Company Fires Off Legal Threats To Site Owner Over Third-Party Forum Post; Self-Inflicted Damage Ensues

from the gun-to-own-head,-Kiss-Trust-warns:-'don't-laugh.-you're-next.' dept

Fri, Mar 14th 2014 2:38pm — Tim Cushing

Once again, it's time to discuss bogus C&D notices, specifically those that acknowledge Section 230 protections before blithely continuing on with the legal threats as though it has absolutely no bearing on the subject at hand.

Mr. Money Mustache, a financial advice blogger (site motto: Financial Freedom Through Badassitry), was recently hit with a trio of C&D notices over a supposedly defamatory comment left by a forum member.

A few weeks ago, a flurry of registered letters and FedEx packages started arriving at the Mustache residence. They were from a law firm representing a company who didn't like something that had been said by a member of the Forum section of this website.

How did they even find out about this conversation, you might ask? Through Google searches. After all these years, this website has garnered sufficient page rank that when we talk about something, it shows up high in the search engine rankings. The company was apparently Googling their own name, found something they did not agree with, and decided they wanted to silence the critics.

The first letter that arrived wasn't sent by a lawyer, but by Glenn Armand, the Chairman of Eastern Point Trust Company, which owns and operates Kiss Trust, the entity besmirched by a forum member's comment. With the introductions made, the vagaries commenced:

It has come to our attention your website's www.MrMoneyMoustache.com has a forum entry http://www.mrmoneymustache.com/forum/ask-a-mustachian/kiss-trust-12422/msg196528/#msg196528 titled "Kiss Trust" which contains numerous false and flagrantly defamatory statements regarding Kiss Trust. Additionally, these posts infringe on our trademarks and copyright in violation of the DMCA.

Note that Armand fails to point out (other than providing a link to a post that has since been locked down by the site owner) any specifics about the "numerous false and flagrantly defamatory statements." (The comment in question appears to be this one, as the wording "scam" and "marketing ploy" are mentioned directly by other, less stupidly-written, letters.)

(There's another comment mentioned directly in this letter "toxic rates" but that one isn't addressed in subsequent communication.)

Also note that the DMCA has nothing to do with trademarks and that defamatory statements rarely violate trademark and copyright law directly. This appears to be Armand throwing every IP-related term at the wall and hoping the resulting mess would scare MMM into deleting the offending post(s).

The letter then attempts to appeal to the site owner's "reasonableness" before making unreasonable requests… like preventing the posting of anything related to Kiss Trust by forum members… in perpetuity. It also cites the Lanham Act, somehow claiming that forum members' posts involve MMM in "deceptive business practices" because his site is ad-supported.

It also mentions another post where a user says Kiss Trust's fees are "positively toxic" as compared to a 529 plan for purposes of college savings, something that would certainly be a statement of opinion -- unless Armand somehow believes this person is stating that opening a Kiss Trust account would literally poison or otherwise physically debilitate the account holder. Plus, it includes a comparison, meaning that a subjective balancing act has been performed by the commenter, who found (subjectively) Kiss Trust's terms wanting.

Then Armand decides the forum posts are "articles," not comments, and claims (without providing specifics) that everything in question (which could be almost anything due to the lack of specificity) is "without a doubt" false and derogatory. He then approaches the trademark/copyright angle, re-asserting that defamation somehow infringes on both.

So, the site owner decided to take down the original thread pending legal advice, while also recognizing the threatening letter was almost completely without merit -- especially in terms of Section 230. He also started a thread to discuss the legal threats. Once that went live, the legal mail came pouring in.

The next letter came from the law offices of Mark B. Williams, and this one ignores the posts mentioned in the previous letter and focuses instead on MMM's new forum thread about Kiss Trust's legal threats. This one cites "tortious interference, trade disparagement, conversion and libel" as being the issue and, unbelievably, threatens to drag in RICO claims if the alleged behavior continues. The letter asks for the removal of the "blog" (which is a forum post) and, again, that MMM's owner prevent anyone from talking about Kiss Trust for as long as either party exists.

The final (so far...) letter -- this one from the law firm of Robinson|Robinson LLC -- is the one that mentions the applicable Section 230 protections. According to this letter, Kiss Trust has convinced its legal representative that MMM has "chosen to post and re-post" comments that are "defamatory per se," thus depriving the site of these protections. Apparently, running a forum that requires registration is no different than "intentionally encouraging illegal or actionable" (the lawyer's words) posts. That leads to this, um, interesting paragraph.

The statement that my client's business is a scam and a marketing ploy that was posted and then re-posted by by you on mrmoneymustache.com, is a clearly false statement published and circulating throughout the google search engine and has caused my client severe economic harm.

Now, while this attorney correctly cites some of Section 230's limitations (via court opinions for somewhat "relevant" cases), he decides, based solely on some magical equation, that MMM has crossed over into the realm of "information content provider," and is no longer protected. But that's a pretty significant misreading of the law. Unless MMM directly edited the comment in question to change it to something disparaging, or Section 230 still provides protection, even if MMM maintains control over what third-party posts are allowed to appear within the forums (a.k.a., moderating).

The lawyer goes on to drag RICO statutes into the mix, which is about as relevant to the allegedly defamatory comment as the chairman's earlier complaints about trademark and copyright violations. There is nothing in the RICO statutes that even remotely applies to third-party content.

Tortious interference arises out of someone preventing someone else from entering a contractual relationship, something Kiss Trust can't even claim in its most fevered dream. The post simply asked for someone's opinion on Kiss Trust and received several answers in return. One highlighted the differences between Kiss Trust's offerings and a 529, while another simply stated the trust was a "scam" and a "marketing ploy." While the second post may prove to be defamatory, the mere mentioning of a business' name by another comment doesn't signal the commenter's intent to utilize its services, making the claim of "interference" specious.

Trade disparagement is far broader, and Kiss Trust may be able to prove that simply by proving the comment was defamatory. However, this will likely result in very nominal damages being awarded unless Kiss Trust can provide evidence linking the comment's appearance to a financial downturn.

While a lot of what's being thrown at MMM is questionable, the main error is the misreading of Section 230 in an attempt to hold the site owner accountable for another person's posting. It would seem that if you're going to quote portions of the statute, you might want to read the parts that directly contradict your assertions.

The good news is that MMM has found legal representation that has already begun punching holes in Kiss Trust's misguided legal "strategy." The other good news, for MMM at least, is that news of the bogus C&D is spreading fast, speeding the "circulation" of Kiss Trust's bullying behavior "throughout the google search engine." MMM's post on the debacle keeps rising in the rankings for search term "Kiss Trust." The post also hit the Top 10 at Hacker News and Popehat twitted it to 12,000 followers. So, I would imagine Kiss Trust is now wondering why it decided to shoot itself in the reputation over something as unnoticeable as a random person's comment in a sea of forum posts.

And it's not as if Kiss Trust's own activities have all been above-board. There's evidence that suggests it wrote its own Wikipedia entry and someone from an IP address in the vicinity of Kiss Trust's HQ was spotted attempting to delete links to its battle with MMM. And a couple of weeks ago, it clipped a few sentences from a forum member's post at Bogleheads and presented it on its site as being an endorsement from Bogleheads itself. It has since been removed.

Even if the comment proves to be defaming, what does Kiss Trust get in return? A company is free to defend its reputation, but it should, at the very least, consider whether the potential reputation damage will outweigh what it's trying to remove. Well, actually, at the very least, it should understand the laws it's attempting to use so that its efforts aren't wasted pursuing the wrong target.

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Filed Under: forum posts, legal threats, mr. money mustache, section 230
Companies: eastern point trust company, kiss trust, kisstrust

36 Comments

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Frankz (profile), 14 Mar 2014 @ 2:51pm

So, since they google themselves, are they now going to try to sue Techdirt for this post? or just send C&Ds?
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John Fenderson (profile), 14 Mar 2014 @ 2:56pm

The funny thing is...
The funny thing is that I would never make a business or purchasing decision based on what some commenter on some blog had to say. However, I will absolutely make business or purchasing decisions based on how companies react to what some commenter on some blog says about them.
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kenichi tanaka (profile), 14 Mar 2014 @ 3:08pm

Has Eastern Point Trust Company stepped into the Twilight Zone because, as a favorite quote of mine from Law and Order, they are throwing every law at MMM and hoping that something will stick.

I'm confused by the demand from EPTC and their demand that "MMM's owner prevent anyone from talking about Kiss Trust for as long as either party exists". Uh, no court in this country would find in favor of EPTC because it would be a violation of the website's first amendment rights and that it would seriously violate the constitutional rights of that website.

I have to say that it takes some big balls to make that demand.
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wto605 (profile), 14 Mar 2014 @ 3:59pm

Someone has learned some legal buzz-words
So I was browsing their google results and found the thread on bogleheads where the user's comment was represented as the site's review. They also posted the response (signed by someone whose name matches the cofounders listed on wikipedia) bolding mine:
Thank you for contacting us. Notwithstanding our belief that the content is in the public domain, our intent is not to misuse your site.

All references to your site are scheduled to be removed from www.kisstrust.com ..

This should be resolved by weeks end.

Regards,

Ned Armand

Edward �Ned� Armand
KissTrust

I find it kind of hilarious that a company bringing reputation claims against a forum attempts to defend a reputation claim from a forum using copyright. While it would be sad to see MMM dragged into court I have been hoping for a rising star to replace the Prenda Comedy Hour in the courts.

Full thread for those interested: http://www.bogleheads.org/forum/viewtopic.php?p=1971957
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kenichi tanaka (profile), 14 Mar 2014 @ 4:09pm

It doesn't matter of this goes to court. To find in favor of Kiss Trust would be a gross violation of the constitutional rights of the website. It also would be seen as a violation of MMM's first amendment rights.

Kiss Trust cannot demand that a website stop talking about it as long as it's still doing business. It could only demand that the offending untrue defamatory posts be removed, if they are defamatory, which the court would have to determine.
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Anonymous Coward, 14 Mar 2014 @ 4:24pm

Ms. Streisand can now take her bow.
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Random Reader, 14 Mar 2014 @ 4:40pm

Rico Act?
Couldn't someone simply report the the law firm of Robinson|Robinson LLC to the Bar for possible misconduct?
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Anonymous Coward, 14 Mar 2014 @ 4:49pm

Oh yea?!
We're going thermonuclear war on your ass!!

Now, how do we arm this thing... oh shit! It's already armed and about to......
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justok (profile), 14 Mar 2014 @ 4:51pm

Never
Never underestimate the capacity of a station wagon full of C&Ds
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madasahatter (profile), 14 Mar 2014 @ 7:09pm

Stupidity
I read comments but as John Fenderson noted I would take the comments with a grain of salt. The grain may be very, very larg depending on the site and what information the commenter included. If a blog I frequent regularly commented on a product I would pay more attention to the post itself whether the it was positive or negative.

What this sounds like is "reputation management" were someone tries to remove negative comments. From what I have heard about reputation management it is often a very dodgy practice. Libel/slander have requirement that the person making the statement deliberately made a false statement that is damaging to another's reputation plus a few other requirements. But if the poster is reporting their experience or conclusions derived from facts it is not libel/slander.
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That Anonymous Coward (profile), 14 Mar 2014 @ 9:59pm

No matter how many times companies get burned this way, they keep touching the stove.
The magical belief that this time it will work for them, because they are better/smarter/paid the lawyers more.
Lawyers get rich, reputations get smashed, and butts hurt more.
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Anonymous Coward, 15 Mar 2014 @ 1:23am

reputation building
Kiss Trust sends the wrath of many lawyers in an effort to protect their reputation. Ironically yesterday I had a neutral opinion of Kiss Trust ( never heard of them until now ) and due to their own actions I now have a negative opinion of Kiss Trust.

A random negative post here or there is expected. I am more suspicious of a company when all I can find is positive feedback, makes me wonder if all the positive comments are from shills.

Putting so much effort into squashing a couple of negative comments leaves me wondering what they have to hide.
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Anonymous Coward, 15 Mar 2014 @ 5:01am

Is Kiss Trust a Scam?
Is Kiss Trust a scam? Let's discuss this.
Inquiring minds want to know.
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antymat, 15 Mar 2014 @ 6:51am

"Kiss Trust" Goodbye...
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Anonymous Coward, 15 Mar 2014 @ 6:57am

Re:
It doesn't matter of this goes to court.

Yes it does. One has to pay to fight AND one has to take time to fight.

To find in favor of Kiss Trust would be a gross violation of the constitutional rights of the website. It also would be seen as a violation of MMM's first amendment rights.

The Constitution is about what the Government can and can not do to oppress you.

Do expand and enlighten us all on how the Government is oppressing here.

Kiss Trust cannot demand that a website stop talking about it

Kiss can demand anything it wants. It may not get what it is demanding, but it can still make any claim it wants to.
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Josh King (profile), 15 Mar 2014 @ 9:39am

Lawyerly Ignorance of CDA 230
What's little-appreciated is the fact that a substantial number of lawyers in the US don't know the first thing about CDA 230. Larger internet companies routinely receive ridiculous C&D letters like this, from (apparently) actual lawyers.
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Anonymous Coward, 15 Mar 2014 @ 11:39am

Re: Lawyerly Ignorance of CDA 230
Part of that is not so much that the lawyers don't understand CDA 230 so much as they understand that many people don't understand the law period. Lawyers can threaten just about anything they want in a letter regardless of whether it has merit or not. It's just a letter. If the person who receives the letter complies because they are scared by the legal jumbo jumbo and don't know better, it accomplishes their goal, which happens quite often.
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Anonymous Coward, 15 Mar 2014 @ 2:44pm

They're also owners of a dubious patent. Hopefully they'll throw their hat into the troll ring as well.
https://www.google.com/patents/US8321318
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Kristen, 15 Mar 2014 @ 3:54pm

Another genius
I think that legal threats must still bring about a company's desired result more often than not, and so some businesses still consider threatening critics to be a good strategy.

What these fools have yet to learn is the fact that even if their sue-'em-now! strategy pays off just as much and just as often as before, the cost of failure has risen steeply. Ask Ms. Streisand.
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dcfusor, 15 Mar 2014 @ 4:55pm

Or, it could all be 2nd order thinking. A company such as that needs customers, especially if they are a ponzi or something similar, and advertising is expensive and fairly ineffective for finding investors. Streisand effect might actually help them find more customers!

Nah, they ain't that smart. They probably only heard about Prenda making money *at first* and didn't follow the rest.
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Anonymous Coward, 16 Mar 2014 @ 3:05am

Re: Re:
"The U.S. Constitution is about what the U.S. government can and can not do to oppress you.

Do expand and enlighten us all on how the U.S. government is oppressing here."

FTFY. I live in the U.S. and live under multiple Constitutions and multiple governments (State, etc). While the OPs perceived unfamiliarity with the U.S. Constitution is quite understandable and forgivable in context, yours is not (as your phrasing strongly indicates that you are native to the U.S.).
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Anonymous Coward, 16 Mar 2014 @ 5:28am

"The next letter came from the law offices of Mark B. Williams, and this one ignores the posts mentioned in the previous letter and focuses instead on MMM's new forum thread about Kiss Trust's legal threats. This one cites "tortious interference, trade disparagement, conversion and libel" as being the issue and, unbelievably, threatens to drag in RICO claims if the alleged behavior continues. The letter asks for the removal of the "blog" (which is a forum post) and, again, that MMM's owner prevent anyone from talking about Kiss Trust for as long as either party exists.�"

Its like me going into someones home and saying to them
"Nope, i dont give you permission to DISCUSS this subject"
WTF
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Anonymous Coward, 16 Mar 2014 @ 5:36am

Re: The funny thing is...
Add another one to that demogratic(? Is that right)..... me, and i suspect a fare few others too
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Anonymous Coward, 16 Mar 2014 @ 6:32am

Streisand effect
By now, one would think there would be an entire law school course on the Streisand effect and the other varieties of explosives littering the internet.
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Anonymous Coward, 16 Mar 2014 @ 8:39am

Re: Re: Re:
Actually it isn't just about the US government. State and local governments have to be consistent with the US Constitution as well, otherwise the state and local laws get declared unconstitutional by the federal courts.
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crade (profile), 17 Mar 2014 @ 8:57am

Re: Is Kiss Trust a Scam?
They obviously think so or they wouldn't have freaked out so bad about someone making the claim.
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nasch (profile), 17 Mar 2014 @ 10:27pm

Re: Re:
The Constitution is about what the Government can and can not do to oppress you.

Do expand and enlighten us all on how the Government is oppressing here.

If a court were to order MMM to suppress discussion of Kiss Trust forever, that would be the government suppressing speech.
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Hyth, 18 Mar 2014 @ 9:28am

RICO
Threatening a RICO claim isn't entirely far fetched. If a plaintiffs lawyer can't pick a predicate offense from s 1961(1)(B) or (1)(A), they show a serious lack of imagination.

I'm not saying it would be a very good claim, but RICO is a terrible statute and it doesn't take a rocket scientist to draft a complaint including it.
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nenita, 19 Mar 2014 @ 6:31am

Re: Is Kiss Trust a Scam?
I sure hope not. I just opened one last month. Unfortunately this is too new and I'm not sure if anybody has actually used it. They would be able to give the real answer. I opened mine with the intention for it to be a "sleeping" fund. I.E. no money goes into it until I die and my child is still a minor at that time.
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cartmanez, 20 Mar 2014 @ 12:32am

who will they sue next
What's next? Should they also sue google for providing these harmful, disparaging, defamatory, and tortuous results to anyone who googles Kiss Trust? I'd never even heard of this company before now. A BS lawsuit is my first impression...wtg. Too bad they did not keep it simple, just stupid.
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Carmen (profile), 22 Mar 2014 @ 11:28am

Pete Discontinued Access to the Offensive Comment
The article above says Mr. Money Mustache's response in part was to "lock down" the mmm site that has the kisstrust.com is a "scam" post. To me this is just one sign that kisstrust.com's threat of legal action has some merit and is being taken seriously by MMM's attorney(s).

Pete's being all cavalier about this. My take is he is going to get quite an education on how long and tiring lawsuits can be. He won't win legal expenses here. He will be distracted from the main purpose of the site. Pride goeth before the fall.
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Anonymous Coward, 24 Mar 2014 @ 12:43am

Re: Pete Discontinued Access to the Offensive Comment
He is just being sensible.
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Joe, 31 Mar 2014 @ 3:18am

Re: Re:
The court order for a public forum?
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John Smyth, 31 Mar 2014 @ 12:35pm

Kiss Trust
What a PR own goal for this silly hypocritical company! I hope it hits their bottom line hard!
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