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Precision Contracting Solutions, LP v. ANGI Homeservices, Inc.

United States District Court, District of Columbia

November 19, 2019

PRECISION CONTRACTING SOLUTIONS, LP, et al., Plaintiffs,
v.
ANGI HOMESERVICES, INC., et al., Defendants.

          MEMORANDUM OPINION

          BERYL A. HOWELL CHIEF JUDGE

         The plaintiffs, a home improvement company and its sole owner, and a contractor and client of the company, initiated this suit alleging that the company's business profiles and associated ratings and reviews were unlawfully removed from the websites of two of the four defendants. See Defs. ANGI Homeservices, Inc. and Angie's List, Inc's Mot. to Dismiss Pls.' Compl. (“Corporate Defs.' Mot.”), ECF No. 13; Def. Vogel's Mots. to Dismiss (“Vogel's Mots.”), ECF Nos. 14, 15, 16;[1] Def. District of Columbia's Mot. to Dismiss (“D.C.'s Mot.”), ECF No. 17. For the reasons stated, all the defendants' motions to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) are granted, and the complaint is dismissed.

         I. BACKGROUND

         Briefly reviewed below are the parties, factual allegations and claims asserted in this lawsuit, as well as relevant procedural background.

         A. The Parties

         Plaintiff Precision Contracting Solutions, LP (“PCS”) is a home improvement contractor currently licensed in the District of Columbia (“the District”). See Notice of Removal, Ex. 1, Compl. ¶ 1, ECF No. 1-1. PCS's sole proprietor is plaintiff Derrick Sieber, id. ¶ 2, and plaintiff Stephen Sieber is “a design consultant to PCS, with no ownership interest or administrative control over PCS, ” id. ¶ 3. The fourth plaintiff, Carolyn Torsell, is a District homeowner who hired PCS to perform “construction services on her home.” Id. ¶ 60.

         Defendants HomeAdvisor and Angie's List are web-based services that match consumers with service providers like PCS. See Id. ¶¶ 5-6; see also www.homeadvisor.com; www.angieslist.com.[2] Kenneth Vogel, another defendant, previously served as an attorney for a former PCS client during litigation between that client and PCS in the Superior Court of the District. See Compl. ¶¶ 8, 121. The District is the fourth defendant. See Id. ¶ 9.

         B. Facts Alleged in the Complaint

         1. PCS's Relationships with HomeAdvisor and Angie's List

         PCS allegedly “had an ongoing business relationship” with HomeAdvisor. Id. ¶ 14. Between 2013 and 2019, PCS “paid Home Advisor over $300, 000 for leads, many of which led to consumer contracts for PCS with District consumers.” Id. ¶ 15. Before entering this business relationship and “post[ing] a profile of [PCS] services, personnel, videos and photos of recent projects . . . on the Home Advisor website, ” id. ¶ 16, PCS “agree[d] to terms and conditions specified by Home Advisor, ” id. ¶ 17. These terms and conditions authorized HomeAdvisor to “remove or modify Content [on the HomeAdvisor website] for any reason.” Id. ¶ 31 (quoting HomeAdvisor Service Provider Terms and Conditions, https://pro.homeadvisor.com/terms/ terms-conditions/).

         “Angie's List on its own initiative, created a PCS profile on its website and published . . . ‘A' ratings and reviews from dozens of District consumers about PCS.” Id. ¶ 44. This profile, the complaint alleges, “created a fundamental source of leads, business development and [a] reputation barometer for PCS during the period 2013 thr[ough] 2019.” Id. ¶ 47; see also Id. ¶ 45 (stating that the profile “created a highly visible reputation barometer for PCS.”). Service providers are “permitted to use” Angie's List only “subject to the terms and conditions contained” in Angie's List's Service Provider's User Agreement.[3] That agreement also allows Angie's List to “remove [Service Provider] Content at any time in Angie's List['s] sole discretion.” Compl. ¶ 42; see also Angie's List Service Provider's User Agreement.

         2. The District's Suit Against PCS and the Siebers

         On July 31, 2019, the District's Office of the Attorney General (“OAG”) filed suit against PCS and Derrick and Stephen Sieber for ongoing violations of the District's Consumer Protection Procedures Act, D.C. Code § 23-3901, et seq., and the District's Construction Code, D.C. Code § 6-1401, et seq. See Complaint, District of Columbia v. Precision Contracting Solutions, L.P., et al., No. 2019 CA 005047 B (D.C. Super. Ct. filed July 31, 2019).[4] The suit alleges that PCS and the Siebers have made misleading statements to consumers, have performed illegal and substandard home improvement work, and have harassed and threatened consumers who complain about PCS business practices. For example:

• “Defendants contracted with a consumer to remodel a basement. Defendants informed the consumer that no underpinning was required for the project as Defendants had a novel method to structurally reinforce the basement. Defendants continued the basement renovation without underpinning until water began seeping into the consumer's basement. When the consumer contacted [the District's Department of Consumer and Regulatory Affairs (“DCRA”)], DCRA's inspection resulted in the issuance of a stop work order. The inspection revealed that Defendants had improperly cut the footers of the property around the perimeter of the basement and had attempted to use concrete on the walls to hide the infiltration of water. To remediate this dangerous condition, the basement had to be completely dug out, fully underpinned and re-poured, at significant cost to the consumer.” Id. ¶ 10.
• “Defendants also enter into contracts with consumers with language indicating that the price will not exceed a certain amount. After consumers make payments to Defendants as required by the contract, Defendants refuse to finish the promised scope of work and demand additional sums to be paid or threaten to abandon the project altogether. In 2017, PCS entered into a contract with a homeowner for a full renovation of their property. Two years later, and after the full sums requested by PCS had been paid, the consumer was left with an unfinished property and PCS continued to demand sums far in excess of the initial contract to complete the project.” Id. ¶ 17.
• “Defendants also mislead consumers regarding the identity and training of Defendant S. Sieber. Defendant S. Sieber's legal name is Stephen Charles Sieber, Derrick Sieber's father. He is introduced to consumers as ‘Stevie Marco,' PCS's designer, even though Defendant S. Sieber is not a licensed interior designer in the District. Defendant S. Sieber . . . is able to negotiate the terms of agreements between PCS and customers, even though he is not licensed by DCRA as a home improvement specialist, in violation of D.C. Code §§ 47-2851.02; 47-2844; and 16 DCMR §§ 800-899.” Id. ¶ 20 (internal citation omitted).

         3. Removal of PCS's Profile from the HomeAdvisor and Angie's List Websites

         Shortly after the District filed its suit, “[o]n August 6, 2019, Home Advisor and Angie's List . . . removed the PCS profile from their websites along with 54 . . . consumer ratings and reviews of PCS that had been posted by District consumers.” Compl. ¶ 49. The next day, Derrick Sieber “sent an e-mail[] to” HomeAdvisor asking “why the PCS profile and ratings and reviews about PCS had been removed, ” id. ¶ 56, and stating that “if such content were not reinstated, PCS and others would file a lawsuit, seek injunctive relief and damages resulting from various causes of action, ” id. ¶ 57.[5] Sieber did not receive a response. Id. ¶ 58.

         Later in August, plaintiff Carolyn Torsell, a District homeowner, “sought to post a rating and review about her experiences with PCS, ” id. ¶ 61, but when she went to HomeAdvisor's and Angie's List's “websites to post her very positive rating and review of PCS, she could not do so because she found no profile or other information about PCS on those websites, ” id. ¶ 62.

         C. Procedural Background and the Plaintiffs' Complaint

         Plaintiffs filed suit in the District's Superior Court in September 2019, and HomeAdvisor and Angie's List removed the case to federal court. See Notice of Removal at 2, ECF No. 1.[6]The complaint seeks $25, 000, 000 in compensatory damages to PCS from Angie's List and HomeAdvisor, an award of $10, 000, 000 in compensatory damages to Stephen Sieber from all defendants on the false light claim, additional damages under the Federal Trade Commission Act, unspecified punitive damages, attorneys' fees, and injunctive relief for the removal of PCS from the HomeAdvisor and Angie's List websites. See Compl. at 22-23.[7]

         More specifically, PCS first alleges that HomeAdvisor's and Angie's List's terms of use and their removal of the PCS profile information, including consumer ratings and reviews, violated 15 U.S.C. § 45b, the Consumer Review Fairness Act (“CRFA”), part of the Federal Trade Commission Act (“FTCA”). Id. ¶¶ 65-97. PCS also alleges that the “intentional[] and unlawful[]” removal of the PCS profiles amounted to tortious interference with existing and prospective business relations of PCS. Id. ¶¶ 98-107. All four plaintiffs allege that the removal of PCS from the websites cast the plaintiffs in a false light. See Id. ¶¶ 108-117. Finally, all plaintiffs claim that the defendants engaged in a conspiracy “to blacken the reputation of PCS in the home improvement market and thereby prevent PCS from entering into future contracts with District consumers.” Id. ¶ 133.

         The defendants filed motions to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6).[ ...


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