AUSTIN, Texas (CN) — A federal judge refused to dismiss claims that a technology company’s allegedly defamatory letters to Google and Apple thwarted the rollout of a competitor’s crack at the rental car toll-processing market.
The defendant Highway Toll Administration LLC claims to be the largest provider of toll processing services in the rental car industry. It processes about 3.7 million tolls a year across the country, mostly through its two primary customers: Avis Budget Group and Enterprise Holdings, according to court documents.
Austin-based BancPass competes with HTA through its downloadable smartphone application PToll.
BancPass claims, among other things, that HTA tortiously interfered with its business and defamed it by pressuring Apple and Google to remove PToll from their app stores in 2014 —a request with which Google allegedly complied, briefly.
Neither Apple nor Google is a party to the lawsuit.
U.S. District Judge Sam Sparks on Thursday rejected HTA’s request for dismissal, allowing BancPass’s defamation claims to proceed to trial.
Sparks did not buy HTA’s argument that it was shielded by immunity because the letters were written before a legal action and merely expressed a legal opinion.
“The court declines to extend absolute immunity from suit for defamation to unsolicited letters mailed to third parties, neither law enforcement nor media, by an aggrieved entity neither the target of any investigation nor an attorney advocating on behalf of a client,” Sparks wrote in his Aug. 25 ruling.
“Here, the letters contain no such explicit statements regarding plans to file suit and were made to corporate entities, not the media.”
PToll customers can pay tolls using smartphones by taking photos of their license plate and choosing a payment method, analogous to having a “tag” or “pass” from a tolling authority.
HTA contracts directly with rental car companies and uses two methods: radio-frequency identification toll tags, and registration of rental car license plate numbers.
HTA says on its website that it started providing services in 2002 and has grown into “the largest provider of toll services for the rental car industry.”
Sparks judge agreed with BancPass’s argument that it does not tortiously interfere with rental agreements between Avis, Enterprise and their customers.
“The court finds BancPass does not induce rental car customers to breach their obligations under their rental contracts by using PToll,” Sparks wrote.
HTA filed notice that it will appeal to the Fifth Circuit but Sparks denied its request to halt proceedings, calling the motion “a tactic designed to avoid trial,” which has been set for September in Austin.
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