Court Tosses Prestigious Pets' $1 Million Defamation Suit Against Unhappy Customers

Legal Issues

from the no-statute-of-limitations-on-the-Streisand-Effect dept

Prestigious Pets, a Texas pet-sitting company, has done a severe amount of damage to the “prestigious” half of its name over the past several months. After front-loading its inevitable reputational ruin by adding a KlearGearian “non-disparagement clause” to its service contracts, the company doubled-down with a $1 million defamation lawsuit after losing out on its small claims court bid to extract $6,766 from an unhappy customer for “lost work opportunities” and “libelous and slandurous [sic] harm.”

The unhappy customers, whose Yelp review only stated the pet sitter Prestigious Pets hired had overfed their fish, were forced to defend themselves against a clearly baseless lawsuit. Fortunately, Chris Dachniwsky of law firm Thompson & Knight stepped up to represent the couple on a contingency basis.

Even better, Public Citizen’s Paul Alan Levy is reporting the court has tossed the lawsuit and found [PDF] the non-disparagement clause Prestigious Pets deployed to its own detriment is unenforceable.

A state District Court in Dallas (Judge Jim Jordan of the 160th District) has struck down a lawsuit over a non-disparagement clause in a form consumer agreement, holding that it could not be enforced against a consumer who expressed dissatisfaction about the service provided by a local business. Although we have won default judgments in Utah against Kleargear and in New York against Accessory Outlet, this case represents the first time a company defended its non-disparagement clause with a brief, and thus the first time we have had a judge’s ruling refusing to enforce such a clause.

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What the decision does make clear is that non-disparagement clauses in form consumer contracts are susceptible to attack in court and that businesses in states with anti-SLAPP statutes should act with care before suing to enforce them.

Any company seeking to enforce these stupid clauses is basically pointing a loaded gun at its own reputation when doing so. Taking someone to court over them is pulling the trigger. Suing unhappy customers has almost never worked out in favor of those filing lawsuits. Even if, by some off-chance, the court agrees with them, the public won’t.

Unfortunately, the very short opinion doesn’t necessarily say the court will never find these clauses enforceable. But this particular case is dismissed with prejudice, meaning Prestigious Pets can’t drag the unhappy customers back into court over the same claims.

Here’s the decision in full, which is greatly aided by the state’s anti-SLAPP law. Legal fees will be paid by Prestigious Pets, which means Thompson & Knight’s good deed is the rare kind that may go rewarded, rather than punished.

On July 29, 2016, the court heard Defendants, Robert Duchouquette and Michelle Duchouquette’s, Motion to Dismiss Plaintiffs’ Claims Under Texas Citizens’ Participation Act. Having considered the Motion, Plaintiffs’ Response, Defendants’ Reply, Plaintiffs’ Sur-Reply, the supporting affidavits and exhibits of the parties and the argument of counsel, the court grants Defendants’ Motion to Dismiss.

IT IS THEREFORE ORDERED AND ADJUDGED that all causes of action alleged in Plaintiffs’ Original Petition are dismissed with prejudice and that Plaintiffs, Kalle McWhorter and Prestigious Pets, LLC, take nothing from Defendants, Robert Duchouquette and Michelle Duchouquette in this action.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that, upon notice and hearing, Defendants are entitled to recover their court costs and reasonable and necessary attorneys’ fees incurred in defending this action as justice and equity may require pursuant to § 27.009(a) of the TEXAS CIVIL PRACTICE AND REMEDIES CODE and recover sanctions against the Plaintiffs sufficient to deter them from bringing similar actions described in Chapter 27 of the TEXAS CIVIL PRACTICES AND REMEDIES CODE.

Filed Under: defamation, gag clause, nondisparagement clause
Companies: prestigious pets