Barnes v. Xcentric Ventures [1]

A.H. Barnes, a California attorney who operates several businesses that help attorneys and other individuals find employment, sued Xcentric Ventures, LLC and Edward Magedson in California state court for defamation over 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.

Barnes alleges that anonymous users of Ripoff Report submitted false and defamatory reports claiming, among other things, that he was dishonest, that he was "cooking the books," and that he had engaged in a pattern of criminal activity including breaching the privacy of his customers, software piracy, data theft, and deliberately violating federal anti-SPAM laws and regulations. Cmplt. ¶¶ 15-17 [3].

Barnes alleges that Ripoff Report and Magedson updated the title of the defamatory thread about him to include the statement "UPDATE Ex-Employee responds . . . SCAM, FRAUD and tons of SPAM." Id. ¶ 18. He alleges more generally that Ripoff Report "deliberately and intentionally alters the content of its purportedly anonymous third-party postings to enhance the salaciousness and magnitude of known defamatory content." Id. ¶ 8. The complaint maintains that Ripoff Report's manipulation of purported third-party content "demonstrates that Rip Off, Magedson, or both exercised at least some degree of control over Rip Off's content thus losing the right to avail themselves of the safe harbor provisions of the Communications Decency Act." Id. ¶ 18.

While the complaint only includes a defamation claim, Barnes also alleges that Ripoff Report and Magedson extort money from companies by offering them the opportunity to participate in a "corporate mediation program," in which the injured company pays Ripoff Report "to help mitigate the damages caused by the defamatory content" posted by users of the website. Id. ¶ 10. Finally, the complaint alleges that Ripoff Report uses "intensive search engine-based technologies" to get unusually high search engine rankings for defamatory content, apparently as part of its alleged scheme to put pressure on companies. See id. ¶ 9.