After six years of legal wrangling, self-storage management software company SiteLink has won a $1.7 million judgment against a rival software provider owned by U-Haul.
A jury found that eMove Inc., a subsidiary of U-Haul, misled consumers when it compared its management software with SiteLink’s in printed brochures and posters. SMD Software Inc., the parent company of SiteLink, alleged in its suit that eMove made several false and misleading claims about its product and, as a result, SMD lost customers.
“This is a huge win for us,” Ross Lampe, SiteLink’s president and CEO, said in a post on the SiteLink blog.
“SiteLink software offers everything eMove claimed we don’t offer, and more, and at prices far below those they misrepresented,” Lampe said.
This is a huge win for us.
— Ross Lampe, president and CEO of SiteLink
The original suit, filed in 2008, originally named U-Haul as the defendant; the suit later was changed to name U-Haul subsidiary eMove as the defendant. The eMove management software is called WebSelfStorage.
After a 13-day trial, a jury decided May 23 that eMove had engaged in unfair and deceptive trade practices. The trial was held in U.S. District Court in New Bern, NC, about 110 miles from SiteLink’s headquarters in Raleigh.
The jury did not find that eMove acted with any kind of malice or made the false statements intentionally, which could have resulted in a greater jury award.
“The primary point is that the jury did conclude that the comparative ads were false and misleading,” said Catharine Arrowood, a partner at law firm Parker Poe who was the lead trial attorney for SMD.
An attorney for eMove couldn’t be reached for comment.
Jury: False statements were made
The jury found that eMove made several false statements regarding SiteLink’s features and pricing.
In addition to inflating the price of SiteLink software in its printed materials, the jury found that eMove falsely claimed SiteLink did not provide confirmed reservations, take online payments or offer call-center services. Other SiteLink features also were misrepresented, the jury found.
The false and misleading statements were presented in the form of comparison charts. Three versions of the chart appeared in three different brochures that were printed in 2004, 2005 and 2008. The brochures were handed out primarily at self-storage industry trade shows. U-Haul field managers also distributed the brochures. One brochure included a line stating that eMove’s software “Blows Away The Competition.”
One of the false statements involved the prices of the PC- and web-based versions of SiteLink software. The 2008 brochure claimed that the software cost $3,000 a month for the PC version and $350 for the web-based version. In actuality, Sitelink said its prices, which varied depending on the size of a facility, were $599 to $2,400 for the PC version and $150 to $300 for the web-based version. Court documents show eMove’s web-only product cost $44.95 a month at the time.
Defense attorneys for eMove argued that the facts in the charts were true and were not misleading.
According to a pretrial order, eMove said it had instructed an employee to verify the accuracy of information in the charts before publishing the 2008 version. The employee said he obtained the information through research and “mystery shopping” on two occasions. The employee claims he confirmed the information with SiteLink’s Lampe at a trade show and with an SMD salesperson by phone.
The defense argued that there was no credible evidence that showed Sitelink had lost a single customer or that eMove had gained any customers as a result of the charts. Furthermore, the defense argued that self-storage operators do not rely solely on printed marketing materials when making business decisions.
In 2010, eMove filed its own suit against SMD in federal court in Arizona, alleging that SMD made false statements about eMove software when comparing it with SiteLink’s. The allegedly false statements were made in a fax sent by SMD to a self-storage facility in Virginia.
The eMove suit also alleged that an SMD executive made false statements about eMove to potential customers at a trade show. It later was revealed that the prospective customers actually were mystery shoppers employed by eMove. Attorneys for SMD argued that the eMove suit was filed in retaliation for SMD’s initial suit.
A federal judge dismissed the eMove suit in 2012. SMD then filed a motion to recover legal fees from eMove — a motion that eMove appealed. In a decision issued April 7, a federal appellate court upheld the payment of legal fees to SMD totaling nearly $934,000.
Photo of New Bern courthouse courtesy of Tom Bower/Flickr