District Court Allows Claims to Proceed Against Ripoffreport.com For Copyright Infringement And “Unfair or Deceptive” Acts In Connection With Allegedly False Online Review

by Foley Hoag LLP - Trademark, Copyright & Unfair Competition
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RippoffWe previously reported on the unique cyber dilemma faced by Richard Goren, a Massachusetts attorney.  Back in 2012, a disgruntled former client of Goren’s logged onto the consumer review site, Ripoff Report (http://www.Ripoff Report/), and posted an outlandish – and apparently false – review of Goren’s business.  The review referred to Goren  as “Psycho-Richard” and accused him of, among other things, fraud, child abuse, domestic violence, drug addiction and “problems coping with his own sexuality.”  Goren sued the client for defamation in the Massachusetts Superior Court and won. He even had the copyright to the review assigned to him, so that he could use the Digital Millennium Copyright Act (DMCA) to have it taken down.

So why is the review still online? Because Ripoff Report has refused to remove it. According to Goren, Ripoff Report’s policy is that it “will not remove a report from its website even if the report is adjudged defamatory.” Instead, Ripoff Report offered Goren the chance to join its “Corporate Advisory Program,” which Ripoff Report advertises will help “repair your reputation” by making search engine results more positive. In addition, Ripoff Report also offers a “VIP Arbitration” service, through which the target of a bad review might be able to get some portions of it redacted.

But Goren wanted the review down, not redacted, and he didn’t want to pay the fees associated with Ripoff Report’s services. He brought suit against Xcentric Ventures LLC, which runs Ripoff Report, in the District of Massachusetts.  The complaint included counts of copyright infringement, defamation and violation of the Massachusetts Consumer Protection Act. Ripoff Report moved to dismiss.

The Court’s Ruling

On March 24, 2014, Judge Denise Casper issued an opinion which allowed the motion to dismiss in part and denied it in part, and included the following holdings:

Copyright. Ripoff Report claimed that Goren had no valid rights under the DMCA because Ripoff Report, not Goren, owned the copyright in the review.  In order to log on to Ripoff Report, a user first must agree to its terms and conditions, which include a transfer of exclusive rights in the review. This would have preceded any assignment to Goren. Goren alleged that the purported transfer to Ripoff Report was invalid, in part because not all the terms and conditions were readily visible to each user.  Judge Casper found that she was unable to resolve the ownership issue on the present record, and denied the motion to dismiss.

Defamation. Section 230 of the Communications Decency Act (CDA) provides that a computer service will not be treated as the “publisher or speaker” of statements provided by another information content provider.  As a practical matter, this shields websites from most lawsuits based on allegedly defamatory statements posted by third parties.  However, such immunity does not apply where the website partakes in or encourages the creation of the defamatory content. Goren argued that because Ripoff Report purported to own the copyright to the review, and because it instructs search engines to make copies of its reviews in order to maximize its search result rankings, it should be considered the publisher of the review. The Court disagreed, holding that the CDA must be interpreted broadly so as not to chill online speech, and dismissing Goren’s defamation claim.

Massachusetts Consumer Protection Act.  Chapter 93A of the Massachusetts General Laws creates a private cause of action for any party who is harmed by “an unfair or deceptive act or practice” in commerce.  This includes acts in commerce that are “immoral, unethical, oppressive or unscrupulous.” Goren argued that it was a violation of the act for Ripoff Report to refuse to remove the defamatory review while simultaneously advertising services by which Goren could pay to fix the damage caused by the review. The Court agreed that such behavior may violate Chapter 93A and allowed this claim to proceed.  This was perhaps the most interesting aspect of the Court’s ruling, because it appears to signal that Ripoff Report’s entire business model will be on trial as the case moves forward.

The parties are now proceeding to discovery.  The Court has set a scheduling conference for the end of April.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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