IGIA, Inc. v. Xcentric Ventures, LLC [1]

IGIA, Inc., a company that sells vacuum cleaners and other houseware products, sued Xcentric Ventures, LLC and Ed Magedson in federal court in New York over negative user reports published on the Ripoff Report [2], a consumer complaint website.  IGIA claimed that the reports constitued trade libel and unfair competition, and that Xcentric and Magedson engaged in extortion by operating the "Corporate Advocacy Program" (CAPS), in which companies accused of bad practices on the website can pay to have Xcentric verify published complaints and resolve disputes with consumers. 

IGIA filed suit after numerous negative reports [3] about it appeared on the Ripoff Report website.  The complaint alleged that Xcentric and Magedson solicited negative reports and created fictional complaints and defamatory headings and titles, thereby losing the protection of section 230 of the Communications Decency Act [4] (CDA 230).  It also claimed that operation of the CAPS program constituted extortion and wire fraud and violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

Xcentric and Magedson failed to answer the complaint.  As a result, the court entered a default judgment [5] in favor of IGIA.  Xcentric then moved to vacate the default judgment.  Subsequently, IGIA voluntarily dismissed [6] the action.  It is not clear from the record whether this voluntary dismissal was the result of a settlement between the parties.