A federal appellate court has backed gripe site ConsumerAffairs.com in a defamation lawsuit filed by a car dealers. The 4th Circuit Court of Appeals ruled that the federal Communications Decency Act gives the site immunity from liability for libel based on posts by users. The ruling upholds a decision issued last year by U.S. District Court Judge Gerald Bruce Lee in Alexandria, Va.
The car dealer, Thomas Nemet of Nemet Chevrolet in Jamaica, N.Y., complained about 20 allegedly libelous posts that appeared on ConsumerAffairs.com. The comments listed in the lawsuit included criticisms about prices and fees.
For instance, one commenter allegedly wrote that she was told she had to purchase a $2,500 extended warranty and an $1,195 alarm system. "I am stuck with a car loan for $28,500 for a car that is worth about 23,500," she wrote, according to the lawsuit.
Nemet alleged in court documents that these remarks were "false, malicious and libelous" and that the commenter merely "suffers from buyer's remorse.'"
While Web sites generally can't be sued for libel based on user comments, Nemet argued for an exception in this case because ConsumerAffairs.com allegedly "funnels the complaints to consumer class action lawyers so the lawyers can make money filing groundless class actions and earn legal fees."
In addition, Nemet alleged that ConsumerAffairs.com helped develop the allegedly defamatory posts by contacting consumers to ask questions, helping them draft or revise complaints and telling them they could recover damages by joining a lawsuit.
Nemet argued that a separate court ruling involving Roommates.com supported the position that ConsumerAffairs.com forfeited its immunity by assisting in the creation of content. In the Roomates.com lawsuit, the 9th Circuit ruled that the site could be sued for civil rights violations because it helped users create unlawful ads.
But the appellate court said that ConsumerAffairs.com's alleged actions were not comparable to those of Roommates.com. "Nemet has merely alleged that Consumeraffairs.com structured its website and its business operations to develop information related to class-action lawsuits. But there is nothing unlawful about developing this type of content," the 4th Circuit wrote.
Nemet also alleged that some of the unflattering posts were not genuine, but were instead authored by ConsumerAffairs.com itself. But a majority of the appellate court found that Nemet had not alleged sufficient facts to move forward on that claim.