A lengthy court battle between political software providers Aristotle and NGP is finally over. A federal judge dismissed both Aristotle’s false advertising claim and a counterclaim from NGP earlier this month, but the court’s findings were just unsealed late last week.
The bitter legal fight between the two firms and their respective founders—John Phillips of Aristotle and Nathaniel Pearlman of NGP—centered on Aristotle’s claim that NGP illegally misrepresented itself as a purely Democratic firm in its marketing materials, even while the company’s software was used by other corporate and trade association PACs that donated to Republicans.
The lawsuit culminated in a bench trial earlier this year and in an opinion unsealed Thursday, the judge concluded Aristotle was unable to prove NGP’s advertising claims were false. The 43 page opinion is worth a full read for those who have been following the case. You can read the court's full opinion here .
Aristotle released a statement last week after the judge’s decision was revealed, but before the court’s opinion was publicly available. In the statement, Aristotle CEO John Phillips harkened back to documents that were unsealed in the case last summer, detailing NGP’s arrangement with Capitol Advantage, which was at the heart of the lawsuit.
The re-seller agreement permitted Capitol Advantage to license NGP software to other trade associations and 527s. The re-branded software was labeled “PACBuilder” and as the court notes in materials unsealed Thursday, “In the 2006 election cycle, thirteen individual corporate and trade association PACs using PACBuilder each gave more of its money to Republicans than to Democrats.”
The dispute, however, was over whether PACBuilder’s association clients should be considered direct clients of NGP. Aristotle argued they were, claiming that made NGP’s description of itself as providing services to “Democrats and their allies” false.
Following a lengthy exploration of the term “ally” in its opinion, the court concluded that Republican giving PACs can “in a strict literal sense" be considered allies of both Republicans and Democrats as long as they contribute to both parties. Therefore the court didn't find NGP's advertising claims to be literally false and said there wasn't enough evidence to prove the firm has been intentionally deceptive in its statements.
NGP released a statement late Thursday labeling the court’s decision a win and drawing attention to other aspects of the opinion, which reference focus groups and other market research conducted by Aristotle.
“Aristotle has now lost in the courtroom, just as it lost in the Democratic marketplace,” NGP-VAN’s Stu Trevelyan said in the statement. “NGP VAN is a proudly Democratic firm.”
Aristotle didn’t comment beyond the statement it released earlier in the month.
On Aristotle’s claims, the court wrote: “What evidence there is at best provides weak anecdotal evidence that a few specific persons might have felt deceived or confused by NGP’s ads, but for all the Court knows, Aristotle’s obviously slanted advertisements that triggered many such reactions could have been a or the source of that confusion.”
On NGP’s counterclaim that Aristotle's materials targeted at NGP's client base made false claims about its practices, the court wrote: “The claim fails for the same reasons as Aristotle’s claims failed. NGP offered no credible evidence of deceptive intent related to this ad, and no evidence that customers were likely deceived or confused by it.”
In the opinion's conclusion, the judge actually laments the ongoing fight between Phillips and Pearlman, chiding them both for the "bitter" legal battle.
“Mr. Phillips and Mr. Pearlman built their competitive and successful companies from the ground up. For that they should be congratulated," the opinion reads. "Unfortunately, the competitive fight between them has become so bitter and vigorous that it has spilled out of the marketplace onto the field of the courtroom."