Angry About a Business Review? This High Court Ruling Sheds Light on When to Sue
A key question before the justices: Had the defendant ranked vendors based on the amount of consulting services they'd purchased?
January 24, 2020 at 02:29 PM
3 minute read
It's one thing to be angry over an unflattering business review, but quite another to prevail in litigation over it—barring specific circumstances.
That's what plaintiff NetScout Systems Inc. learned when it sued research and advisory company Gartner Inc. over a market research report that ranked NetScout as a "challenger"—as opposed to a "leader"—among vendors that monitor and diagnose network performance.
The case turned on whether Gartner's reports were false, defamatory and part of a pay-to-play scheme, as NetScout had argued, or whether constitutional issues were at play, with Gartner claiming its ranking was non-actionable opinion, protected under the First Amendment.
Gartner rates vendors, including those that purchase its services. It had extended an invitation for NetScout to participate in its evaluation—an invitation the plaintiff had accepted, but NetScout said it never purchased Gartner's services. That detail factored into the lawsuit, because it suggested favorable treatment for those who had.
NetScout sought to recover damages, alleging defamation and violation of the Connecticut Unfair Trade Practices Act.
In evaluating the claims, the high court considered the context of the 2014 Gartner ranking at the center of the suit. That report laid out vendors' "relative strengths and weaknesses," according to the Connecticut Supreme Court ruling.
"Whether expressed using colorful jargon, numerical or letter grades, stars, or the standard terminology of 'good, better, best,' such ratings appear virtually any place a potential customer might look—in magazines and newsletters, television advertisements, billboards, waiting rooms, websites, and every other conceivable physical or electronic surface," the opinion noted.
But a key question before the justices: Had Gartner ranked vendors based on the amount of consulting services they'd purchased? NetScout claimed the consultant had given "coded" messages indicating as much, but the high court found insufficient evidence for a claim under Connecticut's Unfair Trade Practices Act.
The justices also agreed with Gartner: Its ranking constituted protected speech.
"Different claims in a different context brought by a differently situated plaintiff may fare differently," according to a footnote in the ruling, which cited Abu Dhabi Commercial Bank v. Morgan Stanley—a case that turned on proof that the reviewer had a financial stake and conflict of interest.
The litigation caught the attention of business ethics scholars, the Reporters Committee for Freedom of the Press and the Connecticut Business and Industry Association, which all applied to file amicus briefs.
Attorneys Jason D. Frank, Emily E. Renshaw, James A. Budinetz, Michael T. Ryan, Elizabeth G. Hays and Michael D. Blanchard represented the plaintiff.
Derek L. Shaffer, Andrew M. Zeitlin, Diane C. Polletta, John J. DiMarco, Robert L. Wyld, Patrick M. Fahey, Michael D. Bonanno, Kathleen M. Sullivan and Robert L. Raskopf represented the defendant.
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