In October 2008, David Benitah, a San Francisco-based immigration attorney and business consultant, sued Linda Law and consumer review websites Yelp and TheSqueakyWheel.com for defamation and trade libel in a California state court. The complaint alleges that the defendants "published false statements regarding plaintiff on the internet," but does not identify any specific statements. Law's negative review of Benitah is still posted on the SqueakyWheel.com, but Yelp appears to have taken the material down.

On January 21, 2009, the court ordered Benitah to appear in court on February 17 to show cause why sanctions should not be imposed for failure to serve the defendants and file proof of service within 60 days of filing the complaint.

Update:

2/4/2009 - Benitah filed response to order to show cause

2/5/2009 -  Proof of service order to show cause hearing set for 2/17/2009 ordered off the calendar by the court

3/18/2009 - Order to show cause hearing set for 5/18/2009, later continued to 6/29/2009

Both Benitah  and Globolex have noow elected to represent themselves Pro Se.

In July 2008, Joseph Styger, a San Francisco dentist, sued former patient Deborah Johnson and various John Doe defendants over a critical review that Johnson posted to consumer review website Yelp.com.  According to the Complaint, the review falsely accused Styger of being an "unethical dentist." Cmplt. ¶ 6.

On August 22, 2008, Johnson filed a special motion to strike the complaint under California's anti-SLAPP law.  The court granted the motion to strike on September 23, 2008, finding that "plaintiff has not demonstrated a probability of prevailing on his claim against Johnson" due to the California's one-year statute of limitations for defamation. See California Code of Civil Procedure 340(c).

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, 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 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 (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 in favor of IGIA.  Xcentric then moved to vacate the default judgment.  Subsequently, IGIA voluntarily dismissed the action.  It is not clear from the record whether this voluntary dismissal was the result of a settlement between the parties.

In July 2008,  Michigan venture capital firm EDF Ventures sued an anonymous commenter to The Funded, a website that enables entrepreneurs to rate venture capitalists anonymously.  The lawsuit, which alleges defamation, revolves around a post warning readers to avoid EDF Ventures "unless you are desperate."

In August 2008, EDF Ventures subpoenaed Adeo Ressi, operator of The Funded, seeking the identity of the anonymous poster. Ressi complied with the subpoena, but indicated that the records in his possession "showed nothing material about the identity" of the anonymous poster.  This is likely because The Funded has adopted affirmative measures to protect the anonymity of site users.

The disputed comment is still online.   

MCW, Inc., a company providing career counseling under the trademark "Bernard Haldane," sued Badbusinessbureau.com, LLC ("BBB") and Edward Magedson in Texas federal court for unfair competition and false advertising under the Lanham Act and trademark infringement and business disparagement under Texas law.  The lawsuit revolved around negative reports about Bernard Haldane services published on the Ripoff Report website, which provides a forum in which consumers may accuse companies and individuals of various "rip-off" and "bad business" practices. 

The complaint alleged that BBB and Magedson posted user reports containing false and defamatory statements about MCW's business, independently created defamatory titles, headings, and editorial comments, and used MCW's trademark in conjunction with the offering and selling of banner advertisements, third-party services, rebuttal and collection fees, and "Rip-Off Revenge" services. 

BBB and Magedson moved to dismiss the complaint for lack of personal jurisdiction and for failure to state a claim, arguing that section 230 of the Communications Decency Act (CDA 230) immunized it from liability for publishing third-party content, that they did not use MCW's trademark in commercial advertising or promotion, and that there was no likelihood of confusion between the parties' services. 

In ruling on the motion, the court held that CDA 230 did not bar MCW's claim because it had alleged that BBB and Magedson created false and defamatory report titles, headings, and other editorial content.  It also determined that BBB and Magedson lost immunity by soliciting a consumer to create disparaging material.  Nevertheless, the court dismissed the federal unfair competition and false advertising claims, concluding that MCW lacked standing, that it could not show a likelihood of confusion as a matter of law, and that Ripoff Report did not use MCW's trademark in commercial advertising or promotion.  The court then declined to exercise subject-matter jurisdiction over the remaining state law claims and dismissed the lawsuit in its entirety.

MCW appealed the ruling, but later voluntarily dismissed its appeal.

Two real estate companies, Parkmerced Investors Properties LLC and Stellar Larkspur Partners LLC, sued eighteen unknown defendants for violation of the Lanham Act (15 U.S.C. § 1125(a)), libel, and tortious interference with contract.  The lawsuit, filed in federal court in California, revolves around anonymous and pseudonymous postings to Apartment Ratings, a forum site that invites discussion about residential apartment buildings in locations throughout the United States.  In October 2008, Parkmerced and Stellar Larkspur  subpoenaed Apartment Ratings, asking for information identifying the authors of the critical comments made about them. 

Apartment Ratings notified the site users whose identities had been inquired about, and one of those users contacted Paul Levy of Public Citizen, who filed a brief asking the court for a protective order against the subpoena and moving to strike the plaintiffs' state-law claims under the California anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16). 

Mr. Levy argued that the website's anonymous posters have a qualified right to engage in anonymous speech, and that the plaintiffs' facially invalid Lanham Act claim cannot justify disclosing the posters' identities.  (Without the Lanham Act claim, the federal court has no subject-matter jurisdiction over the case, so the potential merit of the libel and tortious interference claims should not matter.)  Based on the same weakness, Mr. Levy argued that the plaintiffs could not establish the probability of success required to survive his client's anti-SLAPP motion to strike. 

See our related database entry, Parkmerced Investors Properties LLC v. Does. 

Two real estate companies, Parkmerced Investors Properties LLC and Stellar Larkspur Partners LLC, sued eighteen unknown defendants for violation of the Lanham Act (15 U.S.C. § 1125(a)), libel, and tortious interference with contract.  The lawsuit, filed in federal court in California, revolves around anonymous and pseudonymous postings to Apartment Ratings, a forum site that invites discussion about residential apartment buildings in locations throughout the United States.

Parkmerced Investors Properties LLC owns Parkmerced, a community of 3000+ units in San Francisco.  Stellar Larkspur Partners LLC owns the Larkspur Shores Apartment Homes, a community of about 350 apartments in Larkspur, California. In the last couple of years, users of Apartment Ratings have posted a large number of comments, both positive and negative, about these two properties.  Some of the postings deal with issues like increasing rents and other expenses, maintenance problems, construction noise, crime, and the responsiveness of management to complaints. 

In their complaint, Parkmerced and Stellar Larkspur identify eighteen allegedly false and misleading statements, all of which purport to relate personal experiences of persons living in or visiting the Parkmerced and Larkspur Shores properties.  They maintain that these false statements not only constitute libel, but violate the Lanham Act:  "Defendants' activities constitute false or misleading descriptions of fact and false or misleading representations of fact in violation of §43(a) of the Lanham Act, 15 U.S.C. § 1125(a)[,] because Defendants misrepresent the nature, characteristics and qualities of the Apartments." Cmplt. ¶ 33.  While this looks like a false advertising claim under  15 U.S.C. § 1125(a)(1)(B), there is some indication that the plaintiffs mean to bring a "general Lanham Act claim for misuse of trademark under section 43(a)[, 15 U.S.C. § 1125(a)(1)(A)]."  Affidavit of Paul Alan Levy, ¶ 8.

Parkmerced and Stellar Larkspur have subpoenaed Apartment Ratings, asking for information identifying the authors of the critical comments made about them.  They asked for the identities of those users who wrote the eighteen statements quoted in the complaint, as well as other users who wrote things not specifically mentioned in the complaint.  One of those users contacted Paul Levy, who filed a brief asking the court for a protective order against the subpoena and moving to strike the plaintiffs' state-law claims under the California anti-SLAPP statute (Cal. Code Civ. Proc. § 425.16). 

Mr. Levy argued that the website's anonymous posters have a qualified right to engage in anonymous speech, and that the plaintiffs' facially invalid Lanham Act claim cannot justify disclosing the posters' identities.  (Without the Lanham Act claim, the federal court has no subject-matter jurisdiction over the case, so the potential merit of the libel and tortious interference claims should not matter.)  Based on the same weakness, Mr. Levy argued that the plaintiffs could not establish the probability of success required to survive his client's anti-SLAPP motion to strike.

Hy Cite Corporation, a company that sells dinnerware and cookware under the trademarked name "Royal Prestige," sued Xcentric Ventures, LLC and Edward Magedson in Arizona federal court for defamation, RICO violations, and other torts over reports published on the Ripoff Report website, which provides a forum in which consumers may accuse companies and individuals of various "rip-off" and "bad business" practices.

Ripoff Report hosted 35 "rip-off" reports concerning Royal Prestige, which complained about Hy Cite's sales tactics, misleading promotional offers, the quality of its dinnerware and cookware, and its refusal to abide by the terms of its sale contracts.  The complaint alleged that these reports contained false, misleading, and defamatory statements.  The complaint further alleged that Ripoff Report itself partially created and/or developed this content by creating its own editorial comments and titles, producing original content contained in the rip-off reports, and soliciting individuals to submit reports in return for compensation. 

Hy Cite also alleged that Xcentric and Magedson violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO) by engaging in threatened extortion and wire fraud.  Specifically, Hy Cite claimed that Xcentric and Magedson created and solicited defamatory content and then offered to alter the content to portray the company in a good light in return for $50,000 and a $1,500 monthly retainer.  

Xcentric and Magedson moved to dismiss the complaint, arguing that section 230 of the Communications Decency Act (CDA 230) immunized it from liability for publishing the statements of its users, and that Hy Cite failed to state a viable RICO, Lanham Act, or common law unfair competition claim. 

The district court granted in part and denied in part the motion to dismiss.  The court held that CDA 230 did not justify dismissal because Hy Cite had alleged that Xcentric and Magedson personally created defamatory content in editorial comments, titles, and in the rip-off reports themselves.  Slip op. at 8.  The court also indicated that Hy Cite's allegation that Ripoff Report solicited individuals to submit reports in return for compensation could support a finding that the website was responsible for the creation and development of information.  Id. (As Eric Goldman points out, this last conclusion is at odds with other case law.)

The district court treated Hy Cite's RICO claims as if they were outside of the protection of CDA 230 and held that Hy Cite adequately stated a claim based on the predicate acts of threatened extortion and wire fraud. Here, the court relied on Hy Cite's allegations that defendants created and solicited false and defamatory complaints against businesses and used these complaint to extort money from businesses through its mediation program. See id. at 10-12.

Finally, the district court dismissed Hy Cite's Lanham Act claims for false advertising, unfair competition, and disparagement, holding that the criticism of Hy Cite's business appearing on Ripoff Report was not competitive injury actionable under the Lanham Act.  Id. at 13-15. The court concluded, however, that Hy Cite's state law unfair competition claim survived because common law unfair competition is broader than the Lanham Act in imposing liability for a false and misleading misrepresentation that is likely to cause commercial harm.  Id. at 15.

The parties later settled the case.  The terms of the settlement are not public.

GW Equity, LLC, a mergers and acquisition firm that acts as a consultant to middle-market business owners who seek to sell or merge their businesses, sued Xcentric Ventures, LLC and Edward Magedson in Texas federal court for defamation and other torts over reports published on the Ripoff Report website, which provides a forum in which consumers may accuse companies and individuals of various "rip-off" and "bad business" practices.

In its complaint, GW Equity alleged that Ripoff Report published false and defamatory reports submitted by users without verifying their accuracy. In an effort to circumvent the immunity for website operators provided by section 230 of the Communications Decency Act (CDA 230), GW Equity further alleged that Xcentric and Magedson created, developed, and published defamatory titles, headings, and metatags for these reports concerning GW Equity. It also claimed that Ripoff Report generated defamatory content by providing users with drop-down boxes containing defamatory tags, such as "corrupt companies," which were applied by users to reports about GW Equity.

After completing discovery, Xcentric and Magedson moved for summary judgment. In October 2008, a federal magistrate judge issued his report on the motion, recommending that the district court grant Xcentric and Magedson's motion for summary judgment. The magistrate judge found that Xcentric and Magedson were entitled to the protection of CDA 230 because GW Equity had failed to raise a genuine issue of fact concerning their development or creation of defamatory content. The court indicated that providing drop-down boxes with "a broad choice of categories from which a user must make a selection in order to submit a report [was] not sufficient" to deprive the defendants of immunity, especially because they "did not solely provide users with a selection of categories that were negative and/or defamatory in nature." Slip op. at 7, 10.

The magistrate judge also found that there was no competent evidence that any Ripoff Report employee ever wrote or significantly edited report titles and headings, or changed the category tag on a user report. See id. at 9-10. The magistrate relied in part on a report produced by Xcentric showing IP addresses and locations connected with the reports and rebuttals about GW Equity. This report showed the IP addresses of Ripoff Report servers and machines used by Ripoff Report staff, and noneof those IP addresses matched up with the IPs of a report or a rebuttal about GW Equity. See id. at 9.

Finally, the magistrate rejected GW Equity's argument that Ripoff Report's "Corporate Advocacy Business Remediation & Satisfaction Program" took the website outside of CDA 230. According to GW Equity, under this program Ripoff Report will, for a fee, investigate "rip-off" reports targeting member companies and post prominent rebuttals to those reports. The court indicated that "it is not a bar to immunity for an Internet provider to refuse to remove defamatory material created by a third party, or to otherwise use it to their advantage, even though the Internet provider’s conduct may be considered reprehensible and offensive." Id. at 12.

GW Equity has filed objections to the magistrate's report and recommendation, and the district court had not ruled on those objections as of November 14, 2008.

Update:

01/09/2009 - The district court affirmed the magistrate's report and recommendation and granted Xcentric and Magedson's motion for summary judgment.