RainSoft v. MacFarland

350 F. Supp. 3d 49
CourtDistrict Court, D. Rhode Island
DecidedSeptember 30, 2018
DocketC.A. No. 15-432 WES
StatusPublished
Cited by6 cases

This text of 350 F. Supp. 3d 49 (RainSoft v. MacFarland) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RainSoft v. MacFarland, 350 F. Supp. 3d 49 (D.R.I. 2018).

Opinion

William E. Smith, Chief Judge *53Brian MacFarland is the author of a series of blog posts criticizing the water-treatment company RainSoft. RainSoft has sued over these posts, alleging defamation and violation of the Lanham Act. MacFarland argues his posts are shielded by the First Amendment, and indeed successfully executes a "rolled-up plea": when not protected opinion, they are substantially true. See Black's Law Dictionary 1270 (9th ed. 2009).

I. Background

MacFarland runs the website lazymanandmoney.com, where he blogs about companies who provide consumer products and services, with an eye toward saving his readers money. (See Def.'s Statement of Undisputed Facts ("DSUF") ¶¶ 1-3, ECF No. 88.) MacFarland set his sights on RainSoft starting in summer 2013, after he and his wife sat through an in-home demonstration of RainSoft's water-treatment products. (Id. ¶¶ 9, 19, 24.) The demonstration was conducted by Gus Oster. (Id. ¶¶ 24-25.) Employed by Basement Technologies, a local RainSoft-products dealer, Oster pitched the MacFarlands according to a script written by RainSoft. (Id. ¶¶ 24-27.) The script repeatedly touted RainSoft as a maker of premier water-treatment products, without mention of Basement Technologies, a priority that tracked the companies' business plan. (See, e.g., id. ¶ 27; DSUF Ex. G at 25-27, ECF No. 88-7.)

Their arrangement was, broadly, to make sales by foregrounding RainSoft's brand name and reputation. (See DSUF Ex. U at 2-7, ECF No. 88-21.) The preface to the companies' dealership agreement stated, "[I]t is expected that [Basement Technologies] will protect and embrace the RainSoft®-brand as we all make a living based on its reputation in the marketplace." (Id. at 2.) RainSoft trusted Basement Technologies to "[p]romot[e] the RainSoft®-brand in every customer facing opportunity," so that eventually "every person in the world [would] recognize the RainSoft® trademark." (Id. at 2; DSUF Ex. V at 26, ECF No. 88-22.) RainSoft and Basement Technologies also agreed that "all consumers who purchase RainSoft®-brand products ... from [Basement Technologies] shall be considered the shared customers of AQUION, INC[.]1 and [Basement Technologies] ... and that neither ... has ... any ... superior right, interest[,] or ownership in, or control of, such customers ...." (DSUF Ex. U at 6.)

The agreement went on to stipulate that Basement Technologies could not "sell, service, rent, promote, lease[,] or install products" other than RainSoft's without RainSoft's permission, (id. ), which was never granted, (Pl.'s Statement of Disputed Facts ("PSDF") ¶ 143, ECF No. 109.) It also defined "[t]he proper way for a[ ] [dealership] employee to greet customers when answering the phone": "Hello, ABC Water Company, your local RainSoft Dealer." (DSUF Ex. V at 24 (emphasis omitted).) Ultimately, the "spirit of this agreement" was for Basement Technologies to operate under RainSoft's aegis, and as closely as possible without merging into a *54single entity. (DSUF Ex. U at 2.) In other words, as the agreement's preface provided, addressing Basement Technologies, "You are becoming part of an organization that expects and counts on your participation and support ...." (Id. )

Though MacFarland was not privy to the companies' agreement, his first RainSoft post, regarding the in-home presentation, showed that Oster had accurately conveyed its essence. Titled "Is Home Depot's Water Test from RainSoft a Scam?" the post mixed narration - "The salesman was super nice, and very friendly with our dog." - and critique of Oster's presentation. (Pl.'s Statement of Undisputed Facts ("PSUF") Ex. A at 2-5, ECF No. 106-1.) The latter consisted of calling the in-home presentation a "magic show" and accusing RainSoft of making "false promises," using "high-pressure sales tactics," and other "slightly deceptive practices." (Id. ) MacFarland referred by "magic show" to various acts Oster performed ostensibly showing RainSoft's products purifying the tap water in MacFarland's home. (Id. at 2-3.) MacFarland wondered if Oster had something up his sleeve: "I love to think about how, if I wanted to be devious, I could pull it off. For example, the bottles he brought with him that were labeled for our water could have been laced with contaminants. I'm not saying they were, but it's possible." (Id. ) "As you can tell," MacFarland wrote, "I'm a skeptical person by nature." (Id. at 2.)

The "false promises" MacFarland attributed to Oster included that RainSoft's filtration system would save him $20,000 in appliance-replacement costs over 20 years - this MacFarland "highly doubt[ed], exclaiming, "Wholy [sic] statistics gone wrong, Batman." (Id. at 3.) MacFarland took Oster to task too for what he considered "high-pressure sales tactics," such as offering five years of free soap if MacFarland purchased a RainSoft system on the spot. (Id. at 4.) Because it did not include the cost of labor, MacFarland also found RainSoft's lifetime warranty deceptive: "[i]f I have a lifetime warranty and it costs me $80 a month for repeated maintenance," he reasoned, "what is the warranty actually giving me?" (Id. )

In this first post, MacFarland concluded not that RainSoft was a scam, but that its products were not worth their price: "I don't want to say that the RainSoft EC4 product doesn't work.... From what I'm reading though, the quality is closer to midlevel, but it is really high-priced ...." (Id. at 5.) He ended the post by asking his readers if they had "ever installed a water purification system? ... Was it RainSoft?" (Id. ) Despite his skepticism, however, MacFarland and his wife - who MacFarland "recognized ... was impressed by the product" - gave Oster a $100 check to keep the free-soap option open.2 (Id. )

Published eight days later, MacFarland's second RainSoft post - "RainSoft Scam? (Part 2)" - updated readers on his "ongoing efforts to get healthy water in [his] home." (PSUF Ex. B at 1, ECF No. 106-2.) MacFarland relayed a conversation he had had with a "RainSoft representative" in which MacFarland haggled $1,000 off the price Oster quoted him. (Id. ) He also told of a trip he made to Lowes where a "representative in plumbing was shocked" that Home Depot - who had introduced MacFarland to RainSoft's products *55- would "only connect [MacFarland] to this shady RainSoft company," rather than show him "a range of filtration systems from various manufacturers." (Id. ) MacFarland again mentioned Oster's "magic tricks" and "bad logic," before answering the titular question - "RainSoft Scam?" - by saying he was "leaning towards yes, but you are free to make your own decisions." (Id. at 3.)

MacFarland was less equivocal in his next post, "Yep. RainSoft Scammed Me Out of $100." (PSUF Ex. C at 2-3, ECF No. 106-3.) There MacFarland reported that Oster cashed the $100 check that had held open the free-soap option, contrary to MacFarland's expectations of their agreement, which was that MacFarland would be able to cancel the check any time. (Id. ) MacFarland warned his readership that "if you suspect a company to be a scammer, don't even give them an inch, they'll take a mile." (Id.

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350 F. Supp. 3d 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rainsoft-v-macfarland-rid-2018.