Ripoff Report Folks Sue Newspaper and Reporter for Defamation–Xcentric Ventures v. Village Voice

By Eric Goldman

Xcentric Ventures v. Village Voice Media, CV 2008-02416 (Ariz. Superior Ct. complaint filed Jan. 31, 2008). The case history.

I’ve lost count of the number of times I’ve blogged on lawsuits involving Ed Magedson and related entities Xcentric Ventures, the Ripoff Report, badbusinessbureau.com and others. Certainly they seem to get sued a lot, especially for defamation, as Sarah Bird documented here. If I spent that much time in court, the last thing I’d want to do is bring a lawsuit. But as Sarah Bird’s report enumerates, Magedson and his group have gone on the offensive a few times. Some people just seem destined to spend their lives litigating.

This lawsuit relates to a lengthy and in-depth article on Magedson and the Ripoff Report written by Sarah Fenske that published in February 2007. (I mentioned this article in a blog post here.) To minimize my risk of being the next defendant, I won’t restate the allegedly defamatory language, but it involves a purported quote of Christopher Sharp, a Florida attorney representing Whitney Information in their lawsuit against the Ripoff Report group. See pages 3-4 of the complaint. Not only did the plaintiffs sue the story’s publisher (the Phoenix New Times and its parent the Village Voice), but they sued the reporter Sarah Fenske and her husband (as a Doe to be named later) as well.

On the one hand, I understand why the Ripoff Report group sued over these quotes. I suspect the Phoenix New Times article already has been cited in various plaintiffs’ briefs, and I’m sure that future plaintiffs will continue to do so unless the Ripoff Report group clears their names and establishes the falsity of Mr. Sharp’s allegations.

On the other hand, I thought this lawsuit was rich with irony. In earlier drafts of this post, I had a long list of ironies, many of which I ultimately decided were too snarky even for me. You’ll have to use your imagination. Instead, I’ve decided to focus on just two odd aspects of this lawsuit.

Why Sue the Intermediary?

According to Sarah Bird’s report, Magedson filed a lawsuit against Sharp in February 2007. I haven’t seen the complaint or other case documents, but given the timing I suspect that the lawsuit involves his article quotes (and maybe other issues). The complaint says that Mr. Sharp now “contends that the quotes attributed to him were taken out of context and/or were improperly quoted,” so perhaps the plaintiffs now feel that Sharp has adequately recanted. Either way, a lawsuit against Sharp should be adequate to clear the Ripoff Report’s name.

As a result, unless the Phoenix New Times completely fabricated the statement (which the complaint didn’t allege), the plaintiffs should be satisfied pursuing only Sharp. Indeed, if a company has a problem with a user-supplied report published on Ripoff Report, the Ripoff Report folks say to take it up with the user and leave the Ripoff Report out of it. When the shoe is on the other foot, why did the plaintiffs go after the intermediaries as well?

Cyberspace Exceptionalism

Ripoff Report owes its existence to 47 USC 230. Without that immunization, Ripoff Report almost certainly would have been sued to oblivion. But 47 USC 230 is an exceptionalist statute available only to online media companies. Offline media companies don’t get the same protection, creating a regulatory imbalance that puts offline print publishers at a competitive disadvantage. See Randy Picker’s comments on this point.

So if the Phoenix New Times had published the allegedly defamatory third party quotes only in its online edition, it should have been clearly and fully insulated by 47 USC 230 (as the plaintiffs well know because they helped create some of the expansive 230 precedent that would apply). In contrast, the plaintiffs can bring this lawsuit only because the Phoenix New Times also chose to publish the exact same article in its dead trees edition. I understand that 230 creates this medium-specific dichotomy in defamation law, but if it were my decision, I wouldn’t want to take advantage of it.

UPDATE: I’ve posted the complaint in Magedson v. Sharp.

UPDATE 2: See the response from Ripoff Report’s general counsel.

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