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DEREK W. CORNELIUS and SI03, INC., a Delaware corporation v. RYAN DELUCA d/b/a BODY BUILDING.COM

November 29, 2010

DEREK W. CORNELIUS AND SI03, INC., A DELAWARE CORPORATION, PLAINTIFF,
v.
RYAN DELUCA D/B/A BODY BUILDING.COM; BYRNA MATTHEWS DELUCA D/B/A BODYBUILIDING.COM;
BODYBUILDING.COM, LLC; MOLECULAR NUTRITION, LLC;
M.A.N. SPORTS, INC.; DESIGNER SUPPLEMENTS, INC.; GASPARI NUTRITION, INC.; THERMOLIFE INTERNATIONAL, LLC; ADVANCED NUTRITION;
UNIQUE NUTRITION, INC.; ENGINEERED SPORTS TECHNOLOGY, LLC;
PALO ALTO LABS; SNS NUTRITION; BODY WELL NUTRITION, LLC;
ISS RESEARCH; ERGOPHARM, INC.; BETANCOURT NUTRITION, INC.;
AND NIMBUS NUTRITION, LLC, DEFENDANTS.



The opinion of the court was delivered by: B. Lynn Winmill Chief Judge U.S. District Court

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Before the Court are Plaintiffs' Motion for Leave to File Third Amended Complaint (Dkt. 210) and Defendant Bodybuilding.com's motions to dismiss and for summary judgment (Dkt. 218). Also before the Court is the issue of whether Plaintiffs may discover the identity of Bodybuilding.com's forum moderators.

The Court heard oral argument on November 10, 2010, and took the motion under advisement. For the reasons set forth below, the Court will deny the motion to dismiss and will allow Plaintiffs to amend their Complaint, assuming they can allege sufficient facts to support a cognizable claim.

With respect to Plaintiffs' discovery request for the identity of the forum moderators, the Court finds that Plaintiffs may discover the identity of INGENIUM. However, Plaintiffs have not come forward with enough reasons to justify allowing them to discover the identity of any and all moderators who post anonymously on Bodybuilding.com's forums.

BACKGROUND

Plaintiff SI03 manufactures and markets a line of "nutraceutical products." Defendant Bodybuilding.com operates the internet website www.bodybuilding.com as a marketplace for the sale of nutraceutical products similar to those manufactured by SI03 and the other defendants, including Gaspari Nutrition, Inc. As part of its website, Bodybuilding.com operates "forums," where members of the public, including representatives of SI03's competitors, may post comments and discuss available products.

MEMORANDUM DECISION

The forums direct the public to other pages in the website where nutraceutical products of SI03 and the other Defendants are offered for sale. According to Plaintiffs, Bodybuilding.com appoints moderators to act as representatives of the company to control and edit the forums.

In this lawsuit, Plaintiffs allege that certain competitors of Plaintiffs, with the assistance of Bodybuilding.com, engaged in a pattern and practice of posting disparaging and false comments about Cornelius, SI03, and SI03's products; those competitors included representatives of Bodybuilding.com and Gaspari; and the disparaging comments harmed Plaintiffs.

Plaintiffs now seek to amend their Complaint to clarify their theory of liability against Bodybuilding.com and Gaspari. Bodybuilding.com and Gaspari object to the proposed amendments as futile. In the alternative, Bodybuilding.com has moved to dismiss the proposed complaint and for summary judgment.

ANALYSIS

1. Plaintiffs' Motion to Amend

A. Plaintiffs' Proposed Allegations Against Bodybuilding.com

On May 2, 2007, at 8:37 a.m., an individual using the pseudonym "INGENIUM" posted to the Bodybuilding.com forum the statement: "despite SI03's constant matrix pimping in CASEIN threads, matrix is not a micellar casein product." Second Am. Compl. ¶ 36, Dkt. 48. Plaintiffs claim that the statement misrepresents the nature, characteristics, and/or qualities of Plaintiff SI03's products, and that its publication on a public forum damaged Plaintiffs. Id. "INGENIUM" is a forum moderator, and Plaintiffs allege that "INGENIUM" was acting as Bodybuilding.com representative when he or she posted the disparaging statement.

Despite SI03's assertion in the complaint, Bodybuilding.com insists that INGENIUM was not a moderator or its representative on May 2, 2007, and therefore it cannot be held liable for this statement. Plaintiffs respond that it does not matter whether INGENIUM was a Bodybuilding.com representative on May 2, 2007 because when the post is retrieved, INGENIUM now appears as a forum moderator -- regardless of what his or her status might have been when the post was made. Plaintiffs now seek to amend their complaint to add the following allegations to clarify the factual basis for this theory:

C Bodybuilding.com encourage sits [sic]own employees, including but not limited to its customer service representatives, to actively post in Bodybuilding.com Forums whenever possible. Proposed Third Am. Compl. ¶ 21

C Upon information and belief, a user's status as a moderator on the Bodybuilding.com Forums is designated by the user's name appearing in bold font next to each of his or her posts. Id. ¶ 23. C Upon information and belief, when a reading user (or guest) of the Bodybuilding.com Forums retrieves a post, the status of the posting user (as a moderator or non-moderator) is indicated as of the time the post is retrieved, regardless of the status of the posting user as of the time the post was originally made. Id. ¶ 24 C Upon information and belief, a reading user has no available way to ascertain the moderator status of a posting user as of the original time the post was made. Id. ¶ 25.

C Upon information and belief, one such moderator who uses the handle "INGENIUM" acts within the scope and course of his or her representation for Bodybuilding.com in making and maintaining ...


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