Ripoff Report Wins Against Extortion Claim

from the for-now... dept

Ripoff Report is a site that we’ve discussed a few times before, as it’s dealt with a bunch of lawsuits — all of which it has successfully defended itself against — from organizations upset that users wrote negative reviews on the site. Of course, as you should know, Ripoff Reports has a strong Section 230 safe harbor defense: it’s not creating the content, and thus, is not liable. But, over the past few years we’ve seen more and more attempts to get around Section 230 with creative lawyering. In the latest case against Ripoff Report, the workaround was to charge the company with RICO (racketeering) violations for trying to “extort” companies. Specifically, a company named the Asia Economic Institute (AEI) was upset about a series of negative complaints about its work environment, and asked for them to be removed. Ripoff Report notes that it never removes content, but did pass on information about its Corporate Advocacy Program (CAP), where, for a fee, it tries to effectively moderate between the company and the complaining individual. AEI suggested that this was presented in an extortionary manner — as in “if you want to fix your reputation, you need to pay.”

As Eric Goldman notes, this particular attack appears to have failed miserably, in large part due to the fact that Ripoff Report secretly recorded all of its phone calls. AEI fought against revealing the content of the phone calls, noting that it did not know its staff were being recorded — and, in the end, the judge actually does deem the evidence inadmissible. But just the fact that Ripoff Reports presented the recordings made the two principles from AEI suddenly have their memories jogged, and admit that they might have been “confused” about what was actually said in the calls. From there, the judge found little evidence that the CAP program actually represented any kind of extortion.

AEI claimed that Ripoff Report’s promise to defend itself against any lawsuit represented a legal threat. However, the judge points out that such an interpretation makes little sense. Claiming you will strongly defend yourself against any lawsuit is hardly a threat. On top of that, the judge notes that a “a threat to take legal action cannot constitute extortion unless the threat was made with knowledge that the threatened claim was false and without merit.” Furthermore, the judge notes that the threat to defend itself from any legal action was entirely separate from the CAP program. Thus, the supposed (but non-existent) “threat” was entirely independent from any request for money.

As for the CAP program, the judge doesn’t see that as a threat either, specifically noting that Ripoff Reports makes it clear that no reports on the site will be removed, so there’s no demand for payment to remove a negative report.

Unfortunately, the case isn’t entirely over. The judge did leave open the slim possibility of a RICO charges based on wire fraud, and AEI is heading down that path now. Still, as Eric Goldman notes in his writeup, AEI may have difficulty showing any “harm” to its business due to the following:

AEI was a content publisher from 2000-2009 (it’s now out of business), and during those 9 years, it had zero revenues. This could make it hard for AEI to garner much judicial sympathy over any harm to its business.

Filed Under: complaints, extortion
Companies: asia economic institute, ripoff report