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Monday, 29 July 2019 16:42

U. S. District Judge Dismisses Repairify’s Lawsuit Against AirPro

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On July 15, U. S. Southern District of Texas Judge Ewing Werlein Jr. released a final judgment in the lawsuit filed against AirPro Diagnostics by asTech parent company Repairify.

The case was dismissed because Judge Werlein found there were insufficient grounds for Repairify to sue AirPro in the federal Texas district; however, the ruling merely addressed the venue, not the merits of the case on relevant laws. Because the case was dismissed without prejudice, Repairify is permitted to refile the lawsuit, though the company has not yet indicated whether it intends to do so.

 

In a statement released on July 17 about what it referred to as “asTech’s second unsuccessful attempt to use litigation to damage AirPro’s growth in the marketplace,” AirPro President and CEO Lonnie Margol said, “AirPro remains confident that its ‘Truth Campaign,’ listed on our website, can easily be verified through an independently conducted, side-by-side comparison and renews its challenge to asTech to participate. We are, however, confident that asTech has finally learned through the courts that AirPro meets and exceeds its Ten-Minute Response pledge and that it is far from 'mathematically impossible'. If asTech decides to continue on its failed path of senseless litigation, AirPro will certainly prevail as it proves AirPro delivers superior customer service using OEM software ‘local’ to the vehicle.”

 

The litigation, filed April 15, accused AirPro of false or misleading badmouthing of asTech and followed and exchange of cease and desist letters between the two companies. On April 9, AirPro shared those letters with the industry and issued a challenge to asTech for “an independently monitored side-by-side comparison between our tools, methods and services.”

 

In response, Repairify issued a statement on April 15 in which Repairify CEO Doug Kelly said “We are extremely proud of our product, which has undergone extensive testing and works as promised. Our team is focused on promoting the differentiating characteristics of our product and the superior quality of our customer service. We believe the right way to build market share and customer loyalty is by highlighting the positive aspects of our product and business interactions, not by running around and bad-mouthing our competition.”


 

Kelly continued, “Having said that, we fully intend to defend ourselves in the appropriate forum against malicious, false and unfair attacks by others. Unfortunately, we have been forced into a frustrating distraction from the focus on our product and customers resulting in the filing of the attached lawsuit.”

 

On April 28, Repairify requested an injunction against AirPro, asking the court to force AirPro to remove various statements from its website; AirPro opposed the injunction and in a May 15 statement said “This case is all about our Truth Campaign posted on our website, which we firmly stand by. We welcome this opportunity to finally flush out the truth to educate repairers, OEM’s and the industry at large regarding the honest differences between our technology and services versus that of asTech.”

 

Repairify’s lawsuit stated that AirPro’s attacks against the asTech product had no foundation: “The AirPro website includes misleading statements suggesting that AirPro does have insider knowledge of the current asTech device, and thus is qualified to compare the asTech device with AirPro.”

 

Because the allegedly misleading comments are found on AirPro’s website, they are available for the whole world, including Texas to see. Judge Werlein’s ruling shows how the court evaluates jurisdiction in cases against companies with broad online presences.

 

Although Judge Werlein stated that asTech would be free to sue in Texas if they had produced evidence that AirPro had directly emailed Texas customers with the allegedly defamatory comments, according to the final judgement, “Defendant’s uncontroverted evidence is that, although it distributed the materials about which Plaintiff complains (and which Defendant maintains are truthful), ‘none of the individuals or entities that received the information were located in the state of Texas or ‘based in the state of Texas.’”

 

asTech’s argument that AirPro had emailed Asbury Automotive Group, a national chain doing business in Texas and an asTech customer, Judge Werlein said it did not create Texas jurisdiction since the email was sent to a regional manager in Atlanta.


 

In the lawsuit, asTech pointed out that AirPro Sales and Marketing Vice President Frank LaViola has a home in Houston, but Judge Werlein wrote, “Plaintiff infers that based on his title, LaViola must be responsible for the allegedly defamatory statements in Defendant’s advertising campaign (which Defendant calls the ‘Truth Campaign’), but Defendant produces uncontroverted evidence that LaViola was hired in January 2019 and ‘was not involved in the planning, development or initial execution of the Truth Campaign,’ was not ‘involved in any aspect of creating the Truth Campaign,’ does not control the content of Defendant’s website, and ‘did not direct, order or authorize any of the posts complained of in asTech’s complaint. Given this uncontroverted proof regarding the facts that underlie the Plaintiff’s claims, LaViola’s mere presence in Texas does not support Plaintiff’s assertion of specific personal jurisdiction.”

 

Judge Werlein also rejected consideration based on the fact that two percent of AirPro’s customer base is located in Texas, resulting in an attempt to hire staff in that location. He stated, “allegation or evidence that these minimum contacts have any relation to the allegedly false statements that form the basis of Plaintiff’s claims.”

 

Insisting that AirPro’s comments must be demonstrated to specifically target Texans or reference Texas, Judge Werlein wrote, “In the absence of any statements by Defendant about or expressly directed at Texas, the mere fact that Plaintiff is a citizen of Texas is insufficient to establish specific jurisdiction under both parties compete nationwide ‘effects test,’ particularly where and not only–or even primarily–in Texas,” Werlein wrote.

 

Though asTech’s argument for jurisdiction was supported by the claim that Texans could directly interact with AirPro through ORION and the site’s “Contact Us” feature, the judge stated, “Plaintiff argues that these features make Defendant’s website active, or at least interactive, under the Zippo test used by the Fifth Circuit. [However, asTech hadn’t claimed] there is anything false, misleading or otherwise improper about the interactive portions of Defendant’s website.”

 

Regarding asTech’s disputes with AirPro’s “Truth Campaign” page, Werlein wrote, “Defendant produces uncontroverted evidence–and indeed Plaintiff does not argue to the contrary–that the portions of the website containing the statements that Plaintiff identifies as false and misleading are not interactive and do not allow for the exchange of information.”


 

In regards to asTech’s petition for limited jurisdictional discovery, Judge Werlein rejected the request, writing “Plaintiff does not state what additional evidence it reasonably expects to find if discovery were allowed. The parties, which know each other well and have engaged in previous litigation against each other, have filed full briefs including their verified evidence related to Defendant’s contacts with Texas alleged in Plaintiff’s complaint. As observed, the evidence submitted fails to establish that Defendant is subject to personal jurisdiction in Texas. Without stating what other facts pertinent to jurisdiction are expected to be discovered and a plausible basis for that expectation, Plaintiff fails to carry its burden to show that additional jurisdictional discovery is warranted.”