Ripoff Report Gets a Pricey Lesson on Section 230–Selker v. Xcentric

March 4, 2023 · by · in Derivative Liability

I’ve blogged many Ripoff Report cases over the years, but it’s been a while since my last one (looks like 2018?). In this case, the plaintiff alleges that someone posted a false attack review; he paid Ripoff Report $2,500 to deindex the review; and he tried to enter into Ripoff Report’s “VIP arbitration” service but wouldn’t agree to the arbitration clause and therefore wasn’t able to get the service. He  brought a state court class action lawsuit against Ripoff Report, alleging violations of CA B&P 17200 and the implied covenant of good faith. Ripoff Report removed the case to federal court. The plaintiff successfully remanded the case back to state court and got some of its attorneys’ fees covered.

Section 230

Ripoff Report claimed that removal was justified because Section 230 completely preempted the state law claims. The court rejects the argument because of Section 230(e)(3)’s language that “[n]othing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section.” Cites to Zeran v. AOL (the district court opinion!), Cisneros v. Sanchez, ARK v. La Petite, Leviston v. Jackson, and RL Lackner v. Sanchez.

Ripoff Report cited Murphy v. Twitter, but the court “disregards” it as “inapplicable” because it focused on a different substantive question and arose in a different procedural posture.

Attorneys’ Fees

although the Ninth Circuit has not directly stated that the CDA does not completely preempt state law claims, the statutory language leaves no question as to Congress’ intended scope of preemption….The statutory language of § 230(e)(3) forecloses the possibility of complete preemption. As such, there was no objectively reasonable basis for Defendant’s to remove the case based on complete preemption by the CDA.

On that basis, the court awards $14,605.

Implications

In the ARK case, I wrote: “Section 230 as a basis for removal isn’t a new issue; Cisneros is directly on point and from 2005; but the question has not been litigated frequently. Yet, to this court, it’s so clear that Section 230 doesn’t provide a basis for removal to federal court that it’s sanctionable. News You Can Use.” Sounds like it was indeed news that Ripoff Report could have used.

Case Citation: Selker v. Xcentric Ventures LLC, 2023 WL 2316200 (S.D. Cal. March 1, 2023)