[Pamela Brown, Cnn Anchor:] Then three and a half years later, they received this e-mail, appearing to be from KlearGear, stating they would be fined $3,500 if the negative review wasn't taken down in 72 hours.
[Jen Palmer, Fined By Kleargear.com:] It's ridiculous that anybody would turn around and try to extort us like this, especially for doing something as simple as posting a review online.
[Brown:] But KlearGear told the Palmers they sign add way their freedom in an obscure nondisclosure clause, forbidding them from taking any action that negatively impacts kleargear.com. The Palmer's tried to take the review down, but couldn't. KlearGear then reported the $3,500 bill unpaid to a collections company.
[Palmer:] It was bad enough that when we went to get a second car, it took a month to find a bank that was willing to finance us because of the huge ding this puts on our credit.
[Brown:] They tried to reach out to settle this amicably, but never heard back from the company.
[Scott Michelman, Public Citizen Attorney:] As Jen Palmer's original review online noted, part of the problem with KlearGear's customer service is that they're difficult to contact.
[Brown:] Thus, according to the Palmers, leaving them no choice but to sue, asking the court to declare they never owed the $3,500 and are seeking compensation to be determined by a jury.
[Michelman:] Contract law isn't a game of surprise where businesses get to extort money based on terms that the customers didn't read in the fine print.
[Brown:] Let's bring in CNN legal analysts, Paul Callan and Danny Cevallos. I want to start with you, Paul. First off, I think I can speak on behalf of a lot of consumers. A lot of us don't read the term of use contract, the fine print. We probably should. A big reason is because companies can put these non- disparagement clauses in their contracts. How common is this?
[Paul Callan, Cnn Legal Analyst:] Fortunately, for consumers, it's not very common. The reason it's not common is because a company would be out of business if they did what this company has done, allegedly, to the Palmers. However, you can sign a contract reducing or eliminating your right to comment about anything. I mean, free speech, you know, they can't contract it away, saying I agree not to disparage your product. It's a good lesson for the holiday season. Even if the Palmers win, be careful. Look at the trouble they got themselves into.
[Brown:] Even if it's truthful, Palmers are saying everything they wrote was truthful. That it might have been negative but it was truthful. On that note, you look at the non-disparagement clause on this KlearGear contract. It is very broad, vague, companies saying it's up to our discretion to decide if we should fine you for a negative review. Would that be upheld in the court of law?
[Danny Cevallos, Cnn Legal Analyst:] Well, even if it isn't ultimately upheld, the downside is that they have to get to that court of law to find out whether or not it is a fair disparagement clause or not. In other words, they've been fined. They've had their information reported to a credit bureau. They've suffered all these negative consequences. The only way to vindicate themselves is to get into court. That is a long, long road. You see right away the problem with this disparagement clause. The other thing to add, by the way, is if you look on the internet archives, this disparagement clause does not appear in 2008 on this company's website. It may be the case that there never was a non-disparagement clause that didn't exist when they made the purchase.
[Brown:] Very sneaky if that is, in fact, the case here. I want to ask you, Paul, talking about this contract it seems like the Palmers have a pretty good case. You look at the fact that the wife was the one who posted the review, but she wasn't the one who purchased the items. Can they still be bound by this contract?
[Callan:] No, they can't. It's a great argument by their lawyers. What happened was, of course, the wife was very angry about it. The husband had made the purchase. She's the one who posted the comments. You buy a product and you're supposed to say to your wife, listen, this is a secret? Don't say anything about it. I don't think too many wives will listen to that advice. The more we look at this story Pam, you were covering this from the very beginning. The lesson here is, you just shouldn't do business with companies that have disparagement clauses like this. You shouldn't be buying their product. What does it say that they're so worried that you'll say something negative about their product? That's the lesson in the end. As Danny said, you don't want to wind up in court. The Palmers are going to win probably and they'll never be able to collect their damages and they will have lost in the end.
[Brown:] And, obviously, as we shared in the story, they had a ripple effect from this, with their credit being hurt and that kind of thing. Danny, don't the credit reporting companies, on that no note, have some sort of liability here?
[Cevallos:] Ultimately, no. The real liability it is defamation if a company reports a debt that is not a brood debt. The real liability is on the company. Reporting credit companies will reach out to the company reporting the debt and they rely on whatever that company, like KlearGear, ostensibly told them. Then that's a debt as far as they're concerned. I suppose if they were reckless in researching that, but they rely on the companies to report truthfully and accurately. That's what they're supposed to do.
[Callan:] They're supposed to add the consumer's claim as well, though, when they research it. So they may have some liability here too.
[Brown:] It's based on the fair credit reporting act. By the way, important to mention, we reached out to KlearGear many times and have not heard back both by e-mail and by phone. Danny Cevallos, Paul Callan, thank you for offering your analysis, as always. And in other news today, talk about an amazing rescue. Have you seen this? An LAPD bomb squad officer and two good Samaritans pulled a man out of his burning car yesterday saving his life. It all happened in a matter of seconds when a car crashed on a major Los Angeles freeway. The driver is reported to be in the hospital but is said to be doing OK today. McDonald's has taken down its controversial employee website, the one that encouraged workers to skip fast-food, get a second job and not pay for heat. The site is offline with the message saying it's being upgraded. The site is being re-evaluated because it caused unwarranted scrutiny. Coming up right here on LEGAL VIEW, we hate to sound so cliche, but something in Seattle really is stuck between a rock and a hard place, or something, and it's standing in the way of building a massive new tunnel. Don't you love the sound effects that go along with this? What is this mystery object? We'll look into it after this break.