FreeLife International v. Burge [1]

Direct sales company FreeLife International [2] filed a defamation lawsuit against David Lucas Burge, a natural-foods activist whose website purported to expose FreeLife's health claims about its Himalayan Goji Juice drink. Burge's website, breathe.org [3], featured an in-depth investigative series that disputed FreeLife's contention that its goji drink retains enzymes that other goji drinks lack. FreeLife filed suit in Arizona state court in October 2007, and the defendants removed the case to federal district court in November. 

FreeLife also brought a breach of contract claim against Burge. FreeLife is a multi-level marketing [4] company, and it operates primarily through person-to-person sales. It accomplishes this by allowing interested consumers to sell its goji drinks as "FreeLife Marketing Executives." The online sign-up process for the position includes a contractual provision precluding the signer from disparaging the company. Burge allegedly went through the sign-up process while gathering information on FreeLife and is bound by the provision, according to the company. 

FreeLife also named WhoIs Privacy Protection Services as a defendant. WhoIs is a company that allows website operators to hold domains anonymously by substituting its own contact information for theirs in domain registrations. FreeLife argued that WhoIs helped the operators of breathe.org to remain anonymous and thus assisted in the defamation. WhoIs was dismissed from the case on November 06, 2007, apparently by agreement of the parties.

Burge and the other remaining defendants, including Burge's company American Music Education (AME), filed a motion to dismiss for lack of personal jurisdiction. The court granted the motion with respect to Noelle Boucherle and denied it with respect to Burge. It determined that he had consented to Arizona jurisdiction as part of the terms of the marketing executive contract with FreeLife, and that jurisdiction was appropriate because Burge sufficiently targeted his speech at FreeLife, an Arizona corporation.

The court also dismissed the motion with respect to AME and AME employee Gary Boucherle, but it allowed them to re-file their motions after limited discovery. After completing this limited discovery, the parties agreed the claims against Gary Boucherle would be dismissed. When AME filed a renewed motion to dismiss, the court again denied the motion.

Update:

10/1/2009 - The court denied Burge's motion for summary judgment on the breach of contract claim and the defamation claim.  The court granted FreeLife's motion for summary judgment on Burge's counterclaim.