Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. Nev.: Website operator Angi partially granted judgment in suit brought by building contractor, (Sep 9, 2024)

By Kenneth H. Ryesky, M.B.A., J.D.

After filing of the lawsuit, the solar panel installer reported by state agencies, the Better Business Bureau, and many local news media broadcasts to have ceased operations.

The federal district court in Las Vegas, Nevada has partially granted the motion for judgment on the pleadings brought by Angi, Inc., an Internet website operator named as a defendant by a licensed Nevada building contractor who claimed that a solar panel installer misappropriated the building contractor's Nevada license number for its listing on the website, and that the misappropriation was facilitated by the website operator's failures to verify the information. The court found that the website operator could not benefit from the protections for publishers as provided in the Communications Decency Act and the Nevada state coordinate statute. All except one of the Nevada deceptive trade practices claims were dismissed as inadequately pleaded. The unjust enrichment claim was dismissed without prejudice, and the negligence claim was dismissed in the absence of opposition. In light of the case history, the building contractor was given yet another opportunity to replead its thrice-amended complaint but cautioned to not expect leave to make any further amendments (EverySpace Construction, LLC v. Encor Solar, LLC, No. 2:23-cv-01105-APG-DJA (D. Nev. Sept. 5, 2024)).

Angi, Inc. operates an online Internet platform which, among other things, facilitates connections between homeowners and contractors who provide home construction, improvement, and/or maintenance services. Utah entity Encōr Solar, LLC (Encor) was a solar energy panel purveyor. EverySpace Construction, LLC (EverySpace) is a Las Vegas, Nevada building construction contractor duly licensed as such in the State of Nevada. EverySpace had worked in conjunction with Encor by installing attic insulation and other services in connection with the Encor's solar panel installations. Encor was not licensed as a building contractor in Nevada.

In July of 2023, EverySpace filed a lawsuit against Encor and a its parent company, Lumin8 Holdings, LLC, (Lumin8) and also against Angi, alleging that Encor had, without EverySpace's knowledge or consent, (1) falsely used EverySpace's Nevada license number and other business particulars to gain a listing on Angi's platform; (2) falsely misrepresented its relationship with EverySpace; and (3) persisted with such false representations even after EverySpace apprised Encor of its objections and demanded that Encor cease and desist. EverySpace alleged that Angi had facilitated Encor's deception by failing to deliver on its claims that it takes measures to verify the information provided to it by the contractors it lists.

Against all defendants, EverySpace asserted causes of action sounding in (1) unjust enrichment; (2) negligent misrepresentation; and (3) deceptive trade practices under various Nevada state statutes. EverySpace also asserted fraudulent inducement and fraudulent misrepresentation claims against Encor and Lumin8, and prayed for injunctive relief against all defendants.

Angi timely moved for judgment on the pleadings.

Communications Decency Act. The court found that Angi could not benefit from the statutory protections of the Communications Decency Act. Here, Angi had asserted that it was an interactive computer service provider who was immune under the statute from being treated as a "publisher or speaker" of the false information that appeared on its website. EverySpace's pleadings could plausibly be construed to assert that Angi did not passively transmit the information Encor provided to it, but "materially contributed to the illegality of the Encor listing." The court also noted that the information on Angi's website was commercial speech, and therefore not as broadly protected as personal speech under the First Amendment.

For similar reasons, the court found that Angi could not benefit as a publisher under the analogous Nevada statute.

Deceptive trade practices. The court partially granted Angi's deceptive trade practices claims under the Nevada state statutes. The case being in federal court, EverySpace was required to plead its claims sounding in fraud with particularity. Of those, only the false representations in the course of business claim was plausibly pleaded with sufficient particularity; the other statutory deceptive trade practices claims did not meet the pleading standard.

The Case is No. 2:23-cv-01105-APG-DJA.

Judge: Gordon, A.

Attorneys: Erven Tebbs Nelson (Law Office of Erven T. Nelson) for EverySpace Construction, LLC. David L. Mortensen (Foley & Lardner LLP) for Lumin8 Holdings, LLC d/b/a Ascent Ventures. Andrew L. Campbell (Faegre Drinker Biddle & Reath LLP) for Angi Inc.

Companies: EverySpace Construction, LLC; Encor Solar, LLC; Lumin8 Holdings, LLC d/b/a Ascent Ventures; Angi Inc.

Cases: Advertising StateUnfairTradePractices NevadaNews