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A US court has ruled that a disgruntled customer of an insurance firm cannot be sued for defamation over statements he made on his “gripe site” because those statements are protected free speech.

The case dates back to May 2000, when Ronald DiGiovanni obtained a service warranty – provided by Pennsylvania insurance company Penn Warranty Corp – for his 1994 GMC Sonoma truck.

The truck broke down, but Penn Warranty denied DiGiovanni's warranty claim. Consequently, he brought a small claims action against the firm, alleging breach of contract. The dispute eventually settled with a payout of $2,500.

But DiGiovanni was still unhappy. He set up a 45-page website – PennWarrantyLitigation.com – complaining about the firm. The site was available online for a few weeks in January 2004 but is no longer operating.

According to court papers the site contained some negative comments about the car service warranty industry, auto insurance and judges from New Jersey, but mostly focused on the small claims dispute.

Penn Warranty took objection, and filed a defamation action in relation to eight statements contained on the site, including descriptions of the firm as “crooked” and “blatantly dishonest”.

In response, DiGiovanni argued that the comments were truthful and his personal opinion.

In a ruling, published in late October, Judge Judith Gische agreed with the latter argument.

“Competing with an individual's right to protect one's own reputation, is the constitutionally guaranteed right to free speech,” she wrote. “Consequently, statements that merely express opinion are not actionable as defamation, no matter how offensive, vituperative or unreasonable they may be.”

“Moreover, in the context of statements pertaining to issues of consumer advocacy, courts have been loath to stifle someone's criticism of goods or services,” she added. “The courts have recognised that personal opinion about goods and services are a matter of legitimate public concern and protected speech.”

On this occasion, said Judge Gische, the defamation action had to be dismissed because, on looking at the site as a whole, it was obvious that DiGiovanni was a disgruntled consumer and the speech in question was “merely a statement of defendant's personal opinion about the quality of services provided by plaintiff company.”

The Judge was also asked to rule on whether DiGiovanni’s use of the domain name – PennWarrantyLitigation.com – made him liable for damages in terms of the US Lanham Act, because it infringed upon Penn Warranty’s registered trade mark in the name.

Judge Gische said no, because DiGiovanni was not using the website for a commercial purpose and accordingly could not have the necessary bad faith intent to profit from the trade mark.

Nor were the names of the websites confusingly similar, she added.

See: The ruling

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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