1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9

10 RINGCENTRAL, INC., Case No. 19-cv-02626-NC 11 Plaintiff,

ORDER DENYING

12 v. RINGCENTRAL’S MOTION FOR

SUMMARY JUDGMENT, AND

13 NEXTIVA, INC., et al., GRANTING IN PART AND

DENYING IN PART NEXTIVA’S

14 Defendants. MOTION FOR SUMMARY

JUDGMENT

15 Re: Dkt. Nos. 202, 204 16

17 It is a rainy day for cloud-based communications companies. Before the Court are 18 two motions for summary judgment in this business torts case: first, plaintiff and 19 counterclaim-defendant RingCentral, Inc.’s motion for summary judgment on Nextiva’s 20 counterclaim, and second, defendant and counterclaimant Nextiva, Inc.’s motion for 21 summary judgment on RingCentral’s complaint. See Dkt. Nos. 202 (“Nextiva MSJ”), 204 22 (“RC MSJ”). The Court finds that as to RingCentral’s motion, there are triable issues of 23 fact pertaining to all of Nextiva’s counterclaims. As to Nextiva’s motion, the Court finds 24 that there is no genuine dispute as to the claims involving allegedly false positive reviews 25 of Nextiva, but there are triable issues of fact as to all of RingCentral’s remaining claims. 26 Accordingly, the Court DENIES RingCentral’s motion for summary judgment in its 27 entirety, and GRANTS IN PART and DENIES IN PART Nextiva’s motion for summary 1 I. BACKGROUND 2 A. The Parties and Procedural History 3 Plaintiff and counterclaim-defendant RingCentral is a Delaware corporation, with a 4 principal place of business in Belmont, California. Dkt. No. 116 (“TAC”) ¶ 4. 5 RingCentral provides cloud-based unified communications as a service. Id. ¶ 13. Its 6 software-as-a-service communications platform provides a comprehensive set of business 7 communications features for voice, virtual private branch exchange, audio and video 8 conferencing, messaging, contact center collaboration, SMS, online meetings, contact 9 center, and fax. Id. 10 Defendant and counterclaimant Nextiva, Inc. is an Arizona corporation, with a 11 principal place of business in Scottsdale, Arizona. TAC ¶ 6. Nextiva also provides a 12 cloud-based unified communications market with business phone solutions including 13 voice, video, and messaging. TAC ¶ 14. 14 1. Complaint by RingCentral 15 On May 14, 2019, RingCentral filed its initial complaint, alleging claims against 16 unnamed defendants for tortious interference, trade libel, unfair competition, and 17 trademark infringement. Dkt. No. 1. Nextiva first moved to dismiss the complaint for a 18 more definite statement and failure to state a claim, and the Court granted dismissal with 19 leave to amend. Dkt. Nos. 44, 53. Nextiva later moved to dismiss the second amended 20 complaint, and the Court dismissed defendant UnitedWeb, but otherwise denied the 21 motion. Dkt. Nos. 57, 65. On December 31, 2020, RingCentral filed its third amended 22 complaint for (1) tortious interference, (2) defamation, (3) trade libel, (4) unfair 23 competition, and (5) cybersquatting under the Lanham Act, 15 U.S.C. § 1125(d). See 24 generally TAC. 25 2. Counterclaim by Nextiva 26 Nextiva filed its answer on May 12, 2020, and raised five counterclaims against 27 RingCentral: (1) unfair competition under Cal. Bus. & Prof. Code § 17200; (2) false 1 Act, 15 U.S.C. § 1125(a); (4) trade libel; and (5) intentional interference with prospective 2 economic advantage. Dkt. No. 67 (“Counterclaim”). RingCentral moved to dismiss and 3 strike the counterclaims. Dkt. No. 72. On July 17, 2020, this Court dismissed Nextiva’s 4 trade libel and intentional interference counterclaims. Dkt. No. 81. All parties have 5 consented to the jurisdiction of a magistrate judge under 28 U.S.C. § 636(c). See Dkt. Nos. 6 9, 51. 7 B. The Conflict Between the Parties 8 RingCentral and Nextiva are competitors in the cloud-based unified 9 communications market. TAC ¶ 14. According to RingCentral, beginning in mid-2018, 10 Nextiva initiated a widespread scheme to deliberately and maliciously defame RingCentral 11 and wrongfully interfere with its business opportunities, with the goal of improving 12 Nextiva’s competitive standing. TAC ¶ 21. RingCentral alleges that Nextiva engaged in a 13 broad-based internet campaign of falsehoods against RingCentral to wrongfully damage its 14 reputation and steer potential business toward Nextiva. Id. Specifically, RingCentral 15 alleges — and Nextiva admits — that Nextiva’s independent contractor, Baruch Labunski, 16 fabricated fictitious online personas of RingCentral personnel, registered domain names 17 using fake contact information, and created fraudulent websites associated with those 18 domains for the purpose of redirecting users away from RingCentral, and toward unrelated 19 business websites. Id. ¶ 22; Dkt. No. 133 (“Answer”) ¶ 29. 20 Furthermore, RingCentral alleges that Nextiva posted public reviews on several 21 independent online communications and collaboration review websites using fake personas 22 and misleading email addresses. TAC ¶ 24. RingCentral alleges that the fake negative 23 reviews of RingCentral accused them of providing poor services and engaging in dishonest 24 business practices, while the fake positive reviews of Nextiva harmed RingCentral because 25 it furnished Nextiva with a perfect 5-star rating, casting RingCentral in a bad light. See id. 26 ¶ 25 (emphasis added). 27 Similarly, Nextiva alleges that RingCentral carried out a wide-ranging and 1 Nextiva and other competitors, and posted false reviews to inflate RingCentral’s own 2 performance. See Counterclaim ¶¶ 13–17. According to Nextiva, RingCentral allegedly 3 carried out its scheme by creating and maintaining its own comparison webpage (the 4 “/compare page”) using third-party sponsored websites containing a comparison of 5 services and prices between RingCentral and Nextiva. Id. ¶ 26–29. It also created a 6 customer review page (the “/review page”), which aggregates data from other review 7 sources and allows visitors to read reviews from RingCentral’s customers. Id. ¶ 37. 8 Nextiva alleges, however, that the /review page, is misleading. “While each of the sourced 9 websites . . . contain numerous negative reviews of RingCentral when visited directly, no 10 negative reviews appear when viewed through RingCentral’s website.” Id. 11 RingCentral filed a motion for summary judgment on Nextiva’s counterclaims, and 12 Nextiva filed a motion for summary judgment on RingCentral’s complaint. While these 13 were pending, Nextiva noticed the Court saying it no longer intends to pursue its 14 counterclaim theory that arises out of RingCentral’s comparative pricing page. Dkt. No. 15 287. 16 II. LEGAL STANDARD 17 Summary judgment may be granted only when, drawing all inferences and 18 resolving all doubts in favor of the nonmoving party, there is no genuine dispute as to any 19 material fact. Fed. R. Civ. P. 56(a); Tolan v. Cotton, 572 U.S. 650, 651 (2014); Celotex 20 Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under governing 21 substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 22 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if “the evidence is 23 such that a reasonable jury could return a verdict for the nonmoving party.” Id. Bald 24 assertions that genuine issues of material fact exist are insufficient. Galen v. Cnty. of L.A., 25 477 F.3d 652, 658 (9th Cir. 2007). 26 The moving party bears the burden of identifying those portions of the pleadings, 27 discovery, and affidavits that demonstrate the absence of a genuine issue of material fact. 1 party must go beyond the pleadings, and, by its own affidavits or discovery, set forth 2 specific facts showing that a genuine issue of fact exists for trial. Fed. R. Civ. P. 56(c); 3 Barthelemy v. Air Lines Pilots Ass’n, 897 F.2d 999, 1004 (9th Cir. 1990) (citing Steckl v. 4 Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983)). All justifiable inferences, however, 5 must be drawn in the light most favorable to the nonmoving party. Tolan, 572 U.S. 651 6 (citing Liberty Lobby, 477 U.S. at 255). 7 III. DISCUSSION 8 A. RingCentral’s Motion for Summary Judgment on Nextiva’s Counterclaim 9 Nextiva filed a counterclaim for false advertising and unfair competition under 10 California law, as well as false advertising under the Lanham Act. See Counterclaim ¶¶ 11 63–88. RingCentral moves for summary judgment on all counterclaims. See generally RC 12 MSJ; see Dkt. No. 210 (“Answer”) at 24–25. The Court finds that there are genuine issues 13 of material fact on all issues raised, and therefore DENIES RingCentral’s motion for 14 summary judgment. 15 1. False Advertising and Unfair Competition Claims 16 Nextiva’s counterclaim is based on five forms of alleged misconduct, but the parties 17 ultimately dispute only two of them in their briefing: (1) that on its /compare page, 18 RingCentral makes false claims about its own services and Nextiva’s services, and (2) that 19 RingCentral promotes false star ratings and manipulates its reviews on the /review page. 20 See generally Counterclaim; see also Dkt. No. 226 (“Nextiva Opp’n”) at 2, 5; see also Dkt. 21 No. 245-5 (“RC Reply”) at 3. RingCentral moves for summary judgment on the grounds 22 that Nextiva cannot prove falsity, causation, or economic injury, and that Nextiva’s claims 23 are barred by the unclean hands doctrine. 24 Claims for false advertising and unfair competition under California law are 25 “substantially congruent” to claims made under the Lanham Act, and require the same 26 proof. See Spy Phone Labs LLC v. Google Inc., No. 15-cv-3756-KAW, 2016 WL 27 6025469, at *13 (N.D. Cal. Oct. 14, 2016); see also Walker & Zanger, Inc. v. Paragon 1 claim under the Lanham Act, the plaintiff must allege: “(1) a false statement of fact by the 2 defendant in a commercial advertisement about its own or another’s product; (2) the 3 statement actually deceived or has the tendency to deceive a substantial segment of its 4 audience; (3) the deception is material, in that it is likely to influence the purchasing 5 decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) 6 the plaintiff has been or is likely to be injured as a result of the false statement, either by 7 direct diversion of sales from itself to defendant or by a lessening of the goodwill 8 associated with its products.” Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 9 1139 (9th Cir. 1997). 10 “To demonstrate falsity within the meaning of the Lanham Act, a plaintiff may 11 show that the statement was literally false, either on its face or by necessary implication, or 12 that the statement was literally true but likely to mislead or confuse consumers.” Id. If a 13 plaintiff can provide evidence contrary to the proposition or statement asserted by the 14 defendant in the advertisement, then the “plaintiff has [] met its burden of demonstrating 15 literal falsity.” Id. When evaluating whether a statement is literally false (either on its face 16 of by necessary implication), courts analyze it “in its full context.” Id. at 1139, 1144. 17 a. /Compare Page 18 Nextiva originally complained of four categories of false information on 19 RingCentral’s /Compare Page. RC MSJ at 8; RC Reply at 4. At the hearing, however, the 20 parties focused their arguments only on RingCentral’s alleged statements regarding 21 conference calling, and pricing. See Dkt. No. 268. Then, while the motions on summary 22 judgment were pending, Nextiva provided notice to the Court that it no longer intends to 23 pursue its counterclaim theory that arises out of RingCentral’s comparative pricing page. 24 Dkt. No. 287. As such, the Court omits its analysis of the /compare page, as the issue is 25 now moot. 26 b. /Review Page 27 Nextiva claims that RingCentral produces false star ratings on its /review page. 1 the marketplace, but on the sourced websites where the reviews originate, it has “at least 2 hundreds of one- and two-star reviews; rather than the five one- and two-star reviews 3 reflected on RingCentral’s Reviews Page.” Nextiva Opp’n at 11–12; Dkt. No. 226-2 4 (“Zaleski Decl.”), Exs. 10, 17. 5 First, RingCentral objects to Nextiva’s evidence as inadmissible for lack of 6 authentication, see Zaleski Decl., Ex. 17, and for mischaracterizing an email regarding 7 inaccurate review ratings, id, Ex. 10. The evidence shows screenshots of RingCentral’s 8 customer reviews on the Better Business Bureau and Trustpilot.com. Id. 9 “[U]nauthenticated documents cannot be considered in a motion for summary judgment.” 10 Cristo v. Cayabyab, No. 18-cv-00561-BLF, 2020 WL 1531349, at *6 (N.D. Cal. Mar. 31, 11 2020) (citing Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002)). But the 12 Court is not persuaded by RingCentral’s objections for improper authentication under FRE 13 901. “In considering internet print-outs, courts have considered the ‘distinctive 14 characteristics’ of the website in determining whether a document is sufficiently 15 authenticated.” See Ciampi v. City of Palo Alto, 790 F. Supp. 2d 1077, 1091 (N.D. Cal. 16 2011). Here, in addition to Zaleski’s accompanying declaration, the screenshots of the 17 internet reviews contain sufficient indicia of authenticity, including images and names of 18 various customers, website design, dates and times of publication, and the web address of 19 retrieval. Therefore, the Court OVERRULES RingCentral’s evidentiary objections. 20 Next, RingCentral argues that it is not responsible for any inaccuracies in the star 21 ratings because a third party, BirdEye, aggregates the ratings whereas RingCentral merely 22 republishes them. RC Reply at 9. Both parties’ arguments have been considered. 23 Nextiva’s evidence, however, raises genuine issues of material fact regarding a multitude 24 of these issues including but not limited to, how RingCentral went about fabricating the 25 average star rating, and whether third party BirdEye had discretion to exclude reviews. 26 Zaleski Decl., Ex. 13 at 92:15–93:9. These are questions for the jury. Consequently, 27 RingCentral’s motion for summary judgment on the false advertising law, Lanham Act, 1 c. Causation and Economic Injury 2 RingCentral argues that Nextiva has not proven causation or economic injury. RC 3 Reply at 10–13. “When a party seeks damages for an allegedly false advertisement under 4 the Lanham Act, ‘actual evidence of some injury resulting from the deception is an 5 essential element of the plaintiff's case.’” VBS Distribution, Inc. v. Nutrivita Lab’ys, Inc., 6 811 F. App’x 1005, 1007 (9th Cir.), cert. denied, 141 S. Ct. 454 (2020) (quoting Harper 7 House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 210 (9th Cir. 1989)). Alternatively, 8 damage is assumed under the Lanham Act for comparative advertising between 9 competitors only when it is shown that the statements in the advertising are deliberately 10 false. U-Haul Int’l, Inc. v. Jartran, Inc., 793 F.2d 1034, 1040–41 (9th Cir. 1986). 11 Here, Nextiva’s experts used regression analyses to show that traffic to 12 RingCentral’s web pages closely coincided with reduced Nextiva sales, and that Nextiva 13 would have to spend significant funds to correct the misimpressions that RingCentral’s 14 pages caused in the market. See Dkt. No. 203-5, Ex. 13 ¶ 77, Ex. 7. Nextiva’s evidence 15 suggests that traffic to RingCentral’s web pages caused Nextiva to lose market share and 16 millions in profits. Zaleski Decl., Ex. 8 at 13–16. But RingCentral challenges the experts’ 17 opinions because their conclusions calculate injury across all of Nextiva’s claims without 18 apportionment, including those claims that are now abandoned. RC Reply at 10. 19 Furthermore, RingCentral contends that Nextiva lacks sufficient evidence for a jury to find 20 that customers materially altered their decisions due to RingCentral’s advertising. RC 21 Reply at 7–8. 22 The Court finds that there are triable issues of material fact. A jury should decide 23 whether the documented consumer misimpressions prove that those consumers heeded the 24 allegedly false information, used it to terminate their services with Nextiva or go to a 25 competitor, and resulted in Nextiva losing potential profits. See Zaleski Decl., Ex. 7. 26 Therefore, RingCentral’s motion on causation and economic injury is DENIED. 27 // 1 2. Unclean Hands 2 RingCentral asserts an affirmative defense of unclean hands. To prevail on a 3 defense for unclean hands in response to a Lanham Act claim, RingCentral must show that 4 Nextiva’s conduct (1) “was ‘inequitable’ or ‘unconscionable,’” and (2) “that the plaintiff’s 5 conduct ‘relate[d] to the very activity that is the basis of his claim.’” First Ascent Ventures 6 Inc. v. DLC Dermacare LLC, 312 F. App’x 60, 61 (9th Cir. 2009). RingCentral must also 7 “show that [Nextiva’s] inequitable conduct caused injury.” GrasshopperHouse LLC v. 8 Clean & Sober Media LLC, 394 F. Supp. 3d 1073, 1101 (C.D. Cal. 2019). 9 Factual questions related to the defense can be resolved as a matter of law only if 10 “the evidence presented by both sides would permit the trier of fact to come to only one 11 conclusion.” Metal Jeans, Inc. v. Metal Sport, Inc., 987 F.3d 1242, 1244 (9th Cir. 2021). 12 After considering both parties’ arguments, the Court finds there are factual issues that do 13 not support summary judgment. RingCentral’s unclean hands defense is based upon the 14 factual disputes previously discussed, and thus preclude resolution as a matter of law. 15 Therefore, the Court DENIES summary judgment for unclean hands. 16 For the foregoing reasons, the Court DENIES RingCentral’s motion for summary 17 judgment in its entirety. 18 B. Nextiva’s Motion for Summary Judgment on RingCentral’s Complaint 19 RingCentral filed a complaint for intentional interference with prospective 20 economic advantage, defamation, trade libel, unfair competition, and cybersquatting. See 21 generally TAC. Nextiva moves for summary judgment on all claims. See generally 22 Nextiva MSJ. The Court finds that, except for claims based upon allegedly fake positive 23 reviews of Nextiva, there are genuine disputes of material fact on all of RingCentral’s 24 claims. Therefore, the Court GRANTS IN PART and DENIES IN PART Nextiva’s 25 motion for summary judgment. 26 1. Fake Positive Reviews of Nextiva 27 In its complaint, RingCentral accuses Nextiva of posting fake online reviews, and 1 defamation, and unfair competition. See generally TAC. There are two types of alleged 2 fake reviews at issue: (1) fake negative reviews about RingCentral, and (2) fake positive 3 reviews about Nextiva. Dkt. No. 229 (“RC Opp’n”) at 7–9. Nextiva moves for summary 4 judgment on RingCentral’s defamation and trade libel claims arguing that they cannot, as a 5 matter of law, reach allegedly false reviews of Nextiva. See Nextiva MSJ at 5. 6 Baruch Labunski, under the supervision of Nextiva’s former Chief Marketing 7 Officer, Yaniv Masjedi, posted over 10,000 fake positive reviews of Nextiva on 8 downdetector.com and verified-reviews.com, Dkt. No. 229-2 (“Mullins Decl.”), Exs. 2, 8, 9 9, 10, 19, and posted at least 166 additional fake positive reviews of Nextiva on Capterra, 10 Fit Small Business, G2, Gartner, GetVoIP, Software Advice, and VoIPReview. See Dkt. 11 No. 229-6 (“Yearwood Decl.”) ¶ 18. Additionally, Nextiva published at least 85 fake 12 negative reviews of RingCentral’s services, see Yearwood Decl. ¶ 17, but according to 13 RingCentral’s own expert, approximately five of those fake negative reviews are 14 “verified.”1 See Yearwood Decl., ¶ 7. It is undisputed that the allegedly fake positive 15 reviews of Nextiva concern only Nextiva — the statements in those reviews do not 16 concern RingCentral, nor do they reference RingCentral explicitly or by implication. See 17 Nextiva MSJ at 6, n.3; See Dkt. No. 268. 18 In a prior order on motion to dismiss, this Court held that “some of the reviews 19 quoted in RingCentral’s complaint do not concern RingCentral’s services . . . Those 20 reviews, however, are not the subject of RingCentral’s defamation claim.” Dkt. No. 65 at 21 3. Although the present motion permits the Court to look beyond the pleadings, the same 22 rationale applies. 23 Defamation “involves the intentional publication of a statement of fact which is 24 false, unprivileged, and has a natural tendency to injure or which causes special damage.” 25

26 1 Former FBI agent Ron Yearwood, RingCentral’s expert, identified fake negative reviews as “verified” only if it could be legitimately established as fake by tying it directly to the 27 then-known domains registered by Nextiva’s contractor, Baruch Labunski. See Yearwood 1 Price v. Stossel, 620 F.3d 992, 998 (9th Cir. 2010). A defamation plaintiff must also prove 2 “that the contested statements are of and concerning, him either by name or by clear 3 implication.” Ferlauto v. Hamsher, 74 Cal. App. 4th 1394, 1404 (1999) (internal 4 quotation marks and citations omitted). Similarly, trade libel is the intentional 5 disparagement of another’s property that results in pecuniary damage. Aetna Cas. & Sur. 6 Co., Inc. v. Centennial Ins. Co., 838 F.2d 346, 351 (9th Cir. 1988). A claim for trade libel 7 requires “(1) a publication, (2) which induces others not to deal with the plaintiff, and (3) 8 special damages.” Id. 9 Where words or other matters that are the subject of a defamation action are of 10 ambiguous meaning, or are innocent on their face and defamatory only in light of the 11 extrinsic circumstances, a plaintiff must plead and prove that as used, the words had a 12 particular meaning, or “innuendo,” that makes them defamatory. Smith v. Maldonado, 72 13 Cal. App. 4th 637, 645–46 (1999), as modified (June 23, 1999). This includes the 14 requirement that in an instance of ambiguous language — where the language is 15 susceptible to either a defamatory or innocent interpretation — the plaintiff must also 16 plead and prove the extrinsic circumstances which show that the third person reasonably 17 understood it in its derogatory sense. Id. Whether a statement is reasonably susceptible to 18 a defamatory interpretation is a question of law for the court. MacLeod v. Tribune Publ’g 19 Co., 52 Cal. 2d 536, 546 (1959). 20 The Court finds that there is not a genuine dispute of material fact for two reasons. 21 First, the fake positive reviews of Nextiva are not “of and concerning the plaintiff.” 22 Second, RingCentral does not provide sufficient evidence showing that in light of the 23 extrinsic circumstances, third parties reasonably understood the fake positive reviews to be 24 a part of a “defamatory scheme” against RingCentral. 25 a. “Of and Concerning the Plaintiff” 26 Here, the fake positive reviews at issue concern only Nextiva and neither expressly 27 nor impliedly communicate anything about RingCentral. RingCentral did not advance an 1 at 13–14. Thus, because the fake positive review statements are not “of and concerning” 2 RingCentral, Nextiva has successfully shown an absence of evidence establishing a 3 genuine dispute of material fact regarding the fake positive reviews of Nextiva. See Blatty 4 v. New York Times Co., 42 Cal. 3d 1033, 1042 (1986) (dismissing trade libel claims and 5 explaining that trade libel “requires that the injurious false statement ‘specifically refer to,’ 6 or be ‘of and concerning,’ the plaintiff in some way.”). 7 b. Ambiguous Meaning and Defamatory Scheme 8 In response, RingCentral argues that the fake positive reviews played a “central role 9 in accomplishing the object of the ‘defamatory scheme’ — to defame RingCentral by 10 telling [consumers] that RingCentral was poorly regarded, particularly in comparison to 11 Nextiva.” RC Opp’n at 1. Thus, RingCentral argues that all reviews should be considered 12 for its defamation and trade libel claims, as opposed to just the fake negative reviews of 13 RingCentral. But the law does not recognize a “defamatory scheme.” Even if the 14 statements were “of and concerning” RingCentral, it was charged with proving that the 15 statements in the fake positive reviews had an ambiguous meaning, and that prospective 16 customers reasonably understood those statements to be derogatory against RingCentral 17 under the circumstances. Although it is true that under California law, a defamatory 18 statement can be “expressly stated or implied,” Forsher v. Bugliosi, 26 Cal. 3d 792, 803 19 (1980), here the statements were unambiguous. 20 For instance, RingCentral shows that three prospective customers, who ultimately 21 chose Nextiva, made a comparison between the two companies after looking at reviews. 22 See Dkt. No. 229-5 (“Mohammed Decl.”), Exs. B, E, F. But there is no evidence that 23 those prospective customers interpreted positive reviews about Nextiva to mean something 24 derogatory about RingCentral. In fact, two of the reviews even acknowledge positive 25 pricing attributes for RingCentral, and two provide other unrelated reasons to select 26 Nextiva over RingCentral. See id. Just because prospective customers draw that 27 comparison themselves, does not make fake positive reviews about Nextiva inherently 1 that any statements made in the course of market competition, whether falsified or factual, 2 would necessarily result in defamation. 3 Considering the above analysis, the Court finds that the allegedly fake reviews 4 about Nextiva cannot be actionable as defamation or trade libel. As such, the Court 5 GRANTS Nextiva’s motion for summary judgment regarding RingCentral’s defamation 6 and trade libel claims as to the allegedly fake positive reviews of Nextiva. The evidence of 7 allegedly fake negative reviews of RingCentral, however, does establish that they are “of 8 and concerning the plaintiff.” Therefore, the Court DENIES summary judgment on the 9 defamation and trade libel claims as to fake negative reviews of RingCentral. 10 2. Trade Libel 11 Nextiva moves for summary judgment on RingCentral’s trade libel claim for failure 12 to prove causation and special damages. Nextiva MSJ at 7. 13 Trade libel is the intentional disparagement of another’s property that results in 14 pecuniary damage. Aetna, 838 F.2d at 351. In the Ninth Circuit, plaintiffs must identify 15 specific statements constituting trade libel. See First Advantage Background Servs. v. 16 Private Eyes, Inc., 569 F. Supp. 2d 929, 937 (N.D. Cal. 2008). And a plaintiff “must also 17 prove that the statement played ‘a material and substantial part in inducing others not to 18 deal with [the plaintiff].’” Piping Rock Partners v. David Lerner, 946 F. Supp. 2d 957, 19 981 (N.D. Cal. 2013), aff’d, 609 F. App’x 497 (9th Cir. 2015) (quoting Erlich v. Etner, 224 20 Cal. App. 2d 69, 73 (1964)). Finally, a trade libel plaintiff also must prove special 21 damages, Peak Health Ctr. v. Dorfman, No. 19-cv-04145-VKD, 2019 WL 5893188, at *5 22 (N.D. Cal. Nov. 12, 2019), in the form of specifically itemized pecuniary harm that was 23 proximately caused by the libelous statements. See Piping Rock Partners, 946 F. Supp. 2d 24 at 981. 25 First, the parties disagree on the relevant law for causation and special damages for 26 trade libel. Under Nextiva’s view, a plaintiff is required to “identify particular customers 27 and transactions of which it was deprived as a result of the libel.” Nextiva Reply at 8; 1 Cal. App. 4th 90, 109 (2004) (overruled on other grounds by Baral v. Schnitt, 1 Cal. 5th 2 376 (2016)). Under RingCentral’s view, a “general losses standard” is sufficient to 3 demonstrate damages, requiring that plaintiffs only show lost sales following publication 4 or mass dissemination of the statements and eliminate all other “reasonably likely causes.” 5 RC Opp’n at 16; see Restatement (Second) of Torts §§ 626, 633 (1977). The Court finds 6 that the specific customer and transaction identification standard is the applicable law. 7 Next, applying the above standard for causation and pecuniary loss, the Court finds 8 that there is a genuine dispute of material fact. “Causation is generally a question of fact 9 for the jury, unless reasonable minds could not dispute the absence of causation.” 10 Lombardo v. Huysentruyt, 91 Cal. App. 4th 656, 666 (2001). Here, RingCentral 11 specifically identified customers and transactions. See Dkt. No. 227-10 (“Chou Decl.”), 12 Ex. A; Dkt. No. 201-8; Mohammad Decl., Exs. B, E, F. RingCentral shows that those 13 prospective customers saw reviews of both companies as part of their decision-making 14 process, and that RingCentral lost those particular transactions. Id. But it is unclear, 15 however, whether they saw the allegedly fake reviews, and if so, whether those fake 16 reviews played a substantial and material role in their decision to choose Nextiva over 17 RingCentral. See Chou Decl., Ex. A. As discussed above, several of those reviews 18 indicate numerous reasons for selecting Nextiva. Thus, the evidence raises a triable issue 19 of fact on causation and special damages for trade libel. Therefore, summary judgment is 20 DENIED as to RingCentral’s trade libel claim. 21 3. Intentional Interference with Prospective Economic Advantage 22 Nextiva moves for summary judgment on RingCentral’s intentional interference 23 with prospective economic advantage claim for (1) failure to prove causation and special 24 damages, and (2) failure to prove that Nextiva knew about RingCentral’s prospective 25 business relationships. Nextiva MSJ at 10–12. This claim requires a plaintiff to prove “(1) 26 an economic relationship between the plaintiff and some third party, with the probability of 27 future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; 1 actual disruption of the relationship; and (5) economic harm to the plaintiff proximately 2 caused by the acts of the defendant.” Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 3 4th 1134, 1153 (2003). 4 a. Causation and Special Damages 5 As with a trade libel claim, RingCentral’s prospective customers must have actually 6 read the allegedly fake reviews and taken action because of them for the reviews to 7 proximately cause disruption to RingCentral’s prospective economic relationships. See id. 8 RingCentral must also establish special damages. See Panavision Int’l, L.P. v. Toeppen, 9 945 F. Supp. 1296, 1305 (C.D. Cal. 1996), aff’d, 141 F.3d 1316 (9th Cir. 1998). For the 10 same reasons as the trade libel claim analysis above, the Court finds a genuine dispute of 11 material fact regarding causation and special damages for RingCentral’s intentional 12 interference claim. 13 b. Nextiva’s Knowledge of an Economic Relationship 14 Nextiva also argues that it is entitled to summary judgment because RingCentral 15 cannot establish that Nextiva knew of the economic relationships with which it allegedly 16 interfered. Nextiva MSJ at 12. 17 RingCentral must prove that, at the time Nextiva allegedly posted fake reviews, it 18 knew it was interfering with a contractual relationship. See Altera Corp. v. Clear Logic, 19 Inc., 424 F.3d 1079, 1092 (9th Cir. 2005). In the face of evidence provided by 20 RingCentral showing Nextiva’s involvements with RingCentral’s prospective customers,2 21 Nextiva has not shown an absence of a genuine dispute here. See Mullins Decl., Exs. 47– 22 50, 54; Dkt. No. 202-2 “(Gold Decl.”), Ex. 17 at 6–7; see also Ramona Manor 23 Convalescent Hosp. v. Care Enters., 177 Cal. App. 3d 1120, 1133 (Ct. App. 1986) 24 (holding that it is “not persuaded knowledge of the injured party’s specific identity or 25 name is a prerequisite to recovery for [intentional interference with prospective economic 26

27 2 RingCentral’s only evidence provided on this argument, and portions of Nextiva’s 1 advantage.]”); Altera Corp., 424 F.3d at 1092 (stating that “the defendant need not know 2 exactly who is a party to the contract, so long as he knows he is interfering with a 3 contractual relationship.”); Transcription Commc’ns Corp. v. John Muir Health, No. 08- 4 cv-4418, 2009 WL 666943-TEH, at *10 (N.D. Cal. Mar. 13, 2009) (same). Therefore, the 5 Court DENIES Nextiva’s motion regarding the intentional interference claim on these 6 grounds. 7 4. Unfair Competition Law 8 Nextiva moves for summary judgment on RingCentral’s unfair competition law 9 (UCL) claim on the grounds that it has failed to show it is entitled to an injunction. 10 Specifically, Nextiva argues that RingCentral lacks evidence that the conduct is likely to 11 recur. Nextiva MSJ at 15. The UCL prohibits any “unlawful, unfair, or fraudulent 12 business act or practice.” Cal. Bus. & Prof. Code § 17200; see also Cel-Tech Commc’ns, 13 Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). 14 “[T]o establish standing to pursue injunctive relief . . . [a plaintiff] must 15 demonstrate a ‘real and immediate threat of repeated injury’ in the future.” Chapman v. 16 Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 946 (9th Cir. 2011) (citation omitted). Although 17 “past wrongs are evidence bearing on whether there is a real and immediate threat of 18 repeated injury,” “past wrongs do not in themselves amount to [a] real and immediate 19 threat of injury necessary to make out a case or controversy.” Id. at 948. Rather, to have 20 standing to seek an injunction, a plaintiff “must show a sufficient likelihood—not a 21 speculative possibility—that he will personally be harmed again in the same way.” Cunha 22 v. IntelliCheck, LLC, 254 F. Supp. 3d 1124, 1139 (N.D. Cal. 2017). 23 RingCentral provided sufficient evidence showing that it has standing to pursue an 24 injunction under the UCL. That Nextiva has since fired the alleged wrongdoers and 25 discontinued its policy does not mean that a risk of future injury is lacking. See Dkt. No. 26 180-3, Ex. 5; Nextiva Reply at 12. Much of the evidence in RingCentral’s opposition brief 27 shows disputes of fact about whether the officers and employees (who are still employed 1 Opp’n at 19–20; Mullins Decl., Exs. 15–16, 25, 29–34, 36–37, 55.3 Furthermore, there are 2 disputes of fact regarding whether the unfair and unlawful acts have been discontinued 3 through remedies implemented by specific teams at Nextiva versus company-wide 4 implementation. See RC Opp’n at 20; Mullins Decl., Ex. 25, 56. Thus, the future 5 likelihood of occurrence is a triable issue and summary judgment on the unfair competition 6 law claim is DENIED. 7 5. Cybersquatting 8 Finally, Nextiva moves for summary judgment on RingCentral’s cybersquatting 9 claim on the grounds that RingCentral lacks standing, and that Nextiva cannot be held 10 liable for the acts of Labunski, its independent contractor. Nextiva MSJ at 16–21. 11 RingCentral claims that Nextiva, through the acts of Labunski, committed 12 “cybersquatting” in violation of the Lanham Act, 15 U.S.C. § 1125(d), by “falsely 13 register[ing] at least one domain name strongly suggestive of the RingCentral brand 14 name.” TAC ¶ 85. 15 Yaniv Masjedi was Nextiva’s Chief Marketing Officer who hired Labunski to work 16 on search engine optimization. See Mullins. Decl., Ex. 1 at 324–325. In mid-2017, 17 Masjedi instructed Labunski to impersonate another competitor to post fake negative 18 reviews. See Mullins Decl., Ex. 3. In late 2018, Labunski re-used that idea to impersonate 19 RingCentral; Labunski purchased the domain name “ringcetrnal.com” and used fake 20 identities and funds supplied by Nextiva, see Mullins Decl., Exs. 41–42, Hill Decl., Ex. 2, 21 he created fake email accounts on the “ringcetrnal.com” domain to impersonate 22 RingCentral’s CEO and the CEO’s daughter, and tried to use those false identities to 23 eliminate positive reviews of RingCentral with the Better Business Bureau and Fit Small 24 Business, see Hill Decl., Exs. 3–4. The parties do not dispute that Labunski registered the 25 “ringcetrnal.com” domain name with the domain registrar Namecheap, or that he created 26 the email addresses associated with the domain; they only dispute whether Labunski’s 27 1 actions may be imputed to Nextiva. See Nextiva MSJ at 18; Answer ¶ 29; Gold Decl., Ex. 2 23. 3 a. Standing 4 To have Article III standing, a “plaintiff must have (1) suffered an injury in fact, (2) 5 that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to 6 be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 7 1547 (2016), as revised (May 24, 2016). Plaintiff’s injury must be “(a) concrete and 8 particularized . . . and (b) actual or imminent, not conjectural or hypothetical.” Lujan v. 9 Defs. of Wildlife, 504 U.S. 555, 560 (1992) (internal quotations omitted). “Although 10 general allegations of injury can suffice at the pleading stage, the plaintiff must set forth 11 ‘specific facts’ to survive a motion for summary judgment based on lack of standing.” 12 Braunstein v. Arizona Dep’t of Transp., 683 F.3d 1177, 1184 (9th Cir. 2012) (quoting 13 Lujan, 504 U.S. at 561). 14 RingCentral argues that Labunski’s conduct magnified the effects of the fake 15 negative reviews of RingCentral. See RC Opp’n at 9, 21–22. And as a result, it suffered 16 reputational harm with the review websites who received emails from the 17 “ringcetrnal.com” domain, because they host reviews that have a material impact on 18 RingCentral’s business. Id. But Nextiva claims that there is no evidence that Labunski’s 19 impersonation of RingCentral officials actually harmed RingCentral. See Nextiva MSJ at 20 17–18. 21 Nextiva cites to RingCentral’s 30(b)(6) witness, Tiffany Wan’s, testimony to 22 support its position. Though Wan testified that “the reputation of RingCentral was 23 diminished . . . through the fraudulent emails,” she also lacked knowledge of any changes 24 to RingCentral’s Better Business Bureau membership or of any RingCentral reviews being 25 removed from Fit Small Business. Gold Decl., Ex. 22 at 47:3–17, 55:11–56:5, 60:5–24. 26 But Wan’s lack of knowledge does not prove that RingCentral was not harmed by the 27 cybersquatting, and it is for the jury to weigh the credibility of RingCentral’s witness 1 fact about whether it suffered reputational harm. Nextiva’s request for summary judgment 2 on the standing issue is DENIED. 3 b. Labunski as an Independent Contractor 4 Nextiva contends that as an independent contractor, Labunski’s actions cannot be 5 imputed to Nextiva because (1) Labunski was not Nextiva’s agent at all, and (2) even if he 6 was, Nextiva never authorized Labunski to register the “ringcetrnal.com” domain. Nextiva 7 MSJ at 19. It is well established that traditional vicarious liability rules ordinarily make 8 principals or employers vicariously liable for acts of their agents or employees in the scope 9 of their authority or employment. Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 756 10 (1998). 11 “An agency relationship arises “when one person (a ‘principal’) manifests assent to 12 another person (an ‘agent’) that the agent shall act on the principal’s behalf and subject to 13 the principal’s control, and the agent manifests assent or otherwise consents so to act.” 14 Restatement (Third) Of Agency § 1.01 (2006). “An agent acts with actual authority when, 15 at the time of taking action that has legal consequences for the principal, the agent 16 reasonably believes, in accordance with the principal’s manifestations to the agent, that the 17 principal wishes the agent so to act.” Id. at § 2.01. A principal is liable to a third party 18 harmed by an agent’s tortious conduct within the scope of actual authority. See id. at 19 §7.04. Upon review of the evidence, the Court concludes that RingCentral has provided 20 sufficient evidence for a jury to find that Labunski was an agent of Nextiva for purposes of 21 cybersquatting liability. See Mullins Decl., Exs. 3, 41–42. 22 Even if Labunski was an agent, it does not necessarily mean that Nextiva is liable 23 for conduct that was not authorized, or was outside the scope, of Labunski’s authority to 24 act on Nextiva’s behalf. See 1-800 Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229, 1251 25 (10th Cir. 2013) (quoting Restatement (Third) of Agency § 7.04). Thus, the relevant 26 question is whether a jury could reasonably find that Labunkski’s wrongful conduct was 27 within his authority, or whether Labunski was negligently supervised by Nextiva. 1 || reasonable understanding of the authority conferred upon him by Nextiva. Masjedi’s 2 || instructions to Labunski conferred actual authority to purchase the domain names, and the 3 || evidence suggests that Labunski’s authority to impersonate RingCentral officers was 4 || implied. See Mullins Decl., Exs. 3, 41-42. Nextiva argues that Labunski’s consulting 5 || agreement disclaimed an agency relationship. Nextiva MSJ at 19. But disavowing agency 6 || by agreement is not sufficient under the law. See Restatement at § 1.02. Whether or not a 7 || principal holds out the purported agent as an agent by calling them such, does not 8 || determine the scope of the relationship. See id. § 1.02; see also Operation Tech., Inc. v. 9 || Cyme Int’l T&D, Inc., No. 14-cv-0999-JVS (DFMx), 2016 WL 6246806 at *4, (C.D. Cal. 10 |} Mar. 31, 2016). Therefore, Labunski’s implied actual authority, and Nextiva’s arguably 11 || negligent supervision of Labunski, are triable issues. 12 For the foregoing reasons, the Court concludes that RingCentral has raised a triable 13 || issue of fact that Labunski was acting as Nextiva’s agent with implied actual authority, or 14 || alternatively, that Nextiva negligently supervised Labunski as its agent. Accordingly, the 15 || Court DENIES Nextiva’s motion for vicarious liability on the cybersquatting claim. 16 || IV. CONCLUSION 5 17 Because there are genuine issues of material fact as to RingCentral’s /review page, 5 18 || Nextiva’s damages, and unclean hands, RingCentral’s motion for summary judgment is 19 |} DENIED in its entirety. 20 As explained above, Nextiva’s motion for summary judgment is GRANTED IN 21 || PART and DENIED IN PART. Nextiva’s motion is DENIED on all grounds, except 22 || Nextiva’s motion is GRANTED as to all allegedly fake positive reviews of Nextiva 23 || pertaining to RingCentral’s defamation and trade libel claims only. 24 IT IS SO ORDERED. 25 26 || Dated: June 17, 2021 h-_———— _ 27 United States Magistrate Judge 28