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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-------------------------------------------------------x
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`LIVE FACE ON WEB, LLC,
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`Plaintiff,
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`-v-
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`FIVE BORO MOLD SPECIALIST INC.,
`MARTY KATZ, and JAMES COUTURE,
`et al.
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`Defendants.
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`-------------------------------------------------------x
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`No. 15 CV 4779-LTS-SN
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`MEMORANDUM OPINION AND ORDER
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`Plaintiff Live Face On Web, LLC (“Plaintiff” or “Live Face”) alleges that, after it
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`filed a copyright infringement action against Five Boro Mold Specialist Inc. (“Five Boro”) and
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`its owner, Marty Katz (collectively, for the purposes of this opinion, “Defendants”), Defendants
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`and their public relations consultant, James Couture, a named defendant who is not a party to the
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`instant motion practice, published defamatory content about Plaintiff on the Internet. Plaintiff
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`filed an Amended Complaint (docket entry no. 901 (“Am. Compl.”)) asserting a defamation
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`claim against Defendants and Couture. The Court has jurisdiction of this action pursuant to 28
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`U.S.C. § 1331 and supplemental jurisdiction of the defamation claim pursuant to 28 U.S.C.
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`§ 1367(a).
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`Before the Court is a motion to dismiss Plaintiff’s defamation claim against Five
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`1
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`The Amended Complaint was originally filed on January 8, 2016 as docket entry
`no. 51, but was re-filed on April 5, 2016 at the Court’s request because the
`original filing was not signed by the attorney who filed it.
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`Case 1:15-cv-04779-LTS-SN Document 92 Filed 04/28/16 Page 2 of 8
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`Boro and to dismiss both the defamation and copyright infringement claims asserted against
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`Katz in his individual capacity. (See docket entry no. 57.) The Court has considered all of the
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`parties’ submissions carefully. For the reasons set forth below, Defendants’ motion to dismiss is
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`granted as to the defamation claim against Five Boro and Katz, and denied as to the copyright
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`claim against Katz.
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`BACKGROUND
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` The facts that follow are drawn from the Amended Complaint and are assumed to
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`be true for the purposes of this motion practice.
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`Live Face makes and sells software that creates customized online virtual
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`spokespersons for business websites. (Am. Compl. ¶¶ 14-16.) It registered a copyright for this
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`technology in 2007. (Id. ¶ 22.) In its Amended Complaint, Plaintiff alleges that Defendants
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`Katz and Five Boro used Plaintiff’s proprietary software on two Five Boro websites without
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`permission. (Id. ¶¶ 23-32.) Plaintiff alleges that Katz is “the owner and/or president of Five
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`Boro” and that “[Five Boro] and Katz own, and/or operate and/or control the [offending]
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`websites.” (Id. ¶¶ 3, 23.) Live Face has filed similar copyright infringement lawsuits against
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`other businesses. (Id. ¶ 56.)
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`Live Face alleges that, after it commenced this action, Defendants defamed Live
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`Face by making statements about this and other litigation on a blog, on Twitter, on Facebook, in
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`a Google+ post, and in a press release (together “the Publications”). (Id. ¶¶ 49-55, 59-62, 71-
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`73.) Among other statements, Plaintiff takes issue with the Publications’ claims that: “the filing
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`of actions by [Live Face] to enforce its copyrights are ‘frivolous,’ and . . . [Live Face] was
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`subjecting ‘unsuspecting victims’ to [its] ‘legal wrath’”; “the lawsuits were filed against
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`‘innocent small business clients’”; “[o]ne can only ascertain . . . that [Live Face] is doing nothing
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`more than patent trolling for profits”; and “[t]he defendants in this particular instance are being
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`subjected to what could be construed in many legal circles as barratry.” (Id. ¶¶ 53-55, 71-73,
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`and Ex. O.) Plaintiff alleges that “numerous other media outlets” picked up Defendants’ press
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`release, causing harm to Live Face’s business and reputation. (Am. Compl. ¶ 74 and Ex. P.)
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`DISCUSSION
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`“To survive a motion to dismiss [under Federal Rule of Civil Procedure 12(b)(6)],
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`a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that
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`is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks
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`and citations omitted). This requirement is satisfied when the factual content in the complaint
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`“allows the court to draw the reasonable inference that the defendant is liable for the misconduct
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`alleged.” Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)). A complaint
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`that contains only “naked assertions” or “a formulaic recitation of the elements of a cause of
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`action” does not suffice. Twombly, 550 U.S. at 555. In making its Rule 12(b)(6)
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`determinations, the court “may consider any written instrument attached to the complaint,
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`statements or documents incorporated into the complaint by reference . . . and documents
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`possessed by or known to the plaintiff and upon which [he] relied in bringing the suit.” ATSI
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`Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In deciding a Rule 12(b)(6)
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`motion, a court assumes the truth of the facts asserted in the complaint and draws all reasonable
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`inferences from those facts in favor of the plaintiff. See Harris v. Mills, 572 F.3d 66, 71 (2d Cir.
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`2009).
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`The Defamation Claim
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`“Under New York law, the elements of defamation claim are (1) a defamatory
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`statement of fact, (2) regarding the plaintiff, (3) published to a third party, (4) that is false, (5)
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`made with the applicable level of fault, (6) causing injury, and (7) not protected by privilege.”
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`Egiazaryan v. Zalmayev, No. 11 CV 2670, 2011 WL 6097136, at *3 (S.D.N.Y. Dec. 7, 2011)
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`(citing Dillon v. City of New York, 704 N.Y.S.2d 1, 5 (App. Div. 1st Dep’t 1999)). Although it
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`is ultimately “the responsibility of the jury to determine whether the plaintiff has actually been
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`defamed,” Levin v. McPhee, 119 F.3d 189, 195 (2d Cir. 1997) (citing James v. Gannett Co., 40
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`N.Y.2d 415, 419 (1976)), “[w]hether particular words are defamatory presents a legal question to
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`be resolved by the court[s] in the first instance.” Celle v. Filipino Reporter Enterprises, Inc., 209
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`F.3d 163, 177 (2d Cir. 2000) (second alteration in original) (citing Aronson v. Wiersma, 65
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`N.Y.2d 592, 593 (1985)). Among other questions of law, courts are charged with distinguishing
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`between statements of fact, which may be defamatory, and expressions of opinion, which “are
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`not defamatory; instead, they receive absolute protection under the New York Constitution.”
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`Tucker v. Wyckoff Heights Med. Ctr., 52 F. Supp. 3d 583, 597 (S.D.N.Y. 2014) (internal
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`quotation marks and citations omitted).
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`New York courts have developed a three-step inquiry to distinguish potentially
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`defamatory statements of fact from protected opinions. First, a court asks whether the specific
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`language at issue has a precise and readily understood meaning. Second, the court determines
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`whether the statements are capable of being proven true or false. And third, the court evaluates
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`whether the context of the statements signals to the reader that what is being conveyed is likely
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`to be opinion rather than fact. Gross v. N.Y. Times Co., 82 N.Y.2d 146, 153 (1993). These
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`questions are designed to focus the inquiry on the core issue of “whether a reasonable [observer]
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`Case 1:15-cv-04779-LTS-SN Document 92 Filed 04/28/16 Page 5 of 8
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`could have concluded that [the statements were] conveying facts about the plaintiff,” Gross, 82
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`N.Y.2d at 152, so courts undertake “an analysis that begins by looking at the content of the
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`whole communication, its tone and apparent purpose.” Immuno AG. v. Moor-Jankowski, 77
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`N.Y.2d 235, 254 (1991).
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`Read in context, the statements in the Publications are non-actionable expressions
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`of opinion rather than potentially defamatory statements of fact. The statements that Plaintiff’s
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`litigation is “frivolous” and that Plaintiff subjected “‘unsuspecting victims’ to [its] ‘legal wrath’”
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`are hyperbolic and imprecise. They may mean different things to different people, and they are
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`not capable of being proven true or false because of their subjective, relative meanings. Courts
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`have consistently found that statements calling into question the legitimacy of litigation are non-
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`actionable statements of opinion. See, e.g., Scholastic, Inc. v. Stouffer, 124 F. Supp. 2d 836, 850
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`(S.D.N.Y. 2000) (statements that legal claims were “absurd,” “ridiculous” and “meritless” were
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`non-actionable statements of opinion that were neither precise nor capable of being proven
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`false).
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`The statements that “[o]ne can only ascertain . . . that [Live Face] is doing nothing
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`more than patent trolling for profits,” that “[t]he defendants in this particular instance are being
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`subjected to what could be construed in many legal circles as barratry,” and that Plaintiffs’
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`lawsuits are brought against “innocent small business owners,” are arguably more “precise and
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`readily understood” than other statements in the Publications, but are similarly not easily
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`“proven true or false,” and their context demonstrates that they are statements of opinion. See
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`Gross, 82 N.Y.2d at 153. Moreover, the effect of the use of the rhetorical indicators “one can
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`only ascertain” and “what could be construed” is that “the defendant’s statements, read in
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`context, are readily understood as conjecture, hypothesis, or speculation, [which] signals the
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`Case 1:15-cv-04779-LTS-SN Document 92 Filed 04/28/16 Page 6 of 8
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`reader that what is said is opinion, and not fact.” Levin, 119 F.3d at 197; see also Dworin v.
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`Deutsch, No. 06 CV 13265, 2008 WL 508019, at *5 (S.D.N.Y. Feb. 22, 2008) (“Deutsch gives
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`numerous indicators – e.g., ‘it seemed to me . . .,’ ‘he didn’t seem. . .’ – which signal to readers .
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`. . that what is being read . . . is likely to be opinion, not fact.” (internal quotation marks and
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`citations omitted).
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`Further, the media vehicles used to disseminate the Publications – a Wordpress
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`blog, social media posts, and an unsigned press release complaining about litigation tactics –
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`suggest to readers that they contain opinions, not facts, and they are written in an amateurish
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`fashion. Cf. Gross, 82 N.Y.2d at 152, 155-156 (reports in The New York Times that “appeared
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`in the news section rather than the editorial or ‘op ed’ sections” were “written only after what
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`purported to be a thorough investigation” and were therefore more likely to be treated as facts).
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`These factors further indicate that an ordinary reader would understand the statements at issue to
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`be opinion, not fact.
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`For these reasons, Live Face’s defamation claims as against Five Boro and Katz
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`fail as a matter of law and are dismissed.
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`Live Face’s Copyright Claim Against Marty Katz
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`Defendant Katz also moves to dismiss the copyright claim against him for failure
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`to state a claim. This aspect of the motion is denied because Plaintiff’s allegations are sufficient,
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`at the pleading stage, to sustain a copyright claim against Katz under the theory of vicarious
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`infringement. A corporate officer can be “held liable under a theory of vicarious infringement
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`where he profit[s] from direct infringement while declining to exercise a right to stop or limit it.”
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`Warren v. John Wiley & Sons, Inc., 952 F. Supp. 2d 610, 619 (S.D.N.Y. 2013) (alteration in
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`Case 1:15-cv-04779-LTS-SN Document 92 Filed 04/28/16 Page 7 of 8
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`original) (internal quotation marks and citations omitted). The allegations of infringing conduct
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`against Five Boro and Katz are identical. Plaintiff further alleges control of Five Boro and profit
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`by Katz that support plausible inferences that Katz profited from infringement by Five Boro, had
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`the right as owner and/or president to stop Five Boro from engaging in infringement, and
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`declined to exercise this right. Taken together, these allege the necessary control to support
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`vicarious liability. Although Live Face does not specifically allege that Katz had knowledge of
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`infringement by Five Boro, the doctrine of vicarious liability “does not include an element of
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`knowledge or intent on the part of the vicarious infringer.” Arista Records LLC v. Usenet.com,
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`Inc., 633 F. Supp. 2d 124, 156 (S.D.N.Y. 2009). Therefore, Katz’s motion to dismiss the
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`copyright claim is denied.
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`CONCLUSION
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`For the foregoing reasons, Defendants’ motion to dismiss Plaintiff’s defamation
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`claims (Count Two) as against Five Boro and Katz is granted. The motion is denied insofar as it
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`seeks dismissal of Plaintiff’s copyright claim against Katz.
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`This Memorandum Opinion and Order resolves docket entry number 57.
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`The final pretrial conference for this action is scheduled for October 28, 2016 at
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`12:00 p.m. The parties must confer and make submissions in advance of the conference as set
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`VERSION APRIL 22, 2016
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`Case 1:15-cv-04779-LTS-SN Document 92 Filed 04/28/16 Page 8 of 8
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`forth in the Pre-Trial Scheduling Order (docket entry no. 22).
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`SO ORDERED.
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`Dated:
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`New York, New York
`April 28, 2016
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` /s/ Laura Taylor Swain
`LAURA TAYLOR SWAIN
`United States District Judge
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`VERSION APRIL 22, 2016
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