Whitney Information Network 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: 

01/27/2004

Status: 

Concluded

Location: 

Florida

Disposition: 

Dismissed (total)

Verdict or Settlement Amount: 

N/A
In January 2004, Whitney Information Network, Inc., a company that provides real estate training programs and seminars, and its CEO Russ Whitney sued Xcentric Ventures, LLC and its founder and managing member, Ed Magedson. Xcentric operates the Ripoff Report website, located at... read full description
Parties

Party Receiving Legal Threat: 

Xcentric Ventures, LLC; Badbusinessbureau..org; Ed Magedson

Type of Party: 

Individual
Organization

Type of Party: 

Individual
Organization

Location of Party: 

  • Florida
  • Colorado

Location of Party: 

  • Arizona

Legal Counsel: 

Maria Crimi Speth; Denise B. Crockett; Michael L. Gore; Jonathan P. Ibsen; James A. Weinkle; Brian J. Stack
Description

In January 2004, Whitney Information Network, Inc., a company that provides real estate training programs and seminars, and its CEO Russ Whitney sued Xcentric Ventures, LLC and its founder and managing member, Ed Magedson. Xcentric operates the Ripoff Report website, located at www.ripoffreport.com and www.badbusinessbureau.com, which allows visitors to read and post reports about companies that allegedly have "ripped off" consumers. A number of reports saying derogatory things about Whitney Information Network appeared on the Ripoff Report website. In the original complaint, the plaintiffs alleged that Xcentric and Magedson violated federal and state trademark laws and committed defamation of business reputation (often referred to as "trade libel") by publishing these reports.

In July 2005, the district court dismissed the original complaint, but granted the plaintiffs permission to file an amended complaint. Whitney Information Network re-filed an amended complaint, including only the defamation claim. In the amended complaint, Whitney alleged that Xcentric and Magedson not only published critical reader reports, but edited the complaints to include words like "ripoff" and "scam," and also fabricated certain reports altogether. In February 2006, the court dismissed the amended complaint, reasoning that CDA 230 barred the defamation against Xcentric and Magedson. The Eleventh Circuit Court of Appeals reversed the ruling in March of that year, holding that the allegations that the defendants had altered and fabricated reports were sufficient for Whitney Information to survive a motion to dismiss.

Back in the trial court, the defendants moved for summary judgment, arguing that there was no evidence that they altered or fabricated reports and that CDA 230 thus barred Whitney Information's claim. In February 2008, the court granted the motion for summary judgment, dismissing the amended complaint in its entirety. The court held that Whitney Information had not come forward with any competent evidence to show that Magedson or anyone else working for Xcentric edited or fabricated any reports about it.

The court also rejected Whitney Information's argument that Xcentric and Magedson forfeited the protection of CDA 230 by requiring readers to describe their complaints by choosing from a drop-down menu of tags when submitting a report. The available tags included categories like "con artists," "corrupt companies," and "false advertisements" (which were allegedly applied to reports about Whitney), as well as more neutral terms like "seminar programs," "multi level marketing," "financial services," and "business consulting," just to name a few. The court also rejected the argument that the defendants should lose the protection of CDA 230 because they encouraged and actively solicited defamatory statements from their users.

Details

Content Type: 

  • Text

Publication Medium: 

Forum

Subject Area: 

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

Jurisdiction: 

  • Florida

Source of Law: 

  • United States
  • Florida

Court Name: 

United States District Court for the Middle District of Florida; United States Court of Appeals for the Eleventh Circuit

Court Type: 

Federal

Case Number: 

2:04-CV-47-FtM-34SPC (trial court); 06-11888 (appellate court)

Relevant Documents: 

CMLP Information (Private)

CMLP Notes: 

See about status