LAYTON- The owners of an online retailer who tried to punish a Layton couple for making a negative comment on a web site will get hit with a big fine of their own.
U.S. District Court Judge Dee Benson ruled on April 30 that KlearGear did not have the right to charge a $3,500 fine, and that the business would have to pay for damages incurred by their actions. A hearing will be held in June to determine the amount.
John and Jen Palmer sued KlearGear for damages in December.
KlearGear, a site that specializes in selling tech gadgets and paraphernalia never responded to the complaint, leading to Benson’s summary judgment.
A few weeks before Christmas 2008, John Palmer ordered a small desk toy and key chain from KlearGear, a website based in Michigan. The couple lived in Bountiful at the time.
The order, including shipping — cost less than $20. He paid for it through PayPal.
After the order did not arrive in time for the holiday, John tried calling KlearGear to speak to someone about the problem. His efforts were unsuccessful. After several attempts to contact KlearGear via email, Jen also never received an answer.
A few months later in March 2009, Jen entered a negative review of KlearGear on RipOffReport.com.
More than three years later in May of 2012, John received an email from KlearGear stating that he had violated a "non-disparagement clause" and demanded that he or his wife remove the comment from RipOffReport.com within 72 hours. The email sent from a "KlearGearLegal" address also warned that if the post were not removed immediately, the Palmers would be fined $3500.
A few months later, the Palmer's credit was damaged, causing a lot of problems for the family. When their furnace failed, they had to wait until they could save enough money to replace it. They were also unable to get car loans or a new mortgage they needed.
In March, the Fidelity credit bureau announced that the $3,500 fine had been removed and the couple’s credit was restored.
Judge Benson’s actions were good news for the Palmer’s attorney Scott Michelman, who works the Public Citizen Litigation Group out of Washington D.C.
In a statement to the Clipper, Michelman said, “Today’s judgment rightly holds a bad actor liable for its wrongful conduct. Consumers have the right to speak their minds about their experiences in the marketplace, and when they do so, they help educate their fellow consumers. Corporations should know that they will face consequences if they try to use unfairly one-sided contract language or to abuse the credit reporting system to bully consumers into silence.”
On Monday, the Clipper received a correspondence from a man named Vic Mathieu, who claimed to be an attorney for Descoteaux Boutiques (DBS), which owns KlearGear. Mathieu’s email claimed that KlearGear was not properly served legal papers regarding the Palmer case, and that, “…Once DBS has been served, we will vacate the judgment and litigate.”
Mathieu further argued that Michelman had withheld information from the case, and that the disparagement clause Palmer allegedly violated was valid and in place at the time of his 2008 purchase.
Michelman responded, saying KlearGear was legally and properly served, and that his office has been more than willing to discuss the case. Michelman also reaffirmed his belief that KlearGear’s disparagement clause was illegal.
“Monday’s email does not answer the claims at the heart of this case: that KlearGear used one-sided contractual fine print to try to bully unsatisfied consumers into silence, abused the credit reporting system when the Palmers would not pay KlearGear’s extortionate demand and then defamed the Palmers in the press,” said Michelman in a statement to the Clipper. “If KlearGear decides to appear in court at long last, we welcome the opportunity to demonstrate that the Palmers are entitled to relief, either because of the company’s default or on the merits.”