CT Espresso LLC v. Lavazza Premium Coffees Corp.

Background

CT Espresso LLC purchased and resold Lavazza coffee products through its Amazon storefront, RLM Coffee. In November 2021, the defendants ordered coffee from that storefront to verify whether the Lavazza-branded products were authentic. The products were authentic, but the defendants submitted seven reports to Amazon stating that RLM Coffee was selling counterfeit Lavazza products. The defendants later withdrew the reports after a further check confirmed the products’ authenticity.

CT Espresso sued, asserting claims for breach of contract, defamation, trade libel, and tortious interference with a contract or business relations. In a September 28, 2022 opinion, the court dismissed the defamation, trade-libel, and tortious-interference claims. It concluded that the counterfeit accusations criticized CT Espresso’s products rather than CT Espresso itself, and that the trade-libel claim failed because CT Espresso had not pleaded special damages. The breach-of-contract claim was not subject to that motion and remained pending.

Motion for Reconsideration

CT Espresso moved for reconsideration of only the dismissal of its defamation claim. A motion for reconsideration may provide relief to correct a clear error, and the court found that its earlier treatment of the counterfeit accusation was mistaken. Under New York law, a statement that falsely attacks a business’s basic integrity may support a defamation claim, while a statement limited to the quality of goods or services may instead be treated as trade libel.

The court held that an accusation of counterfeiting can also sound in defamation. CT Espresso alleged that the defendants reported to Amazon that CT Espresso was selling counterfeit Lavazza products. The court found those allegations sufficient at the pleading stage because CT Espresso alleged that the statement was false, that sending the reports to Amazon published the statement to a third party, and that the statement was defamatory on its face. The court also found a plausible basis to infer negligence from the allegations that the defendants had an ongoing relationship with CT Espresso, tested the products, confirmed their authenticity through further review, and nevertheless reported that CT Espresso was selling counterfeits.

Privileges and Immunity

The defendants argued that the Amazon reports were protected by litigation privilege. The court explained that New York’s absolute litigation privilege applies to pertinent statements made by attorneys in court proceedings and can extend to quasi-judicial proceedings—proceedings with attributes similar to a court and, in relevant examples, a governmental or regulatory function. The court found that the complaint did not allege facts showing that Amazon’s process had those characteristics. The court also rejected the defendants’ argument for pre-litigation protection because the complaint did not allege that the defendants anticipated litigation or made demands or threats of litigation before submitting the reports.

The defendants separately invoked the Noerr-Pennington doctrine, which generally protects conduct aimed at influencing government decision-making. The court held that the doctrine did not apply because Amazon is not a governmental entity and the reports sought to influence Amazon’s decision, not the government’s. The court also found that Amazon’s process was not a legally required step before litigation and was not alleged to have been used as a precursor to litigation.

Disposition

The court granted CT Espresso’s October 12 motion for reconsideration and reinstated its defamation claim. CT Espresso did not seek reconsideration of the dismissal of its trade-libel or tortious-interference claims, so this opinion did not alter those dismissals.