Global Royalties v. Xcentric Ventures

NOTE: The information and commentary contained in this database entry are based on court filings and other informational sources that may contain unproven allegations made by the parties. The truthfulness and accuracy of such information is likely to be in dispute. Information contained in this entry is current as of the last event mentioned in the "Description" section below; additional proceedings might have taken place in this matter since this event.

Summary

Threat Type: 

Lawsuit

Date: 

07/24/2006

Status: 

Concluded

Location: 

Arizona, Canada

Disposition: 

Dismissed (total)

Verdict or Settlement Amount: 

N/A
Global Royalties, Ltd., an international firm that brokers investments in gemstones, sued Xcentric Ventures, Inc., Ed Magedson, and Jane Doe Magedson over three allegedly defamatory posts made by a third party, Spencer Sullivan, on Xcentric's website Ripoff Report. According to... read full description
Parties

Party Receiving Legal Threat: 

Xcentric Ventures, LLC; Ed Magedson; Jane Doe Magedson

Type of Party: 

Individual
Organization

Type of Party: 

Individual
Organization

Location of Party: 

  • Canada

Location of Party: 

  • Arizona

Legal Counsel: 

Maria Crimi Speth; David Scott Gingras
Description

Global Royalties, Ltd., an international firm that brokers investments in gemstones, sued Xcentric Ventures, Inc., Ed Magedson, and Jane Doe Magedson over three allegedly defamatory posts made by a third party, Spencer Sullivan, on Xcentric's website Ripoff Report. According to the amended complaint, Sullivan criticized Global Royalties and individuals associated with it and accused the company of "operating a scam involving the sale of gem stones." Am. Compl. ¶ 15. Sullivan allegedly posted this latter comment under the category "Con Artists," one of a number of categories Ripoff Report users can choose from when posting. Id.¶ 16. After Global Royalties' lawyers contacted him, Sullivan requested that his posts be removed from the website. Ripoff Report did not remove the posts, following its strict policy against removing reports.

In July 2006, Global Royalties and its owner, Brandon Hall, sued Sullivan and Xcentric in the Superior Court of Ontario, Canada. When Xcentric did not appear to defend itself, the Canadian court found it in default and issued an order requiring Xcentric to remove the disputed statements. When Xcentric still refused to take down the posts, Global Royalties and Hall sued in federal court in Arizona, seeking to enforce the Canadian court order and bringing a defamation claim under Arizona law.

Xcentric moved to dismiss on the grounds that the Canadian order was unenforceable and that the defamation claim was barred by the statute of limitations, the truth of the statements, and CDA 230 immunity. The court granted Xcentric's motion to dismiss, ruling that the Canadian order was not entitled to enforcement because it was not a final judgment. The court dismissed the defamation claim on grounds that CDA 230 immunized the defendants. It ruled that CDA 230 protected the defendants even though they provided a list of categories including the term "Con Artist" and even though Sullivan himself asked for the post to be removed. The court allowed Global Royalties to file an amended complaint, which it did in December 2007.

The amended complaint dropped the claim for enforcement of the Canadian order and re-pled the defamation claim. Xcentric again moved to dismiss, raising CDA 230 and statute of limitations defenses. In opposing the motion, Global Royalties recycled its previous argument that CDA 230 should not protect website operators when the author of a statement asks for it to be removed. In February 2008, the court granted Xcentric's motion and dismissed the case, noting that "liability based on an author's notice, workable or not, is without statutory support and is contrary to well-settled precedent that the CDA is a complete bar to suit against a website operator for its 'exercise of a publisher's traditional editorial functions -- such as deciding whether or not to publish, withdraw, postpone or alter content.'"

Details

Content Type: 

  • Text

Publication Medium: 

Forum

Subject Area: 

  • Defamation
  • Third-Party Content
  • Section 230
  • Consumer Ratings and Reviews
Court Information & Documents

Jurisdiction: 

  • Arizona
  • Canada

Source of Law: 

  • Arizona
  • Canada

Court Name: 

Superior Court of Ontario; United States District Court for the District of Arizona

Court Type: 

Federal
International

Case Number: 

2:2007cv00956 (D. Ariz.)

Relevant Documents: 

CMLP Information (Private)

CMLP Notes: 

Status checked on 6/4/2008, no appeal filed. (AAB)