Xcentric Ventures, LLC, et al., v. Richeson

Filing 40

REPLY to Response to Motion re 26 MOTION for Order to Show Cause re Contempt filed by Jaburg & Wilk PC, Xcentric Ventures LLC. (Speth, Maria)

Xcentric Ventures, LLC, et al., v. Richeson

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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

Maria Crimi Speth (012574) JABURG & WILK, P.C. 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [e-mail] [phone] David S. Gingras (021097) Gingras Law Office, PLLC 4072 E Mountain Vista Dr. Phoenix, AZ 85048 Tel.: [phone] [e-mail] Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA XCENTRIC VENTURES, LLC, an Arizona limited liability corporation, and JABURG & WILK, P.C., a professional corporation, Plaintiffs, v. SHAWN RICHESON, Defendant. Case No.: 2:10-cv-1931-PHX-NVW REPLY IN SUPPORT OF PLAINTIFFS' MOTION FOR ORDER TO SHOW CAUSE RE: CONTEMPT AND NOTICE OF ADDITIONAL ACTS OF CONTEMPT BY DEFENDANT RICHESON PRIOR TO OCTOBER 13, 2010

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The emails provided to the Court in connection with Plaintiffs' Motion for Order to Show Cause re: Contempt clearly demonstrates that Defendant Richeson acted in violation of the Temporary Restraining Order that was in place at the time the emails were sent. In defense of his actions, Defendant Richeson asserts that the statements in his email are "absolutely fact ( See Response, p. 1 (Doc. No. 34)1);" but he cannot carry the burden
It appears that Defendant Richeson may have actually filed two separate responses to Plaintiffs' Motion for Order to Show Cause. Document No. 34 is titled "Defendants Response to Plaintiff's 1st Motion to Show Cause Verified Pleading." Document No. 35 is titled "Defendants Response to Plaintiff's Motion to Show Cause." The two pleadings, while technically different, are substantively similar in content and need not be addressed separately.
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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

to prove his statements are true, and does not present even a scintilla of evidence to support his position. Defendant Richeson only makes additional false statements of fact. Richeson's violations occurred with the TRO was still in place, and thus constitute contempt even though the Court has now dissolved the TRO. Additionally, Defendant Richeson's continuing actions in violation of the TRO, even after Plaintiff filed a Motion for Order to Show Cause are further evidence to support that the Court must find Defendant Richeson in contempt for six separate violations of the TRO and sanction him. I. DEFENDANT RICHESON'S EMAILS VIOLATED THE TRO The underlying Motion sets out two separate emails sent by Defendant Richeson in violation of the TRO. In the underlying Motion, Plaintiff explains how the statements violate the TRO by harassing, by making unlawful threats, and by attempting to interfere in the relationship between Plaintiffs' and their clients through drawing publicity to false and injurious statements. In response, Defendant Richeson attempts to argue that the emails did not violate the TRO, because the content of those emails are not false. (Document 34) In the context of defamation, the burden of proving the truth of the statements is placed upon the person asserting that defense ­ in this case, the burden is on Defendant Richeson to prove that the statements he made in the emails were true. McClinton v. Rice, 76 Ariz. 358, 365, 265 P.2d 425, 430 (1953) (defendant is "burdened with going forth with evidence of truth."). It "makes no difference that [Defendant Richeson] thought that what he said was true." Id. at 366, 265 P.2d at 430. Defendant Richeson only argues that certain statements within his Response are "fact" and that there is "massive prima facie evidence" to support them. However, he provides no evidence but his opinion. In making arguments in this fashion, Richeson is exploiting the Court. He knows that the pleadings in this case have public visibility, and he thinks that he cannot be held in contempt for anything he files in Court. Richeson's scheme is to file pleadings with the Court without a legitimate legal basis, for the purpose of making false and public 2
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Jaburg & Wilk, P.C. Attorneys At Law 3200 N. Central Avenue, Suite 2000 Phoenix, Arizona 85012 [phone]

statements about Plaintiffs within the purview of the litigation privilege2. Even if the Court is helpless against such exploitation, the Court should not tolerate or condoned Defendant Richeson making similar false statements to the public outside of the litigation in violation of the Court's order. Unquestionably, Defendant Richeson's emails containing false statements were directed to the news media for the purpose of creating bad publicity and interfering with Plaintiffs' ability to conduct their business. There was no legitimate purpose for those emails, and the emails contain false statements about Plaintiffs. The emails were sent in contempt of the TRO. II. THE COURT CAN FIND DEFENDANT RICHESON IN CONTEMPT EVEN AFTER DISSOLVING THE TRO, BECAUSE THE ACTIONS TOOK PLACE WHILE THE TRO WAS STILL IN EFFECT "[A] person subject to an injunction must ordinarily obey it." Irwin v. Mascott, 370 F.3d 924, 931 (9th Cir.2004) (discussing Walker v. City of Birmingham, 388 U.S. 307, 87 S.Ct. 1824, 18 L.Ed.2d 1210 (1967)). In Howat v. Kansas, 1922, 258 U.S. 181, 189, 190, 42 S.Ct. 277, 280, 281, 66 L.Ed. 550, the United States Supreme Court said: An injunction duly issuing out of a court of general jurisdiction with equity powers, upon pleadings properly invoking its action, and served upon persons made parties therein and within the jurisdiction, must be obeyed by them, however erroneous the action of the court may be, even if the error be in the assumption of the validity of a seeming, but void law going to the merits of the case. It is for the court of first instance to determine the question of the validity of the law, and until its decision is reversed for error by orderly review, either by itself or by a higher court, its orders based on its decision are to be respected, and disobedience of them is contempt of its lawful authority, to be punished. Id.; see United States v. United Mine Workers of Am., 330 U.S. 258, 293-94, 67 S. Ct. 677, 696, 91 L. Ed. 884 (1947) (explaining that an order by a court with subject matter and personal jurisdiction must be obeyed by the parties until reversed by orderly and
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Although the application of the litigation privilege is not currently before the Court, Plaintiffs would be remiss not to point out that Defendant Richeson's statements likely fall outside those statements contemplated to be covered by the litigation privilege. "In order to fall within the privilege, the defamatory publication must relate to, bear on or be connected with the proceeding." Green Acres Trust v. London, 141 Ariz. 609, 613, 688 P.2d 617, 621 (1984). The vast majority of Defendant Richeson's defamatory statements fall well outside the reasonable bounds of having "some reference to the subject matter of the proposed or pending litigation...." necessary to be covered by the litigation privilege. RESTATEMENT (SECOND) OF TORTS § 586, Comment c.

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proper proceedings, "without regard for even the constitutionality of the Act under which the order was issued."). The Supreme Court clarified this further, explaining that "persons subject to an injunctive order issued by a court with jurisdiction are expected to obey that decree until it is modified or reversed, even if they have proper grounds to object to the order." GTE Sylvania v. Consumers Union of United States, 445 U.S. 375, 386, 100 S.Ct. 1194, 63 L.Ed.2d 467 (1980). Here, the TRO was issued on September 9, 2010. (Doc. No. 11), and remained in effect until dissolved sua sponte by the Court on October 13, 2010(Doc. No. 37). Defendant Richeson's improper emails were sent on September 10, 2010 and September 26, 2010, respectively,(Doc. No. 26), during the pendency of the TRO. The TRO was fully in effect at the time of Defendant Richeson's improper emails, and the actions taken by Defendant Richeson in violation of the TRO were done in contempt of a direct order of this Court. Defendant Richeson had no grounds to object to the TRO and in fact consented to it. He consented to the TRO three times, first in his response to the Complaint (Doc. No. 15), and again at the hearing on the request for a preliminary injunction, and again when he reaffirmed his consent in his response to this OSC proceeding, in Document 34, the Defendants Response to Plaintiff's 1st Motion to Show Cause Verified Pleading at page 4 of 5, where Defendant Richeson stated "On Tuesday, September 21st 2101 the Defendant was physically present in Phoenix Arizona and agreed to the extension of the temporary restraining order hereinafter called (TRO) . . ." (emphasis added). Because Richeson

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consented to the extension of the TRO, he has no grounds to complain that it violated his constitutional right to free speech. C.f. Charter Comm. Inc. v. County of Santa Cruz, 304 F.3d 927, 935 (9th Cir. 2002) (upholding the proposition that when a party voluntarily enters agreement under which another must approve his actions he has waived his right to claim that a denial violates his First Amendment rights).

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III.

DEFENDANT RICHESON HAS ENGAGED IN ADDITIONAL CONTEMPTUOUS ACTIONS SINCE PLAINTIFFS' SEPTEMBER 29, 2010 MOTION A. Defendant Richeson Sent An Email On October 6, 2010 In Violation Of The TRO

On October 6, 2010, Defendant Richeson sent an email to Maria Speth. See Email from Shawn Richeson to Maria Speth, attached hereto as Exhibit "A". While this email appears to have been sent under the guise of a "personal" communication, Defendant Richeson quickly segued into comments about the Ripoff Report website. The email contains a number of statements from Defendant Richeson regarding his insistence to find a link between Xcentric and Jaburg & Wilk separate and apart from that of a simple attorney/client relationship. Even though Defendant Richeson acknowledges that there is no evidence to support his theory that Jaburg & Wilk plays any role in the operation or management of the Ripoff Report website, he continues to refer to Ed Magedson as a "master criminal" and insist that Jaburg & Wilk will be "taken down with him." Id. In sarcasm dripping with faux "concern" for Ms. Speth, Defendant Richeson mentions her husband by his full given name, explaining "I don't know your husband Raymond, but I have to imagine he has told you to stay away and dump this Magedson guy." See Exhibit "A." Further, Defendant Richeson threatens that Ms. Speth "put your Family's interest above your client's interest." Id. As the Court will note, in this same email, Defendant Richeson actually mentions that the "Russian mob wants Magedson [sic] physical address." Id. By explicitly referencing Ms. Speth's family and the Russian mob, Defendant Richeson is making his harassing and threatening intentions crystal-clear ­ if she continues to advocate on behalf of Plaintiffs, Ms. Speth should fear for her family's safety. As the Court will recall, Plaintiffs sought the TRO as a result of the multiple statements made by Defendant Richeson to the effect that he would obliterate the business of Jaburg & Wilk. In particular, Defendant Richeson made statements like he would "make sure Jaburg and Wilk couldn't get a client if they stood on the corner with sign 5
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saying `we sue for food;'" that his "operation `ass slam jaburg and wilk' will be a huge success;" and that he would "cause as much grief, public scrutiny and loss of revenue as humanly possible to you and the firm of Jaburg and Wilk." (Doc. No. 8). Defendant Richeson's email demonstrates Defendant Richeson's intent to follow through with his prior threats despite the injunction. The email was sent by Defendant Richeson for the

sole purpose of disrupting and otherwise destroying the business relationship between the Plaintiffs. By sending this email, Defendant Richeson (1) knowingly published a false and misleading communication about Plaintiffs; and (2) intentionally interfered with the contractual relationship between Jaburg & Wilk and Xcentric Ventures, i.e. a Plaintiff and its client. That is in direct violation of the TRO. B. Defendant Richeson Sent An Email On October 10, 2010 In Violation Of The TRO

On Sunday, October 10, 2010, Defendant Richeson sent an email to all attorneys at Jaburg & Wilk, a number of email addresses associated with the Arizona Republic and www.azcentral.com, as well as nearly thirty email addresses connected to the Phoenix Chamber of Commerce. See Email from Shawn Richeson to numerous recipients,

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attached hereto as Exhibit "B". This email purported to request that Jaburg & Wilk review comments from the website www.jaburgwilksucks.com "for accuracy." Id. The website itself contained numerous false and otherwise harassing statements regarding Plaintiffs, including: (a) (b) (c) (d) (e) "Ed Magedson's Address For Sale ($35.00)" "I spent a bunch of time and my own money tracking this ass clown down." "I would Imagine that Ed Magedson sleeps with one eye open." "Maria Speth is his attorney and I believe his partner in crime as well." "I have been over to her house at [address given by Defendant Richeson, but redacted for the purpose of this pleading]." (f) "Her direct line is [home phone number given by Defendant Richeson, but redacted for the purpose of this pleading]." 6
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(g)

"She is married to Raymond Speth and they have a black Ford F150 in the driveway."

(h) (i)

"My Phoenix home is located less than 5 miels from her house." "My experts have found [Magedson's] personal cell phone at [phone number given by Defendant Richeson, but redacted for the purpose of this pleading]."

(j)

"David Gingras was able to get the charges of 12 counts of sexual indecency with a minor dropped, but we all know what really went down."

See Exhibit "B." Plaintiffs sought the TRO as a result of the multiple statements made by Defendant Richeson to the effect that he would obliterate the business of Jaburg & Wilk. In

particular, Defendant Richeson made statements like he would "make sure Jaburg and Wilk couldn't get a client if they stood on the corner with sign saying `we sue for food;'" that his "operation `ass slam jaburg and wilk' will be a huge success;" and that he would "cause as much grief, public scrutiny and loss of revenue as humanly possible to you and the firm of Jaburg and Wilk." (Doc. No. 8). Defendant Richeson's email demonstrates Defendant Richeson's intent to follow through with his prior threats despite the injunction. The email was sent by Defendant Richeson for the purpose of disrupting and otherwise destroying the business of Plaintiffs by attempting to malign the reputations of Plaintiffs. By sending this email, Defendant Richeson (1) knowingly published a false and misleading communication about Plaintiffs; and (2) intentionally interfered with the contractual relationship between Plaintiffs and their clients, each of which is in direct violation of the TRO. This form of communication ­ making false statements to a news agency and to members of the Phoenix Chamber of Commerce ­ is a continuation of Defendant Richeson's harassment of Plaintiffs. Additionally, by attempting to publicize information purporting to be personal contact information and residential address information, Richeson is both attempting to 7
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intimidate Plaintiffs, and inviting further harassment of the Plaintiffs by people who are already hostile to the Ripoff Report. C. Defendant Richeson Sent An Email On October 9, 2010 In Violation Of The TRO See Email from Shawn

On Saturday, October 9, 2010, Defendant Richeson sent an email to Ms. Speth titled "www.JaburgandWilkSucks.com - Settlement Offer."

Richeson to Maria Speth, attached hereto as Exhibit "C". By this email, Defendant Richeson proposed what he referred to as a "settlement offer." Id. The proposal was simple on its face ­ Defendant Richeson suggested that Jaburg & Wilk purchase the domain name www.jaburgandwilksucks.com from him. Id. The email does not include what the suggested purchase price for this domain name should be. Id. The proposal was prefaced by the statement "I never go away." Id. However, the email does contain an implied threat ­ that if Plaintiffs don't purchase the domain name, it, and its defamatory content, would be made public. That threat is bolstered by various statements of

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Defendant Richeson, including that "[m]ost of your usual tactics and leverage points are completely neutralized" and that "who cares" about Plaintiffs pleadings (including the underlying Motion for Order to Show Cause). Id. By sending this email, Defendant Richeson (1) knowingly published a false and misleading communication about Plaintiffs; and (2) intentionally interfered with the contractual relationship between Plaintiffs and their clients, each of which is in direct violation of the TRO. Defendant Richeson did not send this email for any legitimate legal purpose or to further settlement in this litigation, but instead, to harass or otherwise intimidate Plaintiffs into dropping the present lawsuit. That is not a legitimate settlement position to take, but instead, is an action in direct violation of the TRO.

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D.

Defendant Richeson Posted An Article On October 9, 2010 In Violation Of The TRO

Also on October 9, 2010, Defendant Richeson published an article on the website www.pissedconsumer.com3. See Article, attached hereto as Exhibit "D". This article contains a number of accusations that have been made only by Defendant Richeson, including certain information which Defendant Richeson has not made public in his pleadings, but only exist in his emails to Plaintiffs. The false allegations made in the article include statements that typically permeate Defendant Richeson's emails, including the statement "Jaburg and Wilk P.C. is in fact an owner partner and controlling force in the management of the famous or should I say infamous web site:

www.RipoffReport.com." Id. In his recently filed Third Party Complaint (Doc. No. 39), Defendant Richeson references the "recorded testimony" of a "former employee" of Ed Magedson, a "Mr. Rogers.". Similar statements are made in the article published by Defendant Richeson, which includes the name, address, and telephone number of this individual. See Exhibit "D." The article purports to include certain information provided to Defendant Richeson by Mr. Rogers; however, no such information has been conveyed, and, even if it were, Defendant Richeson had no legitimate basis to believe the substance of that information. Of equal importance to note is that this article also contains what Defendant Richeson has previously claimed to be the home address of Mr. Magedson. See Exhibit "D." In Defendant Richeson's previous emails and other publications, he stated (1) that the Russian mob wanted Mr. Magedson's address, and (2) that he would sell Mr. Magedson's address to anyone who wanted to pay him $35.00. See Exhibits "A" and "B" (showing content of the website www.jaburgandwilksucks.com). Defendant Richeson also claimed that he was the only individual who knew Mr. Magedson's home address. Yet, as indicated in the article, Defendant Richeson is now providing that information for free to the public. See Exhibit "D." Defendant Richeson made the information about Mr.
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The specific URL for the posting at issue is http://jaburg-and-wilk.pissedconsumer.com/jaburg-and-wilk-adamkunz-intimidates-witnesse0201010092

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Magedson's purported home address publicly available just a few days after mentioning that the Russian mob wanted Mr. Magedson's address and implying that the information was wanted so that they could cause physical harm to Mr. Magedson. Defendant Richeson makes further statements in the article that are directly aligned with his prior correspondence with Plaintiffs. Those statements include numerous

references to the "criminal enterprise" of Ed Magedson, which is the theme of Defendant Richeson's Third-Party Complaint. See Exhibit "D"; see also Doc. No. 39 (submitted to the Court just two days after the publication of the article). By publishing the article on the Pissed Consumer website, Defendant Richeson acted in violation of the TRO. Defendant Richeson (1) knowingly published a false and misleading communication about Plaintiffs; and (2) intentionally interfered with the contractual relationship between Plaintiffs and their clients, each of which is in direct violation of the TRO. By publishing information regarding Mr. Magedson's purported home address, which he has taken great care to keep private, Defendant Richeson clearly made these statements for the sole purpose of harassing and otherwise intimidating Plaintiffs into stopping the pursuit of this litigation and providing Mr. Richeson the services he is demanding from the Ripoff Report. Unquestionably, this article is in violation of the TRO. IV. CONCLUSION Defendant Richeson has admitted to making each of the statements identified in the original Motion for Order to Show Cause. The sole defense to his actions is his mistaken belief that those statements are true, and therefore are not in violation of the TRO. However, the statements made by Defendant Richeson were the very statements which gave rise to the TRO in the first place, and are false and defamatory. Defendant

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Richeson's unsupported opinion of the truth of those statements ­ mistaken or otherwise ­ is not a defense to his actions taken in contempt of a direct and specific order of this Court. Moreover, the additional four actions taken by Defendant Richeson in violation of 10
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the TRO makes it clear that he has no regard for the order of this Court, and is willing to act in contempt with reckless abandon, until forced to act otherwise. Based on the foregoing, it is requested that the Court issue an Order requiring that Defendant Richeson appear and show cause why he not be found in contempt for the six separate communications made by Defendant Richeson in violation of the TRO. DATED this 18th day of October, 2010. JABURG & WILK, P.C.

s/Maria Crimi Speth Maria Crimi Speth David S. Gingras Attorneys for Plaintiffs

Certificate of Service I hereby certify that on the 18th day of October, 2010, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing. I have also caused to be delivered to Defendant, who is not registered with the CM/ECF System, a copy of the attached document by First Class Mail and E-Mail: Shawn Richeson 1906 Twilight Drive Killeen, Texas 76543 [e-mail] Defendant Pro Per

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s/Debra Gower

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