AUTOMATED TRANSACTIONS, LLC & a.
AMERICAN BANKERS ASSOCIATION & a.
Argued: February 14, 2019
Shaheen & Gordon, P.A., of Concord (Steven M. Gordon,
Timothy J. McLaughlin, and Stephanie K. Annunziata on the
brief, and Mr. Gordon orally), for the plaintiffs.
Devine, Millimet & Branch, P.A., of Manchester (Jonathan
Shirley and Joshua M. Wyatt on the brief, and Mr. Wyatt
orally), for defendant American Bankers Association.
Litchfield Cavo, LLP, of Lynnfield, Massachusetts (Mark A.
Darling and Bethany P. Minich on the brief, and Mr. Darling
orally), for defendant Credit Union National Association.
Desmarais Law Group, PLLC, of Manchester (Debra L. Mayotte on
the brief and orally), for defendants Robert H. Stier and
Pierce Atwood, LLP.
R. Bissonnette, of Concord, on the brief, for American Civil
Liberties Union of New Hampshire and Electronic Frontier
Foundation, as amici curiae.
plaintiffs, Automated Transactions, LLC (ATL) and David
Barcelou, appeal an order of the Superior Court
(Tucker, J.) dismissing their defamation and New
Hampshire Consumer Protection Act (CPA) claims against the
defendants, American Bankers Association (ABA), Credit Union
National Association (CUNA), Robert H. Stier, and Pierce
Atwood, LLP. The plaintiffs argue that the trial court erred
because it could not determine, at the motion to dismiss
stage, that the statements upon which the plaintiffs premised
the defendants' liability were nonactionable. We affirm.
plaintiffs' amended complaint alleges the following
facts. Barcelou is an inventor who, after achieving success
with various inventions in the 1970s and 80s, began working
in 1993 toward "automating tournaments." He hoped
to develop a system where any "game of skill" could
automatically accept an entry fee, administrate a winner, and
award the winner an immediate cash prize. Barcelou, who
created a prototype of this "Automated Tournament
Machine" in 1994, sought to include "automated
teller machine" (ATM) functionality in his invention,
i.e., the ability to dispense cash.
his prototype was complete, Barcelou hired a computer
scientist to document his invention, as well as an industrial
design firm to help refine it. After creating additional
prototypes, he filed patent applications, sought capital
investments, and assembled a management team. Although his
efforts to commercialize his invention were ultimately
unsuccessful, he was granted an ATM-related patent by the
United States Patent and Trademark Office in 2005. A short
time thereafter, Barcelou sued the convenience store chain
"7-Eleven," alleging that the store's
"VCOM" machines infringed his newly-granted patent.
around 2008, Barcelou formed ATL and made the company the
exclusive licensor of his patent. ATL began offering patent
licenses and bringing infringement litigation, and pursued
additional patents on Barcelou's ATM-related innovations.
The company's efforts were largely fruitful: from 2011 to
2012, ATL generated over $3 million in licensing revenues. In
addition, the United States Patent and Trademark Office
granted the plaintiffs additional ATM-related patents. It is
in the wake of this success that the plaintiffs argue, in
their amended complaint, that the defendants engaged in a
"defamatory smear campaign . . . in a malicious effort
to destroy" their legitimate licensing efforts. For
example, the defendants made statements referring to ATL as a
"patent troll," as well as statements
characterizing ATL's licensing efforts as extortive. The
plaintiffs contend that ATL's revenues have declined due
to the defendants' statements, and that their statements
permanently damaged Barcelou's reputation and caused him
plaintiffs sued the defendants, among others,  for defamation
and for violation of the CPA. The defendants moved to dismiss
the plaintiffs' claims, arguing, inter alia,
that their statements could not give rise to defamation
liability because they were only expressions of opinion. The
trial court granted the defendants' motions. The court
found that the references to the plaintiffs as patent trolls
were no more than the opinions of the defendants, the facts
upon which those opinions were based were evident from
context, and the statements did not imply the existence of
other facts. Regarding the statements referring to the
plaintiffs' activity as extortive, the court dismissed
the plaintiffs' defamation claims as to these statements
because it found them to be rhetorical hyperbole, not
assertions of fact. The court also dismissed the
plaintiffs' CPA claims.
appeal, the plaintiffs argue that the court erred in
dismissing their claims. In reviewing a motion to dismiss,
our standard of review is whether the allegations in the
plaintiffs' pleadings are reasonably susceptible of a
construction that would permit recovery. Sanguedolce v.
Wolfe, 164 N.H. 644, 645 (2013). We assume the
plaintiffs' pleadings to be true and construe all
reasonable inferences in the light most favorable to the
plaintiffs. Id. We need not assume the truth of
statements that are merely conclusions of law, however.
Id. We then engage in a threshold inquiry that tests
the facts in the complaint against the applicable law, and if
the allegations constitute a basis for legal relief, we must
hold that it was improper to grant the motion to dismiss.
Id. In conducting this inquiry, we may also consider
documents attached to the plaintiffs' pleadings,
documents the authenticity of which are not disputed by the
parties, official public records, or documents sufficiently
referred to in the complaint. Ojo v. Lorenzo, 164
N.H. 717, 721 (2013).
survive the motion to dismiss, the plaintiff[s] must have
alleged facts that would show that the defendant[s] failed to
exercise reasonable care in publishing a false and defamatory
statement of fact about [the plaintiffs] to a third
party." Cluff-Landry v. Roman Catholic Bishop of
Manchester, 169 N.H. 670, 678 (2017) (quotation
omitted); see Pierson v. Hubbard, 147 N.H. 760, 763
(2002); Indep. Mechanical Contractors v. Gordon T. Burke
& Sons, 138 N.H. 110, 118 (1993). Embedded in this
recitation is the requirement that the challenged statement
be one "of fact." Pierson, 147 N.H. at
763. Conversely, "[a] statement of opinion is not
actionable unless it may reasonably be understood to imply
the existence of defamatory fact as the basis for the
opinion." Thomas v. Telegraph Publ'g Co.,
155 N.H. 314, 338 (2007) (citing Milkovich v. Lorain
Journal Co., 497 U.S. 1, 18-19 (1990)); accord Nash
v. Keene Publishing Corp., 127 N.H. 214, 219 (1985);
see also Restatement (Second) of Torts § 566,
at 170 (1977) ("A defamatory communication may consist
of . . . an opinion, but a statement of this nature is
actionable only if it implies the allegation of undisclosed
defamatory facts as the basis for the opinion."). A
further corollary of defamation law's factual requirement
is that statements of "rhetorical hyperbole" are
not actionable because they cannot reasonably be interpreted
as factual assertions. Milkovich, 497 U.S. at 20
(quotation omitted); see Pease, 121 N.H. at 65.
Whether a given statement can be read as being or implying an
actionable statement of fact is a question of law to be
determined by the trial court in the first instance.
Thomas, 155 N.H. at 338-39; accord Piccone v.
Bartels, 785 F.3d 766, 772 (1st Cir. 2015); see also
Riley v. Harr, 292 F.3d 282, 291 (1st Cir. 2002)
("[T]he courts treat the issue of labeling a statement
as . . . protected opinion as one ordinarily decided by
judges as a matter of law." (quotation and brackets
omitted)). Words alleged to be defamatory must be read in the
context of the publication taken as a whole. Morrissette
v. Cowette, 122 N.H. 731, 733 (1982); accord
Duchesnaye v. Munro Enterprises, Inc., 125 N.H. 244, 249
important criterion for distinguishing statements of opinion
from statements of fact is verifiability, i.e.,
whether the statement is capable of being proven true or
false. See Milkovich, 497 U.S. at 21-22;
Piccone, 785 F.3d at 771-72; see also 1
Robert D. Sack, Sack on Defamation § 4.2.4, at
4-22 n.74 (4th ed. 2014) (noting the primacy of
verifiability). "Where an expressive phrase, though
pejorative and unflattering, cannot be objectively verified,
it belongs squarely in the category of protected
opinion." Piccone, 785 F.3d at 772 (quotations
omitted); see also Phantom Touring, Inc. v. Affiliated
Publications, 953 F.2d 724, 728 (1st Cir. 1992) (finding
statement that theater production was "a rip-off, a
fraud, a scandal, a snake-oil job" to be protected
opinion because, in part, there could be "no objective
evidence to disprove it"); Catalfo v. Jensen,
657 F.Supp. 463, 468 (D.N.H. 1987) (finding statement that
plaintiff was "sleazy" to be expression of opinion
because, even assuming the word carried the definition
"marked by low ethical standards, . . . it is [not]
capable of verification" because "[e]thical
standards are inherently subjective"). "The vaguer
a term, or the more meanings it reasonably can convey, the
less likely it is to be" verifiable and hence
actionable. Levinsky's v. Wal-Mart Stores, Inc.,
127 F.3d 122, 129 (1st Cir. 1997); see also McCabe v.
Rattiner, 814 F.2d 839, 842 (1st Cir. 1987).
course, even if a statement is properly described as an
opinion, that "does not automatically shield it from a
defamation claim. After all, 'expressions of
"opinion" may often imply an assertion of objective
fact.'" Yohe v. Nugent, 321 F.3d 35, 41
(1st Cir. 2003) (quoting Milkovich, 497 U.S. at 18);
see Thomas, 155 N.H. at 339 (explaining that certain
statements were not protected because, "even assuming
arguendo these statements are opinions, they are
clearly based upon undisclosed facts"). At the same
time, "even a provably false statement is not actionable
. . . when an author outlines the facts available to him,
thus making it clear that the challenged statements represent
his own interpretation of those facts." Riley,
292 F.3d at 289 (quotation omitted); see Piccone,
785 F.3d at 772-73 (explaining that, even if statement that
plaintiff was "unprofessional" was provably false,
it was not actionable because defendant disclosed the facts
upon which he based his statement). When the speaker
discloses the facts upon which he bases his statement,
"no reasonable reader would consider the term anything
but the opinion of the [speaker] drawn from the circumstances
related." Chapin v. Knight-Ridder, Inc., 993
F.2d 1087, 1093 (4th Cir. 1993); see also Partington v.
Bugliosi, 56 F.3d 1147, 1156 (9th Cir. 1995) (explaining
that "[t]he courts of appeals that have considered
defamation claims after Milkovich have consistently
held that when a speaker outlines the factual basis for his
conclusion, his statement is" not actionable for
defamation; citing cases).
statements of "imaginative expression" or
"rhetorical hyperbole" are generally nonactionable
because they "cannot reasonably be interpreted as
stating actual facts about an individual."
Milkovich, 497 U.S. at 20 (quotation and brackets
omitted); see Pease, 121 N.H. at 65 (concluding that
phrase "journalistic scum of the earth" could not
reasonably be understood as assertion of fact because the
phrase "was no more than rhetorical hyperbole" that
"[e]ven the most careless reader must have
perceived" was not meant literally (quotation and
brackets omitted)); Greenbelt Pub. Assn. v. Bresler,
398 U.S. 6, 13-14 (1970) (concluding that, "as a matter
of constitutional law, the word 'blackmail' . . . was
not" defamatory as used by the defendant; context of
statement made clear that word was used to criticize
plaintiff's negotiating position, not to accuse him of
literal crime of blackmail). "For better or worse, our
society has long since passed the stage at which the use of
the word 'bastard' would occasion an investigation
into the target's lineage or the cry 'you pig'
would prompt a probe for a porcine pedigree."
Levinsky's, 127 F.3d at 128. A statement
containing arguably hyperbolic language, however, must still
be evaluated in its appropriate context to determine whether
it could be reasonably construed as asserting or implying the
existence of defamatory facts. See id. at 130-32
(statement that "you are sometimes put on hold for 20
minutes-or the phone is never picked up at all" could,
when considered in context, be reasonably interpreted as
factual assertion); Gray, 221 F.3d at 248-49.
appeal, the plaintiffs argue that the statements they
challenged in their amended complaint are actionable for
defamation because they are capable of being proven false or
otherwise do not qualify as rhetorical hyperbole. They also
argue that, when each challenged statement is considered in
context, each can be reasonably understood to imply the
existence of undisclosed defamatory facts. In addition, the
plaintiffs contend that the trial court could not determine,
at the motion to dismiss stage, that the challenged
statements were nonactionable. Specifically, the plaintiffs
claim their amended complaint alleged that the facts
expressed by the defendants, and upon which the defendants
relied to support the challenged statements, were false.
Finally, the plaintiffs contend that the court erred in
dismissing their CPA claims.
turning to our analysis of the challenged statements, we make
the following observations. The plaintiffs' amended
complaint alleges that many of the defendants' statements
are defamatory because they refer to ATL as a “patent
troll.” Generally speaking, “patent troll”
is a derogatory phrase used to describe “a class of
patent owners who do not provide end products or services
themselves, but who do demand royalties as a price for
authorizing the work of others.” John M. Golden,
“Patent Trolls” and Patent Remedies, 85 Tex. L.
Rev. 2111, 2112 (2007); see Halo Electronics, Inc. v.
Pulse Electronics, 136 S.Ct. 1923, 1935 (2016). Use of
the phrase has proliferated in recent years as “[a]n
industry has developed in which firms use patents not as a
basis for producing and selling goods but, instead, primarily
for obtaining licensing fees.” eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 396 (2006) (Kennedy,
J., concurring); see Golden, supra. Despite
this uptick in use, "a widely accepted definition of a
patent troll has yet to be devised." Golden,
supra at 2112 n.7. The term is
used by some to refer to any party that doesn't actually
produce goods or services. Indeed, some use "troll"
to refer to anyone who is suing them . . . . Others would
exclude some entities-notably universities and individual
inventors-from the troll definition. Still others would limit
patent trolls further, to include only . . . companies whose
primary line of business is filing patent suits. And even
that definition is too broad for some, who would limit the
term patent troll to those who assert patents they bought
from others, only those who assert invalid patents, or only
those who engage in certain "abusive" tactics in
patent litigation, such as pressuring allegedly infringing
manufacturers by threatening those manufacturers'
end-user customers, or seeking nuisance-value settlements.
Allison et al., How Often Do Non-Practicing
Entities Win Patent Suits?, 32 Berkeley Tech. L.J. 237,
242 (2017) (footnote omitted); see also Ronald J.
Mann, Do Patents Facilitate Financing in the Software
Industry?, 83 Tex. L. Rev. 961, 1023-24 (2005)
("[A]ny effort to design a suitable definition of the
term 'troll' is likely to lend credence to the view
that the status as a troll is in the eye of the beholder.
Every firm that has a patent valuable enough to support major
[infringement] litigation . . . has acquired that patent from
some person who has invested the resources to invent that
technology."); Electronic Frontier Foundation v.
Global Equity, 290 F.Supp.3d 923, 946 (N.D. Cal. 2017)
(statement that plaintiff "seems to be a classic patent
troll" could not give rise to defamation liability
because the statement was "an expression of
opinion"). Thus, although "patent troll" ...