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'''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 Arizona.<ref>[http://news.justia.com/cases/featured/arizona/azdce/2:2007cv00954/344869/ Federal Document listing address]</ref> Ed Magedson is the site’s [[Editor-in-Chief]].
'''Ripoff Report''' is a privately-owned and operated for-profit [[website]] founded by [[consumer advocate]] and well known homosexual, Ed Magedson. The Ripoff Report has been online since December 1998 and is operated by Xcentric Ventures, LLC which is based in Arizona.<ref>[http://news.justia.com/cases/featured/arizona/azdce/2:2007cv00954/344869/ Federal Document listing address]</ref> Ed Magedson is the site’s [[Editor-in-Chief]].


==Background==
==Background==

Revision as of 05:20, 1 July 2011

Ripoff Report
Type of site
Consumer
Available inEnglish
Created byEd Magedson
URLhttp://www.ripoffreport.com/

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

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 February 2011, the Ripoff Report contains more than 600,000 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.

Criticism and controversy

Some aspects of the Ripoff Report have been the subject of significant criticism. Some of this criticism has resulted in litigation against the site. The Ripoff Report maintains a very lengthy section on the site devoted to discussing many of these issues and explaining the site's position as to each issue.[2] The page includes Ripoff Report’s answers to various questions including:

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 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 ruling, Global Royalties, Ltd. v. Xcentric Ventures, LLC, 544 F.Supp.2d 929 (D.Ariz. 2008), the court found that Ripoff Report was not required to remove reports in this context.[3]

Plaintiffs have also attempted to remove reports by suing the author and obtaining an injunction requiring the removal of the offending content. In one case, Blockowicz v. Williams, 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][6][unreliable source?] [7] 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, Blockowicz v. Williams, --- F.3d ---, 2010 WL 5262726 (7th Cir. 2010), which affirmed the lower court’s decision and agreed that Ripoff Report was not required to comply with the lower court’s injunction.

On day after the Seventh Circuit’s ruling in Blockowicz, a Florida state court reached the opposite conclusion in Giordano v. Romeo, No. 09-68539-CA-25 (Fla. Cir. Ct. Dec. 28 2010). In Giordano, the court held that the law allowed it to issue an injunction requiring Ripoff Report to remove a complaint posted by a third party. One observer called the court’s decision “a baffling and clearly erroneous ruling.” Ripoff Report is currently appealing the ruling.

New Arbitration Program

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.” [8] 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.

Litigation Involving Communications Decency Act Immunity

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.[9] 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.[10]

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 in MCW, Inc. v. Badbusinessbureau.com LLC, 2004 WL 833595 (N.D.Tex. 2004) 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 in MCW 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 have generally rejected the argument that MCW establishes that Ripoff Report is not entitled to CDA immunity.

Other notable cases involving the Ripoff Report include the following:

  • Intellect Art Multimedia, Inc. v. Milewski, 2009 WL 2915273 (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, 2009 WL 62173 (N.D.Tex. 2009) summary judgment entered in favor of Ripoff Report based on CDA immunity)[11]
  • Global Royalties, Ltd. v. Xcentric Ventures, LLC, 544 F.Supp.2d 929 (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, 2008 WL 450095; 2008 U.S. Dist. LEXIS 11632 (M.D.Fla. Feb. 15, 2008) (summary judgment entered in favor of Ripoff Report based on CDA immunity).
  • A-1 Technology, Inc. v. Ed Magedson, 2011 150033/10; (N.Y. Sup. Ct. June 22, 2011) (claims against Ripoff Report dismissed).

Other Lawsuits Against Ripoff Report

Many other companies have sued Ripoff Report, but so far none of these cases have ever been resolved against the site.[12][13][14] Some previous suits can be reviewed at Citizen Media Law Project.[15] 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.[16][failed verification]
  • On February 11, 2010, a lawsuit was filed in Georgia. The entire complaint appears to have been copied verbatim from another case.[17][18]
  • On January 27, 2010, a lawsuit was filed against Ripoff Report in California, accusing Ripoff Report and Magedson of attempted extortion and RICO Act violations, among other claims.[19][20]
  • 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.[21]

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,[22] 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.[23][24][25]

Default Judgment Against Ripoff Report and Ed Magedson

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.[26] 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 of 2010 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.

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.[27] The current number of participants in the program is not known, however the site makes no effort to conceal the identity of program members – a search for “corporate advocacy” conducted on the site returns more than 1,600 results with titles clearly announcing the name of any company that has joined the program.

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 in Asia Economic Institute, LLC v. Xcentric Ventures, LLC, Case No. 10-CV-01360 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.

Ripoff Report's 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.

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 judgment was 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. Ripoff Report was later awarded an additional $40,000 in attorney’s fees and other costs against ComplaintsBoard.

On May 10, 2011, Ripoff Report filed a similar action for copyright infringement relating to a "copycat" website located at www.reportaripoff.co. According to the Complaint, Ripoff Report alleged "Since at least November 2010, Defendants ... have engaged in a campaign to willfully infringe Plaintiff’s ... Copyright and to engage in deceptive and unlawful commercial use of Plaintiff’s registered trademarks ... ." The lawsuit seeks damages, attorney's fees, and injunctive relief.

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, Case Number: FA0710001087178 (domain name <rippoffreport.com> ordered transferred to Ripoff Report)
  • Xcentric Ventures, LLC v. WhoisGuard, Case Number: FA0802001153351 (domain name <thebadbusinessbureau.com> ordered transferred to Ripoff Report)
  • Xcentric Ventures, LLC v. YDS Web Solution, Case Number: FA0912001298258 (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, Case Number: FA1012001363406 (domain name <reportaripoff.net> ordered transferred to Ripoff Report)

High Search Engine Visibility and Search Engine Optimization

Complaints posted on the Ripoff Report are often highly ranked on search engine results pages, giving these complaints significant public visibility. Because the Ripoff Report does not verify reports for accuracy before they are published, many critics have complained that the site creates a safe haven for the publication of false or fabricated reports.

In May 2009, Ripoff Report filed a lawsuit against a Washington state-based Search engine optimization firm, SEOmoz.org, claiming that the site made false statements about the Ripoff Report in an article entitled The Anatomy Of A Ripoff Report Lawsuit. Ripoff Report's lawsuit against SEOmoz was dismissed for lack of personal jurisdiction.[28] The complaint also claimed that SEOmoz encouraged third parties to file frivolous lawsuits against Ripoff Report.

On February 4, 2010, Ripoff Report's lawsuit against SEOmoz was dismissed for lack of personal jurisdiction. In its ruling, the District Court held that the defendants (residents of Washington state) were not subject to personal jurisdiction in Arizona because publishing allegedly false statements on the Internet is, standing alone, not sufficient to expose the defendant to jurisdiction in the plaintiff's home state. Ironically, courts have reached the exact opposite conclusion in other cases in which Ripoff Report was a defendant. In another case, the court found that Xcentric was properly subject to personal jurisdiction in Tennessee based on the publication of reports about a Tennessee-based company. (EASI v. Xcentric Ventures, LLC, 2007 WL 15577202 (M.D.Tenn. 2007), United States District Court in Tennessee.)

References

  1. ^ Federal Document listing address
  2. ^ About Us: Want to sue Ripoff Report? Do you really want to sue Ripoff Report? You should read this information before filing a lawsuit against Ripoff Report or the Founder ED Magedson.
  3. ^ 544 F.Supp.2d 929 Global Royalties, Ltd. v. Xcentric Ventures, LLC (D.Ariz. 2008)
  4. ^ Blockowicz v. Williams, ___ F.Supp.2d ____, (N.D.Ill. 2009), the United States District Court for the Northern District of Illinois.
  5. ^ Ripoff Report Not Bound by Takedown Injunction Against User--Blockowicz v. Williams. Goldman, Eric. Technology & Marketing Law Blog]. (December 22, 2009).
  6. ^ Court: 'no recourse' for victims of defamatory postings under Section 230 Sheffner, Ben. Copyrights & Campaigns. (December 22, 2009)
  7. ^ 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. Retrieved 2010-09-20.
  8. ^ Ripoff Report Arbitration Page
  9. ^ Section 230 of the Communications Decency Act, Citizens Media Law Project.
  10. ^ Online Activities Covered by Section 230
  11. ^ 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).
  12. ^ "Carmel Cafiero: "Risky Business"". WSVN Orlando Fox 7News www.bad-business-rip-off.net. video
  13. ^ Han, Nydia (2006). "Consequences of Complaining Online An Action News Consumer Special Report". 6ABC WPVI-TV Philadelphia. {{cite journal}}: Unknown parameter |month= ignored (help)
  14. ^ "Elderly Couple Scammed Trying To Put Their Business Online". WOIO 19ActionNews. 2007. {{cite journal}}: Unknown parameter |month= ignored (help)
  15. ^ "Search for all Xcentric related lawsuits on Citizen Media Law Project". ripoffreport.com. Retrieved 2009-01-15.
  16. ^ Seth Greenky v Jeffrey Joslin Xcentric Ventures LLC RipoffReport.com
  17. ^ Complaint Herman & Russo, P.C. v. Xcentric Ventures, LLC et al.
  18. ^ Certain Approval Programs, LLC v. Xcentric Ventures, LLC No. CV08-1608.
  19. ^ 'Asia Economic Institute, LLC v. Xcentric Ventures, LLC, et al., Los Angeles County Superior Court Case No. SC106603
  20. ^ Portions of the complaint appear to have been copied verbatim from prior cases.Energy Automation Systems, Inc. v. Xcentric Ventures, LLC et alEnergy Automation Systems, Inc. v. Xcentric Ventures, LLC
  21. ^ Dr. Max Antoine v. Xcentric Ventures, LLC, et al.
  22. ^ "William L. "Bill" Stanley". spamhaus.org.
  23. ^ "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.
  24. ^ "Police Blotter: Dark side of 'reputation defending' service". CNET News.com. 2007. {{cite journal}}: Unknown parameter |month= ignored (help)
  25. ^ 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
  26. ^ 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.
  27. ^ 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).
  28. ^ The Anatomy Of A Ripoff Report Lawsuit, Bird, Sarah seomoz.org. (January 21, 2008).
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