Over at his Technology and Marketing Blog, Eric Goldman points to a recent district court decision issuing a preliminary injunction against a solar installation company which, according to the decision, engaged in a series of shady practices vis-a-vis consumers who agreed to use its solar panel installation services. In an action brought jointly by the attorneys general of Kentucky and Tennessee under several state consumer fraud laws as well as the federal Consumer Financial Protection Act, the trial court enjoined several aspects of the company’s scheme, including the placement of a clause in its form contract that forbade customers from putting any criticisms of the company on social media which, the Court held, is a patent violation of the Consumer Review Fairness Act. Considering that the clause does not appear to have been written by someone familiar with the English language, I have to wonder about the defendants’ claim that a lawyer reviewed and approved it: Note this excerpt “Breaching acceptance of this clause by buyer can and will deem monetary compensation benefits to Ideal Horizon Benefits, LLC/Solar Titan USA.”
Of especial interest are the remedies that the court discussed. It held that rescission of the entire contract, and refund of payments that the consumers had made on the contract, is a permissible remedy for a CRFA violation; that the individuals running the company could be held personally liable for a CRFA violation; and that the contention that the clause had been blessed by counsel was no defense to liability. Indeed, the court ordered that the personal assets of the individuals running the company be frozen to ensure that there are sufficient funds to satisfy the eventual judgment in the case.
The decision is reported as 2023 WL 2299570 (E.D. Tenn. Feb. 28, 2023)
