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This Opinion Is Subject to Motions for Rehearing Under Rule 22 As Well As Formal Revision Before Publication in the New Hampshire Reports

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This Opinion Is Subject to Motions for Rehearing Under Rule 22 As Well As Formal Revision Before Publication in the New Hampshire Reports NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by e-mail at the following address: [email protected]. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court’s home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Sullivan No. 2018-0198 AUTOMATED TRANSACTIONS, LLC & a. v. AMERICAN BANKERS ASSOCIATION & a. Argued: February 14, 2019 Opinion Issued: August 16, 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. Gilles R. Bissonnette, of Concord, on the brief, for American Civil Liberties Union of New Hampshire and Electronic Frontier Foundation, as amici curiae. HANTZ MARCONI, J. The 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. I The 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. Once 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. In or 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 2 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 emotional distress. The plaintiffs sued the defendants, among others,1 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. II On 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 1 In addition to defendants ABA, CUNA, Pierce Atwood, and Stier, the plaintiffs named the following entities as defendants in their amended complaint: Crain Communications, Inc. d/b/a Crain’s New York Business; Charles von Simson; W. John Funk; Gallagher, Callahan & Gartrell, P.C.; Networld Alliance, LLC; Ralph E. Jocke; Walter & Jocke Co., LPA; Mascoma Savings Bank; and Stephen F. Christy. Defendants Charles von Simson, Ralph E. Jocke, and Walker & Jocke Co., LPA filed motions to dismiss on personal jurisdiction grounds, which the trial court granted, and which the plaintiffs have not appealed. Defendants Mascoma Savings Bank and Stephen F. Christy filed a motion for summary judgment, which the trial court granted, and which the plaintiffs have not appealed. The plaintiffs filed motions for voluntary nonsuit as to defendants Crain Communications, Inc. d/b/a Crain’s New York Business and Networld Alliance, LLC, which the trial court granted. Finally, although the trial court dismissed the plaintiffs’ claims against defendants W. John Funk and Gallagher, Callahan & Gartrell, P.C., the plaintiffs have not appealed the dismissal of their claims against those two defendants. 3 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). “To 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));2 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 (1984). 2 Although defamation is a state law cause of action, the requirement that the challenged statement be one of fact is an aspect of defamation law in which “constitutional concerns intrude into what is otherwise a cause of action governed by state law.” Catalfo v.
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