Pissed Consumer Sues Reputation Management Firms Over Their Bogus Lawsuit/Fake Defendant/Takedown Scams

from the well,-here-we-go... dept

Wed, Oct 26th 2016 11:45am — Mike Masnick

In the last few weeks, we've written a few posts about Richart Ruddie's company, Profile Defenders, which appears to be "improving reputations" online by filing bogus defamation lawsuits, finding a bogus made-up "defendant" to "admit" to posting defamatory information, reaching a "settlement" and getting a court order. The whole scheme is about getting that court order, which is then sent on to Google and others (mainly Google). The whole point: if Google sees a court order saying that some content is defamatory, it will de-index that page. That the whole process to get that court order is a total sham is basically ignored. That may be changing. We were just noting that some of Profile Defenders' cases are in trouble, and at least one has had the court order vacated.

Of course, it appears that Ruddie and Profile Defenders are not the only ones playing this game of judicial fraud. We wrote about a bunch of similar cases back in March that were targeting the online review site Pissed Consumer and some other review sites. At the time, Pissed Consumer had found 11 such lawsuits. In that article, we noted some of the lawyers and firms that appeared to be either involved or benefiting from these cases. And it appears that Pissed Consumer has had enough -- and has sued (represented by Marc Randazaa).

You can read the full complaint, which is an interesting read. It goes into great detail on each of the different cases that it's suing over, but the introduction to the complaint lays out the basics. I'm reposting it in full (minus some citations) here because it's a good summary:

This case involves a creative solution to a common frustration for many businesses, who do not like negative reviews that are published about them on the Internet. However, removing consumer reviews from the Internet is a difficult process given that they are protected by the First Amendment.

Nevada Corporate Headquarters, has gone to great lengths to attempt to suppress consumer reviews in the past. It has filed at least one SLAPP suit in Nevada seeking injunctive relief to censor those negative reviews. In that case, Nevada Corporate Headquarters suffered a resounding loss when they were hit with an anti-SLAPP order.... They also lost at summary judgment in a SLAPP-back suit. That action resulted in a significant judgment for attorney fees and costs....

Undaunted by these set-backs, Nevada Corporate Headquarters has now conspired with other companies and individuals to create a scam whereby they suppress negative reviews from the Internet, while evading any First Amendment or due process considerations. This scam also allows them to avoid the risk of another anti-SLAPP attorney fee award.

Several other businesses and professionals who have been the subject of negative reviews online have also employed the same fraudulent machinery as Nevada Corporate Headquarters, as a means of removing this content while evading detection and liability.

The scam is not all that complicated. Google will remove search engine results from its well-known search engine if it is provided with a court order determining that the information is indeed defamatory.

However, when Nevada Corporate Headquarters sued consumer review websites in the past, it was severely disappointed. (See Exhibits 1 & 2.) Therefore, they needed to concoct a new censorship scam. So they used a stooge plaintiff, ZCS Inc. ("ZCS"), to sue a stooge defendant, Collins Mattos ("Mattos").

Defendant Doe Corporations, so called “reputation management companies,” conceived and organized the scam as an alternative way to remove negative posts in lieu of undergoing an adversarial proceeding. Several other businesses and professionals have contacted these “reputation management companies,” which have used similar schemes to remove negative consumer reviews about them.

The other conspirators engaged attorneys Mark W. Lapham ("Lapham") and Owen T. Mascott (“Mascott”) to file sham lawsuits either by the subjects of the negative reviews or by corporations that had no interest in the allegedly defamatory statements, against a defendant who most certainly was not the party that published the allegedly defamatory statements, and the parties immediately stipulated to a judgment of injunctive relief, so the conspirators could provide the order to Google and other search engines, thus achieving the goal of deindexing all pages containing negative reviews.

At first blush, Defendants’ scam appears rather brilliant but incredibly unethical. Now that Plaintiff has uncovered and exposed Defendants’ unlawful deeds, Consumer Opinion LLC respectfully requests that this Court discipline them for those misdeeds.

The rest of the filing goes into a lot more details about these court orders, obtained under false pretenses.

The actual claims in the case are for unlawful, unfair and fraudulent business practices, abuse of process and civil conspiracy. As we've seen in other cases, actually getting lawyers disciplined for such bad behavior is actually fairly rare. But Randazza has a history of being a bulldog about these kinds of things (remember Righthaven?). This should be an interesting case to follow.

001 Complaint (PDF)001 Complaint (Text)

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Filed Under: court orders, defamation, fake lawsuits, mark lapham, owen mascott, reputation management, richart ruddie, takedowns
Companies: nevada corporate headquarters, pissed consumer

36 Comments

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David, 26 Oct 2016 @ 11:58am

Don't piss off judges.
You can get away stuff sometimes, as long as you don't piss off judges. Making judges look like fools is not something I'd think they will take lightly.

I'd personally expect lawyers to lose licenses, if not actually serve time, for something like this.
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PlagueSD (profile), 26 Oct 2016 @ 12:20pm

A little thing called Perjury
Perjury - n. the offense of willfully telling an untruth in a court after having taken an oath or affirmation.

synonyms: lying under oath, giving false evidence/testimony, making false statements, willful falsehood
"she was found guilty of perjury"

I'd expect to see jail time and/or licenses lost. Although, not sure if anyone is under "oath" in these courts. Maybe that needs to change.
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Anonymous Coward, 26 Oct 2016 @ 12:30pm

You're going to be able to see this ass kicking from space... Everyone stocked up on popcorn? This one is going to be good!
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Ryunosuke (profile), 26 Oct 2016 @ 12:30pm

*munches TechDirt Popcorn(tm)*

I think i seen this movie a few years ago, didn't it star John Steele and Paul Hansmeier?
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I.T. Guy, 26 Oct 2016 @ 12:38pm

Re:
It starred Barbra Streisand... they were just co-stars.
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PlagueSD (profile), 26 Oct 2016 @ 1:47pm

Re:
Techdirt popcorn™. You should at least know the alt-code for "tm" :)
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Anonymous Coward, 26 Oct 2016 @ 1:47pm

Re:
I think mikes missing a hell of an opportunity to sell TechDirt(TM) branded popcorn.
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jayhawkeye2 (profile), 26 Oct 2016 @ 1:58pm

Unsurprisingly Mark W. Lapham has had quite a discipline history with the state bar of California.

http://members.calbar.ca.gov/fal/Member/Detail/146352

http://www.calbarjournal.com/Februar y2016/AttorneyDiscipline/SuspensionsProbation.aspx#2
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scotts13 (profile), 26 Oct 2016 @ 2:10pm

Re: Don't piss off judges.
That's what my grandfather used to say - "Whatever you do, NEVER piss off a judge!" He was a Philadelphia cop.
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Anonymous Coward, 26 Oct 2016 @ 2:13pm

Re: A little thing called Perjury
It's kind of like Prenda. They happen to have engaged in fraud and will likely get in trouble, but they've revealed a real problem: apparently it's possible for a private settlement to affect some unrelated party. It's like if I disagreed with my neighbor about the property line, and we came up with a settlement that involved extending our backyards onto a third neighbor's land. No court order should apply to Google unless they were a defendent or plaintiff.

(Similarly, Prenda engaged in copyright-related fraud; but a legitimate copyright holder really could sue for the things Prenda sued for. The defendents got out of trouble on a technicality, basically: a "properly formatted" lawsuit could have stuck.)
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Anonymous Coward, 26 Oct 2016 @ 2:23pm

Re: Re:

You should at least know the alt-code for "tm" :)

Much easier if you set up a Compose key: Compose T M
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Anonymous Coward, 26 Oct 2016 @ 2:26pm

Re: A little thing called Perjury
Although it *is* a crime, perjury is one of those crimes that seems to be rarely punished. Unless you're one of the little people. Then they'll throw the book at you.
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Eldakka (profile), 26 Oct 2016 @ 4:17pm

Re: A little thing called Perjury
The lawyers providing representation in cases do not take oaths. Nothing a lawyer says as part of their cases as representatives or the palintiff of defendent is said under oath. Otherwise they'd all be committing perjury when they make their opening statements "We will prove/disprove that it did/did not happen".

It's only witnesses called to the stand that take the oaths, and if a case, as in these examples, never actually goes to trial, no-one takes any oaths during the entire process.

I'm not saying it's not a fraud on the court, misrepresentation, but what it is not in any way, shape or form is perjury.
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Norahc (profile), 26 Oct 2016 @ 4:21pm

Discovery
Discovery on this is going to be real interesting and a major cause of the upcoming popcorn shortage. They're going to have to explain how they identified the so called defamation defendants without any information from the website such as IP address or email address.
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That One Guy (profile), 26 Oct 2016 @ 6:05pm

I've love to be proven wrong... but I don't expect to be
Discovery? Please, if copyright trolls have taught us anything it's that when those that (ab)use the legal system this way have a case go against them they drop it as fast as possible.

There is no way they'll stick around long enough for details like that to come out unless a judge forces them to, which isn't likely to be the case. Instead they'll just drop the case(s) and move on to a new judge to try the trick again.
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Norahc (profile), 26 Oct 2016 @ 6:29pm

Except the parties accused of abusing the system are the defendants in this case. That means they don't get to cut and run with a voluntary dismissal when things get ugly.
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That One Guy (profile), 26 Oct 2016 @ 7:12pm

Re:
No, both parties are in on the scam, the 'defendant' for not existing and/or signing bogus 'admissions of guilt' and the ones bringing the lawsuit for knowingly setting up a bogus 'lawsuit'. The judge is basically the only one not involved in the scam(knowingly at least), which means unless they nail those responsible to the floor and demand answers it's easy enough to 'cut and run' and try elsewhere.
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Anonymous Coward, 26 Oct 2016 @ 9:04pm

Re: Re: A little thing called Perjury

It's only witnesses called to the stand that take the oaths...

No, it also includes willfully making an untrue statement in any declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, United States Code.
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Clayton E. Cramer, 26 Oct 2016 @ 9:20pm

Re: I've love to be proven wrong... but I don't expect to be
But not before causing victims sleepless nights and legal fees. I was a Righthaven victim told to settle because even winning would cost $30K.
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Anonymous Coward, 26 Oct 2016 @ 10:21pm

Re: Re:
One Guy? Ya missed a stitch there...

"this case" in the GP is Pissed Consumer's case against "Corporations Doe", rather than "fictitious plaintiff vs fictitious defendant".
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Anonymous Coward, 26 Oct 2016 @ 10:53pm

"Reputation Management", sounds like "Anger Management" to me. I really need to put a few lawyers on retainer and open an office. Sorry about the quotation marks, I couldn't help myself.
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DB (profile), 26 Oct 2016 @ 10:53pm

Jurisdiction?
I expect that the first response will be a question of jurisdiction. The venue isn't proper because the original plaintiff or defendant does not live in the jurisdiction.

That's an advantage of using fictional parties in different jurisdictions. It's always the wrong venue.

I imagine attorney-client privilege will be thrown on the wall, but I can't see that sticking.

Questioning standing does have a chance of being considered, but I expect that a judge can find a sufficient relationship to move into basic discovery, especially if the judge suspects fraud.
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That Anonymous Coward (profile), 27 Oct 2016 @ 1:33am

the 'Bye Felicia' .gif goes here.
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Anonymous Coward, 27 Oct 2016 @ 4:10am

Does anyone have the locations of the exhibits?
They're referenced in the filing, but I haven't been able to find them yet. (Sorry if that's clueless, I haven't had a lot of coffee yet this morning.)
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Anonymous Coward, 27 Oct 2016 @ 4:58am

If you think you have a reputation that needs to be managed, then perhaps you have a problem ... and it is not your reputation.
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Anonymous Coward, 27 Oct 2016 @ 6:38am

Re:
> Sorry about the quotation marks, I couldn't help myself.

Seemed appropriate to me.
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Anonymous Coward, 27 Oct 2016 @ 6:40am

Re: Jurisdiction?
> but I expect that a judge can find a sufficient relationship to move into basic discovery, especially if the judge suspects fraud.

Judges can pretty much do what they want in a common law system.
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Anonymous Coward, 27 Oct 2016 @ 7:09am

Re:
Using reputation management happens because those who use it cannot control their anger, especially those who get angry over the truth hurting their business.
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Norahc (profile), 27 Oct 2016 @ 8:57am

Re: Jurisdiction?
Reading the complaint, it seems like Randazza covered that question pretty well and it won't leave them a lot of wiggle room.
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Ninja (profile), 27 Oct 2016 @ 9:16am

Usually when you see Randazza you can expect a good copyright beating in a good sense. I expect these morons go Prenda sometime soon.
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Jay, 27 Oct 2016 @ 3:05pm

Right to be forgotten USA
So now PC is getting greedy and this will cause them to end up shutting down their scam site or lose a lot of their traffic because this attention will cause the Right to be forgotten to come to America and everybody whos on their site will want to get off. Really stupid of PC GREED KILLS YOU TRUMPer.
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That One Guy (profile), 27 Oct 2016 @ 5:08pm

Re: Re: Re:
Ah, so it is. I was reading it on a wider scope of the practice in general, not realizing at the time of my comments that his/her comment was focused on this specific case. That would indeed make it more difficult for the scum to wiggle out unscathed, in which case hopefully Randazaa nails them to the wall as a warning to others.
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Norahc, 27 Oct 2016 @ 6:03pm

Re: Right to be forgotten USA
Funny, I don't remember seeing a right to be forgotten in the Bill of Rights. Even if someone tried to bring it here, it would face serious First Amendment challenges.

But I'm curious as to how you determined that PC was being greedy by protecting their interests these possibly bogus defamation suits.

Then again I'm still trying to figure out why you decided that the issue needed to be tied into Trump. Seems like a long walk off a short pier type of connection.
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Anonymous Coward, 28 Oct 2016 @ 6:52am

Re: Re: Right to be forgotten USA
> ...it would face serious First Amendment challenges.

Unfortunately, the Constitution is on it's way out.
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Eldakka (profile), 3 Nov 2016 @ 11:37pm

Re: Re: Re: A little thing called Perjury
Correct, but since that us not relevant to the calls of 'perjury" being made about these lawyers, I did not think it relevant on the point that the lawyers presenting a case are not committing perjury.
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Mark, 6 Oct 2017 @ 2:39pm

Pissed Consumer Deserves It
This website itself is a scam but complaining about scams. You can go on there and falsely write review and claim anything you want. They are worried about 1st amendment rights but yet will allow you to remove your companies reviews.... If you pay them to. That sir is a scam, especially when a company can prove that it is false. Still you must pay. If they were so worried about the 1st amendment they would not allow things to be removed for monetary gain. Scams complaining about scams....
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