Sorry, You Can't Abuse Copyright Law To Make A Negative Review Disappear

from the copyright-as-censorship dept

Over four years ago, we first wrote about the bizarre and convoluted attempt by a lawyer named Richard Goren to remove a negative review on Ripoff Report. As we noted, he may very well have a totally legitimate defamation claim against the guy who wrote the review, but it's the events that happened later that were questionable. Goren did sue the author of the post -- "Christian Dupont" -- for defamation and won a default judgment when Dupont ignored the lawsuit. But here's where things get problematic: the state court where the case was brought, as part of the default judgment, assigned the copyright on the posts to Goren. He then turned around and claimed that the post on Ripoff Report was infringing on his copyright and sued the company behind Ripoff Report, Xcentric (he also, somewhat bizarrely, added Dupont as a plaintiff in the case alongside himself -- something Ripoff Report claims was invalid). It also tossed in a bunch of other claims, including libel and intentional interference with prospective contractual relations.

The case has spent four years winding through the courts, and the 1st Circuit appeals court has now rejected Goren's argument, and done so fairly comprehensively. For the non-copyright claims, it was quite easy to dismiss them under CDA 230, as Ripoff Report was not the publisher of the works, and therefore, not liable for what was said -- and cites a number of well known cases highlighting how this is totally uncontroversial, including our own case as yet more evidence of the First Circuit recognizing the broad protection of CDA 230:

As we explained in Lycos, immunity under § 230 should be "broadly construed." 478 F.3d at 418-19. In fact, we noted there that Congress has expressed a "policy choice . . . not to deter harmful online speech through the . . . route of imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages." Id. at 418(quoting Zeran v. Am. Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997))(omissions in original). Given that legislative policy choice, we do not see how we can construe the CDA's definition of an ICP -- which provides that an ICP is a "person or entity that is responsible . . . for the creation or development of information[,]" 47 U.S.C. § 230(f)(3) -- to encompass Xcentric in this case.

Such a construction of this statutory definition of an ICP would flout Congress's intent by wrongly preventing an ICS like Xcentric from claiming immunity. Lycos, 478 F.3d at 418. As the plaintiffs recognize, Xcentric did not alter the content of the information DuPont posted such that Xcentric could be said to have been "responsible for . . . creat[ing] or develop[ing]" that content by reason of having actually authored it, whether in whole or in part. In addition, as the District Court found, nothing in the amended complaint indicates that Xcentric, simply by holding itself out as the copyright holder of the postings or by directing search engines to cache DuPont's postings on their websites, "specifically encourage[d]" the content set forth in DuPont's postings.

In fact, a sister circuit has rejected the view that an ICS, by merely providing such direction to search engines with respect to information the ICS has not altered, becomes an ICP of that information. See Kimzey v. Yelp! Inc., 836 F.3d 1263, 1270- 71 (9th Cir. 2016) ("Yelp is not liable for disseminating . . . [user-generated] content in essentially the same format to a search engine, as this action does not change the origin of the third-party content." (citing Ascentive, LLC v. Op. Corp., 842 F. Supp. 2d 450, 476 (E.D.N.Y. 2011))); see also Ayyadurai v. Floor64, Inc., No. 17-10011-FDS, 2017 WL 3896668, *17 (D. Mass. Sept. 6, 2017) (analyzing cases from other circuits which determined that "republishing and commenting upon user generated content, does not constitute 'creation or development.'" (citation omitted)). And we do not see why that conclusion should differ if the ICS also represents that it holds the copyright. Nor are we aware of any precedent that requires a contrary conclusion. Accordingly, we affirm the District Court's ruling on the motion to dismiss.

On to the copyright claims. The issue here is that when first posted, Ripoff Report required Dupont to agree to terms saying that anything you posted you were officially licensing to Ripoff Report, and that license was "irrevocable." This one seems like it should be easy. When the content was posted, an irrevocable license was granted, and thus even if the copyright later changes hands, as in this case, it's not infringing to keep the content up. To argue against this, Goren claimed that because it was a standard clickthrough license, it was not a valid license that Dupont had signed, first because there was no "consideration" given to the poster as required for a license to be valid. The court, correctly, rejects this argument:

The problem with this argument, however, is that, even if consideration is necessary in order for a party to grant an irrevocable nonexclusive license... performance can itself constitute consideration sufficient to establish a binding contract. And, in this case, the plaintiffs concede that Xcentric did actually post the reports at issue. Thus, given that performance, the plaintiffs offer no authority or persuasive argument as to why there is insufficient consideration for the conveyance of the irrevocable nonexclusive license in this case.

The next argument feels even more desperate. Goren argued that such an irrevocable license can't be valid because it's bad public policy, because libel is bad. The argument is only marginally more sophisticated than that, and the court again, is not impressed:

But, while the plaintiffs contend that there is a "strong public policy against per se libel[,]" the plaintiffs offer no basis for concluding that this public policy provides a reason to hold the nonexclusive license itself invalid. The fact that one holds such a license does not in and of itself protect one from liability for libeling another. Furthermore, even assuming that DuPont's postings were per se libelous, no aspect of copyright law protects the holder of such a license from liability for libel, and nothing in the District Court's opinion suggests otherwise. Thus, the plaintiffs' assertion that there is a public policy against per se libel fails to show that this nonexclusive license may not be enforced.

There were a few other aspects of the case (including some confusion over the lower court's ruling and whether or not it thought the license actually transferred the copyright itself to Xcentric), but on the key issues, things turned out basically exactly as we expected four years ago. CDA 230 protects against blaming the platform for the user's speech, and you can't worm your way around that by convincing a court in a default judgment to hand over the copyrights and then claim infringement over properly licensed content.

But there is one other important point here. Goren also has to pay Xcentric/Ripoff Report over $120,000 in legal fees and costs. In copyright cases, awarding attorneys fees is more common than in many other types of cases. The Supreme Court recognized this back in its Fogerty ruling in 1994, which it reinforced just last year in one of the Kirtsaeng cases. While there are specifics to the standard, the short version is that if the court thinks you're abusing the judicial system with your copyright case, not only do you lose, but you pay the other side's legal fees. And the appeals court agreed with the lower court that this clearly applied to this case, and pointed out that the district court properly analyzed the Fogerty factors -- and thus, Goren's little adventure into censorship-by-copyright, with a slight detour into default judgment land, is not just a failure, but a fairly costly one.

Filed Under: cda 230, christian dupont, copyright, defamation, reviews, richard goren
Companies: ripoff report, small justice, xcentric

EFF, Public Citizen Enter Legal Battle That Started With Defamation But Is Somehow Now All About Copyright

from the the-Section-230-sneak-attack dept

Copyright is supposed to be a limited-use protection for creative works. The "limited" part went away with endless term extensions and auto-copyright for any creation attached to a "fixed medium." These days, copyright is the magical cure-all that doesn't actually cure anything. It's a weapon to be wielded dishonestly and inelegantly against the ignorant, in hopes of limiting speech to only what IP abusers like.

A lawsuit over a negative review hosted at Ripoff Report began with an all-too-familiar tactic: an attempt to route around Section 230 protections by claiming copyright infringement. The chain of events leading up to the bogus copyright claim is all sorts of problematic.

The case arose from a posting on a gripe site called Ripoff Report that recites a litany of insults and complaints written by Christopher Dupont against Massachusetts lawyer Richard Goren. Goren sued for defamation, and Dupont never showed up to defend the suit, so the court issued a "default judgment" in favor of Goren.1

Here's where things get odd. As part of the default judgment, Goren asked for and received a court order purporting to transfer Dupont's ownership of his copyright in the post to Goren. Goren and his company Small Justice then sued Ripoff Report's parent company Xcentric for copyright infringement.

The default judgment transferring copyright is indeed odd, as it has nothing to do with relief from defamation. The judgment simply should have resulted in a court order directed at Dupont to remove the review. (It's a default judgment so the question of whether or not the review is truly defamatory hasn't been explored, but...)

Ripoff Report isn't really helping matters with its policies. For one, it refuses to take down reviews for almost any reason, while also allowing entities to purchase services like statement retractions and the burial of negative reviews. It also prevents users from deleting posted complaints, presumably to head off legal threats issued by criticized parties. This doesn't do much for users who might delete something when threatened, but it also lets those who issue bogus threats know that this tactic won't work here.

Ripoff Report's copyright claim to the disputed review isn't much better than the lawyer's post-judgment claim. Anyone posting a complaint to Ripoff Report is forced to click through an "agreement" that hands over the rights to the complaint to Xcentric.

Unfortunately, Xcentric's legal theories haven't all been good for users, either: Xcentric claimed that it, in fact, is the true owner of the copyright in content posted to its site, not the users. The argument was based on the fine print to which users "agree" when they post content, which says that Xcentric gains an "exclusive license" to the content. It is a quirk of copyright law that this exclusive license language is actually code for transferring ownership of the copyright.

The EFF and Public Citizen argue against this "agreement," as well as Goren's abuse of IP protections, in its submitted brief [PDF]. In it, they make the point that Xcentric/Ripoff Report have a non-exclusive license to host users' reviews, rather than being in complete control of the content. While this may seem more favorable to the plaintiff and his infringement claim, it also insulates Xcentric from being sued for copyright infringement.

In contrast, users do clearly intend to give Xcentric permission to host the content, and understand that permission cannot be revoked. This is called an irrevocable, non-exclusive license, and in this case granting such a license to Xcentric advances the user's interest in censorship-resistant publishing on Ripoff Report and does not restrict their freedom to repost elsewhere. Therefore, even if Goren did obtain ownership of the copyright, Xcentric would not be liable because it has permission to host the content, and that permission cannot be retracted.

This doesn't mean any of the parties composing the brief are supportive of Ripoff Report's copyright grab. Public Citizen's Paul Alan Levy (who contributed to the amicus brief) sums it up this way in his post on the lawsuit:

In lay terms, the terms of service are themselves a ripoff.

This explains why Ripoff Report wants the court to bypass any examination of its browsewrap "agreement" when considering the amicus brief, despite the fact that it would help defend it against bogus infringement lawsuits like Goren's.

Abusing IP law is often the path of least resistance. And that is true of Ripoff Report just as much as it is for the aggrieved lawyer.

Those who wish to censor will try to use whatever area of law has the weakest protections for free speech. We encourage the First Circuit and other courts to bolster speech protections in the copyright realm, to resist attempts to dress up other claims as copyright infringement in order to censor speech, and to look askance at clickthrough "contracts" that compromise users' freedom.

Fortunately, Ripoff Report has now decided -- after the submission of this amicus brief -- to revamp this part of its terms of service. Paul Alan Levy notes that the company (Xcentric) should be applauded for taking this step, but perhaps not sent a round of drinks on the house.

In a comment posted yesterday to my blog post last week about an amicus brief that Public Citizen and EFF filed in the First Circuit, Ripoff Report founder Ed Magedson announced that his company is going to modify the browsewrap agreement that it has been imposing on users, whereby the company purported to obtain an exclusive license to carry reviewers’ critical content. This is progress for which that company deserves praise.

Progress, yes. But Xcentric still asserts its control of the copyright, albeit now in nonexclusive form. Magedson claims this control is needed to battle scraper sites, and will never (and has never) been used to go after site users. But Levy is not so sure this "protection" is actually necessary.

Indeed, when I pressed Magedson in a conversation after he made his comment, it seemed to me that the justification for taking copyright was two-fold – that scrapers take traffic from his web site, and that scrapers make it less valuable for companies to buy into the “Corporate Advocacy Program.” Neither of those arguments suggests that there is any reason why the interests of consumers who write reviews on Ripoff Report are advanced by the taking copyright ownership away from them.

With the modification to the terms of use in place, it's likely Xcentric/Ripoff Report will be able to sidestep any additiona judicial scrutiny as this case moves forward.

Filed Under: copyright, copyright assignment, defamation, reviews, section 230
Companies: ripoff report, small justice, xcentric

Court Order Takes Another Stab At Stripping Away Ripoff Report's Section 230 Protections

from the and-the-entity-doing-the-most-damage-to-section-230-is... dept

If anyone's going to succeed in carving a slice out of Section 230 protections, it's probably not going to be law profs and their terrible revenge porn legislation proposals. It will be Xcentric/Ripoff Report, a company that greatly benefits from these protections, but seems intent on muddying the third-party liability waters with questionable actions.

Eric Goldman covers yet another lawsuit involving Xcentric, one that could potentially cause some problems for thousands of other websites and platforms, thanks to lousy 10th Circuit precedent and the presiding judge's less-than-impressed take on Ripoff Report's tactics. Goldman quotes a fair bit of the order denying Xcentric's motion to reconsider its earlier (denied) motion to dismiss, pointing out the dubious precedent the court is relying on, as well as the inferences it draws from various Ripoff Report actions and statements.

First off, the court refers to 2009's FTC vs. Accusearch decision, which contains one of the district's more dubious Section 230 rulings.

Xcentric’s motion fails on the merits. The controlling authority for the interpretation of the CDA in the Tenth Circuit is FTC v. Accusearch Inc., 570 F.3d 1187 (10th Cir. 2009). Notwithstanding Xcentric’s claim that the Tenth Circuit was haphazard in its language, the Court stated: “We therefore conclude that a service provider is ‘responsible’ for the development of offensive content only if it in some way specifically encourages development of what is offensive about the content.”

The court came to the right decision then, but for the wrong reasons. Accusearch (aka, Akiba) was selling illicitly-obtained phone records, something that was clearly illegal. The court decided this implicated Section 230, thanks to Akiba raising it as a defense. It argued it was only the conduit between buyers and sellers and did no collection of phone records itself. This was partly true. But Akiba did more than act as an Amazon or Ebay of phone records. It directly sold records provided by third parties. This should have been what erased its Section 230 protections, but the court thought otherwise.

It ruled that Akiba was a "publisher" or "speaker," using very vaguely-drawn definitions of these terms. Furthermore, it asserted Akiba "participated in the creation or development of information," something it didn't seem to have done.

Goldman:

As for the interpretation of “creation and development,” I don’t see how anyone can interpret those words to include retailing a record without any modifications at all.

So, the court reached the right decision but deployed dodgy arguments. Now these arguments are being used to punch holes in Section 230 in this Xcentric case.

On top of the questionable precedent it cites, the court also finds other actions by Xcentric to be adversely effecting its 230 protections.

Xcentric argues that drawing all inferences in favor of Vision Security, it must be found to have been a neutral publisher. The facts as alleged, however, support a contrary conclusion. Applying the Iqbal standard, the court must give weight to the following allegations: Xcentric maintains the “Ripoff Report” website with a tag line, “By Consumers, for consumers” and “Don’t let them get away with it. Let the truth be known.” Contrary to the stated tagline, the Ripoff Report allows competitors, not just consumers, to post comments. The Ripoff Report home page states: “Complaints Reviews Scams Lawsuits Frauds Reported, File your review. Consumers educating consumers.” These allegations allow a reasonable inference that the Ripoff Report encourages negative content.

From there, the court wanders into a discussion of something nearing extortion allegations.

These specifically pleaded facts support a reasonable inference that Xcentric was not a neutral publisher. It had an interest in, and encouraged, negative content. It refused to remove the content, even when told by the author that it was false and he wanted it removed. What interest would a neutral publisher have in maintaining false and harmful content against the wishes of the author unless it advanced its own commercial interests? The alleged facts allow a reasonable inference that Xcentric refused to remove the offensive content to promote its own corporate advocacy program. Indeed, it is reasonable to infer that the very raison d’etre for the website was to commercialize on its ability to sell its program to counter the offensive content the Ripoff Report encouraged.

The conclusion the court reaches is that Xcentric is not immune under Section 230. This case hasn't been decided yet, but these opinions -- considering the precedent being cited -- have the potential to do genuine harm to Section 230 protections, at least in the Tenth Circuit. As Goldman points out, a favorable ruling employing these arguments would lay out a welcome mat for a ton of questionable lawsuits.

What stands out most to me is the favorable citation to the Accusearch case. It’s the governing law in the Tenth Circuit, so it’s an entirely appropriate citation, but this is additional evidence that perhaps the Accusearch case has done more damage to Section 230 than the more publicized Roommates.com case. I’m reminded of another recent bad Section 230 ruling, the General Steel v. Chumley case, also in the Tenth Circuit and also favorably citing Accusearch. To me, I’m getting nervous that Accusearch has tainted the Tenth Circuit’s jurisprudence such that we’ll see continued anomalous cases there. It would be a green light for Section 230 haters to forum-shop their cases into the Tenth Circuit.

Goldman also posits this combination of rulings has turned the definition of "neutral publisher" into an unreachable ideal.

The court’s legal test of “neutral publisher” is an oxymoron and incoherent. By definition, no publisher is ever neutral. Instead, any legal standard dependent on “neutrality” becomes a placeholder for other social norms. As we saw in the Washington Supreme Court Backpage ruling, when the battleground shifts to a website’s purported “neutrality,” the defendants are in trouble. In this case, the court misinterprets “neutrality” to mean that soliciting only negative reviews wasn’t “neutral.” By the same implication, then, a website that only permitted positive reviews wouldn’t be “neutral” either (for example, eBay’s feedback forum restricts sellers to only leaving positive feedback for buyers). [...] Now, in light of the Backpage ruling, I expect anti-230 plaintiffs will call the defendant “non-neutral” in every complaint. Can’t hurt, might help.

That's something Section 230 doesn't need: additional opportunities for misguided plaintiffs to throw every argument against a friendly venue's walls and hope that something sticks. Ripoff Report -- which spends a great deal of time in court -- uses its Section 230 protections to their fullest extent. The problem is that it deploys certain tactics that courts find unpleasant. While these really shouldn't be enough to strip it of these protections, the tactics do seem to be having a deleterious effect on judges' opinion of the website. And once one decides it has crossed the line, Section 230 protections will begin eroding quickly.

Filed Under: cda, jurisdiction shopping, liability, secondary liability, section 230, tenth circuit
Companies: ripoff report, xcentric

Judge Finds No One To Like In Lawsuit Brought By Ripoff Report Against Overreaching State Prosecutor

from the Section-230-but-an-afterthought dept

Ripoff Report has always been targeted by some very creative legal efforts, thanks to its aggressive use of its Section 230 protections. Forced to find other ways to remove allegedly defamatory content, plaintiffs have tried everything from questionable copyright lawsuits to extortion allegations. Not much of it has stuck.

Ripoff Report not only plays Section 230 hardball, but it often brings lawsuits against those who have attempted to remove third-party content through dubious legal means. In this case, covered by Eric Goldman, Xcentric (Ripoff Report's host/parent company) is seeking a preliminary injunction against Iowa county prosecutor Ben Smith, who has relentlessly pursued the company in hopes of finding a link between certain third party contributors and the company itself.

The judge presiding over the lawsuit isn't impressed with either side. In the course of this opinion, which partially grants Xcentric's demand for an injunction, there are no winners: just two brutish louts engaged in questionable tactics.

Goldman notes there is a Section 230 nexus, but it's only a small part of the overall lawsuit -- one that Xcentric has deployed as an offensive weapon to head off further harassment by Ben Smith. (Goldman compares it to Google's lawsuit against Mississippi attorney general Jim Hood).

Xcentric raises a very questionable CDA claim, arguing that the protections grant it "immunity" from further prosecutorial actions related to content contributed by someone named "Meade." The judge finds that to be a bit of a stretch.

Plaintiffs argue that they are entitled to immunity under the CDA because – despite their financial relationship with Meade – they were not information content providers with regard to any of the allegedly-unlawful posts about the state’s witnesses. At this stage of the case, however, they have failed to demonstrate a likelihood of success on their claim that the CDA protects them from criminal liability for any potential violation of Iowa Code Section 720.4. This is because there is substantial evidence suggesting that the plaintiffs materially contributed to the alleged illegality of the information at issue.

[...]

I am not fully convinced of Magedson’s credibility on this issue. Xcentric paid Meade a large amount of money and Magedson has strong feelings about Richter’s case. I simply do not believe that he was blissfully unaware of what Meade was planning to post.

As Goldman notes, this sort of relationship is much "closer" than most other cases where Section 230 protections are invoked.

This isn't the only thing the judge finds questionable about Xcentric's claims and tactics. There's more criticism contained elsewhere in the opinion. While he does find its First Amendment claims credible, its assertions of Fourth and Sixth Amendment violations are less convincing.

[P]laintiffs contend that Smith violated their rights under the Fourth Amendment. According to their briefs, this argument is based on Smith’s application for, and execution of, a search warrant. The only evidence of record concerning a search warrant is the application and warrant concerning Anna Richter’s home… [Richter was charged with first-degree murder by Ben Smith, something a Ripoff Report review claimed was a bogus charge.]

Even if the plaintiffs had strong arguments on the substantive merits of this claim (and I am hardly convinced that they do), they did not address the crucial issue of standing. Fourth Amendment rights are personal and cannot be asserted vicariously. In order to have standing to complain about an allegedly-unreasonable search, a party must have a reasonable expectation of privacy in the area searched…

Plaintiffs have made no effort to show that they had a reasonable expectation of privacy with regard to Anna Richter’s home or any of the items seized from that home.

Xcentric's Sixth Amendment claims are even weaker.

Citing no authority, plaintiffs contend Smith violated their Sixth Amendment rights by obtaining and reviewing communications subject to the attorney-client privilege and by filing an ethics complaint against their counsel.

Plaintiffs’ failure to reference supporting authority is a major clue about the merits of this claim. I have not, through independent research, located any case law that might support the claim, as currently framed. Among other things, it is undisputed that Smith has not yet charged plaintiffs with any offense. But see Texas v. Cobb, 532 U.S. 162, 172 (2001) (Sixth Amendment right to counsel attaches only to charged offenses).

Perhaps there is a non-frivolous Sixth Amendment argument to be made, but plaintiffs have not taken the trouble to make it.

And circling back to Xcentric's First Amendment claims, Judge Leonard Strand finds its demand for an injunction to be more than a little hypocritical.

I also find plaintiffs’ proposed item I (enjoining Smith from “[t]hreatening, intimidating, accusing or otherwise stating that plaintiffs’ lawyers are violating any laws in representing plaintiffs”) to be inappropriate and sadly ironic. After loudly championing the importance of First Amendment freedoms in this case, plaintiffs have proposed a gag order that would restrain Smith’s speech.

But Smith is far from blameless. The judge also smacks the prosecutor around for his obsessive harassment of Xcentric, prompted by criticism of him hosted at Ripoff Report -- all of which was done supposedly to "protect" state's witnesses.

While Smith contends he is acting solely for the benefit of various witnesses who have been targeted on Ripoff Report, I find that he has acted, at least in part, for retaliatory reasons. For starters, I am amazed that Smith offered no direct evidence, such as copies, of any Ripoff Report posts that have allegedly harassed or defamed any witnesses who testified against Richter. Instead, he chose to provide only his own characterizations of the statements at issue...

If Smith’s investigatory tactics have truly been motivated by a desire to protect the State’s witnesses from harassing or defamatory posts on Ripoff Report, it would have been a fine idea for him to offer those statements into evidence.

The judge finds Smith's actions to be -- at least in part -- clearly retaliatory. The opinion lists several examples of how Smith's handling of Xcentric varied greatly from his pursuit of any other entity facing similar charges.

Smith admits that he has worked over a thousand hours and has issued over one hundred subpoenas during his investigation into Ripoff Report. Smith presented no evidence that in his role of Sac County Attorney, he has devoted similar time and resources into other investigations of potential misdemeanor offenses.

[...]

He wrote a 119-page, singled-spaced affidavit in support of an application to obtain a search warrant, relying on avowed enemies of Ripoff Report for substantial portions of its contents. He then filed the application as public record, rather than sealing it as is his usual practice. This allowed him, in effect, to publicly air his allegations about the plaintiffs before filing any charges.

[...]

More troubling, and what I find to be most persuasive, is what Smith did with privileged and confidential information after obtaining it by his myriad of subpoenas. Upon obtaining communications that clearly appear to be between Xcentric and its own counsel (e.g., Ex. 8), Smith did nothing to advise Xcentric of this fact. Nor did Smith do anything to preserve their confidentiality. Instead, he put at least one such communication (Ex. 8) into evidence in a proceeding and provided other presumably privileged communications to third-parties, including various enemies of Ripoff Report. He also disclosed Xcentric’s financial and banking information to third-parties, thus allowing that information to become public. While disclosing privileged and confidential information to others, Smith did not require those individuals to enter into non-disclosure agreements. He has provided no legal justification for this.

It's ugly all over, and Judge Strand is only willing to grant Xcentric some of what it requested. The injunction issued prevents prosecutor Ben Smith from doing the following:

A. Bringing criminal charges against Xcentric or Magedson related to any postings related to criticisms of the State or its evidence presented in State v. Richter.

B. Continuing the investigation of Xcentric and Magedson such as sending search warrants or subpoenas to their banks, email providers and other service providers.

C. Reading Xcentric’s privileged attorney-client communications.

D. Disclosing Xcentric’s attorney-client privileged communications to others.

E. Disclosing Xcentric’s financial and banking records to others.

F. Disclosing Magedson’s personal and private communications to others.

G. Disclosing any communications or information obtained through investigation of Xcentric or Magedson.

It would seem items C-F shouldn't need an injunction. These are things a prosecutor shouldn't be doing in the first place. Unfortunately, Smith's past actions prove he's severely in need of outside guidance. As for Xcentric, it may have a solid First Amendment claim, but its invocation of Section 230 protections is less sturdy than it would normally be, thanks to its for-pay relationship with a contributor.

Filed Under: ben smith, iowa county, meade, section 230, vindictive
Companies: ripoff report, xcentric

Court Dismisses Ripoff Report's Malicious Prosecution Lawsuit Against People Who Sued It Five Years Ago

from the no-winners;-just-multiple-losers dept

There aren't too many user-generated-content-reliant sites that defend their Section 230 turf more viciously than Ripoff Report. This has earned it a thuggish reputation, something its pay-for-play quasi-reputation management offerings do little to dispel. For better or worse (and it's definitely some of each), Section 230 is the Ripoff Report's load-bearing center.

Because of its entrenched defense, those hoping to skirt the site's Section 230 protections have tried a number of questionable legal gambits. One person got a court to assign him the copyright on a particularly nasty review, which he then used to pursue a copyright infringement lawsuit against the site. In this case, the Asian Economic Institute attempted to quash critical reviews by claiming Ripoff Reports was engaged in extortion (with its for-pay "Corporate Advocacy Program," which advocates on behalf of aggrieved companies).

This Section 230-dodging tactic didn't work. The court found little that backed up AEI's racketeering claims -- claims that shifted mid-trial when Ripoff Report revealed it had secretly recorded all of its phone conversations with the plaintiffs.

Rather than enjoy its victory, Ripoff Reports (as Xcentric) filed its own lawsuit against the AEI principals, alleging malicious prosecution. Proving once again that two wrongs don't make a right, the Ninth Circuit Court of Appeals has found… well, not exactly for the defendants (the former AEI plaintiffs), but rather that Xcentric (the company behind Ripoff Report) was capable of filing equally-baseless lawsuits. From the opinion:

Xcentric Ventures appeals the district court’s grant of summary judgment and judgment on the pleadings in favor of defendants Mobrez and Llaneras and Rule 12(b)(6) dismissal of defendant Borodkin in Xcentric’s malicious prosecution action. We have jurisdiction pursuant to 28 U.S.C. § 1291 and review de novo. We agree with the district court that Xcentric cannot prove an element of its malicious prosecution claims, that the underlying claims were brought or continued without factual or legal probable cause. We also deny Borodkin’s motion for sanctions.

As the court points out, the very low bar of "legal probable cause" was met by the defendants' prior extortion claims. That the claims ultimately were determined to be without merit does not raise the original lawsuit to the level of "malicious prosecution." The appeals court affirms the lower court's decision.

The former plaintiffs (now defendants) are also graceless winners. Rather than walk away from the twice-dismissed lawsuit, Mobrez and Llanernas approached the Ninth Circuit Appeals Court and asked it to publish the decision it had rendered more than two months earlier. Why? Well, apparently so they could show the world that they too were capable of having a questionable lawsuit against them dismissed -- much like theirs against Xcentric was five years earlier. Um... touché?

Filed Under: lawsuits, malicious procecution, ninth circuit, section 230
Companies: asian economic institute, ripoff report, xcentric

Florida Court Realizes Its Mistake, Reverses Order For Ripoff Report To Take Down Content

from the good-to-see dept

At the beginning of January, we wrote about a troubling court ruling in Florida, where a judge ordered XCentric, the operators of Ripoff Report, to remove some content from their website, despite the company's policy against such removals and the clear and well-established safe harbors for Ripoff Report from Section 230. There were some serious problems with this ruling beyond just the Section 230 questions, including the prior restraint issue, whereby content was ordered taken offline despite the lack of a full evidentiary hearing on the merits.

Thankfully, the judge who made this clearly incorrect ruling was not re-elected, and the case was handed off to another judge who quickly righted the wrong, noting that Ripoff Report was clearly protected by Section 230 of the CDA. Perhaps even more interesting is that Paul Alan Levy, who was preparing an amicus brief for the appeal, was able to get his hands on the original transcripts of the hearing and highlights just how troubling the initial ruling was on a prior restraint basis, in that the order was not based on any findings of the likelihood of success of the original defamation claims:

The transcript of the hearing at which the original TRO against the author was adopted is particularly revealing.   The order was not based on any findings of likelihood of success that the author would be found liable on the defamation claims; everybody understood that the only objective was to facilitate an order against XCentric.  The author never conceded that she was even negligent in making her statement that Giordano was a convicted felon, not to speak of acting with actual malice as would be required for a judgment of defamation assuming that Giordano is a public figure.  Indeed, there was some suggestion that Giordano had told the author that he had previously been in trouble with the law.  So, perhaps he was a felon, just not a convicted felon?  The author apparently stood by everything else she had said about Giordano; yet the judge ordered XCentric to take the entire statement down because, the judge said, he didn't want to be involved in editing the statement. 

And this is exactly part of the problem. The judge was in such a rush to shut down the content, no effort was made to determine if there was a true legal basis for removing the content.

Filed Under: free speech, injunctions, section 230
Companies: ripoff report, xcentric