Janson v. Legalzoom.com, Inc.

• Decision Date: 02 August 2011
• Docket Number: Case No. 2:10–CV–04018–NKL.
• Citation: 802 F.Supp.2d 1053
• Court: U.S. District Court — Western District of Missouri
• Parties: Todd JANSON, Gerald T. Ardrey, Chad M. Ferrell, and C & J Remodeling LLC, on behalf of themselves and all others similarly situated, Plaintiffs, v. LEGALZOOM.COM, INC., Defendant.

802 F.Supp.2d 1053

Todd JANSON, Gerald T. Ardrey, Chad M. Ferrell, and C & J Remodeling LLC, on behalf of themselves and all others similarly situated, Plaintiffs,

v.LEGALZOOM.COM, INC., Defendant.

Case No. 2:10–CV–04018–NKL.

United States District Court, W.D. Missouri, Central Division.

Aug. 2, 2011.

David T. Butsch, Butsch Simeri Fields LLC, St. Louis, MO, James J. Simeri, Butsch Simeri Fields LLC, Clayton, MO, Kari A. Schulte, Matthew A. Clement, Timothy W. Van Ronzelen, Cook, Vetter, Doerhoff & Landwehr, P.C., Jefferson City, MO, for Plaintiffs.

Robert M. Thompson, Christopher C. Grenz, James T. Wicks, Bryan Cave, LLP, Kansas City, MO, John Michael Clear, Bryan Cave, St. Louis, MO, for Defendant.

ORDER

NANETTE K. LAUGHREY, District Judge.

Before the Court are the Motion for Summary Judgment [Doc. # 100] filed by Defendant LegalZoom.com, Inc. (“LegalZoom”), as well as the Motion for Partial Summary Judgment [Doc. # 88], Motion to Exclude Expert Testimony [Doc. # 86], and Motion to Strike [Doc. # 114] filed by the representative Plaintiffs in this class action. For the following reasons, the Court grants LegalZoom's Motion for Summary Judgment with respect to Plaintiffs' claims as they relate to patent and trademark applications and denies it in all other respects. The Court also grants Plaintiffs' Motion for Partial Summary Judgment and denies the Motion to Strike and the Motion to Exclude Expert Testimony as they relate to the Motion for Summary Judgment.

I. BackgroundA. Relevant Uncontroverted Facts ¹

LegalZoom is a privately held corporation with its principal place of business in California. LegalZoom maintains a website—www. legalzoom. com—which offers online legal document forms and services.

First, LegalZoom's website offers blank legal forms that customers may download, print, and fill in themselves. Among the blank legal forms customers may download from the LegalZoom website are affidavits, bills of sale, letters, releases, promissory notes, and various types of agreements. Plaintiffs make no claim with respect to these blank legal forms that customers may download, print, and fill-in themselves.

In addition to such blank forms, LegalZoom's website also offers an internet portal, which is the subject of this dispute. With respect to the services offered through the internet portal, LegalZoom has aired a television advertisement stating:

Over a million people have discovered how easy it is to use LegalZoom for important legal documents, and LegalZoom will help you incorporate your business, file a patent, make a will and more. You can complete our online questions in minutes. Then we'll prepare your legal documents and deliver them directly to you.

[Doc. # 119 at 51.] Another LegalZoom advertisement states:

Log on to LegalZoom.com and check out filing incorporation papers for a new business. Click the tab marked “Incorporations, LLCs and DBAs.” Then click the “get started” button, and you're in. Just answer a few simple online questions and LegalZoom takes over. You get a quality legal document filed for you by real helpful people.

Id. at 52. These advertisements also contain LegalZoom's disclaimer: “LegalZoom isn't a law firm. They provide self-help services at your specific direction.” Id.

Among the legal documents available through LegalZoom's internet portal are business formation documents, estate planning documents, pet protection agreements, and copyright, trademark, and patent applications. After making an initial selection, the customer enters answers to questions via a “branching intake mechanism” (or decision tree), referred to on the website as an “online questionnaire.” Customers type in answers to the questions contained in the online questionnaire. In some cases, customers select an alternative from a list of choices or checkboxes provided by LegalZoom. The branching mechanism skips questions for sections of the questionnaire that are inapplicable based on the customer's prior answers. For example, the questionnaire for a last will and testament asks if the customer has children; if the customer's answer is “no,” questions about the customer's children are skipped and the customer is taken to a different next question than if the customer's answer had been “yes.”

The online questionnaire process is fully automated. No LegalZoom employee offers or gives personal guidance on answering the questions, although information relevant to the customer's choice sometimes appears on the screen. For example, when completing the questionnaire to purchase a last will and testament, a question appears: “Would you like to protect your personal representative from liability?” After the question, there appears on the screen: “How did most people answer this question?” followed by “yes.”

When the customer has completed the online questionnaire, LegalZoom's software creates a completed data file containing the customer's responses. A LegalZoom employee then reviews that data file for completeness, spelling and grammatical errors, and consistency of names, addresses, and other factual information. If the employee spots a factual error or inconsistency, the customer is contacted and may choose to correct or clarify the answer.

After the review of the data file, LegalZoom's software automatically enters the information provided by the customer via the online questionnaire into the LegalZoom template that corresponds with the type of document sought by the customer. LegalZoom's templates include standardized language created by attorneys (licensed outside the state of Missouri) to apply to common consumer and business situations. The software also removes sections of the template that are inapplicable based on the customer's answers to the questionnaire. For instance, if a customer has answered that she has no children in responding to the online questionnaire for a last will, no provisions for bequests to children are included in the final document. All information entered by a customer (other than payment and shipping) is used by the software to fill in LegalZoom's template. In other words, the software does not edit or select from the information entered by the customer.

After the customer's data has been input into the template, a LegalZoom employee reviews the final document for quality in formatting—e.g., correcting word processing “widows,” “orphans,” page breaks, and the like. The employee then prints and ships the final, unsigned document to the customer. In rare cases, upon request, the document is emailed to the customer. A customer does not see the purchased document until it is delivered. All Missouri customers who select a given document and provide the same information will receive an identical final product.

After receiving the document, the customer may review, sign, execute, and use the final document at his convenience. The customer may take the unexecuted document to an attorney for review and choose not to use the document at all. Under LegalZoom's refund policy, customers can obtain a full refund (less charges paid to third parties for filing fees or other costs) for 60 days after their transaction if they are not satisfied.

With respect to some of the intellectual property documents, LegalZoom files the government document for the customer based on the customer's answers to the questionnaire. For example, a copyright application is completed using the information gathered through the customer's answers to the questionnaire and then uploaded directly from LegalZoom to the appropriate government office. In the copyright example, the customer will also, at the time of the application or later, send LegalZoom the work for which copyright protection is sought, and LegalZoom will also provide that material to the appropriate government office for the customer. At the time the copyright application is submitted to the appropriate government office by LegalZoom for the customer, LegalZoom reviews the entire submission to make sure it complies with what the customer wished to copyright as set forth in the answers provided to the questionnaire. Similarly, there are two different methods by which a person may create a trademark. LegalZoom determines the trademark-registration method after the customer that selected a trademark document answers questions in the branching questionnaire developed by LegalZoom for the trademark process. Like a copyright application, the customer never sees the trademark application before it is uploaded to the government office by LegalZoom. For documents in the business-services division, LegalZoom also determines what particular government document to use based on the consumer's answers to the questionnaires.

Limited customer service is available to LegalZoom customers by email and telephone. LegalZoom customer-service representatives receive training concerning the company's policy against providing legal advice and are regularly instructed not to recommend forms or documents or give any legal advice. LegalZoom customer-service representatives are repeatedly informed that giving legal advice to a customer will result in dismissal, and that even approaching giving legal advice to a customer will result in discipline up to and including dismissal.

The named Plaintiffs had no personal interaction with any LegalZoom employee while using the LegalZoom website or afterward. The named Plaintiffs never believed that they were receiving legal advice while using the LegalZoom website. Plaintiff Todd Janson paid LegalZoom $121.95 for his will, while Plaintiffs Gerald Ardrey and Chad Ferrell paid LegalZoom $249 for the articles of organization of Plaintiff C & J Remodeling.

B. Procedural History

This action was removed to federal court on February 5, 2010. Plaintiffs' Amended Petition contains four counts. [Doc. # 1, Ex. 1 at 8.] Count I asserts a claim for unlawful practice of law pursuant to Mo.Rev.Stat. § 484.020. Count II asserts a claim for money...