Ripoff Report

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This article is weighted too heavily toward only one aspect of its subject. Please help improve this article by adding more general information. You can discuss the issue on the talk page. (December 2011)
Ripoff Report
Ripoffreport.com screenshot 2007-08-29.png
URL http://www.ripoffreport.com/
Type of site Consumer
Available language(s) English
Created by Ed Magedson
Launched December 8, 1998
Current status Online

Ripoff Report is a privately owned and operated for-profit website founded by consumer advocate Ed Magedson. The Ripoff Report has been online since December 1998 and is operated by Xcentric Ventures, LLC which is based in Tempe, Arizona.[1] Ed Magedson is the site's current Editor-in-Chief.

Contents

[edit] Background

The Ripoff Report allows users to post complaints known as "reports" which contain details of the user's experience with the company or individual listed in the report. The site requires users to create an account which includes a valid email address before reports can be submitted. There is no cost or charge to users who wish to create a report. According to the site's Terms of Service, users are required to warrant that their reports are truthful and accurate, but the site itself does not investigate or confirm the accuracy of reports. As of December 2011, the Ripoff Report contains more than 800,000 unique reports.

Companies who have been named in a report may choose to respond by submitting a "rebuttal" which explains their side of the story. Like reports, rebuttals may be posted for free by anyone with a user account. However, Ripoff Report may limit the number of rebuttals filed per-report and may decline to publish rebuttals in certain cases.

[edit] Non-removal policy

One of the more controversial aspects of the Ripoff Report is its policy against removing reports. Unlike some other message boards or blogs, Ripoff Report does not allow authors to remove their own reports and the site will not remove reports in response to legal demands from attorneys. This policy is disclosed to users in the site's Terms of Service. The front page of the site explains the reason for this policy as follows: "Unlike the Better Business Bureau, Ripoff Report does not hide reports of 'satisfied' complaints. All complaints remain public and unedited in order to create a working history on the company or individual in question." A longer discussion of the policy is found on the site's Frequently Asked Questions page.

This non-removal policy was the subject of a 2007 lawsuit against the Ripoff Report which involved an author's request to remove several reports he submitted in which he referred to a Canadian company as a "scam." In a published federal ruling,[2] the court found that Ripoff Report was not required to remove reports in this context.[3]

Plaintiffs have also attempted to force Ripoff Report to remove reports by suing the author and obtaining an injunction requiring the removal of the offending content. In one recent case, Blockowicz v. Williams, 675 F.Supp.2d 912 (N.D.Ill. 2009), a federal district court in Chicago found that Ripoff Report was not required to comply with such an injunction.[4] Some observers have stated this outcome was legally correct but morally troubling.[5] The plaintiffs in the Blockowicz case appealed the district court's refusal to enforce their injunction against Ripoff Report. On December 27, 2010, the Seventh Circuit Court of Appeals issued an opinion,[6] which affirmed the lower court's decision and agreed that Ripoff Report was not required to comply with the lower court's injunction.

One day after the Seventh Circuit's ruling in Blockowicz, a Florida state court reached the opposite conclusion.[7] In Giordano, the court held that the law allowed it to issue an injunction[8] requiring Ripoff Report to remove a complaint posted by a third party. The plaintiff filed an appeal asking the Third District Court of Appeal in Florida to hold that Ripoff Report could be ordered to remove reports. On December 28, 2011, the Court of Appeal issued an opinion,[9] which called Ripoff Report's non-removal policy "appalling", but the court agreed that the Communications Decency Act did not allow injunctive relief requiring the site to remove reports: "However much as this Court may disapprove of business practices like those embraced by Xcentric, the law on this issue is clear. Xcentric enjoys complete immunity from any action brought against it as a result of the postings of third party users of its website."

Despite its long history of refusing to remove complaints, in July 2010, Ripoff Report announced a new program called "VIP Arbitration" which has the stated purpose of offering victims of false reports a new way to clear their names. According to the site, the arbitration program involves private, third party arbitrators who are paid to review disputed reports and render decisions about their accuracy. Although Ripoff Report is well known for its refusal to remove reports, the site now explains: "Any statements of fact that the arbitrator determines to be false will be redacted from the original report."[10] The site has also posted an updated FAQ page with an additional discussion of the arbitration program. The page includes links to examples of how reports look after being submitted to the program. The current cost of the program is $2,000.

[edit] Litigation involving the Communications Decency Act

According to a United States law called the Communications Decency Act, 47 U.S.C. § 230(c), websites like the Ripoff Report are protected from most forms of civil liability arising from user-generated content. This protection applies even if the website hosts material which is false and even if the site does not take any steps to investigate content prior to publication or remove content after receiving notice that the material is false.[11] Protection also extends to editorial changes made by the website operator itself, as long as such editing does not alter the meaning of the original third-party content.[12]

Because of the site's steadfast refusal to remove complaints, many lawsuits have been filed against the Ripoff Report claiming the site does not qualify for protection under the CDA or that such protection has been lost due to its alleged solicitation of defamatory content, its refusal to remove content which is false, and its alleged alteration and/or modification of reports or their titles. For a variety of reasons, none of these cases have ever reached trial.

In one frequently cited case from 2004, a federal court in Texas.[13] held that Ripoff Report may not be entitled to CDA immunity. This part of the ruling was based on the fact that the plaintiff claimed that Ripoff Report itself created defamatory material as opposed to simply hosting material created by a third party. Based on these allegations, the court determined that CDA immunity would not apply because, "Contrary to the defendants' arguments, MCW is not seeking to hold the defendants liable for merely publishing information provided by a third party. Rather, MCW is seeking relief because the defendants themselves create, develop, and post original, defamatory information concerning [the plaintiff]." MCW, 2004 WL 833595, *9.

Critics of the Ripoff Report sometimes claim that Ripoff Report "lost" the MCW case. However, after finding that the plaintiff's allegations were sufficient to overcome CDA immunity, the court found that it lacked jurisdiction and the case was dismissed on that basis. According to a summary of the case from the Citizen Media Law Project, the plaintiff "MCW appealed the ruling, but later voluntarily dismissed its appeal." More recent legal decisions involving the Ripoff Report have generally rejected the argument that MCW establishes that the site is not entitled to CDA immunity.

In early 2012, Ed Magedson the owner of RipOffReport.com accused Internet reform activist Michael Roberts of criminal hacking, and these allegations were repeated on Fox news.com by journalist Perry Chiaramonte; Roberts has filed suit against both Fox news and Ed Magedson. Roberts claims that this was a preemptive strike to discredit him because Magedson knew that Roberts was planning to expose his appalling business practices and his collusion with GOOGLE AdWords®. Roberts followed through with his promise in May 2012 with the YouTube video titled "Why Google Loves Internet Defamation Displays It On Page 1. Especially RipOffReport.com"

Other notable cases involving the Ripoff Report include the following:

  • Asia Economic Institute, LLC v. Xcentric Ventures, LLC[14] (May 4, 2011) (summary judgment granted in favor of Ripoff Report due, in part, to CDA immunity);
  • Herman & Russo, P.C. v. Xcentric Ventures, LLC,[15] (Feb. 14, 2011) (summary judgment granted in favor of Ripoff Report due to CDA immunity);
  • Intellect Art Multimedia, Inc. v. Milewski,[16] (N.Y.Sup. Sept. 11, 2009) (claims against Ripoff Report dismissed for failure to state a claim due to CDA immunity);
  • GW Equity, LLC v. Xcentric Ventures, LLC,[17] (N.D.Tex. 2009) summary judgment entered in favor of Ripoff Report based on CDA immunity);[18]
  • Global Royalties, Ltd. v. Xcentric Ventures, LLC,[19] (D.Ariz. 2008) (claims against Ripoff Report dismissed pursuant to Fed. R. Civ. P. 12(b) (6) without leave to amend based on CDA immunity);
  • Whitney Info. Network, Inc. v. Xcentric Ventures, LLC,[20] 2008 U.S. Dist. LEXIS 11632 (M.D.Fla. Feb. 15, 2008) (summary judgment entered in favor of Ripoff Report based on CDA immunity).

[edit] Other lawsuits

Many other companies have sued Ripoff Report, but so far none of these cases have ever been resolved against the site.[21][22] Some previous suits can be reviewed at Citizen Media Law Project.[23] A partial list of recent cases includes the following:

  • A lawsuit was filed against Ripoff Report in New York in January 2010 seeking $11 million in damages. The complaint also asserts claims against Magedson and against Google. As of December 2011, the case remains ongoing.
  • On March 12, 2010, a lawsuit was filed against Ripoff Report in New Jersey. The complaint includes claims for RICO/extortion and seeks damages of $33,333,333.00. The case was subsequently dismissed by the court in August 2011.[24]

Several people and businesses listed on Ripoff Report have allegedly hired the Defamation Action League, an organization run by William L. "Bill" Stanley (possibly a pseudonym), who is listed as one of the world's top 200 spammers,[25] to attempt to make Magedson and his business partners remove specific reports. In return, Magedson filed a lawsuit under RICO. On June 21, 2007 a preliminary injunction was granted against DefamationAction.com and ComplaintRemover.com. Stanley and his associates were found liable for defamation and making death threats. Robert Russo, who claims not to be part of the Stanley group—but who does own ComplaintRemover.com, filed an answer, defenses and a counter-suit in the case. The parties reached a settlement on May 15, 2009.[26][27][28]

Despite its track record of successfully defending cases brought in U.S. courts, in July 2003 a default judgment was entered against the site in the Eastern Caribbean Supreme Court High Court of Justice for EC$27,100,932.00.[29] The award, made in Eastern Caribbean currency rather than U.S. dollars, has not been recognized or enforced by any U.S. Court. With the recent passage of the SPEECH Act which prohibits U.S. courts from recognizing foreign judgments if they conflict with U.S. law, it is unlikely that any foreign judgments against Ripoff Report would be enforceable in the United States.

[edit] Corporate advocacy program and extortion claims

Some of the harshest criticism is focused on Ripoff Report's "Corporate Advocacy, Business Remediation & Customer Satisfaction Program." The operation of the program is described in detail on the Ripoff Report website's Corporate Advocacy Program page. The program requires companies to pay a fee to Ripoff Report in exchange for which the site will act as an intermediary between the company and any unhappy customers who have posted complaints on the Ripoff Report site. Companies who join the program must agree to meet certain conditions including a promise to make refunds when requested. In return, while existing reports are not removed, the Ripoff Report's editor, Ed Magedson, will update the titles of reports to reflect that the company has joined the program and has made a commitment to increasing customer satisfaction.

In February 2007 The Phoenix New Times reported that at least 30 companies now pay Ripoff Report for participation in the Corporate Advocacy Program.[30]

Several companies have sued Ripoff Report based on claims that the Corporate Advocacy Program is unlawful. None of these claims have ever succeeded at trial. On July 19, 2010, a federal court in Los Angeles, California entered an order granting partial summary judgment in favor of Ripoff Report in a case which alleged that the Corporate Advocacy Program was "extortion" and that the program violated federal racketeering laws. The court's order stated that the Corporate Advocacy Program was not extortion under California law because, "The offer to help Plaintiffs restore their reputation and facilitate resolution with the complainants in exchange for a fee does not constitute a threat under California Penal Code § 519." Based on the determination that the services offered by Ripoff Report do not constitute extortion, the court granted summary judgment in favor of Ripoff Report as to the plaintiffs' extortion claim.[31]

In October 2011, a federal court in California reached a similar conclusion in a lawsuit against another consumer complaint/review site - yelp.com. In that case, the plaintiffs accused Yelp, Inc. of committing extortion by charging money to remove negative reviews. In a 15-page ruling, the federal court held that these allegations were barred by the Communications Decency Act.[32]

[edit] "SLAPP-back" lawsuits

Ripoff Report's legal FAQ page contains a warning to anyone who might be considering suing the site: "any suit filed against us without probable cause may subject the complaining party and/or their attorneys to liability in the State of Arizona for wrongful use of civil proceedings. We don't mean to sound harsh, but if you knowingly file a frivolous lawsuit against us, regardless of where your case is filed, you and/or your lawyers can be subject to a lawsuit in Arizona in which a jury could, if appropriate, award both substantial compensatory and punitive damages against you."

This threat warns would-be plaintiffs that if they bring a lawsuit against the Ripoff Report and lose, Ripoff Report may respond by filing a new lawsuit against the unsuccessful plaintiff (and possibly their attorneys) for malicious prosecution. This type of action is commonly referred to as a "SLAPP-back lawsuit"[33] which derives its name from the acronym for strategic lawsuit against public participation or "SLAPP."

Ripoff Report does not disclose how many SLAPP-back lawsuits it has brought in the past. However one such action was filed on July 18, 2011 in federal court in Arizona against several parties and their attorneys. The underlying matter, Asia Economic Institute, LLC, et al., v. Xcentric Ventures, LLC, et al. was resolved in favor of Ripoff Report in May 2011 with an order granting summary judgment in favor of Ripoff Report as to all claims in the case. As the prevailing party in the earlier case, Ripoff Report's SLAPP-back lawsuit seeks damages in excess of $75,000 plus an unspecified amount of punitive damages.[34]

[edit] Lawsuits against competing sites

In addition to defending itself from lawsuits, on several occasions Ripoff Report has also acted as a plaintiff and has sued competitors who were accused of stealing content from Ripoff Report in an effort to increase their own popularity by expanding the amount of material on their competing sites.

On May 26, 2011, Ripoff Report filed a lawsuit in federal court in Arizona against the operator of a competing website located at www.scaminformer.com. The lawsuit against ScamInformer seeks copyright infringement damages of "not less than $63,000,000", plus injunctive and other relief.

On May 10, 2011, Ripoff Report filed a similar action for copyright infringement relating to a "copycat" website located at www.reportaripoff.co.

In December 2008, Ripoff Report filed a complaint in federal court in Arizona against a competitor, ComplaintsBoard.com, accusing it of violating U.S. copyright law by stealing "large quantities of copyrighted works from the Rip-off Report site without … permission or consent." The lawsuit further alleged that ComplaintsBoard violated U.S. trademark law by using Ripoff Report's name and trademarks to "mislead consumers" resulting in "substantial actual confusion among consumers" as to the relationship between the two websites.

ComplaintsBoard failed to respond to the lawsuit and in October 2009, a default judgmentwas entered in favor of Ripoff Report which awarded damages, attorney's fees, and costs of more than $60,000.00. The judgment also included a permanent injunction prohibiting ComplaintsBoard from using Ripoff Report's name or content in the future.[35] Ripoff Report was later awarded attorney's fees and other costs against ComplaintsBoard.[36]

[edit] Domain name disputes

Ripoff Report has occasionally taken action to shut down imposter sites by using ICANN's Uniform Domain Name Dispute Resolution Policy or UDRP. Such actions have included the following:

  • Xcentric Ventures, LLC v. Domain Privacy LTD,[37] (domain name <rippoffreport.com> ordered transferred to Ripoff Report)
  • Xcentric Ventures, LLC v. WhoisGuard,[38] (domain name <thebadbusinessbureau.com> ordered transferred to Ripoff Report)
  • Xcentric Ventures, LLC v. Mark Johnson,[39] (domain name <rip0ffrep0rt.com> ordered transferred to Ripoff Report)
  • Xcentric Ventures, LLC v. YDS Web Solution,[40] (domain names <ripoff-reporters.com>, <ripoff-reporter.com>, <ripoff-reporters.net>, <ripoff-reporter.net>, <ripoff-reporters.org>, <ripoff-reporter.org>, <ripoff-reporter.info> ordered transferred to Ripoff Report)
  • Xcentric Ventures, LLC v. Report A Rip Off, Inc,[41] (domain name <reportaripoff.net> ordered transferred to Ripoff Report)

[edit] References

  1. ^ Federal Document listing address
  2. ^ Global Royalties, Ltd. v. Xcentric Ventures, LLC, 544 F.Supp.2d 929 (D.Ariz. 2008)
  3. ^ 544 F.Supp.2d 929 Global Royalties, Ltd. v. Xcentric Ventures, LLC (D.Ariz. 2008)
  4. ^ Blockowicz v. Williams, 675 F.Supp.2d 912 (N.D.Ill. 2009), the United States District Court for the Northern District of Illinois.
  5. ^ Masnick, Mike (2009-12-24). "Should A Site Be Forced To Takedown Content If A Court Rules Against The User?". Techdirt.com. Archived from the original on 2010-09-20. http://www.webcitation.org/5sslmsKqn. Retrieved 2010-09-20. 
  6. ^ Blockowicz v. Williams, 630 F.3d 563, 2010 WL 5262726 (7th Cir. 2010)
  7. ^ Giordano v. Romeo, No. 09-68539-CA-25 (Fla. Cir. Ct. Dec. 28 2010)
  8. ^ injunction
  9. ^ Giordano v. Romeo, --- So.3d ---, 2011 WL 6782933 (Fla.App. 3rd Dist. 2011)
  10. ^ Ripoff Report Arbitration Page
  11. ^ Section 230 of the Communications Decency Act, Citizens Media Law Project.
  12. ^ Online Activities Covered by Section 230
  13. ^ MCW, Inc. v. Badbusinessbureau.com LLC, 2004 WL 833595 (N.D.Tex. 2004)
  14. ^ U.S. District Court, Central District of California Case No. 10-CV-1360
  15. ^ U.S. District Court, Northern District of Georgia Case No. 10-CV-398
  16. ^ 2009 WL 2915273
  17. ^ 2009 WL 62173
  18. ^ Goldman, Eric. Rip-off Report Rolls to Another Win--GW Equity v. Xcentric Ventures Technology and Marketing Law Blog, Technology and Marketing Law Blog, (January 19, 2010).
  19. ^ 544 F.Supp.2d 929
  20. ^ 2008 WL 450095
  21. ^ "Carmel Cafiero: "Risky Business"". WSVN Orlando Fox 7News www.bad-business-rip-off.net. http://www.bad-business-rip-off.net/7news-ripoffreport.wmv.  video
  22. ^ Han, Nydia (November 28 2006). "Consequences of Complaining Online An Action News Consumer Special Report". 6ABC WPVI-TV Philadelphia. http://abclocal.go.com/wpvi/story?section=consumer&id=4804312. 
  23. ^ "Search for all Xcentric related lawsuits on Citizen Media Law Project.". ripoffreport.com. http://www.citmedialaw.org/search/node/xcentric. Retrieved 2009-01-15. 
  24. ^ [http://www.scribd.com/doc/76595531/Antoine-v-Xcentric-Ventures-LLC-Order-of-Dismissal Dismissal
  25. ^ "William L. "Bill" Stanley". spamhaus.org. http://www.spamhaus.org/rokso/listing.lasso?-op=cn&spammer=William%20Stanley%20/%20Ironserver.com. 
  26. ^ "Docket case nr. 2:2007cv00954: Xcentric Ventures, LLC and Ed Magedson vs William Stanley, Robert Russo, QED Media Group, L.L.C., Defamation Action League and Internet Defamation League". Arizona District Court. http://dockets.justia.com/docket/court-azdce/case_no-2:2007cv00954/case_id-344869/. 
  27. ^ "Police Blotter: Dark side of 'reputation defending' service". CNET News.com. June 29 2007. http://news.com.com/2100-1030_3-6194158.html. 
  28. ^ http://img.pr.com/release-file/1007/252020/kenton-hutcherson-declaration.pdf Document mentioning the settlement agreement in the case Xcentric Ventures/Magedson vs QED Media/Russo
  29. ^ Alyon Technologies v. Badbusinessbureau.com, LLC Ed MAgedson Technolkogy Alliance Group LLC doing business as TGA d/b/a Tagnet.net, The Eastern Caribbean Supreme Court in the High Court of Justice Federation of Saint Christopher and Nevis Saint Christopher Circuit (Civil) A.D. 2003.
  30. ^ The Real Rip-Off Report Ed Magedson calls himself an advocate. His enemies call him an extortionist. Fenske, Sarah. Phoenix New Times. (February 1, 2007).
  31. ^ Asia Economic Institute, LLC v. Xcentric Ventures, LLC, Case No. 10-CV-01360
  32. ^ Levitt v. Yelp!, Inc., 2011 WL 5079526 (N.D.Cal. Oct. 26, 2011)
  33. ^ "SLAPP-back lawsuit"
  34. ^ Summary Judgment
  35. ^ default judgment
  36. ^ awarded an additional $40,000 in attorney's fees
  37. ^ Case Number: FA0710001087178
  38. ^ Case Number: FA0802001153351
  39. ^ Case Number: FA0806001203824
  40. ^ Case Number: FA0912001298258
  41. ^ Case Number: FA1012001363406

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