Opinion
21-55048
11-09-2022
ROYAL HOLDINGS TECHNOLOGIES CORP., DBA X.Labs, a Delaware corporation, Plaintiff-Appellee, v. IP VIDEO MARKET INFO, INC., a Hawaii corporation and Pennsylvania corporation, Defendant-Appellant.
NOT FOR PUBLICATION
Argued and Submitted March 18, 2022 San Francisco, California
Appeal from the United States District Court for the Central District of California Stanley Blumenfeld, Jr., District Judge, Presiding D.C. No. 2:20-cv-04093-SB-PLA
Before: W. FLETCHER, GOULD, and COLLINS, Circuit Judges.
MEMORANDUM
Plaintiff-Appellee Royal Holdings Technologies Corporation ("X.Labs") sued Defendant-Appellant IP Video Market Info, Inc. ("IPVM"), alleging defamation and related torts over product reviews IPVM published of X.Labs' app, Feevr. IPVM made a motion to strike under California's Strategic Lawsuit Against Public Participation statute, see CAL. CODE CIV. PROC. § 425.16(b)(1), which was partially denied. IPVM has appealed, and we reverse and remand.
Because X.Labs concedes that the viability of all of its claims for relief is "contingent on whether [its] defamation claim survives," we address only the defamation claim. "The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage." See John Doe 2 v. Super. Ct., 206 Cal.Rptr.3d 60, 68 (Ct. App. 2016) (citation omitted). X.Labs must plead sufficient facts to establish each of these elements. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It has failed to do so with respect to the statements at issue.
1. X.Labs contends that IPVM's claims regarding Feevr's accuracy are false because "actual testing of the Feevr system . . . demonstrates that the Feevr system is in fact accurate and reliable for its intended purpose." X.Labs' complaint pointed to testing of its products in a controlled testing environment. Under such conditions, "the skin temperature measurements recorded by the Feevr units were within 1°C of the skin temperature measurements recorded" by two other devices.
We conclude that X.Labs failed to plead sufficient facts to establish the falsity of IPVM's statements regarding Feevr's accuracy. X.Labs measured Feevr's accuracy under optimal conditions, and it would not be reasonable to infer that Feevr is similarly accurate under the real-world conditions in which it is intended to be used, i.e., in crowds at public spaces such as airports, train terminals, and concerts. Moreover, X.Labs has not pleaded specific facts showing that a 1°C average margin of error-let alone a 1°C average margin of error relative to two devices with unspecified accuracies-is sufficiently small for the product to be accurate for measuring elevated human body temperatures. We agree with IPVM that 1°C may be "a significant range for human body temperature." Indeed, X.Labs alleges that the "[a]verage human body temperature" has an upper range of "37.5°C," whereas "[w]hen a person has a fever, their core temperature is elevated" to "38.1°C" and higher-a mere 0.6°C difference. Accordingly, we cannot say that X.Labs has carried its burden with respect to IPVM's criticisms of Feevr's accuracy.
2. IPVM described X.Labs' marketing as "misleading." IPVM explained that X.Labs "repeatedly refers to COVID-19 in its marketing, including [at] the very top of their website" and in "the first ten seconds of their marketing video," "[b]ut no screening system can detect coronavirus, regardless of what is claimed." Moreover, IPVM referenced its concerns about Feevr's accuracy in decrying "how misleading much of [X.Labs'] marketing is."
We conclude that X.Labs failed to plead sufficient facts to establish falsity. The operative complaint alleges, in relevant part, only that "[c]ommon symptoms of COVID-19 include fever, cough, and shortness of breath or difficulty breathing"; that "[t]he Feevr system performs a preliminary scan to efficiently and effectively screen and detect individuals in a crowd with an elevated forehead skin temperature"; and (as noted earlier) that Feevr was tested to be "within 1°C of the average skin temperature measurements recorded by" two other thermal devices. For the reasons discussed in the preceding section, X.Labs' allegations do not plead sufficient facts to show that Feevr is accurate within the relevant parameters. And X.Labs' allegations wholly fail to establish that Feevr is sufficiently accurate to be useful for detecting and stopping the spread of COVID-19. Accordingly, X.Labs has not carried its burden with respect to showing the falsity of IPVM's description of X.Labs' marketing as "misleading."
3. An IPVM article also identified a "Violation Risk" based on a view that Feevr violated FLIR's software development kit ("SDK") license agreement. IPVM claimed that the agreement "prohibits the use of FLIR devices, like the FLIR ONE Pro that Feevr uses, from apps like Feevr's." IPVM quoted the agreement's provision that the "FLIR SDK may not be used in conjunction with any Apps designed for medical or health-related purposes." IPVM updated the article to include both (1) X.Labs' denial that it uses the SDK; and (2) FLIR's disavowal of knowledge of Feevr's operation and confirmation that the FLIR ONE Pro is not marketed for temperature screening.
X.Labs' theory is that the article is defamatory because it falsely implies "that X.Labs and the Feevr system have run afoul of the FLIR SDK License Agreement." The alleged defamatory nature of the statement thus rests on the asserted combination of a false statement of fact coupled with a legal contention that is based on that factual error. But legal claims are generally matters of opinion, not statements of fact. See Franklin v. Dynamic Details, Inc., 10 Cal.Rptr.3d 429, 437-38 (Ct. App. 2004) (holding that "statements purporting] to interpret copyright law and contract law and [to] apply that law to fully disclosed facts" constituted "opinion statements based upon expressly stated facts"). Moreover, the IPVM statement does not suggest that its claim of a "Violation Risk" is based on any undisclosed facts; on the contrary, it quotes what IPVM contends is the relevant language and it states that this language is implicated, in IPVM's view, because Feevr uses the "FLIR ONE Pro." Even assuming that X.Labs is correct that the license agreement is not triggered merely by use of the FLIR One and that Feever does not use the FLIR SDK in any respect, a statement of a legal opinion based on disclosed facts "can be punished only if the stated facts are themselves false and demeaning." See Standing Comm. on Discipline v. Yagman, 55 F.3d 1430, 1439 (9th Cir. 1995) (emphasis added); see also id. ("A simple expression of opinion based on disclosed nondefamatory facts is not itself sufficient for an action of defamation, no matter how unjustified and unreasonable the opinion may be or how derogatory it is." (simplified)). Because the allegedly false underlying fact at issue here-that Feevr uses the FLIR SDK-is not itself defamatory, X.Labs' claim fails.
REVERSED and REMANDED.
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.