June 10, 2013 12:06pm PT by Eriq Gardner
Kickstarter Fights Lawsuit After Pulling Plug on Book Project (Exclusive)
Ever wonder what sort of legal trouble would be in store for Kickstarter if the upstart platform decided to terminate service for a user in the midst of a big fundraising campaign? Wonder no longer because the subject is front-and-center in a pending court dispute.
The plaintiffs in the case are Kristin "M.K." Ducote and her husband and professional race car driver, Chapman Ducote. M.K. is the author of a book, entitled Naked Paddock, about life, love and drama in the world of professional motorsports. At the end of 2012, the Ducotes decided to use Kickstarter's platform to raise funds they say were needed to publish the book.
Because Chapman is a celebrity race car driver, says a lawsuit that later followed, the two were invited to appear on "Kourtney and Khloe Kardashian Hit Miami" (sic). The Ducotes hoped that the reality TV appearance timed to the launch of their Kickstarter project would bring great rewards. But in January, after Kickstarter approved the initial project, and five days after it launched on the site, Kickstarter allegedly hit the brakes.
"The unexpected and unexplained actions by Kickstarter in suspending the Project on the website at the same time the Kardashian appearances were occurring on television was an unexpected and huge shock," said the lawsuit first filed in Florida state court in April. "It is almost as if Kickstarter decided to pull the plug at the exact moment they knew MK, Ducote and [their publisher] War Chest needed them the most."
Late last week, Kickstarter answered the lawsuit and explained why a judge should throw it out.
The Ducotes are suing for breach of contract, fraudulent inducement and unjust enrichment and are seeking more than $1 million in lost sales for the book. The complaint states that the suspension "caused damage to Plaintiffs' reputation by its implication to the tens of thousands of people that were marketed to view their Project, that their product, the novel Naked Paddock, was somehow fraudulent or nonexistent or unavailable."
But Kickstarter also gives reasons why it believes the lawsuit fails.
As for the allegation that Kickstarter fraudulently induced the Ducotes into signing up based on the advisement that it had the capability of providing a forum to raise funds, Kickstarter responds, "None of these supposed 'misrepresentations' are actionable. At best, the first set of statements constitutes inactionable expressions of future expectations and opinion based on past performance, which Plaintiffs do not allege with particularity to be false."
As far as we know, this is just the second lawsuit that Kickstarter has faced over a specific project. The other dispute involved the allegation that a creator's project infringed upon some company's patent. Recently, the parties in that case requested a stay of the proceedings in an effort to resolve the dispute through settlement discussions. This latest dispute might be the first lawsuit testing a fundraising campaign gone bad.
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