A Kansas federal court granted Angie's List's motion to dismiss a class action lawsuit alleging false advertising, finding that most of plaintiff's claims were time-barred and the rest were not properly pled. The owner of a tree trimming business spent over $200,000 in advertising on Angie's List from 2005 and 2013. According to the plaintiff, Angie's List's business model misleads consumers by not revealing that the ranking of businesses is heavily influenced by how much such member businesses pay Angie's List. Further, plaintiff also alleged that Angie's List engaged in deceptive practices by improperly giving consumers a negative impression of its business over an extended period of time prior to plaintiff ceasing advertising on Angie's List.
In dismissing plaintiff's lawsuit, the court determined that the plaintiff failed to show that the statements on Angie's List's website were made for purposes of influencing consumers to buy defendant's goods or services. The court stated "At best, plaintiff [Strauss] has plausibly pled that the 2016 [Angie's List] website statements influenced consumers to buy the goods or services of a tree care business other than plaintiff [Strauss], but not the goods or services of defendant."
Takeaway: Companies with websites containing consumer reviews may wish to consider disclosing how the rankings are determined, if factors other than the review itself determine the ranking.
This article is presented for informational purposes only and is not intended to constitute legal advice.