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Court Dismisses Ripoff Report's Malicious Prosecution Lawsuit Against People Who Sued It Five Years Ago

from the no-winners;-just-multiple-losers dept

There aren't too many user-generated-content-reliant sites that defend their Section 230 turf more viciously than Ripoff Report. This has earned it a thuggish reputation, something its pay-for-play quasi-reputation management offerings do little to dispel. For better or worse (and it's definitely some of each), Section 230 is the Ripoff Report's load-bearing center.

Because of its entrenched defense, those hoping to skirt the site's Section 230 protections have tried a number of questionable legal gambits. One person got a court to assign him the copyright on a particularly nasty review, which he then used to pursue a copyright infringement lawsuit against the site. In this case, the Asian Economic Institute attempted to quash critical reviews by claiming Ripoff Reports was engaged in extortion (with its for-pay "Corporate Advocacy Program," which advocates on behalf of aggrieved companies).

This Section 230-dodging tactic didn't work. The court found little that backed up AEI's racketeering claims -- claims that shifted mid-trial when Ripoff Report revealed it had secretly recorded all of its phone conversations with the plaintiffs.

Rather than enjoy its victory, Ripoff Reports (as Xcentric) filed its own lawsuit against the AEI principals, alleging malicious prosecution. Proving once again that two wrongs don't make a right, the Ninth Circuit Court of Appeals has found… well, not exactly for the defendants (the former AEI plaintiffs), but rather that Xcentric (the company behind Ripoff Report) was capable of filing equally-baseless lawsuits. From the opinion:

Xcentric Ventures appeals the district court’s grant of summary judgment and judgment on the pleadings in favor of defendants Mobrez and Llaneras and Rule 12(b)(6) dismissal of defendant Borodkin in Xcentric’s malicious prosecution action. We have jurisdiction pursuant to 28 U.S.C. § 1291 and review de novo. We agree with the district court that Xcentric cannot prove an element of its malicious prosecution claims, that the underlying claims were brought or continued without factual or legal probable cause. We also deny Borodkin’s motion for sanctions.
As the court points out, the very low bar of "legal probable cause" was met by the defendants' prior extortion claims. That the claims ultimately were determined to be without merit does not raise the original lawsuit to the level of "malicious prosecution." The appeals court affirms the lower court's decision.

The former plaintiffs (now defendants) are also graceless winners. Rather than walk away from the twice-dismissed lawsuit, Mobrez and Llanernas approached the Ninth Circuit Appeals Court and asked it to publish the decision it had rendered more than two months earlier. Why? Well, apparently so they could show the world that they too were capable of having a questionable lawsuit against them dismissed -- much like theirs against Xcentric was five years earlier. Um... touché?

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Filed Under: lawsuits, malicious procecution, ninth circuit, section 230
Companies: asian economic institute, ripoff report, xcentric


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  1. identicon
    Anonymous Coward, 26 Aug 2015 @ 10:02pm

    Re:

    … the racketeering extortion claims that were litigated here. That claim was dismissed for lack of evidence, not Section 230.
    Indeed, Mr Masnick's 2010 Techdirt article links to Eric Goldman's blog post, which states as much. And the July 19, 2010 decision from the Central District of California confirms Mr Goldman's read:
    D. Plaintiffs’ RICO Claims
     . . . .
    In their motion for summary judgment, Defendants assert that Plaintiffs have not presented sufficient evidence to establish a triable issue of fact that Defendants engaged in the predicate act of extortion or attempted extortion. For the reasons stated below, the Court agrees.
    Note that Mr Cushing's article above talks about a “Section 230-dodging tactic”.

     

    Parenthetically, I do see, though, that Judge Snow's March 20, 2013 order refers to Judge Wilson's May 4, 2011 order, which states:
    Whether Defendants are shielded from liability by the CDA is at the heart of this case.
    But then Judge Snow's March 20, 2013 order states:
    The specific factual allegations contained in Xcentric's FAC focus on the litigation of the extortion claims by the AEI Plaintiffs. Xcentric's allegations regarding the other claims are limited to general assertions that those claims were "groundless."

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