Trump defeats $84 million defamation suit over domain dispute

September 15, 2016

REUTERS/Carlo AllegriDonald J. Trump, The Trump Organization and two associates have dodged a New York federal lawsuit seeking $84 million that alleged the presidential hopeful was responsible for defaming the owner of the domain trumpestates.com by calling him a cybersquatter.

Domain reseller Scott Stephens failed to identify in his lawsuit which of the defendants made the allegedly defamatory statements, when the statements were made and to whom, according to U.S. District Judge Eric N. Vitaliano of the Eastern District of New York.

Even if Stephens had specified details about the alleged harmful statements thus meeting the basic pleading requirements for a federal defamation suit, the judge said “Stephens’ actions would have barred his filing of a good-faith defamation claim.”

The judge found it relevant that Stephens published a link to a March 1 New York Post article on trumpestates.com.

In the article, Trump Organization Executive Vice President Alan Garten, one of Trump’s associates named as a defendant in the defamation suit, told the Post that Stephens was “cybersquatting” and “violating the law,” Judge Vitaliano said.

“Thus, it appears that Stephens is using ‘trumpestates.com’ to further disseminate the same statements which, he alleges, are harmful to his reputation,” the judge said.

Under New York law, a person who voluntarily republishes allegedly defamatory words cannot sue for libel, according to the order.

Judge Vitaliano dismissed Stephens’ suit for defamation and tortious interference with business relations.

Domain dispute at WIPO

According to the order, Stephens registers domains and resells them.

Allegedly, in 2004, he bought trumpestates.com and has continuously maintained the domain.

More than 10 years later, Trump filed a complaint with the World Intellectual Property Organization, seeking an order requiring Stephens to transfer the domain.

In May 2015 the sole WIPO panelist ordered Stephens to transfer trumpestates.com to the real estate mogul, who owns more than 700 registered trademarks consisting of or incorporating the Trump mark in over 80 countries. Trump v. Stephens, No. D2015-478, 2015 WL 2357107 (WIPO Arb. May 8, 2015).

The panelist found Trump, as the complainant, satisfied the requirements of the Uniform Domain Name Dispute Resolution Policy, known as the UDRP.

First, the domain was confusingly similar to the Trump mark. It incorporated the mark in its entirety, adding the generic word “estates,” the decision said.

This combination made it especially confusing because the Trump mark is strongly associated with luxury real estate, the panelist wrote.

Additionally, Stephens never showed he had legitimate rights or interests in the domain name, the WIPO decision said.

Rather, when visitors went to trumpestates.com, they saw advertisements that associated the domain name with Donald Trump, the decision said.

The advertisements said trumpestates.com — “which has no evident generic value” — was for sale on eBay for $21 million and scottnot.com, a website registered to Stephens, the decision said.

Based on the advertised high price and association with The Trump Organization, the panelist decided Stephens registered trumpestates.com in bad faith, either hoping to elicit a substantial offer from Trump or another party.

Domain dispute in New York’s Eastern District

The WIPO Arbitration and Mediation Center entered its decision after Stephens filed his suit against The Trump Organization and the presidential hopeful in the Easter District of New York seeking $21 million in compensatory damages and $63 million in punitive damages.

The complaint alleged the defendants communicated to at least one party that Stephens was cybersquatting and violating the law. It also sought a declaratory judgment that Stephens did not violate U.S. trademark law or the UDRP.

The website at trumpestates.com links to three articles on the New York Post’s website about the WIPO domain dispute, but the complaint failed to specify the allegedly defamatory statements, according to the recent court order.

Because of these deficiencies Judge Vitaliano dismissed Stephens’ common law claims.

He also denied Stephens’ request for a declaratory judgment.

Although Trump did not register “Trumpestates,” “Trump Estates” or “Trumpestates.com” as trademarks, the Anti-cybersquatting Consumer Protection Act, 15 U.S.C.A. § 1125(d)(1)(A), only requires domains to be confusingly similar to protected marks, not completely identical, Judge Vitaliano said.

Given the plethora of Trump-related registered marks, the judge said the pleading for a blanket declaration of no trademark violation lacked specificity and dismissed the suit.

Stephens v. Trump Organization LLC et al., No. 15-cv-2217, 2016 WL 4702437 (E.D.N.Y. Sept. 7, 2016).