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Layton couple sue KlearGear for $3,500 negative-review charge
Commerce • Lawsuit says "non-disparagement clause" is outlandish, unconstitutional.

By Matthew Piper The Salt Lake Tribune

Published December 18, 2013 5:49 pm
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
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After refusing to pay a $3,500 charge for disparaging the online geek gadget retailer, a Layton couple are taking KlearGear to court.

"One of the important things about this case is to send a message to bad actors like KlearGear that they can't stick outlandish terms in the fine print and expect to be able to enforce them," said Scott Michelman, an attorney with Public Citizen who is co-counsel with Utah attorney Lester A. Perry of Hoole & King.

According to a lawsuit filed Wednesday in U.S. District Court, John Palmer ordered a desk toy and a key chain in December 2008 for his wife, Jen. The items, worth less than $20, never arrived, and KlearGear canceled the order after an email correspondence. Jen then shared her dissatisfaction with KlearGear's service in a review on RipoffReport.com.

In May 2012, the lawsuit says, a KlearGear email informed the Palmers they had 72 hours to remove the RipoffReport.com post or pay KlearGear $3,500, because the couple had violated a "non-disparagement clause" in KlearGear's terms of use that prohibits customers from criticizing the company. (The lawsuit states that this clause was not present at the time of the purchase, but that it's irrelevant because the terms are "unconscionable" and violate the First Amendment — and what's more, that John Palmer was the customer and his wife wrote the review.)

RipoffReport.com does not alter reviews unless they are factually incorrect and the request is initiated by the company being reviewed — not the customer — but a KlearGear representative told the Palmers that was irrelevant: Either pay $3,500 or credit bureaus will be notified of your debt. A few months later, the company followed through.

The couple say their poor credit rating delayed a car loan for a used Toyota and rendered them unable to obtain a loan for a broken furnace in October, when they piled blankets atop their 3-year-old son to keep him warm at night. They also have been deterred from refinancing their home or selling their house and buying a new one, the lawsuit states.

In November, the couple sent KlearGear a letter demanding that their credit be restored, $75,000 in compensation and removal of the non-disparagement clause from the site's terms of use.

To date, no answer. What's more, they're not even sure where KlearGear is based.

"There are a number of things we've either discovered or read about them that make us concerned about what kind of company it is," Michelman said. "Since we've sent the demand letter, they appear to have moved within Grandville, Mich., and both locations appear to be nothing more than a mail drop."

Michelman said that if KlearGear doesn't show up in court, then the plaintiffs can win by default.

"We want to make sure that this never happens to anybody else again," Jen Palmer told The Salt Lake Tribune in November.

KlearGear did not respond to a request for comment Tuesday.

mpiper@sltrib.com

Twitter: @matthew_piper



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