NetScout Systems, Inc. v. Gartner, Inc.

Decision Date11 September 2017
Docket NumberCV146022988S
CourtSuperior Court of Connecticut
PartiesNetscout Systems, Inc. v. Gartner, Inc

UNPUBLISHED OPINION

MEMORANDUM OF DECISION RE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY NO. 305)

Hon Charles T. Lee, J.

INTRODUCTION

On or about August 5, 2014, the plaintiff, NetScout Systems, Inc. (NetScout), commenced this action against the defendant Gartner, Inc. (Gartner), for violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § § 42-110b et seq., defamation, and defamation per se. On February 17, 2015, NetScout filed the operative revised complaint (Docket No. 131), the first count of which alleges that Gartner's purportedly unbiased ratings of NetScout and other vendors in actuality were corrupted by favoritism towards the vendors that were Gartner's highest paying customers. The second count alleges that the rating and comments assigned by Gartner to NetScout, although couched as opinion, were defamatory and untrue and that NetScout should have been ranked as a Leader in its field rather than a Challenger.

On December 9, 2016, Gartner filed the present motion for summary judgment. (Docket No. 305.) The court grants Gartner's motion for summary judgment as to the defamation count because there is no genuine issue of material fact that, for the purposes of the First Amendment Gartner is a limited purpose public figure, the speech at issue relates to matters of public concern, and NetScout has failed to present clear and convincing evidence that such statements were made with actual malice. The court also grants Gartner's motion for summary judgment as to the CUTPA count because it is based on harm allegedly caused by the same speech protected by First Amendment principles, and because NetScout has presented insufficient evidence of causation to prove that Gartner's review of NetScout was influenced by a pay-to-play scheme.

The Allegations of the Complaint

In its Revised Complaint, NetScout alleges the following: NetScout is a major provider of analytical hardware and software products to facilitate the management of internet network performance. Gartner is a leading information technology research and advisory company. Gartner's research reports influence companies seeking to purchase technology equipment. As a result, being ranked positively by Gartner increases a company's sales and revenue. Gartner also sells its consulting services to many of the same vendors it ranks.

Gartner represents that its research product is unbiased. NetScout alleges, however, that the ranking system is not based on objective facts but rather, on Gartner's " pay-to-play" business model, whereby a vendor's ranking is influenced by the amount of fees it pays to Gartner. In its Magic Quadrant research report dedicated to NetScout's industry, Gartner assigned NetScout an unfair ranking with respect to some of its competitors, along with negative comments relating to its products. NetScout alleges that these statements were based not on merit, but on a lack of fees paid by NetScout to Gartner, i.e., Gartner issued false statements about NetScout in furtherance of a " pay-to-play" scheme, thereby violating CUTPA (count one) and defaming NetScout (count two).

The Previous Ruling on Gartner's Motion to Strike

On December 15, 2015, this court denied Gartner's motion to strike both counts of the complaint . Gartner's position in support of its motion to strike was that NetScout failed to sufficiently allege actual malice, which Gartner argued was required to support NetScout's defamation claim under the First Amendment because NetScout was a public figure and the statements at issue related to a matter of public concern. Gartner further argued that NetScout's CUTPA claim should also fail because it relied wholly on the defamation claim.

In its memorandum of decision (Docket No. 140.03), the court determined, among other things, that there were insufficient facts alleged to support Gartner's argument that NetScout was a public figure, and that the court could not conclude at the motion to strike stage that the statements alleged were of public concern because there was insufficient information provided as to the circulation of the Magic Quadrant report at issue. The court also determined that there were sufficient allegations to support the CUTPA claim based on the alleged " pay-to-play" scheme.

The Present Motion for Summary Judgment

The operative revised memorandum in support of Gartner's motion for summary judgment was filed on March 20, 2017. (Docket No. 418.) On February 17, 2017, NetScout filed its memorandum in opposition to Gartner's motion (Docket No 384), to which Gartner filed a reply on March 9, 2017. (Docket No. 402). The court heard oral argument on April 10, 2017. On April 11, 2017, Gartner filed a motion to supplement its argument in response to a question directed to Gartner by the court at oral argument. (Docket No. 433.) On April 26, 2017, NetScout filed a motion for leave to correct and supplement the record (Docket No. 434), to which Gartner filed a response on May 1, 2017 (Docket No. 451), and NetScout filed a reply on May 12, 2017 (Docket No. 455).

CONTENTIONS OF THE PARTIES

Gartner's grounds for summary judgment are (i) that NetScout's claims for defamation, defamation per se, and violation of CUTPA are all barred by the First Amendment; and (ii) that the CUTPA claim is not supported by evidence, is nonactionable, and the plaintiff has failed to demonstrate an " ascertainable loss." Gartner argues that the alleged defamatory statements are matters of public concern and that NetScout is a limited public figure for the purposes of the controversy addressed by the alleged defamatory statements, findings which would require a genuine issue of material fact as to whether the statements were false and were made with actual malice, i.e., conscious or reckless disregard for such falsity. Gartner claims that NetScout has failed to submit counter-evidence supporting such a genuine issue of material fact, and that, because the CUTPA claim is based on, and causation is solely attributable to, the same speech, the CUTPA claim must fail for the same reason. Gartner's arguments specific to the CUTPA claim are that (i) Gartner's business model is not prohibited by CUTPA; (ii) there is no evidence that vendor payments influenced NetScout's rankings; and (iii) NetScout has failed to demonstrate an " ascertainable loss" as required to support a CUTPA claim.

NetScout counters that Gartner's speech is " commercial speech" for the purposes of the First Amendment, which receives diminished constitutional protection. Even if Gartner's speech is not commercial, NetScout contends that the speech is not of public concern and NetScout is not a public figure and, therefore, that NetScout need only demonstrate negligence with respect to the falsity of Gartner's statements. In the alternative, even if there is no genuine issue of material fact that NetScout is a public figure and the speech is of public concern, it argues that it has submitted sufficient proof to create a question for the jury as to the falsity of the statements and as to Gartner's malice in publishing them. NetScout contends that the First Amendment does not bar its CUTPA claim, and that Gartner's " pay-to-play" model, as well as Gartner's allegedly false statements that its research is " unbiased" and " objective, " are in violation of CUTPA. NetScout argues that Gartner's " pay-to-play" model caused NetScout an " ascertainable loss" because Gartner's lackluster review of NetScout steered away potential clients.

THE EVIDENCE SUBMITTED

The scope of submissions on this motion is voluminous. Attached to the supporting and opposing memoranda, the parties submitted over 400 exhibits, numerous affidavits and excerpts from deposition transcripts. The court has carefully reviewed the evidence submitted by the parties and finds little disagreement as to the relevant underlying facts.

The Parties

NetScout is an established provider in the network performance monitoring and diagnostics (NPMD) market, meaning it provides technology products that allow a company to monitor and diagnose the performance of its computer network. NetScout serves approximately 2000 clients, including Fortune 100 corporations, all five branches of the United States military, banks, and financial service providers, generating hundreds of millions of dollars of revenue in 2013 and 2014 in more than thirty countries.

Gartner is a leading information technology (IT) research and advisory company, and works with its clients to research analyze, and interpret their IT-related needs. One service that Gartner provides is its Magic Quadrant research reports (MQ), which are designed to aid clients and consumers in making IT purchases or investment decisions. As an influential IT consulting company, Gartner's research reports, including the MQ, influence companies seeking to purchase IT equipment. As a result, being ranked highly is credibly beneficial to a company's sales and revenue. At the same time, Gartner offers consulting and other services to the same vendors it ranks in its research reports.

The MQ Process

The MQ at issue provides a matrix of four boxes in which are placed the vendors being evaluated. Two broad criteria, the " Ability to Execute" and " Completeness of Vision " provide the axes of the quadrant (see below). The four quadrants are labeled: (i) " Leaders" (top right)--the most desirable; (ii) " Challengers" (top left)--intermediate; (iii) " Visionaries" (bottom right)--intermediate; and (iv) " Niche Players" (bottom left)--the least desirable. NetScout was placed in the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT