Seaton v. Tripadvisor LLC

• Decision Date: 28 August 2013
• Docket Number: No. 12–6122.,12–6122.
• Parties: Kenneth M. SEATON, dba Grand Resort Hotel and Convention Center, Plaintiff–Appellant, v. TRIPADVISOR LLC, Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

728 F.3d 592

Kenneth M. SEATON, dba Grand Resort Hotel and Convention Center, Plaintiff–Appellant,

v.TRIPADVISOR LLC, Defendant–Appellee.

No. 12–6122.

United States Court of Appeals,Sixth Circuit.

Argued: July 30, 2013.

Decided and Filed: Aug. 28, 2013.

ARGUED:Todd A. Shelton, John Rogers Law Group, Greeneville, Tennessee, for Appellant. Laura R. Handman, Davis Wright Tremaine LLP, New York, New York, for Appellee. ON BRIEF:Todd A. Shelton, John T. Milburn Rogers, John Rogers Law Group, Greeneville, Tennessee, Sidney Gilreath, Gilreath & Associates, Knoxville, Tennessee, for Appellant. Laura R. Handman, James Rosenfeld, Samuel M. Bayard, Davis Wright Tremaine LLP, New York, New York, S. Russell Headrick, Baker, Donelson, Bearman, Caldwell & Berkowitz, Knoxville, Tennessee, for Appellee.

Before: MOORE, CLAY, and WHITE, Circuit Judges.

OPINION

KAREN NELSON MOORE, Circuit Judge.

Plaintiff Kenneth Seaton is the sole proprietor of Grand Resort Hotel and Convention Center (“Grand Resort”) located in Pigeon Forge, Tennessee. Defendant TripAdvisor LLC ranked Grand Resort number one on its “2011 Dirtiest Hotels” list. Seaton filed suit in Tennessee state court, alleging claims for defamation and false-light invasion of privacy based on TripAdvisor's placement of Grand Resort on the “2011 Dirtiest Hotels” list. After removing the case to federal court, TripAdvisor filed a motion to dismiss, asserting that Grand Resort's placement on the list is protected under the First Amendment. Seaton moved to amend his complaint, seeking to add two additional claims: “trade libel/injurious falsehood” and tortious interference with prospective business relationships. The district court granted TripAdvisor's motion to dismiss and denied Seaton's motion to amend as being futile. For the reasons set forth in this opinion, we AFFIRM the district court's grant of TripAdvisor's motion to dismiss and its denial of Seaton's motion to amend his complaint.

I. BACKGROUND

According to the complaint, Grand Resort has operated since 1982 and has “established itself as a valuable business in the state and county, [and] it justly and properly gained and kept the confidence and goodwill of the public generally, including many tourists that travel to The Great Smoky Mountains for vacation.” R.1–1 (Compl. at ¶ 5) (Page ID # 5). Defendant TripAdvisor “is a worldwide company and subsidiary of Expedia, Inc. which is in the business of doing surveys of hotels and restaurants throughout the world.” ¹Id. at ¶ 3 (Page ID # 4). “On January 25, 2011, ... TripAdvisor published a survey which concluded that ... Grand Resort ... was the dirtiest hotel in America.” Id. at ¶ 7 (Page ID # 5).

On October 11, 2011, Seaton filed suit against TripAdvisor in the Circuit Court for Sevier County, Tennessee. In his initial complaint, Seaton alleged, among other things, that TripAdvisor

published its allegations ... to cause the public to cease and refrain from doing business with [Grand Resort] and to cause great injury and irreparable damage to and to destroy [Grand Resort's] business and reputation by false and misleading means[. TripAdvisor] caused the [list] to be published in the industry, including CNN, ABC, NBC, and WATE, defaming [Grand Resort's] business with unsubstantiated rumors and grossly distorted ratings and misleading statements to be used by consumers.

... TripAdvisor used a rating system which is flawed and inconsistent and distorts actual performance and perspective.

Id. at ¶ 7, 9 (Page ID # 5–6). Although it is not entirely clear from the complaint, it appears that Seaton alleged two claims under Tennessee law: defamation and false-light invasion of privacy. See R. 25 (D. Ct. Op. at 6) (Page ID # 271). Seaton sought five-million dollars of compensatory damages and five-million dollars of punitive damages. R. 1–1 (Compl. at ¶ 11) (Page ID # 6).

TripAdvisor removed the case to the Eastern District of Tennessee on November 17, 2011 on the basis of diversity jurisdiction, Seaton being a citizen of Tennessee and TripAdvisor being organized in Delaware with its principal place of business in Massachusetts. R. 1 (Not. of Removal) (Page ID # 1–3). Shortly thereafter, TripAdvisor filed a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), attaching a screenshot of the “2011 Dirtiest Hotels” feature that appeared on its website. R. 7 (Mot. to Dismiss) (Page ID # 39–40); R. 8–1 (Def. Ex. A) (Page ID # 66). This “2011 Dirtiest Hotels” list “as reported by travelers on TripAdvisor” contains: “Grand Resort Hotel & Convention Center[,] Pigeon Forge, Tennessee” next to the number “1” position; a photograph of a ripped bedspread; a quotation that “ ‘There was dirt at least 1/2? thick in the bathtub which was filled with lots of dark hair.’ ”; and a thumbs-down image beside the statement “87% of reviewers do not recommend this hotel.” Id.

On March 31, 2012, Seaton moved to amend his complaint. The proposed amended complaint added facts, including “different configurations” of the “2011 Dirtiest Hotels” list, and two claims: tortious interference with prospective business relationships and “trade libel/injurious falsehood.” R. 16–1 (Am. Compl. at ¶¶ 9, 24–32) (Page ID # 205–06, 210–13). Seaton also expanded his allegations:

TripAdvisor used a flawed, inconsistent, unsupported, and improper system or method of naming and/or designating the Grand Resort Hotel and Convention Center as the dirtiest hotel in the United States or in placing the Grand Resort Hotel and Convention Center on the “2011 Dirtiest Hotels” list.

...

By relying, in part or in whole, upon ... unverifiable data, and further applying such faulty methodology, TripAdvisor knew or should have known the statements it made regarding the “Dirtiest Hotels” list were false and defaming to the Plaintiff and TripAdvisor acted with negligence or reckless disregard for the truth or falsity of the statements.

Id. at ¶¶ 13, 14 (Page ID # 207–08).² On August 22, 2012, the district court granted TripAdvisor's motion to dismiss, reasoning that the list is protected opinion—it reflects TripAdvisor's users' subjective opinions—and therefore is not capable of being defamatory. R. 25 (D. Ct. Op. at 6–13) (Page ID # 271–78). The district court denied Seaton's motion to amend his complaint, finding that the additions would be futile because the added claims also require Seaton to show that TripAdvisor published false statements. Id. at 15–17 (Page ID # 280–82). This timely appeal followed.

II. ANALYSIS

“[I]n cases raising First Amendment issues[,] an appellate court has an obligation to make an independent examination of the whole record in order to make sure that the judgment does not constitute a forbidden intrusion on the field of free expression.” Milkovich v. Lorain Journal Co., 497 U.S. 1, 17, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990) (internal quotation marks and alteration omitted). In the present case, we are confident that the district court's judgment does not intrude on the First Amendment because the district court properly granted TripAdvisor's motion to dismiss and denied Seaton's motion to amend the complaint. Seaton did not state a plausible claim for defamation because TripAdvisor's placement of Grand Resort on the “2011 Dirtiest Hotels” list is not capable of being defamatory. Placement on the “2011 Dirtiest Hotels” list constitutes protected opinion because the list employs loose, hyperbolic language and its general tenor undermines any assertion by Seaton that the list communicates anything more than the opinions of TripAdvisor's users. Seaton failed to state a plausible claim for false-light invasion of privacy because he did not allege that he was personally named on the list and because Grand Resort, as a business, cannot make such a claim under Tennessee law. Seaton's claim for trade libel/injurious falsehood is not plausible, as pleaded by Seaton, because it requires proof of publication of a false statement of fact regarding Grand Resort; Seaton cannot prove falsity because the placement of hotels on TripAdvisor's list constitutes protected opinion. Finally, Seaton did not state a plausible claim for tortious interference with prospective business relationships because, as he acknowledges, it relies on the “2011 Dirtiest Hotels” list being defamatory.

We review de novo both the district court's grant of a Rule 12(b)(6) motion to dismiss and its denial of a motion to amend the complaint when it concludes that such an amendment would be futile. Louisville/Jefferson Cnty. Metro Gov't v. Hotels.com, L.P., 590 F.3d 381, 384 (6th Cir.2009); Dubuc v. Green Oak Twp., 312 F.3d 736, 743 (6th Cir.2002). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Although “[m]atters outside of the pleadings are not to be considered by a court in ruling on a 12(b)(6) motion to dismiss,” documents attached “ ‘to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to [the plaintiff's] claim.’ ” Weiner v. Klais & Co., 108 F.3d 86, 88–89 (6th Cir.1997) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993)).³

A. Defamation

“To establish a prima facie case of defamation in Tennessee, the plaintiff must establish that: 1) a party published a statement; 2) with knowledge that the statement is false and defaming to the other; or 3) with reckless disregard for the truth of the statement or with negligence in failing to ascertain the truth of the statement.” Sullivan v. Baptist Mem'l Hosp., 995 S.W.2d 569, 571 (Tenn.1999). “The question of whether [a writing] was understood by its...