Xyience Inc. v. Bergeron [1]

Xyience Inc., a manufacturer of energy drinks and supplements, sued Rich Bergeron in Nevada state court over statements posted on his MySpace.com page and website, unlimitedfightnews.com. According to the complaint, Bergeron posted an article to his MySpace page that contained allegations that that Xyience was under investigation by the Securities and Exchange Commission and that a class action lawsuit was pending against the company. Xyience contends that Bergeron is the author of these statements, but he maintains that he found these statements in an email widely circulated on the web, which he merely posted to his MySpace page with a disclaimer. (MySpace removed the posting and Bergeron's profile shortly thereafter.) Mr. Bergeron provided us with links to other websites where the article apparently still appears (here [2], here [3], and here [4]).

The complaint further alleges that Bergeron posted to his website a report entitled "Xyience Investigative Report: Creator Russell Pike's Criminal Tendencies Revealed," in which he claimed that the company and its majority shareholder, Russell Pike, were defrauding investors and conspiring with Dana White, president of Ultimate Fight Challenge, to defraud investors. The complaint claims also that Bergeron "continues to post defamatory articles" about the company on his website, but does not identify any specific statements.

The complaint sets forth claims for defamation, tortious interference with prospective economic advantage, and intentional interference with contract. Xyience alleges that Bergeron's reports have cost the company millions of dollars due to lost investor contributions, prompting the company to seek $25 million in damages.

Alongside the complaint, Xyience filed a motion for preliminary injunction to compel Bergeron to take down his reports and to prohibit him from publishing any future reports about Xyience. On July 27, 2007, Bergeron filed a motion to quash service of summons (i.e., a motion to dismiss) for lack of jurisdiction, arguing that the Nevada court does not have personal jurisdiction over him because he is a resident of Massachusetts without significant contacts with Nevada.

On September 6, 2007, the court granted Xyience's motion for a preliminary injunction. The court's order requires Bergeron to "remove any and all articles or postings regarding false claims about Xyience from the internet" and prohibits him from making any statements suggesting or implying that Xyience is being investigated by the SEC. It also requires Bergeron to remove "any and all articles or postings claiming that Xyience is defrauding investors and/or is conspiring with Dana White or the Ultimate Fight Challenge to defraud investors" and prohibits him from making any future represenations to that effect. On the same day, the court dismissed Bergeron's motion to quash the service of summons.

Update:

10/01/2007 - Bergeron filed a motion to dismiss the complaint.

3/20/2008 - Xyience filed a notice of removal to the United States Bankruptcy Court.

3/28/2008 - Bergeron filed a motion to suspend bankruptcy proceedings and for summary judgement on oustanding claims.

6/05/2008 - Counterdefendant Ferttita filed an application for order to show cause regarding unauthorized recording of court proceedings.