Xcentric Ventures and Ripoffreport.com get sued (again)

Xcentric Ventures, LLC has been named as a defendant in its share of lawsuits, many of which challenge materials appearing on the company’s ripoffreport.com website. Last year the Eleventh Circuit ruled on a personal jurisdiction issue involving Xcentric, and at the moment there appears to be seven suits pending against the company in various federal district courts across the country.

GW Equity, LLC v. Xcentric Ventures, LLC, et al was filed earlier this summer in the Northern District of Texas. According to the complaint (this link does not include any of the supporting affidavits or exhibits thereto), GW Equity (“GW”) is “a mergers and acquisitions firm in the middle market assisting clients in mergers, acquisitions, and strategic growth.” GW alleges that “false, misleading, disparaging and/or defamatory” information regarding its business and reputation, “discussions of intellectual property and proprietary information that clearly belong to GW Equity,” and information “regarding GW Equity’s business practices” appears on the ripoffreport.com site. The complaint also includes multiple, non-specific allegations that Xcentric created posts that appear on the website, including “numerous false and deceptively misleading statements of fact concerning GW Equity, its executives, and its employees, made at least in part in concert or conspiracy with a disgruntled former GW Equity employee.” GW further claims that defendants “includ[e] additional language to the so-called ‘Rip-off Reports,’ such as ‘ripoff,’ ‘fraud,’ and ‘scam,’” “edit, alter, change, and create report names and identifiers,” offer a search function, and categorize postings with headers such as “Corrupt Companies.”

GW alleges defamation, interference with business relationships, business disparagement, civil conspiracy and RICO violations. It seeks damages and injunctive relief, including, believe it or not, an order barring defendants “from posting any further comments and statements regarding GW Equity on [ripoffreport.com] without GW Equity having the opportunity to first respond to the alleged author privately.”

Earlier this month in a short but seemingly sweeping ruling, Judge Kinkeade denied Xcentric’s motion to dismiss for lack of personal jurisdiction, finding that the defendants “have purposefully availed themselves to this forum by maintaining an interactive website.”

Xcentric filed its Answer last week, raising Section 230 as a defense, and asserting among other things that it does not “publish, create, solicit, or develop any of the statements at issue in this matter.” It also implied that it will be serving a Rule 11 motion on GW’s counsel, seeking attorneys’ fees it incurs in connection with its defense.

The complaint no doubt contains (i) unflattering references to GW, (ii) the phrase “defamatory statements” and the like, and (iii) allegations that Xcentric authored something. Perhaps I am being overly critical, but I nonetheless could not find a single allegation wherein plaintiff clearly pulls it all together, and (i) cites a specific statement appearing on ripoffreport.com, (ii) claims the statement is defamatory or the like, and (iii) alleges that Xcentric authored such statement. Perhaps the facts would not support such an allegation, in which case this action should probably be dismissed, at least in part. While the filing of a motion for judgment on the pleadings remains a possibility, I suspect there is going to be some discovery in this case, and perhaps an amended complaint submitted, before any dispositive motions are filed. But if Xcentric merely “published and posted” statements on its website that were submitted online by others, I would expect Section 230 to immunize Xcentric against most if not all of GW’s claims, regardless of whether one or more of those statements defamed GW.

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One thought on “Xcentric Ventures and Ripoffreport.com get sued (again)

  1. […] As you may know, the defendants operate ripoffreport.com, a website that solicits consumer complaints. The basis of the defamation claim were statements by one Spencer Sullivan, who apparently posted messages on the site (i) referring to Global’s operation as a “scam”; (ii) stating that two individuals “involved with” Global “had written bad checks and otherwise treated him dishonorably”; and (iii) stating that “any upstanding commercial operation could bear the scrutiny of a crime unit without any issue” (posted after plaintiffs had discouraged potential customers from contacting Canadian law enforcement). Defendants allegedly refused Sullivan’s subsequent request to remove his posts from the website. […]

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