July 22, 2005
Ripoffreport.com Wins 47 USC 230 Case
Whitney Information Network, Inc. v. Xcentric Ventures, LLC, 2005 WL 1677256 (M.D. Fla. Jul 14, 2005).
The plaintiff runs real estate training programs. The defendants run ripoffreport.com and ripoffrevenge.com where consumers can submit complaints about businesses. The consumers write the critiques, but the defendants select which ones to publish.
The opinion is a little cryptic what happened, but apparently the defendants posted some critical consumer critiques. I was able to find some examples of the complaints that may have been the basis of the lawsuit. The critques then got good search engine indexing--presumably meaning that when searchers looked for the plaintiffs at the search engines, the critical opinions were prominently displayed in the search results.
The plaintiffs sued for defamation. The defendants moved to dismiss the complaint based on 47 USC 230, which the court granted immediately. This is not surprising--the defamation is based on third party content that the defendants chose to publish, so this is an archetypical application of 47 USC 230.
My only question: why did the plaintiffs even try the defamation cause of action? Didn't they know that the cause of action would be immediately mowed down on a motion to dismiss? Why didn't they at least try some creative plead-arounds? Plead-arounds have a low chance of success, but they would have had more likelihood of success than bringing a complaint covered squarely by 47 USC 230.
(I should hasten to add that the plaintiffs may have been emboldened by MCW Inc. v. badbusinessbureau.com, 2004 WL 833595 (N.D. Tex. Apr. 19, 2004). The defendant in that case is the same as the defendant in this case, and the MCW case is one of the very few aberrational cases suggesting that 47 USC 230 can be bypassed if sufficient website involvement is alleged).
The plaintiffs also sued for trademark infringement (and some related causes of action). The court also grants the defendants' motion to dismiss, saying that there is no possibility of likelihood of confusion between a gripe site and the real estate training firm's website. I'm not 100% convinced that the court's discussion here is consistent with trademark law, but I am 100% convinced that the court improperly made findings of fact in granting the motion to dismiss. At minimum, the court needed to convert its decision to a summary judgment.
Whatever the way we get there, this ruling makes clear that this judge doesn't want to hear from a grumbly business that a website offering consumer complaints about the business is engaging in trademark infringement. This is the right result as a matter of policy, but I remain frustrated with how many judges are willing to let trademark plaintiffs hamper the free flow of reputational information.
This case is a useful precedent for any websites that allow consumers to rate/grade business partners--including sites like Amazon and eBay that have feedback mechanisms, and (naturally) websites that allow consumers to have their say, like my former employer Epinions.
Hat tip to InternetCases.com for catching this one.
For voyeurs, you might be interested in my personal experience with ripoffreports.com and a pugnacious plaintiff.