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Federal judge rules against online retailer's $3,500 charge for Utah couple's negative review

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SALT LAKE CITY - A federal judge has ruled against an online retailer that tried to force a Utah couple to pay $3,500 over a critical online review.

U.S. District Judge Dee Benson entered a default judgment on April 30 in favour of John and Jen Palmer of Layton after KlearGear.com failed to respond to the couple's lawsuit.

Benson ruled the Palmers owe nothing to KlearGear.com, but the gadget retailer owes them a sum to be determined at a court hearing in June, The Salt Lake Tribune reported (http://bit.ly/1lFpPjf ).

KlearGear.com officials did not immediately respond to a request for comment Sunday.

The couple, in their complaint filed in December, say John Palmer never received two gifts he ordered for his wife, and Jen Palmer then posted a critical review about the company's customer service on RipoffReport.com.

Michigan-based KlearGear.com told the Palmers in 2012 that they had 72 hours to remove the negative review or pay $3,500 because they violated a "non-disparagement clause" in its terms of use with customers, the lawsuit said.

The couple refused, saying the clause was not in effect when the items were purchased and the terms violated the First Amendment. They also note RipoffReport.com has a policy of not removing posted reviews.

KlearGear.com notified credit bureaus of the couple's failure to pay, which led to a poor credit rating that delayed a car loan and prevented them from securing a loan for a broken furnace, according to the suit.

Benson, in his order, said the retailer is liable to the Palmers for defamation, intentional infliction of emotional distress and violation of the Fair Credit Reporting Act.

The couple's attorney, Scott Michelman of the Washington, D.C.-based non-profit Public Citizen Litigation Group, has said the case is about protecting consumers' rights to free speech.

KlearGear.com sells computer-themed gifts, apparel, gadgets and private label merchandise, according to its website.

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Information from: The Salt Lake Tribune, http://www.sltrib.com

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