A federal judge has dismissed a case filed by a Christian legal group against nonprofit watchdog GuideStar over its use of Southern Poverty Law Center's (SPLC) "hate group" label on its profile page.
Liberty Counsel filed the lawsuit in the U.S. District Court for the Eastern District of Virginia after Guidestar began including disclaimers at the top of the online profiles of several social conservative nonprofits indicating that they have been labeled as a hate group by the SPLC.
The conservative Christian law firm argued that the designations violated the Lanham Act, a federal trademark statute that prohibits trademark infringement and false advertising.
Judge Raymond A. Jackson, however, contended that GuideStar's decision to include the disclaimers cannot be considered a commercial use or a violation of the Lanham Act as Liberty Counsel's profile page does not solicit funds for the leading nonprofit information service.
"The Court finds that Plaintiff has not sufficiently pled a claim for a violation of the Lanham Act. Plaintiff did not sufficiently plead facts to satisfy the first element of a Lanham Act violation because the Court determines that Defendant's statement is not commercial speech," the judge stated in his ruling, as reported by The Non Profit Times.
"The Court finds that Defendant's use of SPLC's notation is not commercial speech because the notation does not fall under the type of speech that violates the Lanham Act. Defendant's review of Plaintiffs organization would fall under the laws of the First Amendment, not that of the Lanham Act," the judge added.
Mat Staver, founder and chairman of Liberty Counsel, said that his organization intends to appeal the case to the U.S. Court of Appeals for the Fourth Circuit. He contended that the opinion lacked thorough analysis of the Lanham Act.
He added that GuideStar's disclaimers were intended to harm Liberty Counsel, noting that the conservative legal firm had lost potential donations as a result of the designation.
"GuideStar's republication [of SPLC's hate groups] intended to have a commercial impact on Liberty Counsel. They had a commercial motivation to inflict a commercial harm by reducing the amount of donation and [harming the] reputation of Liberty Counsel," Staver said, citing the example of Prudential Insurance, which has stopped offering employees matching donations made to the conservative law firm.
Staver noted that his organization might also pursue defamation claims in state court in Virginia, in addition to an appeal in federal court.
Guidestar decided to remove the disclaimers from the profiles last year after receiving criticisms and alleged threats to staffers, but the nonprofit watchdog maintained that it will make the SPLC hate group designations available upon request.
In an interview last year, GuideStar CEO Jacob Herald stated the organization began incorporating SPLC's hate group labels due to the rise of "hateful rhetoric" in the U.S.
While SPLC was not named in the federal lawsuit, Staver said that Liberty Counsel is still considering whether to sue the far-left organization over the hate group label either as an individual party or on behalf of itself and others. The law firm is currently working with representatives of between 45 and 60 groups that were also designated as hate groups by the SPLC.