Cambridge Who's Who Publishing v. Xcentric Ventures [1]

Cambridge Who's Who Publishing, Inc. ("Cambridge") sued Xcentric Ventures, LLC and Edward Magedson in federal court in New York over user reports published on the Ripoff Report [2] website, which provides a forum in which consumers may accuse companies and individuals of various "rip-off" and "bad business" practices. Xcentric also allegedly operates a "Corporate Advocacy Business Remediation and Consumer Statisfaction 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. 

Cambridge filed suit after a number of negative reports about it appeared on the Ripoff Report [2] website.  The complaint alleged that Xcentric operates an extortion scheme centered around the publication of defamatory consumer reports about Cambridge and other companies in an effort to extract "protection money" (in the form of the CAPS program) to portray Cambridge and others in a positive light on the website.  Cambridge claimed that this conduct constituted extortion and violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO).  It also claimed that Xcentric's conduct constituted defamation, tortious interference with contract and prospective economic gain, trademark infringement, and conspiracy to injure in trade, business and reputation. 

Xcentric and Magedson moved to dismiss the complaint for lack of personal jurisdiction.  Cambridge cross-moved the court for permission to take discovery on matters relating to jurisdiction.  The court denied Xcentric's motion with permission to renew it after the completion of limited discovery on the question of Xcentric's ties to New York, specifically in connection with its CAPS program. The court limited discovery to the CAPS program, indicating that publishing consumer reviews, selling books, and giving consumers advice online was not sufficient to show that Xcentric transacted business in New York.  Slip. op. at 7-8 [3]. The court refused to consider Xcentric's argument based on section 230 of the Communications Decency Act [4], indicating that CDA 230 does not affect a court's personal jurisdiction over a defendant.  Id. at 3-4 n.1 [3].

The parties settled the case, and Cambridge voluntarily dismissed its complaint in January 2008. The terms of the settlement are not public.