Med Express Ordered To Pay $20k In Sanctions For Frivolous Lawsuit Over A Negative eBay Review

from the slappety-slapp-slapp dept

Back in 2013, we wrote about an Ohio medical equipment company, named Med Express, which had sued a marginally dissatisfied customer, Amy Nicholls, demanding she take down her eBay review. Her review wasn't even that bad. It just expressed dismay that the product she ordered arrived postage due, meaning she had to pay more than expected to get it. She found that to be a nuisance and expressed it. The lawyer representing Med Express, James Amodio, told Public Citizen's Paul Levy directly that he had filed the lawsuit to get the review taken down, even if it was entirely truthful. Here was Paul Levy, at the time:

I contacted James Amodio, Med Express’s lawyer, to explain to him the many ways in which his lawsuit is untenable. He readily admitted that, as the complaint admits, everything that the customer had posted in her feedback was true; he did not deny that a statement has to be false to be actionable as defamation; but he just plain didn’t care. To the contrary, he told me that I could come up to Medina, Ohio, and argue whatever I might like, but that the case was going to continue unless the feedback was taken down or changed to positive. And he explained why his client was insisting on this change — he said that it sells exclusively over eBay, where a sufficient level of negative feedback can increase the cost of such sales as well as possibly driving away customers

A couple of days later, Med Express's President, Richard Radey, showed up in our comments, appearing to apologize for the lawsuit, and saying it was a mistake and he was instructing his attorneys to drop the lawsuit. He also claimed that the lawyers were doing a lot of this without his knowledge, but he clearly signed an affidavit claiming that the review included "false" information. Paul Levy, once again, pointed out that if this was all a big mistake, it seemed odd that Med Express had filed a bunch of similar lawsuits:

Of the current crop of lawsuits, the suit against Nicholls isn’t even the worst. I haven’t yet been able to see the original documents from the transaction on which Med Express’ lawsuit against Guam resident Tan Jan Chen is based, but the lawsuit against Scranton-area resident Dennis Rogan is over a two-word “neutral” buyer feedback stating “Order retracted.” Apparently, Rogan bought a piece of equipment on eBay but Med Express had to refund his money because, as it explained in a message accompanying the PayPal refund, “This should not have been still listed—we removed this item a few weeks back-it broke.” As in Nicholls’ case, the statement over which Med Express sued for libel was true, but even worse than in Nicholls’ case, Rogan had not even left “negative” feedback.

Also, thanks to a friendly Popehat signal, Nicholls (and Rogan) had found pro bono legal support from Tom Haren and Jeffrey Nye (along with Levy), who quickly filed a response and counterclaims, meaning that even though Radey claimed Med Express was dropping the lawsuit against Nicholls, it couldn't just walk away.

And... because of that, Med Express just got hit with $20,000 in sanctions for filing a bogus lawsuit. You can read the decision here. Even without an anti-SLAPP law in Ohio, the court clearly recognized that this was a frivolous lawsuit. Not only that, the court found that Radey himself appeared to be playing word games in his own testimony to the court.

Specifically, during testimony Radey claimed that he had seen the reviews give "1" ratings in "all of those categories" (on eBay you can rate a seller on 4 different categories). However, as a representative from eBay told the court, the sellers don't actually get to see those ratings -- and, neither Rogan nor Nicholls actually gave Med Express a "1" in every category (in fact, Rogan only rated Med Express in one category and gave the company the highest rating, a 5). That's called lying by Radey.

The deposition of [eBay's] Ms. Long shows that Mr. Rady's testimony was false.

Radey then testified again, in which he tried to tap dance around his earlier false testimony. The court explains here:

Mr. Radey also testified again. His testimony varied from the first hearing in that he attempted to clarify his prior trial testimony wherein he testified he saw Defendants Nicholls and Rogan rated him with all 1's in the detailed seller ratings categories. This time he testified he must have jumped to the conclusion Nicholls and Rogan rated him with all 1's (as opposed to his prior testimony that he basically watched it happen almost live). Mr. Rady also testified he called Ebay years ago and Ebay gave him the idea to file suit against Ebay and buyers leaving negative feedback. The negative feedback could be removed by court order. The testimony wasn't credible.

Apparently, Radey and Med Express went through five different lawyers during this whole process, and back in July, their last lawyer withdrew from the case, citing "irreconcilable differences with the client." And the company has not found a new lawyer.

In the end, the court is not at all impressed by Radey.

The Plaintiff's complaints had no merit, legally or factually, when they were filed.

The court then lists out the four indications of a frivolous filing, noting that Med Express's suit violated all four.

The Plaintiff's suit was for an improper purpose. The goal was to thwart Ebay's seller ranking system for financial gain by obtaining an injunction against out of state defendants unlikely to be able to defend themselves. The Defendants did absolutely nothing wrong. They simply participated in Ebay's feedback component in exactly the manner in which Ebay intended. While Mr. Rady may perceive Ebay's seller ranking system to be unfair to sellers, the remedy wasn't to attack the buyers.

The Plaintiff's complaint was not warranted under existing law, could not have been supported by a good faith argument for an extension, modification, or reversal of existing law, and could not be supported by a good faith argument for the establishment of new law. The Defendants did nothing more than accurately recite a statement of facts and express their opinion.

Meanwhile, in Levy's blog post about this (linked above), he notes that it appears that Radey has been seeking to avoid all the negative publicity about this by changing the name of his business on eBay.

Med Express changed its eBay moniker from Med Express Sales to Medical Specialists, apparently to try to avoid the negative associations caused by its lawsuit; a recent check of eBay suggests that, although Med Express was still in business as of the second sanctions trial this past spring, it has changed its selling name again.

Either way, it looks like he's going to have to pay up for his bogus lawsuits. Hopefully this is a lesson to others who think about filing similar SLAPP suits, even where there are no anti-SLAPP laws.

Filed Under: bad reviews, defamation, feedback, frivolous lawsuits, richard radey
Companies: ebay, med express, medical specialists

Med Express Apologies For Suing Customer, Says It Was A Mistake, But Doesn't Mention The Long List Of Similar Lawsuits

from the what's-the-opposite-of-truthful? dept

Earlier this week, we posted about eBay seller "Med Express" suing a customer for leaving accurate, but negative, feedback on eBay. We found the story from Paul Levy's original post on the Public Citizen website, and a bunch of other sites picked up on the story, including our friends at Popehat and Ars Technica.

Yesterday, Richard Radey, the President of Med Express made the rounds on all of those sites, including ours, issuing what may appear to be a heartfelt apology, saying that he never intended the customer to be a target, that the company fully supports any and all feedback, and that he had not read the actual lawsuit until the issue got attention. He also claims that he was trying to deal with a separate, but related issue in getting eBay to remove a "Detailed Seller Rating" which impacts how much Med Express has to pay. He claims that the "low ratings caused us to lose our Top Rated Seller Plus" standings, which could lead to "a potential fee increase of tends of thousands of dollars over the course of the year." And, he claims, the only way to remove those "is by court order" and he "was told that such court orders were not uncommon." He concludes:

The only person to blame here is me. You have spoken and I have listened. A terrible wrong needs to be righted. I am instructing our attorneys to drop the lawsuit. I want to assure everyone that you may feel free to leave any feedback on our company without fear of reprisal. I have learned my lesson.

That certainly sounds sincere. But is it? The first thing that struck me was that he said low ratings, plural -- not the single low rating we had heard about. And, indeed, Paul Levy has presented a compelling argument that Radey's apology raises more questions than it answers. First off, he discovered that Med Express has been filing similar lawsuits for years, all against customers who leave ratings that Med Express does not like. In one, quite incredible, case, they even sued a guy who left an accurate neutral review. Yes, it wasn't even negative. And the company still sued.

Of the current crop of lawsuits, the suit against Nicholls isn’t even the worst.  I haven’t yet been able to see the original documents from the transaction on which Med Express’ lawsuit against Guam resident Tan Jan Chen is based, but the lawsuit against Scranton-area resident Dennis Rogan is over a two-word “neutral” buyer feedback stating “Order retracted.”   Apparently, Rogan bought a piece of equipment on eBay but Med Express had to refund his money because, as it explained in a message accompanying the PayPal refund, “This should not have been still listed—we removed this item a few weeks back-it broke.”   As in Nicholls’ case, the statement over which Med Express sued for libel was true, but even worse than in Nicholls’ case, Rogan had not even left “negative” feedback. 

Rogan could have suggested that the advertising and sale of an item that the seller knew it could not deliver violated FTC rules for mail-order merchants, but he gave the company the benefit of the doubt while concluding, at the same time, that other customers ought to learn that Med Express cannot always be trusted to have the goods that it is advertising.  His generosity did not prevent Radey from signing an affidavit averring that the neutral feedback and negative statement were “false,” attempting to get an injunction requiring that the feedback be taken down, and demanding an award of compensatory and punitive damages as well as attorney fees—not the $1.00 in nominal damages that Radey claims are all that he wanted his lawyer to seek against Nicholls.

Yeah, also, that signing an affidavit thing is a problem. Radey suggests in his apology that he didn't know what was going on, and seems to imply that this was a one off thing. But based on Levy's research, we see a long list of similar lawsuits -- and they include affidavits signed by Radey. So for him to claim he was unaware of what was going on seems quite questionable.

In the meantime, it appears that the customer who was at the center of the original lawsuit, Amy Nicholls, has found highly qualified pro bono help in the form of Tom Haren and Jeffrey Nye, and they've already filed a response and counterclaims. That also means that, even if Radey wants to dismiss this lawsuit, he can no longer do so unilaterally. If Nicholls, represented by Haren and Nye decide to pursue this, Radey may really regret trying to silence customers.

Filed Under: apology, defamation, paul levy, reviews, richard radey
Companies: ebay, med express