Evangelical 'Financial Whiz' Who Apparently Hates Gossip, Sues YouTuber For Criticism

Free Speech

from the gossip-away dept

Dave Ramsey is a radio host/”personal finance guru” whose religious beliefs appear to be a key part of his public persona. A long and detailed story in the Daily Beast a few years back showcased another apparent part of his persona: what appears to be significant anger towards those who criticize him or his company, including former employees:

The public criticism enraged Ramsey, who, according to one current employee, went on a ?warpath? to expose the Twitter critics. During an all-staff meeting on May 7 that was described by several current employees, Ramsey offered thousands of dollars in bounties in exchange for the identities of the tweeters. (Employees? accounts differed on the dollar figure, but ranged from $5,000 to $20,000). Ramsey was especially intent on identifying the tweeter behind @LampoLeadership (suspended), a parody account that had begun tweeting about the inner workings of Lampo, suggesting it was run by someone inside the company.

There’s a lot more in that story, including this tidbit:

The seeming paranoia of Ramsey?s outburst in the May 12 staff meeting startled some Lampo employees, but many said they had come to expect explosive behavior from the boss. ?This is the guy who once pulled a loaded pistol out of a gift bag to teach us a lesson about gossip,? said one former employee. ?It was bizarre, even for Ramsey.? (Ramsey has tweeted photos of his gun collection, which includes semi-automatic rifles.)

That event, which allegedly occurred in 2011, is one of Lampo?s worst-kept secrets, a moment that was a turning point for many. ?That was the day I began planning my exit,? one said. For another, Ramsey?s gun illustration served as a reminder that the man she worked for ?instills fear and dominance and control over every aspect of life.?

That’s all prelude. Last year, Ramsey’s company, Lampo Group, which also does business as Ramsey Solutions, sued a real estate YouTuber named Kevin Paffrath, who made a series of unflattering videos about Ramsey. Part of the background here is that Lampo/Ramsey Solutions has some sort of deal where it will sign up real estate agents (along with insurance and tax service professionals) to its “Endorsed Local Providers” (ELP) program. Fans of Ramsey can then “find” a local professional who is endorsed by Ramsey, and if they end up doing business with that professional, Ramsey takes a bit of a cut. ELPs also pay to be a part of this program, in exchange for getting leads from Ramsey’s site.

Paffrath was apparently in the ELP program for some time, but was kicked out. Ramsey/Lampo claim he was kicked out for not meeting with a “coach” often enough, though there’s some dispute over that. Either way, Lampo sued Paffrath in what has all the trappings of a traditional SLAPP suit. Lampo/Ramsey and its lawyers are trying to get around this really being about the negative videos made by Paffrath by throwing all sorts of other stuff at the courtroom wall. Despite multiple times that the lawsuit alleges Paffrath made false statements, there’s no defamation claim in the complaint. Instead, it claims breach of contract, fraud, promissory fraud, negligent misrepresentation, business disparagement, trade secrets violation, unfair competition, and false and misleading advertising. However, as you dig into the details, it sure looks like they’re just mad that he criticized and mocked Ramsey.

Paffrath, who lives in California, sought to use California’s anti-SLAPP law in this case, which is in federal court in Tennessee (it was originally filed in state court, but quickly removed to federal court, given that Paffrath is out of state). Unfortunately, the court decided that state anti-SLAPP laws don’t apply in federal court (there’s currently a very split set of rulings on that particular question, with some regions allowing the use of anti-SLAPP laws in federal courts, and others not).

The latest motion to dismiss from Paffrath is quite a read. It makes the clear case that this is nothing more than a SLAPP suit:

This is a Strategic Lawsuit Against Public Participation (a ?SLAPP-suit?) filed by the Plaintiff, a celebrity and public figure, against the Defendants that centers upon satirical YouTube videos entitled: ?Dave Ramsey: Exposed,? ?dave Ramsey is suing me,? and ?A Message for Dave Ramsey.? …. The Plaintiff is upset, among other things, because Mr. Paffrath?s satirical YouTube videos mocked Dave Ramsey and were well-received by the public…. In retaliation, the Plaintiff has filed suit against the Defendants over several extravagant claims including: (1) a breach of contract claim; (2) fraud and misrepresentation claims; (3) speech-based ?business disparagement? and ?unfair competition? claims; (4) a misappropriation of trade secrets claim; and (5) a ?false and misleading advertising claim? under the Lanham Act.

As the motion makes clear, none of the claims in the amended complaint are backed up with anything. Indeed, the motion to dismiss includes as an exhibit the transcript of a truly breathtaking deposition given by a senior Lampo exec, Jack Galloway. Paffrath’s lawyer, Daniel Horwitz puts on an absolute clinic in how to do a deposition. It’s long, but worth reading. Of course, much of the length is taken up by the lawyer for Lampo, Brandon Bundren objecting to nearly every single question that Horwitz asks, followed by letting Galloway answer anyway. Step by step throughout the deposition, Horwitz gets Galloway to admit that basically nothing in Lampo’s complaint caused any harm or is the real reason it sued.

He gets Galloway to admit that Lampo more or less admitted in an earlier discovery that it can’t come up with any evidence of any losses due to Paffrath’s videos. The only “losses” they describe are Paffrath no longer paying them the ELP fees. But they can’t exactly sue over that, since they were the ones who kicked Paffrath out of the program in the first place:

BY MR. HORWITZ:
Q. Would you agree that this contract could have been terminated at any moment including the first day that it was executed?
MR. BUNDREN: Objection to the form, speculation, calls for a legal conclusion.
THE WITNESS: Yes
BY MR. HORWITZ:
Q. Would you agree that Lampo does not have any right to $4200 under this agreement?
MR. BUNDREN: Objection to the form, calls for a legal conclusion.
THE WITNESS: Please re-ask the question.
BY MR. HORWITZ:
Q. Sure. This contract provides for Mr. Paffrath to pay Lampo $350 a month, correct?
A. That’s correct.
Q. And it provides that either party can terminate this agreement at any moment; is that correct?
A. That’s correct.
Q. So there’s no right to have 12 months of payments made under this agreement; is that right?
MR. BUNDREN: Objection to the form, calls for a legal conclusion. You can answer.
THE WITNESS: I’m not sure.
BY MR. HORWITZ:
Q. If Mr. Paffrath had terminated this agreement the day that it was signed, how much would he owe Lampo?
MR. BUNDREN: Objection to the form, calls for a legal conclusion, speculation.
THE WITNESS: No further payments.
BY MR. HORWITZ:
Q. None at all?
A. Huh-uh.
Q. If Lampo terminated this agreement within a month of it being signed, how much would Mr. Paffrath owe Lampo?
MR. BUNDREN: Same objection.
THE WITNESS: Nothing other than referrals that were sent in the future — that were sent that closed in the future.
BY MR. HORWITZ:
Q. And if no referrals were sent, then how much would Mr. Paffrath owe Lampo?
MR. BUNDREN: Same objection.
THE WITNESS: Zero.

Later in the deposition, Galloway admits that the “harm” was really about Paffrath “tarnishing” Lampo’s brand — which is classic 1st Amendment protected speech, thus (again) putting this into SLAPP territory. Part of the “fraud” claims is that Paffrath apparently included zip codes in his ELP application that were regions he didn’t actually serve as a real estate agent. But as Horwitz gets Galloway to admit, there was no actual harm from that — just from him mocking them.

BY MR. HORWITZ:
Q. Was Lampo injured based on the ZIP codes that Kevin Paffrath submitted to it?
MR. BUNDREN: Objection to the form,calls for a legal conclusion.
THE WITNESS: I do not have personal knowledge that Lampo was injured.
BY MR. HORWITZ:
Q. Was Lampo injured by what you have referred to as — I’m characterizing here, so please correct me if I’m mischaracterizing you — false statements about his intentions?
MR. BUNDREN: Objection to the form, calls for a legal conclusion, also asks a question on a — that’s more appropriate for a Rule 30(b)(6) deposition and not of this witness.
You can answer.
THE WITNESS: Yes, I believe so.
BY MR. HORWITZ:
Q. And what were those injuries?
MR. BUNDREN: Same objection.
THE WITNESS: Our brand is a brand of integrity and trust and we’re in the business of helping people. And —
BY MR. HORWITZ:
Q. Sir — (indicating.)
A. — when Mr. Paffrath went online to say that we’re liars and cheaters, it damages that brand, it keeps people who we wanted to help from having full trust in us, and it tarnishes a brand that we’ve worked hard to build.
Q. Sir, will you please go back to your answers to Interrogatory 1? Can you tell me if there’s any provision in there that references damage to Lampo’s brand?
MR. BUNDREN: Objection, calls for a legal conclusion.
THE WITNESS: No, there is not.
BY MR. HORWITZ:
Q. Sir, in your answer to Interrogatory 2, is there any indication that Lampo lost business because of damage to its brand?
MR. BUNDREN: Same objection.
THE WITNESS: (Reviews document.) No.

And, perhaps my favorite exchange — considering how much of this case depends on the claims that Paffrath “lied” about Ramsey’s service, and things like the claim that Ramsey was just a “hand-off” service (passing through unqualified leads), Horwitz gets Galloway to admit that one could think that was the case:

BY MR. HORWITZ:
Q. Would it be fair to characterize Lampo as a hand-off service between prospective leads and ELP agents?
MR. BUNDREN: Objection to form, lack of foundation, argumentative.
THE WITNESS: Do you mind to define hand-off service?
BY MR. HORWITZ:
Q. Whatever it means to you.
A. No.
MR. BUNDREN: Objection.
THE WITNESS: I would not characterize it.
BY MR. HORWITZ:
Q. Why not?
A. To me, hand-off implies that there is not a lot of effort made to send quality referrals to quality agents and we put a great deal of effort into both of those.
Q. Would other people be entitled to have a different opinion of the meaning of hand-off service?
MR. BUNDREN: Objection, vague, and ambiguous, speculation, and argumentative.
THE WITNESS: They would be entitled.

Oh, just one more tidbit from the transcript. Remember that claim in the Daily Beast article about Ramsey pulling out a gun? About that:

BY MR. HORWITZ:
Q. Has Dave Ramsey ever pulled a gun out of a bag to try to teach a lesson about gossip?
MR. BUNDREN: Objection, harassing, and relevance. We’re getting pretty far afield from the claims made in this case. If we need to call the Judge, we will so I wouldn’t spend much time on this.
You can answer.
THE WITNESS: Yes.

The motion to dismiss highlights how all of the claims in the complaint are just smokescreens for the actual SLAPP nature of this lawsuit. Hell, one of the claims — business disparagement — is not even a recognized tort in Tennessee where the case was filed.

The whole case just seems to be an exercise in trying to avoid being called out for a clear SLAPP by simply avoiding defamation claims. But all of the claims in the lawsuit seem completely bogus, and the real issue leading up to the complaint seems focused almost exclusively on the mocking videos. Hopefully the court recognizes this and tosses the case quickly.

For what it’s worth, there are a couple other oddities associated with this case that should be mentioned as well. Ramsey appears to really want to avoid having to be deposed himself, and got a “protective order” blocking a subpoena for him to be deposed. The reasoning is somewhat odd:

I have no personal knowledge of any facts involved in this litigation. I have never had any personal dealings with the defendants, nor have I ever corresponded with defendants by email or otherwise. The only information I possess about the background and allegations of this litigation is summary information provided to me either by RS?s legal counsel or at RS?s legal counsel?s direction.

Basically, Ramsey is insisting he’s got nothing to do with this case at all. Yet, again in the deposition mentioned above, Galloway makes it clear that Ramsey was deeply engaged in internal discussions about this lawsuit — and even that the decision to sue was made by the executive leadership team, of which Ramsey is obviously the boss:

Q. Was this litigation filed at Dave Ramsey’s direction?
MR. BUNDREN: Objection to the form, speculation, foundation.
THE WITNESS: It was a group decision by our executive leadership of which Dave is the CEO.
BY MR. HORWITZ:
Q. Was that decision made in a meeting?
A. My recollection of it is poor. My best recollection would be that Dave, our general counsel — not the entire group in a board meeting but that they would have been made aware of. But the decision would have been between Dave, myself, our general counsel. It’s possible there were other people in that conversation but I don’t have memory of who they would be.

That certainly sounds like Ramsey was well aware of the decision to sue this guy, which raises some questions about that claim to the court that he’s not involved in the case at all. Again, given that there is a lot of evidence suggesting the entire point of this lawsuit is to go after someone for making videos that make fun of Ramsey, it looks pretty silly for him to suggest he’s unaware of the details of the case beyond being briefed on it by lawyers.

Finally, speaking of stifling speech and protective orders, this case carries a very odd “Temporary Restraining Order” that not only has Paffrath agreeing to remove all the videos in question (so we can’t even see them), but also that no one associated with Paffrath, including his lawyers, are allowed to discuss the case publicly. Both of these are blatant restrictions on free speech, and it seems odd to me that the defendant appeared to agree to this without question.

The Defendants, their officers, agents, attorneys, and all persons in active concert or participation with them, agree not to post any content on any Defendants’ Accounts or elsewhere related to Ramsey, its employees, officers, principals, and/or this litigation.

That’s… pretty crazy. In what world is it okay for a situation in which there’s an obvious SLAPP suit, for the defendant to be gagged from even talking about the litigation or about the plaintiff in the case? If anything, this just gives more credence to the claim that this is a SLAPP suit and the goal is to silence Paffrath from criticizing Ramsey.

Oh, and because it needs to be said again: this is why we need a federal anti-SLAPP law, and we needed it years ago.

Filed Under: anti-slapp, criticism, david ramsey, free speech, kevin paffrath, slapp
Companies: lampo group, ramsey solutions