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In re Homeadvisor, Inc. Litigation

United States District Court, D. Colorado

August 21, 2019




         This matter[1] is before the Court on Plaintiffs' Motion for Preliminary Injunction and Declaratory Judgment [Docket No. 34].[2] The Court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2).

         I. BACKGROUND

         Defendant HomeAdvisor, Inc.[3] is an online business that connects consumers who have home service requests with home service professionals (“HSPs”) who have joined defendant's network to perform the tasks requested. Docket No. 34 at 2-3. Plaintiffs are all former members of defendant's network. Docket No. 1 at 15-20, ¶¶ 8-15.

         When an HSP purchases a membership through defendant's service, defendant creates an online profile page for that HSP. Docket No. 34 at 3. The profile pages are accessible via internet search engine results or through defendant's online directory. Id. When a potential consumer arrives at an HSP's profile page, he or she has access to the contact information the HSP has supplied and may click a button that reads “Get a Quote” to contact that HSP. Docket No. 67 at 7.

         Plaintiffs allege that, when a member cancels his or her membership in defendant's network, defendant continues to maintain the profile pages of those former HSPs. Docket No. 34 at 5. Plaintiffs state that, in maintaining former HSPs' profile pages, defendant is engaged in making false misrepresentations about plaintiffs' businesses in order to generate revenue for itself. Id. For example, plaintiffs allege that defendant, as of October 7, 2018, maintained a “Get a Quote” button on the profile pages of former HSPs. Id. at 9; Docket No. 35-1 23, ¶ 65. Further, plaintiffs claim that, when a customer clicks on the “Get a Quote” button on the page of a former HSP, the customer “may” be taken to a page that states the former HSP does not provide service in the customer's zip code. Docket No. 34 at 6; Docket No. 35-1 at 24, ¶¶ 67-68. Plaintiffs also claim that, on some former HSP profile pages, defendant places an alert that states, “Please Note: This business is not a screened and approved member of HomeAdvisor.” Docket No. 34 at 6; Docket No. 35-1 at 36, ¶ 108. Plaintiffs contend that this is misleading and casts the former HSP in a negative light. Docket No. 34 at 6.

         Finally, plaintiffs allege that when defendant deletes the content of former HSPs' profile pages, it maintains the URL, which often includes former HSPs' business names. Id. at 7. Plaintiffs claim that, as of October 7, 2018, when potential customers completed an internet search for a former HSP's business and clicked on the link to the former HSP's profile page, the customers were informed that the “page [they] are looking for is no longer available.” Id.; Docket No. 35-1 at 29, ¶ 81 and at 32, ¶ 90. Plaintiffs contend that this page “gives the false impression that the Former HSPs are no longer in business.” Docket No. 34 at 7. Plaintiffs assert that these features harm their businesses by stating false information and by diverting potential customers away from their businesses and to competitors. Docket No. 34 at 11.

         Defendant has presented evidence, however, that each of the profile pages that are the subject of plaintiffs' motion have been removed. Docket No. 67 at 7. Indeed, no profile page exists and no non-member profile page exists for plaintiffs' businesses. Docket No. 69 at 13-14, ¶¶ 23-25. Defendant also asserts that the issues plaintiffs raise were all errors that have since been corrected. See Docket No. 69 at 9-11, ¶¶ 15-18. For example, the message that the former HSP does not provide service to a particular area was an “unintended display” that has, as of October 30, 2018, been fixed, and the message no longer appears unless an HSP has actually declined to provide service to that area. Docket No. 69 at 10, ¶ 17. Further, also as of October 30, 2018, the message alerting a potential customer that the former HSP had not been screened and approved by defendant has been altered to now read, “Please Note: This business is not a current member of the HomeAdvisor network.” Docket No. 69 at 11, ¶ 18. Finally, the web pages stating that the profile pages of former HSPs were “no longer available” do not exist any longer, as defendant updated its website to send a “404” signal to search engines for those former HSPs' pages, which indicates to the search engine that the page no longer exists and the search engine should no longer display it in search results. Id. at 12, ¶ 19. No member page or non-member page exists for the preliminary injunction plaintiffs on defendant's website. Id. at 13-14, ¶¶ 23-25.

         Moreover, defendant asserts it does not and has never diverted requests for quotes made via the “Get a Quote” button on the profile pages to other HSPs. Docket No. 69 at 9, ¶ 15. Further, upon reviewing its web traffic data - specifically, all web traffic sessions that began on one of the preliminary injunction plaintiffs' profile pages - it determined that no request for service had ever been submitted on defendant's platform as a result of a user entering the website via one of the preliminary injunction plaintiff's profile page after that plaintiff had canceled his or her membership. Docket No. 69 at 15, ¶ 27. For these reasons, defendant argues no preliminary injunction should issue because there is no threat of irreparable harm. Docket No. 67 at 13-14.

         Plaintiffs[4] seek a preliminary injunction (1) enjoining defendant from maintaining the profile pages for the preliminary injunction plaintiffs and the “classes, ”[5] (2) requiring that defendant remove the online profile pages and URLs associated with those plaintiffs and the putative classes from its website within five days, and (3) prohibiting defendant from using the business names or information of those plaintiffs or the members of the putative classes or representing that defendant's products or services are associated with those of the plaintiffs or of the putative classes. Docket No. 34-1 at 1-2. Plaintiffs also seek a declaratory judgment declaring that defendant's actions regarding their profile pages violate the Lanham Act, the Colorado Consumer Protection Act, the Florida Deceptive and Unfair Practices Act, and the Idaho Consumer Protection Act. Id. at 2.


         To succeed on a motion for a preliminary injunction, the moving party must show (1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in the movant's favor; and (4) that the injunction is in the public interest. RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008)); see also Little v. Jones, 607 F.3d 1245, 1251 (10th Cir. 2010). “[B]ecause a preliminary injunction is an extraordinary remedy, the right to relief must be clear and unequivocal.” Beltronics USA, Inc. v. Midwest Inventory Distribution, LLC, 562 F.3d 1067, 1070 (10th Cir. 2009) (quoting Greater Yellowstone Coalition v. Flowers, 321 F.3d 1250, 1256 (10th Cir. 2003)) (internal quotation marks omitted). Granting such “drastic relief, ” United States ex rel. Citizen Band Potawatomi Indian Tribe of Oklahoma v. Enter. Mgmt. Consultants, Inc., 883 F.2d 886, 888-89 (10th Cir. 1989), is the “exception rather than the rule.” GTE Corp. v. Williams, 731 F.2d 676, 678 (10th Cir. 1984).

         There are three types of preliminary injunctions that are disfavored in this circuit: (1) injunctions that disturb the status quo, (2) injunctions that are mandatory rather than prohibitory, and (3) injunctions that provide the movant substantially all the relief it could feasibly attain after a full trial on the merits. See Schrier v. Univ. of Colo., 427 F.3d 1253, 1260 (10th Cir. 2005).

         Plaintiffs argue the injunction they seek is a “prohibitory injunction that will maintain the status quo, ” Docket No. 78 at 13. To determine whether injunctive relief would alter the status quo, the Court looks to the “last uncontested status between the parties which preceded the controversy.” Schrier, 427 F.3d at 1260. The status quo is “not necessarily the positions that the parties occupied at the time litigation began.” Cobra N. Am., LLC v. Cold Cut Sys. Svenska AB, 639 F.Supp.2d 1217, 1229 (D. Colo. 2008). It is also “not defined by the parties' existing legal rights, ” but rather by the “reality of the existing status and relationships between the parties, regardless of whether the existing status and relationships may ultimately be found to be in accord or not in accord with the ...

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