MagicJack, LP v. Happy Mutants LLC, Case No. CIV 091108 (Sup. Ct. Cal. Marin County, Jan. 5, 2010)
Opinion (hosted by Boing Boing)
On January 5, 2010, the Superior Court of California for the County of Marin entered judgment against plaintiff MagicJack, reiterating its May 2009 holding that MagicJack had not established a probability of prevailing on its claims against Boing Boing and ruling that Boing Boing was entitled to legal fees and costs resulting from MagicJack’s lawsuit. In May, Boing Boing had moved to strike MagicJack’s claims under California’s anti-SLAPP (“strategic lawsuit against public participation”) rule. In its May 2009 holding against MagicJack, the court first noted that MagicJack's claims targeted protected speech activity because Boing Boing’s statements "involve consumer information affecting a large number of persons." The court then observed that posting on the Boing Boing site "provides information about [MagicJack's] product not only to the 'substantial' number of people who have already purchased the device, but also to other consumers who might be considering purchasing such a device."
The court’s judgment is available here. The May 2009 ruling is available here. Gizmodo provides an overview of the case. Boing Boing also provides a full account of the events along with hosting all legal documents.
In March 2009, MagicJack, a Florida-based VOIP company which promotes a USB dongle that allows subscribers to make free or inexpensive phone calls over the internet, sued Boing Boing over a blog post from April 2008 criticizing MagicJack's End-User Licensing Agreement (“EULA”) and various aspects of its website. The post alleged that MagicJack’s EULA allowed the company to target ads at users based on their calls and was not accessible from MagicJack’s homepage or at sign-up. The post also criticized MagicJack for requiring its users to waive their right to sue in court, and claimed that MagicJack’s website contained a phony visitor counter whose numbers were unreflective of actual site traffic. Finally, the post alleged that MagicJack’s website would report that “Your MagicJack is functioning properly,” even when none had been installed.
MagicJack filed a lawsuit for defamation and unfair competition in California state court, alleging that statements in the blog post were false, misleading, and had irreparably harmed MagicJack's reputation by exposing it to "hate, ridicule and obloquy." Boing Boing moved to strike the complaint under California's anti-SLAPP statute, Cal. Code Civ. Proc. § 425.16, asserting that: "This is precisely the type of bad-faith, strategic lawsuit that the California legislature sought to prevent when it enacted the anti-SLAPP statute. . . . If permitted to proceed, MagicJack's lawsuit threatens to have a chilling effect not just on Boing Boing, but more generally on public criticism and debate concerning corporate practices and consumer privacy rights."
In May 2009, the court granted the motion to strike. The court reasoned that MagicJack's claims targeted protected speech activity because the statements "involve consumer information affecting a large number of persons" and that posting on the Boing Boing site "provides information about [MagicJack's] product not only to the 'substantial' number of people who have already purchased the device, but also to other consumers who might be considering purchasing such a device."
In an era where courts have struggled to determine the right balance of critical reviews with paid sponsorship and company advertising, this case carries significant First Amendment ramifications for the tech blogging community.