Rip-off Report Rolls to Another Win–GW Equity v. Xcentric Ventures

By Eric Goldman

GW Equity LLC v. Xcentric Ventures LLC, 2009 WL 62173 (N.D.Tex. Jan. 9, 2009)

I previously blogged about this case in October when the magistrate judge issued his report and recommendations finding that Rip-off Report was immune from the plaintiff’s claims per 47 USC 230. I thought that ruling was noteworthy because it addressed–and rejected–three principal arguments that plaintiffs use against the Rip-off Report:

1) Rip-off Report offers users pulldown menus to tag their reports

2) Rip-off Report writes titles and other parts of user reports

3) Rip-off Report profits from its Corporate Advocacy Program

As I mentioned in my last post, the plaintiff objected to the magistrate recommendations, so the district court judge reviewed the objections. In this careful and thoughtful ruling, Judge O’Connor overrules the objections and upholds the magistrate recommendations in total–affirming summary judgment dismissal in favor of Rip-off Report.

Although the judge doesn’t add much new analysis to the magistrate report, there are still some good nuggets:

* the MCW precedent (a rare adverse ruling for the Rip-off Report) is distinguishable because it only dealt with a motion to dismiss, not summary judgment.

* the en banc ruling does not apply because that decision turned on the fact that merely asking the discriminatory question was illegal under the Fair Housing Act, whereas here the pulldown tagging options are not per se illegal.

* the opinion discusses Rip-off Report’s “content monitors,” who in some cases admitted that they have added the words “rip-off,” “fraud” and geographic information to user-submitted postings. However, the testimony indicated that it had been “years” since the word “rip-off” was added by Rip-off Report, and any added geographic information would be inconsequential to the legal analysis.

* in a different lawsuit involving GW Equity, Dickson Woodard testified in a deposition that Magedson, not Woodard, wrote some postings putatively from Woodard. The court does not permit the deposition to be introduced in this case because Rip-off Report did not have a chance to participate in that deposition.

* In this lawsuit, the plaintiffs introduced an affidavit from Josh Bammel that he uploaded negative reports about GW Equity to Rip-off Report and the published reports contain words he didn’t write. At his deposition, he acknowledged that he had been drinking before making the postings, and in his words, “[a]fter four or five Crown and Cokes, man, you aren’t going to remember what you wrote.” It reminds me a little of the Lucy v. Zehmer case, where the putative seller of real property–documented in a bar on a bar receipt–said that he was “high as a Georgia pine.” With an admission like this, the affidavit was properly excluded.