Virginia's long-

arm statute. The Defendant has engaged in business related to this matter in Virginia, Defendant

maintains an office in Virginia, and through its website, advertises specificaUy to Virginia residents.
4. Defendant conducted a significant amount of commercial activity in the

Commonwealth and derives significant profit from the Commonwealth, including, but not limited
to, posting advertisements by Virginia attorneys on its website and obtaining advertising revenue
from Virginia residents.

5.
Virginia.

Defendant is also affiliated with a Virginia attorney whose offices are in Fairfax,

6.

Venue exists pursuant to 28 US.C § 1391(a), as a substantial part of the events or

omissions giving rise to the claims occurred in this District.

7.

At all material times, Plaintiff NEMET CHEVROLET LTD. was and remains a

corporation duly organized under the laws of the State of New York, with its principal place of

business at 153-12 Hillside Avenue, Jamaica, New York 11423.
8. At all material times, Plaintiff THOMAS NEMET, d/b/a NEMET MOTORS was

and remains a sole proprietorship doing business at 153-12 Hillside Avenue, Jamaica, New York
11423.

9.

At all material times, Defendant CONSUMERAFFAIRS.COM, ING, is a

corporation duly organized in the state of California, doing business in Virginia, with its principal

place of business in the County of Fairfax at 11350 Random Hills Road, Suite 800, Fairfax, Virginia
22030.

FACTS COMMON TO ALL COUNTS

Consumeraffairs.Com Website

10.

The Plaintiffs are a group of franchised automotive dealers that have been selling

cars in the New York area for over 90 years. They have an excellent reputation in the community
for fair dealing and truthfulness.

11.

Defendant operates in commerce under the guise of "consumer affairs" for the

purpose of unlawfully diverting consumers and deriving a profit from misdirecting consumers.
12. Upon information and belief, Defendant's website is not a "consumer affairs"

website dedicated to helping consumers, as the website's name suggests, but is a ploy to sell online
advertising and assist members of the plaintiffs' bar with soliciting potential clients.
13. The consumers whose alleged complaints are posted on Defendant's website are

actually confused about the nature and purpose of Defendant's website. None of the alleged
complaints about Plaintiff posted on Defendant's website have been reported or acted upon by the

state agency actually responsible for addressing consumer complaints, the New York Gty

Department of Consumer Affairs. By contrast, numerous other automobile dealers have been cited

fordeceptive orrnisleading practices bythe New York Qty Department of Consumer Affairs.
14.

Indeed, Defendant's founder and president, in sworn written testimony, admitted

that Consumeraffairs.com's "sole source of income is advertising on the Website." According to the
sworn Affidavit of James R. Hood, the Website accepts advertising from "Google, TribalFusion, BURSTMedia, DoubleClick, FastClicks, and 24/7 RealMedia, among others." This advertising is

sold by placing lines of code on each website that correspond to the webpage content. Thus "a page

that mentions 'Ford' may get ads for Fords, other kinds of cars, and auto-related goods." A true and
correct copy of the Affidavit of James R. Hood is attached as Exhibit A.

15.

Moreover, according to the Consumeraffairs.com website, «[a]U of the complaints

submitted through our complaint form are reviewed by class action attorneys and hundreds of cases
have been filed as a result."

16.
Virginia.

Indeed, one of Defendant's editors is a practicing plaintiffs' attorney from Fairfax,

Cbraumeraffairs.Cnm's Defamatory ArhVW

17.

Defendant's website recklessly published numerous false and defamatory statements

against Plaintiffs' business, causing Plaintiffs' business reputation harm and causing loss of
customers.

18.

According to Mr. Hood's sworn affidavit, Defendant's website solicits consumers to

complete "complaint forms" in order to publish alleged complaints against a business on the
website. Mr. Hood and his staff "sort through the Complaint Forms, and omit any that contain

libelous or obscene statements, as well as any that seem to stem from isolated incidents, rather than
a pattern of behavior."

19.

Despite the fact that Defendant's staff allegedly .viewed the complaint forTM, as

demonstrated below, Defendant and its employs recklessly and/or rnaliciously allowed numerous
false, libelous, and damaging statement, against Plaintiffs' business to be posted on their website.
20. In addition, Defendant's staff never contacted Plaintiffs for a response prior to

publishing these defamatory and false statements and rebuffed Plaintiffs' efforts to share the
accurate facts related to several complaints.

21.

On or about November 10,2007, and continuing to date, Defendant published and

disseminated on the website consumeraffain.com, and, upon information and belief, Defendant
participated in the preparation and publication of a false, defamatory, malicious, and libelous article
of and concerning Plaintiffs, containing the following:
Renee of Woodside NY (11/10/07):

person, Lou, he was in a rush and so were we.

mind you I was 9 months pregnant! When we finally saw the financial

incorrect, was there all day with my husband and my 3-year old son

I bought a 2004 Nissan Quest at NEMET last year. I actually saw the vehicle for $18,900 on the Internet. They claimed that the price was

We went through the paperwork quickly because we were the only
t y

$20000 and change they added some Tires4Life and Drivecare both Lif almost $27000. Lou told us we needed this so that the bank would accept me for a low interest rate. The monthly payment for about
$500.

for thousands of dollars. This of course brought the price now to

^T^^6" T'm*tbiU ^ Price of the car *TM diff«m

--~""b ""- ·jii"> "»c pnv-c ui uic car was currerent

We told him we did not want it so he told us he would help subsidize
monthly payments after the three months. He also told us that after the three months he would take off the Tires4Life and DriveCare
because we wont need it.

ror the first three months $100 per month and then bring down our

tX ?^f^3r httr-When we S°t0 NEMET, we are told that Lou
tires were damaged. It took 4 weeks of going back and forth

$1000 for Tires4LIfe, we tried getting new tires because the two right

NO LONGER works there due to things like this. Why should we sulrer for his lies ad misleading information? Becaus we paid over

physically and on the phone. Everyone gives you the run around

there.

+Zi?^£?k ? mJ^y I*?TMTM of $500 and a car with
seem like they did not know what he was doing. This is [major
burden in my finances which I did not plan or want.

22.

TTiis post was made by Nemet customer Renee P. Williams of Woodside, New York

Several statements in his post are false. Plaintiffs' records demonstrate that the "Tires for Lifeprogram does not cover physical damage to tires, such as the damage caused by a nail. Although the

damage to Ms. Williams' tires was not covered by the "Tires for Life" program, in the interest of
customer satisfaction, Ms. Williams' tires were replaced by the Plaintiffs at no charge. Finally, in her
post, Ms. Williams states that the Plaintiffs were supposed to reduce her monthly payment for the

first three months of her loan. However, she did not make this claim until a year after purchasing
her vehicle and her statement about this was false.

23.

On or about October 29,2007, and continuing to date, Defendant published and

disseminated on the website consumeraffairs.com, and, upon information and belief, Defendant
participated in the preparation and publication of a false, defamatory, malicious, and libelous article
of and concerning Plaintiffs, containing the following:
William of Richmond Hill NY (10/29/07)

On Oct. 30,2001 purchased a 2002 Nissan Altima (new) from NEMET a NISSAN dealer. I also Purchased a Primier Ultra protective plan (Warrantee) This warrantee was sold to me by the NEMET and was included in my car payment. Terms of service 84 months or 100,000 miles. My car presendy has 74,000 miles.
On September 24,2007,1 took my car to NEMET Repair Center to check the car because it was making a rattling noise and black smoke

was coming from the exhaust. On that day I was informed that my care engine problems and they were going to check to see what my warrantee covered. Later that day a representative from NEMET

me to remove my car otherwise they were

y 8 weeks,

StOrage-NEMETid

24.

This post was made by Nemet customer William Casas Jr., of Richmond Ml, New

Yort Ttee statements are false. Pontiffs' record, demonstrate, Mr. Casas' insumnce policy was
cancelled at his request.

25.

On or about the October 26,2007, and continuing to date, Defendant published and

disseminated on the website consumeraffain.com, and, upon information and belief, Defendant
participated in the preparation and publication of a false, defamauny, malicious, and Hbelous aiticle
of and concerning the Plaintiffs, containing the following:
Esther of Jamaica NY (10/26/07)

tnotTZ on the vehicle for $1195. TheP^siveof the car was thlt that, COStu$2?°? alo"8 "*h « price alarm system is not mstaUed
is worth about 23,500.

I went to buy a car. I was told that I had to get an extended warranty

inflated and now I am stuck with a car loan for $28,500 for a car that

I lamcBSltuad the Pa>TMents )W but I am now legally bound to a
loan of $28,500 with monthly payments of close to $600.

26.

Upon information and belief, these posts were made by Nemet customer

EstherSauveurofJamaica,NewYorl, These statements « false. Plaintiffs'records demonstrate that Ms. Sauveur originally signed a valid, binding Retail Agreement with Plaintiffs and now suffers
from "buyer's remorse." Plaintiffs' sales contract, clearly state that all sales are final.

27.

On or about the May 4,2007, and continuing to date, Defendant published and

disseminated on the website consumeraffairs.com, and, upon information and belief, Defendant
participated in the preparation and publication of a false, defamatory, malicious, and Ubelous article
of and concerning the Plaintiffs, which contains the following:
Arthur of Melville NY (05/04/07)

Ai tliis point, I already spent there 8 hours.

downpayment and I was told that this downpayment fully refindable

msurance poky to the new Murano. They asked a $200 00 as

We are offered a 2007 Nissan Murano Leather interior for 31,000 by Elway the safes manager. Offered was excepted, then we transfer

start going over the finace paper until the person Seth who is the
was never asked for nor told during the sale stage.

However, with this great deal everything seemed fbe at fim until we
inance manager put some unwanted item on the invoice Such as

Insurance ETCH PRO For $2999, Protection Plan $1999.00 which

1 still did not receive my downpayment of $200.00.

The price of the car goes up from 31000 to 38000 (without taxes vet)

28.

Based upon the information provided in the post, Plaintiffs could not determine

which customer, if any, this post pertained to. However, upon information and belief, these
statements are untme and defamatory. In addition, Defendant did not, and would not, provide

Plaintiffs with enough information to determine the author of the post.

29.

On or about the April 30,2007, and continuing to date, Defendant published and

disseminated on the website consumeraffairs.com, and, upon information and belief, Defendant
participated in the preparation and publication of a false, defamatory, malicious, and libelous article
of and concerning Plaintiffs, which contain the following:

Thomas of Oakland Gardens NY (04/30/07)
email I sent to Nemet motors and Hyundai. I would like to inform why I feel as a NYC Fire Fighter I was burned by one of your

04/28/2007 11:56 AM To Whom It May Concern This is a copy of

rchips.Nemet ite of Jamaica Queens NY. J have already acomplam. with At local Better Business Bureau bJTeAa

to getting the car.

thtTlVfrT 77 \$T°° deP?it tOdeal and*« deal forward the car.1 left the dealership happy with the Mcurc looked »donfe

was a great deal for me so I went over it several times with the

All of the good karma I felt disappeared when I went to pick up the
new car.

car costing me $1830.00 more than it should have. I complained of

would lose my $1000.00 depositi feel I had no choice but to takeThe

faded on his promised to include the $440.00 delivery charge in the pnce When I balked at this I was told if I did not complete the deal I

trade-in saying you still are getting great sales tax savings and also

The salesman informed me I was only going to get $15250.00 for my

T"16"'tO 3 manager(Carlos) but he said their * nothing he

$16500.00 for trade-in. Me and my wife know what was said

I know its only my word against theirs since I have nothing in writing f^S^ICaS\eXCept ^ salesmai* business card writing out

treats rirehghters in your name.

We and property as a firefighter your word was good and you for yc rilled your promise. I just wanted you to know how Nemet motors

As my wife said they are not like you when you promised to protect

30.

Based upon the information provided in the post, Plaintiffs could not determine

which customer, if any, this post pertained to. However, upon information and belief, these
statements were untrue and defamatory. In addition, Defendant did not, and would not, provide

Plaintiffs with enough information to determine the author of the post.

31-

On or about the April 11,2007, and continuing to date, Defendant published and

dominated on the website consume^.com, and, upon infonnation and belief, Defendant
palpated « the preparation and publication of a false, defamatory, malicious, and ubelous anicle
of and concerning Plaintiffs, which contains the following:
Svetlana of Brooklyn NY (04/11/07):

£ tune they^ T^time t0 **the PaperloSy By the ime^ were done I was restless and my head hurt.
panties added on the car for me to be able to drive off that

appeared to be a good deal in the Newspaper, boy wiTwrone-1 purchased a 2003 altima from them thinking wj g^ineTeood

I went to purchase a car from Nemet Motors after I saw what

of paper saymg that since it was so late (9:30 PMj1 had to havT

I sat down with the finance manager Sid and this is when he started making all kinds of promises. He mshed me thnmgh a whole bunch

the next dayall the wayuntd the mght. This guy seems to never get a

blt'ft ft ft" ' W "^

break because he was never able to answer my calls (ya right) He was

**^

Sd^ ^ fatHur ^ mCffine all thet0warrantiesthe deal^hiP) off drive t0 told me that everythmg was dedded t0 drive t0 will be taken Sid

so the GM Scott was called in. Uey promised to taKff one of the

L°dXto ^P^tlTMthe car-ft told me! had the choiTMTM ltTnul aI1 ^e warranties. I started crying in no office

AU the extras were still in the new contact, so I told him that I wasn^t

^TST50^ ""^ f^ ** a

many extended warranties that were added, but I knew that all they

d ^ ddd

mZ f°r a,fe,wmore,m?nths which made my monthly payments y py

Tliey made me feel like I had no choice but to take that offer because

more affordable so I left with the new contract. Come to find out new contract. Come to find out

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fixing the problem and not to worry, but I am still showing an outstanding balance for both banks.

They have been telling me now for the past few weeks that they are

bumper guard damage. Once again I had to make another trip to this dealership. When I got there the GM Scott told me that they would
together He then told me that I can get a lawyer and in five yean he wiU see if I ever get anything. I started crying again I front of my one
and a half year old son.

was in a senous accident which the car appeared to have frame and

Not only that, I took my car to my mechanic to find out that the car

fix anything and then told his mechanics to put everything back

two loans and if I don't my excellent credit will be destroyed Emotionally this situation has taken a huge toll on me. I can not eat sleep, or think straight. These people have ruined my life.

Till this day nothing has been fixed with the car nor was the other loan voided. I don't know what to do; there is no wayl can pay for

32.

This post was made by Nemet customer Svetlana Yusupova of Brooklyn, New York.

These statements were false. As Plaintiffs' records demonstrate Ms. Yusupova contracted with the Plaintiffs and voided her previous contract to lower her monthly payments. In addition, Plaintiffs
agreed to purchase Ms. Yusupova's trade-in vehicle after 3 months for the full purchase price. Ms.
Yusupova, however, never traded in her vehicle and instead sold the vehicle to another car
dealership.

33.

On or about the April 3,2007, and continuing to date, Defendant published and

disseminated on the website consumeraffain.com, and, upon information and belief, Defendant
participated in the preparation and publication of a false, defamatory, malicious, and libelous article
of and concerning Plaintiffs, which contains the following:

Louella of New York NY (04/03/07)

We were trying to lease a car. Unfortunately, we got too excited so they took advantage by adding a lot of extras to the car without informing us. These extras had my initials though they were not my handwriting. We were surprised when we first got the statement which states that we are PURCHASING it at $431.00 for 6 yrs which
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eventually said that they will do something about it. True enough, up to this day it still states the same amount. We tried to return the car as it is costing us too much but they don't want to and they were treating us without respect at all. They are very rude and we feel that
we are so aggravated.

amounts the car to be $30K when it was originally only $16,800.00. When we received it, we went back to tell them that we don't want to buy it, just lease. They passed us from one person to another then

34.

This post was made by Nemet customer Louella E. Espinal of Richmond Hills, New

York These statements were false. Plaintiffs' records demonstrate that Ms. Espinal signed a valid,
binding Retail Agreement with the Plaintiffs, and then attempted to back out of the contract. In
addition, Ms. EspinaPs allegations of forgery are untrue and defamatory.
35. At the time of publication, Defendant published all of complaint described above

with reckless and wanton disregard of whether they were false and untrue.
36. As a result of the publications and the acts of Defendant, Plaintiffs have suffered

public contempt, ridicule, disgrace and prejudice; have suffered great mental pain and anguish; and have suffered irreparable injury to their good name, business reputation, and social standing, and

have lost the esteem and respect of their friends, acquaintances, business associates, and of the
public generally.

37.

Defendant negligently or recklessly published the articles with the knowledge that

the information in the articles was false and would cause prospective Nemet customers to not
purchase vehicles from Nemet.

COUNT I

(Defamation)

38.
through 37.

Plaintiffs repeat and incorporate by reference the allegations set forth in paragraphs 1

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39.

Through the publication of false and misleading statements on its website,

specifically including, but not limited to, the statements alleged in Paragraphs 21,23,25,27,29,31 and 33, Defendant maliciously discredited the Plaintiffs' honesty, credit and business reputation.
40. As discussed above, Defendant knew, or was reckless in not knowing, that the

published statements about Plaintiffs' business were false.

41.

Defendant's false and misleading comments thus defamed Plaintiffs perse and caused

harm to Plaintiffs' reputation and business. WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in their favor

and, against Defendant, issue bjunctive relief and monetary relief b the amount of $5000,000.00, or
b such greater amount to be proven at trial, punitive damages b the amount of $1,500,000.00, and

pre-judgment bterest, and grant such other and further relief that the Court may deem appropriate.
COUNT II

(Tortious Interference With A Business Expectancy)

42.
through 41.

Plabtiffs repeat and bcorporate by reference the allegations set forth b paragraphs 1

43.

Defendant knew, or should have known that prospective Nemet customers, when

searchbg for information on the Plabtiffs' business, would view Defendant's false statements
relating to the Plabtiffs' busbess on Defendant's Consumeraffairs.com website. 44. Defendant btentionally and/or recklessly disregarded this knowledge and

improperly posted false and misleadbg information about the Plaintiffs on its website. 45. Defendant's false and misleadbg articles caused potential Nemet customers not to

contract with Plabtiffs, resultbg b monetary damages to Plaintiffs.
WHEREFORE, Plabtiffs respectfully request that this Court enter judgment b their favor

and, agabst the Defendant, issue bjunctive relief and monetary relief b the amount of $500,000.00,
or b such greater amount to be proven at trial, punitive damages in the amount of $1,500,000.00,

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and pre-judgment interest, and grant such other and further relief that the Court may deem
appropriate.
COUNT in

(Violation of Section 43(a)(l)(A) Of The Lanham Act)

46.
through 45.

Plaintiffs repeat and incorporate by reference the allegations set forth in paragraphs 1

47.

Defendant operates in commerce under the guise of "consumer affairs" for the

purpose of unlawfully diverting consumers and deriving a profit from misdirecting said consumers.
48. Defendant's practice of using in commerce the name "consumer affairs" cause or are

likely to cause confusion, to cause mistake, or to deceive as to its affiliation, connection, or
association with a State, Federal, or other organization. Defendant's practices of using in commerce

the name "consumer affairs" cause or are likely to cause confusion, to cause mistake or to deceive as
to the origin, sponsorship, or approval of Defendant's services or commercial activities.
49. As a result of the foregoing, Plaintiffs are or are likely to be damaged by such acts.

50.

Therefore, Defendant's acts or practices, as set out above, are confusing, deceptive,

or misleading and violate section 43 (a) (1) (A) of the Lanham Act, 15 U.S.C § 1125 (a) (1) (A).

WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in their favor

and, against the Defendant, issue injunctive relief and monetary relief in the amount of $500,000.00,
or in such greater amount to be proven at trial, punitive damages in the amount of $1,500,000.00,
and pre-judgment interest, and grant such other and further relief that the Court may deem
appropriate. COUNT IV

(Violation of Section 43(a)(l)(B) Of The Lanham Act)

51.
through 50.

Plaintiffs repeat and incorporate by reference the allegations set forth in paragraphs 1

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52.

Defendant's practices of using in commercial advertising or promoting the name

"consumer affairs" misrepresent or are likely to misrepresent the nature, characteristics, or quality of
its services or commercial activities.

53.

Defendant's misleading promotion of the "consumer affairs" name is likely to

influence the purchasing decision and deceive consumers, including Plaintiffs' customers.
54. Defendant placed its false and misleading statements into interstate commerce by

publishing on the World Wide Web. 55. As a result of the foregoing, Plaintiffs are likely to be damaged by the

misrepresentation.

56.

Therefore, Defendant's acts or practices, as set out above, are confusing, deceptive,

or misleading and violate section 43 (a) (1) (B) of the Lanham Act, 15 U.S.C § 1125 (a) (1) (B).
WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in their favor

and, against Defendant, issue injunctive relief and monetary relief in the amount of $500,000.00, or
in such greater amount to be proven at trial, punitive damages in the amount of $1,500,000.00, and
pre-judgment interest, and grant such other and further relief that the Court may deem appropriate.
PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, by and through their undersigned counsel, respectfully prays that

judgment be entered in their favor of the foregoing Complaint against Defendant, and that this
Court in addition:

a.

Award Plaintiffs such monetary relief monetary relief in the amount of

$500,000.00, or in such greater amount to be proven at trial, punitive damages in the amount

of $1,500,000.00, and pre-judgment interest and costs, and grant such other and further
relief that the Court may deem appropriate.

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b.

Permanently enjoin Defendant from violating Section 43(a) of the Lanham

Act,15U.S.G§1125(a);

c.

Permanently enjoin Defendant from defaming the Plaintiffs by causing

untrue and misleading articles to be posted on its website;

d.

Award all relief that the Court finds necessary to remedy Defendant's

continuing violation of Section 43(a) of the Lanham Act 15 U.S.C § 1125(a), and common

law defamation and tortuous interference with a business expectancy claims, bcluding, but
not limited to, redress and disgorgement of Defendant's unjust gains;
e. Award Plaintiffs their costs and attorneys' fees incurred in this matter.

TURY DEMAND

Plaintiffs respectfully request a trial by jury.

Respectfully submitted,

Benjamin G. Chew (VSB # 29113) Andrew M. Friedman (Pro Hac vice application pending) Jacob D. Krawitz
PATTONBOGGSLLP 2550 M Street, NW Washington, DC 20037

[phone]
Facsimile: [phone]

Email: [e-mail]

Dated: March 17,2008

Counsel for the Plaintiffs

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