Court Order Takes Another Stab At Stripping Away Ripoff Report's Section 230 Protections

Legal Issues

from the and-the-entity-doing-the-most-damage-to-section-230-is... dept

If anyone’s going to succeed in carving a slice out of Section 230 protections, it’s probably not going to be law profs and their terrible revenge porn legislation proposals. It will be Xcentric/Ripoff Report, a company that greatly benefits from these protections, but seems intent on muddying the third-party liability waters with questionable actions.

Eric Goldman covers yet another lawsuit involving Xcentric, one that could potentially cause some problems for thousands of other websites and platforms, thanks to lousy 10th Circuit precedent and the presiding judge’s less-than-impressed take on Ripoff Report’s tactics. Goldman quotes a fair bit of the order denying Xcentric’s motion to reconsider its earlier (denied) motion to dismiss, pointing out the dubious precedent the court is relying on, as well as the inferences it draws from various Ripoff Report actions and statements.

First off, the court refers to 2009’s FTC vs. Accusearch decision, which contains one of the district’s more dubious Section 230 rulings.

Xcentric’s motion fails on the merits. The controlling authority for the interpretation of the CDA in the Tenth Circuit is FTC v. Accusearch Inc., 570 F.3d 1187 (10th Cir. 2009). Notwithstanding Xcentric’s claim that the Tenth Circuit was haphazard in its language, the Court stated: “We therefore conclude that a service provider is ‘responsible’ for the development of offensive content only if it in some way specifically encourages development of what is offensive about the content.”

The court came to the right decision then, but for the wrong reasons. Accusearch (aka, Akiba) was selling illicitly-obtained phone records, something that was clearly illegal. The court decided this implicated Section 230, thanks to Akiba raising it as a defense. It argued it was only the conduit between buyers and sellers and did no collection of phone records itself. This was partly true. But Akiba did more than act as an Amazon or Ebay of phone records. It directly sold records provided by third parties. This should have been what erased its Section 230 protections, but the court thought otherwise.

It ruled that Akiba was a “publisher” or “speaker,” using very vaguely-drawn definitions of these terms. Furthermore, it asserted Akiba “participated in the creation or development of information,” something it didn’t seem to have done.

Goldman:

As for the interpretation of “creation and development,” I don’t see how anyone can interpret those words to include retailing a record without any modifications at all.

So, the court reached the right decision but deployed dodgy arguments. Now these arguments are being used to punch holes in Section 230 in this Xcentric case.

On top of the questionable precedent it cites, the court also finds other actions by Xcentric to be adversely effecting its 230 protections.

Xcentric argues that drawing all inferences in favor of Vision Security, it must be found to have been a neutral publisher. The facts as alleged, however, support a contrary conclusion. Applying the Iqbal standard, the court must give weight to the following allegations: Xcentric maintains the “Ripoff Report” website with a tag line, “By Consumers, for consumers” and “Don’t let them get away with it. Let the truth be known.” Contrary to the stated tagline, the Ripoff Report allows competitors, not just consumers, to post comments. The Ripoff Report home page states: “Complaints Reviews Scams Lawsuits Frauds Reported, File your review. Consumers educating consumers.” These allegations allow a reasonable inference that the Ripoff Report encourages negative content.

From there, the court wanders into a discussion of something nearing extortion allegations.

These specifically pleaded facts support a reasonable inference that Xcentric was not a neutral publisher. It had an interest in, and encouraged, negative content. It refused to remove the content, even when told by the author that it was false and he wanted it removed. What interest would a neutral publisher have in maintaining false and harmful content against the wishes of the author unless it advanced its own commercial interests? The alleged facts allow a reasonable inference that Xcentric refused to remove the offensive content to promote its own corporate advocacy program. Indeed, it is reasonable to infer that the very raison d’etre for the website was to commercialize on its ability to sell its program to counter the offensive content the Ripoff Report encouraged.

The conclusion the court reaches is that Xcentric is not immune under Section 230. This case hasn’t been decided yet, but these opinions — considering the precedent being cited — have the potential to do genuine harm to Section 230 protections, at least in the Tenth Circuit. As Goldman points out, a favorable ruling employing these arguments would lay out a welcome mat for a ton of questionable lawsuits.

What stands out most to me is the favorable citation to the Accusearch case. It’s the governing law in the Tenth Circuit, so it’s an entirely appropriate citation, but this is additional evidence that perhaps the Accusearch case has done more damage to Section 230 than the more publicized Roommates.com case. I’m reminded of another recent bad Section 230 ruling, the General Steel v. Chumley case, also in the Tenth Circuit and also favorably citing Accusearch. To me, I’m getting nervous that Accusearch has tainted the Tenth Circuit’s jurisprudence such that we’ll see continued anomalous cases there. It would be a green light for Section 230 haters to forum-shop their cases into the Tenth Circuit.

Goldman also posits this combination of rulings has turned the definition of “neutral publisher” into an unreachable ideal.

The court’s legal test of “neutral publisher” is an oxymoron and incoherent. By definition, no publisher is ever neutral. Instead, any legal standard dependent on “neutrality” becomes a placeholder for other social norms. As we saw in the Washington Supreme Court Backpage ruling, when the battleground shifts to a website’s purported “neutrality,” the defendants are in trouble. In this case, the court misinterprets “neutrality” to mean that soliciting only negative reviews wasn’t “neutral.” By the same implication, then, a website that only permitted positive reviews wouldn’t be “neutral” either (for example, eBay’s feedback forum restricts sellers to only leaving positive feedback for buyers). […] Now, in light of the Backpage ruling, I expect anti-230 plaintiffs will call the defendant “non-neutral” in every complaint. Can’t hurt, might help.

That’s something Section 230 doesn’t need: additional opportunities for misguided plaintiffs to throw every argument against a friendly venue’s walls and hope that something sticks. Ripoff Report — which spends a great deal of time in court — uses its Section 230 protections to their fullest extent. The problem is that it deploys certain tactics that courts find unpleasant. While these really shouldn’t be enough to strip it of these protections, the tactics do seem to be having a deleterious effect on judges’ opinion of the website. And once one decides it has crossed the line, Section 230 protections will begin eroding quickly.

Filed Under: cda, jurisdiction shopping, liability, secondary liability, section 230, tenth circuit
Companies: ripoff report, xcentric