May 09, 2008
Ripoff Report Responds re. Xcentric Ventures v. Village Voice
By Eric Goldman
Last week I blogged about a lawsuit that some of the Ripoff Report folks brought against the Phoenix New Times and its reporter, Sarah Fenske, for defamation based on quotes attributed to attorney Christopher Sharp in an article published in February 2007. In my post, I pointed out some potentially ironic aspects of the lawsuit. Thomas Duffy, general counsel of Xcentric Ventures (the company that operates the Ripoff Report), was kind enough to send me a reply, which I am republishing below with his permission. (Note: I don't plan to let this blog become a new battleground to litigate the case in public, but I thought this response deserved airtime). I don't have much commentary to add to this response but I gratefully welcome thoughts from those of you who have faced similar litigation choices. In all cases, I sincerely hope the parties can find a prompt solution that doesn't involve wasted litigation expenses.
TEXT OF LETTER -----------------------------------------
Dear Professor Goldman:
Your analysis of the New Times suit is, as usual, very insightful. Rip-off Report not only saw the irony of a suit against New Times, but actually was loathe to even file the suit. In fact, we still have not even served it on the New Times. Here's the catch-22 that led to filing the suit: Sharp (the attorney quoted in the New Times) keeps saying he was taken out of context and the quote might not have been accurate. I am sure you have heard of the "empty chair" defense -- when a defendant points to someone not there to say it is their fault. Even with Sharp's statements that the quote was not accurate, we still did not want to involve New Times in a suit so we sent them a subpoena asking for the recording of the interview (if it exists), for any notes of the interview or to take Ms. Fenske's deposition. The answer we got was no, no and no. We will be filing a motion to compel. In the meantime, the statute of limitations would have run if we did not at least file the suit. Imagine if Fenske's testimony eventually is, "That's not what Sharp said at all and I intentionally misquoted him." Neither litigation counsel nor I wanted to explain to Ed nothing could be done because the statute of limitations has run. I am sure you understand this "in the trenches" litigation dilemma.
Even with all these litigation considerations, Rip-off Report would not have filed the New Times suit if they had simply published a retraction that what Attorney Sharp said was not supported by any evidence OR if New Times had proven to us that Sharp did actually say what was attributed to him. As you know, people assume newspapers have been fact checked and Ed and Rip-off Report just wanted a simple statement that Sharp's statement was unverified or, in the alternative, proof that Sharp was actually responsible for the statements in question.
As you point out, the irony was not lost on us that this situation is very similar to the usual attempt to get around Section 230 by claiming that Ed wrote the Rip-off Report in question. Proving that negative is never easy given that we guaranteed the report writer's anonymity. There are no such concerns here: there is a statement which has been attributed to Sharp and there may be a tape of the interview. There is no reason to keep a tape or notes private: the Shield Laws do not apply (Sharp was not an anonymous source and specifically waived any privilege), it is extremely relevant and, sooner or later, it is going to have to be produced. Given this doubt about who actually uttered the statements in question, I must respectfully point out that, even if New Times were solely an online provider, the suit against them would still be in exactly the same posture. There is an unfair dichotomy between print and online providers but this is not a case that shows the dichotomy: online or off, Ed and Rip-off Report will leave New Times alone if shown New Times is not responsible for the quote. Similarly, if New Times misquoted Mr. Sharp as he claims, there would be liability for both print and online media. Simply put, this is not a derivative liability case but Ed does want to get to the bottom of the issue of who made the statements.
I wish we could just assume that New Times had properly quoted Mr. Sharp. Unfortunately, there are some questions about New Times' motives in this. New Times knows Ed runs a legitimate site: they had listed Rip-off Report as the best consumer website in the past and Ed had assisted all the New Times newspapers around the country including the Village Voice before and after New Times purchased it. We have our suspicions about why New Times decided to do a hatchet job on Ed but we will leave that for another day. What I can tell you for sure is that Ed's contacts at several government agencies, such as the IRS, and members of the Corporate Advocacy Program independently told Ed that Ms. Fenske was only looking for dirt on Ed. When they had nothing but praise for Ed and Rip-off Report, she was not interested in what they had to say.
In summation, the problem here is New Times' lack of cooperation leaving us no choice in the particular (and, perhaps, peculiar) factual situation. For the sake of media accuracy, we hope New Times can show the statements are solely attributable to Mr. Sharp but, until they do, we have a client to protect.
Thank you for your commentary and for all your work keeping us all up to date on the latest in Internet Technology, Marketing and First Amendment Law.
END OF LETTER TEXT ----------------------------------
Thomas B. Duffy,
General Counsel to Xcentric Ventures, LLC
Posted by Eric at May 9, 2008 09:40 AM | Derivative Liability
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