Asia Economic Institute et al v. Xcentric Ventures LLC et al

Filing 163

STATEMENT of Genuine Issues in Support of Plaintiff's Opposition to Summaruy Judgment MOTION for Summary Judgment as to Entire Case 145 filed by Plaintiffs Asia Economic Institute, Iliana Llaneras, Raymond Mobrez. (Borodkin, Lisa)

Asia Economic Institute et al v. Xcentric Ventures LLC et al

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DANIEL F. BLACKERT CSB No. 255021 LISA J. BORODKIN CSB No. 196412 Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Telephone [phone] Facsimile [phone] [e-mail] [e-mail] Attorneys for Plaintiffs, Asia Economic Institute LLC, Raymond Mobrez, and Iliana Llaneras UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ASIA ECONOMIC INSTITUTE, a California LLC; RAYMOND MOBREZ an individual; and ILIANA LLANERAS, an individual, ) ) ) ) ) ) Plaintiffs, ) ) vs. ) ) XCENTRIC VENTURES, LLC, an Arizona LLC, d/b/a as BADBUSINESS ) ) BUREAU and/or ) BADBUSINESSBUREAU.COM ) and/or RIP OFF REPORT and/or ) RIPOFFREPORT.COM; BAD ) BUSINESS BUREAU, LLC, organized ) ) and existing under the laws of St. ) Kitts/Nevis, West Indies; EDWARD MAGEDSON an individual, and DOES ) ) 1 through 100, inclusive, ) ) Defendants. ) ) Case No.: 2:10-cv-01360-SVW-PJW The Honorable Stephen V. Wilson PLAINTIFFS' STATEMENT OF GENUINE ISSUES IN OPPOSITION TO MOTION FOR SUMMARY JUDGMENT November 1, 2010 Date: Time: 1:30 p.m. Courtroom: 6

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Pursuant to Central District of California Local Civil Rule 56-2, Plaintiffs Asia Economic Institute, LLC, Raymond Mobrez, and Iliana Llaneras ("Plaintiffs") respectfully submit the following Statement of Genuine Issues in Opposition to Defendants' Motion for Summary Judgment [ DN-145]. Facts 1 through 34 correspond to the facts and supporting evidence presented in the Statement of Facts in Support of Defendants' Motion for Summary Judgment [DN-146]. These facts are followed by additional material facts and supporting evidence showing a genuine issue. DEFENDANTS' ALLEGED UNCONTESTED FACTS 1. Defendant XCENTRIC VENTURES, Disputed. Defendant Magedson also LLC ("Xcentric") operates the website operates the website www.RipoffReport.com. www.Ripoffreport.com (the "Website") in addition to Xcentric. See Declaration of Lisa J. Borodkin ("Borodkin Dec.") [DN-163] at ¶2, Ex. 1 (June 2, 2010 30(b)(6) Deposition of Xcentric) at 143:15-19; Borodkin Dec. at¶3, Ex. 2 (June 8, 2010 Deposition of Edward Magedson) at 56:19-25; 63:916; 68:23-25. 2. Defendant EDWARD MAGEDSON Undisputed. ("Mr. Magedson") is the manager of Xcentric and the founder and "ED"itor of the Ripoff Report site which he started in 1998. Undisputed; however they also engage 3. Plaintiffs RAYMOND MOBREZ in business as individuals outside of ("Mr. Mobrez") and his wife ILIANA AEI. See Declaration of Raymond LLANERAS ("Ms. Llaneras") are Mobrez ("Mobrez Dec.") [DN-160] at the principals of ASIA ECONOMIC ¶¶3, 4; Declaration of Iliana Llaneras INSTITUTE, LLC ("AEI"). ("Llaneras Dec.") [DN-161] at ¶¶3-5. 4. As of September 2010, six complaints Disputed. The reports also concern
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(called "reports") have been posted about AEI on the Ripoff Report site. All of these reports and any comments thereto are attached as Exhibit 22 to the First Amended Complaint. FAC Ex. 22

5. All of these reports were created by third parties, not by Defendants.

Plaintiffs Raymond Mobrez and Iliana Llaneras, and there has been a Report about witness Kenton J. Hutcherson that concerned Plaintiffs in this case. On August 6, 2010, Defendants Xcentric and/or Magedson personally posted Report #629379 about Kenton J. Hutcherson, a witness in this case, stating that Mr. Hutcherson was "bragging about a declaration he submitted in a lawsuit against Ripoff Report pending in federal court in California," referring to this action. See August 23, 2010 Declaration of Daniel J. Blackert [DN-125] ("8/23/10 Blackert Dec.") at ¶22 & Ex. 5; August 16, 2010 Declaration of Lisa J. Borodkin [DN-121] ("8/16/10 Borodkin Dec.") at ¶11 & Ex. 5. Disputed. Defendants created Report #629379 in its entirety. 8/23/10 Blackert Dec. ¶22 & Ex. 5; 8/16/10 Borodkin Dec. ¶11 & Ex. 5. Defendants create portions of the title and all of the HTML computer code that generates the meta tags, title tags and that influences Google Search Results for the Reports. See Request for Judicial Notice ("RJN"), Ex. 4 (October 4, 2010 Declaration of Justin Crossman ) [DN-159-4] (10/4/10 "Crossman Dec") at ¶¶5-6. Defendants create links that are embedded into the body of reports. See July 27, 2010 Declaration of Joe Reed [DN-96-25] ("Reed Dec'") at ¶¶14-15. Defendants create the portions of the titles of reports that said "Ripoff Report" and then later replaced with "Review." See
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July 30, 2010 Declaration of Joe Reed [DN-102] ("Reed Dec. 2") at ¶12. Defendants admit that "the title tag portion of the [Defendants'] code was rewritten and implemented on April 26, 2010 which resulted in a change in the way the title displays." See August 4, 2010 Declaration of Justin Crossman [DN-109] ("8/4/10 Crossman Dec.") at ¶¶13-14. Defendants have not disclosed the identity of the authors. Plaintiffs had not had an opportunity to conduct discovery. Discovery was bifurcated and stayed. Disputed. Defendants have not 6. Before it appeared on the site, each disclosed the identity of the authors. report about AEI was reviewed by one Plaintiffs had not had an opportunity to of Xcentric's staff of content conduct discovery. Discovery was monitors. bifurcated and stayed. 7. Xcentric's servers automatically Disputed. Defendants have not record the name of each content monitor disclosed the identity of the authors. who reviews a post made to the site. Plaintiffs had not had an opportunity to conduct discovery. Discovery was bifurcated and stayed. The data stored in Xcentric's servers is unreliable. Defendants have admitted that "prior to July 4, 2009, if a report or rebuttal was modified in any way, the modification would overwrite the existing data." See August 4, 2010 Declaration of Justin Crossman [DN-109] ("8/4/10 Crossman Dec.") at ¶6. that they are unable to confirm that they have a complete record of all Disputed. There have been changes to 8. Each content monitor who reviewed the posts about AEI has testified that no the way the titles of reports are displayed since the inception of this changes, additions, or deletions action in January 2010. Defendants were made to any of these reports, nor were any changes, additions or deletions admit that "the title tag portion of the
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made to the comments/rebuttals.

9. The text of each report and each comment/rebuttal originated entirely with the third party author and was not created or altered by either Xcentric or Magedson.

10. When an author submits a report to the Ripoff Report site, they are presented with a series of blank forms that help them to construct their report.

[Defendants'] code was rewritten and implemented on April 26, 2010 which resulted in a change in the way the title displays." See August 4, 2010 Declaration of Justin Crossman [DN109] ("8/4/10 Crossman Dec.") at ¶¶13-14. Defendants have also inserted links into the text of reports, comments and rebuttals that were not submitted by the authors. See July 27, 2010 Declaration of Joe Reed [DN-96-25] ("Reed Dec'") at ¶¶14-15. Disputed. Defendants created Report #629379. 8/23/10 Blackert Dec. ¶22 & Ex. 5; 8/16/10 Borodkin Dec. ¶11 & Ex. 5. Defendants create the HTML computer code that generates the meta tags, title tags and that influences Google Search Results for the Reports. See Request for Judicial Notice [DN159-4] ("RJN"), Ex. 4 (Declaration of Justin Crossman "Crossman Dec")) at ¶¶5-6. Defendants embed links and redact links in the encoding within the body of Reports that affects their behavior in Google Search Results. See Declaration of Joe Reed ("Reed Dec.") a [DN-96-25] at ¶¶14-16. Disputed. The forms are not "blank." The forms contain detailed instructions on how defendants want the forms to the completed. Affidavit of Ben Smith [DN-148] ("Smith Aff") at ¶¶5-10 & Exs. A-E. The forms in Exhibit A tell the contributor to include "AKA"s and multiple names for companies and encourage the contributor to use multiple instances of the subject's name in the title. Smith Aff. Ex. A.
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11. The forms ask the author for basic information such as the name of the person or company they want to write about, and the address and phone number of the company at issue.

Disputed. The information requested by the forms is not "basic." The instructions are heavily biased. The forms strongly recommend that the contributor include the "Phone, FAX, and e-email address of Company or Individual you are reporting" urging that "The more information you provide, the better." See Smith Aff. Ex. A. However, when it comes to the contributor, the forms tell the contributor ­ twice - "DO NOT sign your name, or include any e-mail addresses in the report" and "Enter YOUR first name ONLY." See Smith Aff. Ex. C. Disputed. The contributor does not 12. During this process, the author is prepare the title for the report. asked to prepare a title for their report Defendants determine what the title is, by entering data into four boxes. not the contributor. The Defendants The first box asks for the name of the company being reported, the second box combine certain elements furnished by the contributor with a code written by asks for "descriptive words" explaining what the report is about, the the Defendants to create the title. See Crossman Dec. [DN-159-4] at ¶¶5-6. third box asks for the city, and the The title of reports has changed during fourth box asks for the state. the period covered by this action so that, for example, Defendants changed the top line of Report #417493 from "Ripoff Report: Asia Economic Institute, AEI, WorldEcon: Raymond . . ." as of January 1, 2010 to "Asia Economic Institute, AEI, WorldEcon Review | Rip-off Report #417493" as of July 30, 2010. See 7/30/10 Reed Dec. ¶15 & Ex. D [DN-102-4] 13. During this process, the site explains Disputed. Defendants have not "The title of your report is divided into disclosed the identity of the authors. four boxes below but will appear as one Plaintiffs had not had an opportunity to line after your report is submitted." conduct discovery. Discovery was
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bifurcated and stayed. 14. The site also shows the author a Disputed. Defendants have not sample of how the report title will disclosed the identity of the authors. appear based on the data they have Plaintiffs had not had an opportunity to entered. conduct discovery. Discovery was bifurcated and stayed. 15. At the screen where the actual report Disputed. The box is not blank. The text is entered, the author is presented forms include highly suggestive, biased with a blank box. instructions to create a negative report, to avoid providing the author's contact information. The forms tell the contributor ­ twice - "DO NOT sign your name, or include any e-mail addresses in the report" and "Enter YOUR first name ONLY." See Smith Aff. Ex. C. 16. Xcentric makes no suggestion as to Disputed. The forms include highly suggestive, biased instructions to create what the author a negative report, to avoid providing should say other than offering generic the author's contact information. The comments about forms tell the contributor ­ twice style such as "DO NOT use ALL "DO NOT sign your name, or include CAPITAL LETTERS, any e-mail addresses in the report" and it makes it hard to read." "Enter YOUR first name ONLY." See Smith Aff. Ex. C. Disputed. The Smith Aff. ¶10 & Ex. E 17. Before the author is allowed to submit their report, they are required to do not contain the full Terms of Service and do not show the portions review and agree to certain terms quoted from regarding defamatory which state, among other things, "By material. Plaintiffs had not had an posting this report/rebuttal, I attest this opportunity to conduct discovery. report is valid." The author must also separately agree to Xcentric's Discovery was bifurcated and stayed. Irrelevant. Defendants do not enforce Terms of Service which state, among their terms of service and will not other things, "You will NOT post on remove posts even if they violate the ROR any defamatory, inaccurate, terms of service. abusive, obscene, profane, offensive, threatening, harassing, racially offensive, or illegal material, or any material that infringes or violates
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another party's rights (including, but not limited to, intellectual property rights, and rights of privacy and publicity)." 18. When a report is finally submitted to the site, Xcentric's servers automatically combine the unique text supplied by the author with various HTML code that is generic to every page on the site.

19. During this process and using keywords supplied by the author (such as the name of the company being reported), Xcentric's servers automatically create "meta tags" which are used by search engines

Disputed. The HTML code is not generic to every page on the site. For members of the Corporate Advocacy Program and subjects that have entered into private agreements with defendants, Defendants have offered to and will manually insert 250 to 350 words chosen by the subject into the title meta tag of the HTML for the Report in a way that changes the Google search results. See Reed Dec. at ¶¶16-23, Exs. C & D; 8/16/10 Borodkin Dec. ¶3 & Ex. 1; ¶5, Ex. 3. Defendants admit that they have redacted names and identities of subjects from reports, which necessarily requires manually changing the HTML code for certain Reports. See July 14, 2010 Declaration of David Gingras and Letter [DN-125-6, DN125-7] [inadvertently filed in reverse order]. In particular, Defendants have expressly agreed that "Xcentric will insert into the body of Report number 311070, Report number 254798, and report number 261756 up to 250 words of content provided by QED." See FAC ¶175 and Ex. 8. Disputed. For members of the Corporate Advocacy Program and subjects that have entered into private agreements with defendants, Defendants will manually insert 250 to 350 words chosen by the subject into the title meta tag of the HTML for the
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to index the contents of the specific page at issue.

Report in a way that changes the Google search results. See Reed Dec. at ¶¶16-23, Exs. C & D; 8/16/10 Borodkin Dec. ¶3 & Ex. 1; ¶5, Ex. 3. In particular, Defendants have expressly agreed that "Xcentric will insert into the body of Report number 311070, Report number 254798, and report number 261756 up to 250 words of content provided by QED." See FAC ¶175 and Ex. 8. 20. The meta tags for each page are not Disputed. Title and description meta normally visible to viewers, but they can tags are displayed on search engine results such as Google and are known be seen by individuals with to be highly influential in determining basic technical knowledge who choose the content of Google search results. to view the actual HTML code for a Google's "Search Engine Optimization report's webpage. Starter Guide" states "Description meta tags are important because Google might use them as snippets for you pages." See Reed Dec. ¶¶16-19 & Ex. B at 5 [DN-96-25] 21. The term "Ripoff Report" is a Disputed. A search of the Trademark federally registered trademark, Electronic Search System ("TESS") at Registration #2958949, used to identify uspto.gov did not return a registration the website www.RipoffReport.com. for a trademark in "Ripoff Report." It returned a registration for a typed drawing mark in "Rip-off Report" registered to Defendant badbusinessbureau.com, LLC LTD, a Limited Liability Company in St. Christ-Nevis. Disputed. In certain cases, the meta 22. Every report page on the Ripoff Report site includes meta tags based on tags are not based on keywords supplied by the author but are altered unique keywords supplied from the author such as the name of the company to being with 250 words of content chosen by the subject of the report involved and other words used by the pursuant to membership in the author to create the title for Corporate Advocacy Program, private their report.
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agreement in settlement, or otherwise. See Reed Dec. at ¶¶16-23, Exs. C & D; 8/16/10 Borodkin Dec. ¶3 & Ex. 1; ¶5, Ex. 3. In particular, Defendants have expressly agreed that "Xcentric will insert into the body of Report number 311070, Report number 254798, and report number 261756 up to 250 words of content provided by QED." See FAC ¶175 and Ex. 8. The addition of the 250 words has the effect of pushing the negative keywords so far down in the HTML coding as to disappear and be irrelevant to search engines. See Reed Dec. ¶¶16-23 & Exs. C-D [DN96-25] 23. Xcentric's servers also automatically Disputed. Defendants manually alter include three different keywords--ripthe meta tags of some of the pages on off, ripoff, rip off--into the meta tags of the Website, for members in the every page on the site. Corporate Advocacy Program, those who have reached private settlements with Defendants and otherwise. See Reed Dec. [DN-96-25] at ¶¶16-23, Exs. C & D; 8/16/10 Borodkin Dec. ¶3 & Ex. 1; ¶5, Ex. 3. In particular, Defendants have expressly agreed that "Xcentric will insert into the body of Report number 311070, Report number 254798, and report number 261756 up to 250 words of content provided by QED." See FAC ¶175 and Ex. 8. 24. Again, these words are NOT visible Disputed. The meta tags and key words are highly visible and influential in in the title or body of any particular Google search results. See Google's report; they are simply indexing "Search Engine Optimization Starter references used by search engines in order to accurately reflect the source of Guide," which states "Description meta tags are important because the indexed page. Google might use them as snippets for you pages." See Reed Dec. ¶¶16-19 &
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Ex. B at 5 [DN-96-25] Disputed. If Defendants removed the 25. If the keywords "rip-off, ripoff, rip keywords "rip-off, ripoff, rip off" from off" were the meta tags for each report page, the removed from the meta tags for each page might appear differently on report page, the Google search engine results because page would appear physically keyword redundancy in meta tags unchanged to anyone URLs, domain names and directory viewing it. structures influence the text that appears as snippets in Google search results. See Reed Dec. ¶¶13-19 and Ex. B at 9-10 ("Making use of the `description' meta tag") [DN-96-25]; 7/30/10 Reed Dec. at ¶¶12-14 [DN102]. 26. Mr. Mobrez admitted in his Disputed and irrelevant. Defendants deposition that he had altered the titles of the postings about no evidence Defendants created or AEI, added links in the body of the altered any of the postings and in the comments, altered postings about AEI. the directory structure of the URL to optimize search results for the reports about AEI and otherwise directly engaged in conduct harmful to Plaintiffs Mobrez and and Llaneras as well as AEI. See Reed Dec. ¶¶ 10-19. [DN-96-25]; 7/30/10 Reed Dec. ¶¶1415 & Exs. C-D [DN-102, DN-102-3, DN-102-4]. Discovery has not yet begun on the claims in this case. Discovery was stayed. Disputed. Defendant Magedson sent 27. The First Amended Complaint alleges that Defendants committed fraud Plaintiff Mobrez an email on May 5, by representing to Plaintiffs that "filing 2010 stating, inter alia, "Best to a rebuttal has only a positive effect respond to the report . . . Just file a ..." but no such representation was ever rebuttal" and "file a rebuttal . . . We made. know it works." See May 3, 2010 Declaration of Raymond Mobrez at ¶11 & Ex. G. Defendants cannot point to any representations from Defendants
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where a negative effect of posting rebuttals was disclosed. 28. At no time did Defendants ever Disputed. Defendant Magedson sent inform Plaintiffs that filing a rebuttal Plaintiff Mobrez an email on May 5, has only a positive effect. 2010 stating, inter alia, "Best to respond to the report . . . Just file a rebuttal" and "file a rebuttal . . . We know it works." See May 3, 2010 Declaration of Raymond Mobrez at ¶11 & Ex. G. Defendants cannot point to any representations from Defendants where a negative effect of posting rebuttals was disclosed. Disputed as to whether the email is a 29. When contacted by Plaintiff standard "form email." Defendant Raymond Mobrez in May 2009, Magedson has testified inconsistently Defendant Ed Magedson sent Mr. that there is one of two standard eMobrez a lengthy "form email" mails that are sent. See Borodkin Dec. response. at Ex. 2 [DN-162-2] at 201:13-15. 30. Mr. Magedson honestly believes that Disputed. Plaintiffs contend that filing a rebuttal is the best way of Magedson's belief is self-interested, as responding to a complaint. filing a rebuttal refreshes content on the Website, raises the prominence of the Report on Google search results and generally benefits defendants more than it benefits the subjects of the Reports. See Declaration of Anthony Howard [DN-96-24] at ¶¶10-16 & Ex. A. Plaintiffs contend that Magedson is likely aware that rebuttals improve Google search rankings for the website, as Defendants engage in several other search engine optimization practices in the Google Search Engine Optimization Starter Guide. See Reed Dec. [DN-96-25] at ¶¶9-19 and Ex. B. 31. Mr. Magedson has no control over Disputed. Plaintiffs contend that it is how Google or any other search engine well known in the search engine decides to rank content, and he community that a rebuttal refreshes
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does not know and does not believe that filing a rebuttal always increases the prominence of a report in search engines such as Google.

content on the Website, raises the prominence of the Report on Google search results and generally benefits the web prominence of the Reports. See Declaration of Anthony Howard ("Howard Dec") [DN-96-24] at ¶¶1016 & Ex. A. Plaintiffs contend that Magedson is likely aware that rebuttals improve Google search rankings for the website, as Defendants engage in several other search engine optimization practices in the Google Search Engine Optimization Starter Guide. See Reed Dec. [DN-96-25] at ¶¶9-19 and Ex. B. Plaintiffs also contend that Magedson and Xcentric have shown favorable treatment to Google and its founders by disclaiming reports about Google, redacting or changing their names from reports, see FAC [DN-100] at ¶¶121-137; Borodkin Dec. Ex. 2 [DN-162-2] at 40:25-42:20, 197:22-198:19; and that such actions have been noted by members of the search community as likely attempts by Defendants to prevent being punished by Google's search ranking algorithm. See Howard Dec. at ¶¶8-9 & Ex. A. 32. Mr. Magedson is aware of reports Disputed. Irrelevant. Plaintiffs containing rebuttals which are not attempted to complete the deposition of prominently located in search Defendant Magedson prior to engine results such as Google. discovery being suspended. 33. Neither Xcentric nor Mr. Magedson Disputed. Report # 502429 itself states had any knowledge of Plaintiffs' that "I . . . googled his name, and found relationships with their employees at the all these bad reports" and "as a result of time each report was posted. these reports I am going to blow him off." FAC at Ex. 22 at 1 [DN-96-22]; Report # 571232 states "I googled him immediately . . . and found this site"
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34. At his deposition, Mr. Mobrez was unable to identify a single employee of AEI who quit as a result of any actions of Xcentric or Mr. Magedson.

and "I should have googled him sooner and saved myself the trip over there" and otherwise describing that potential employees or contractors were dissuaded from working with Plaintiffs as a result of the Reports on the Website retrieved by Google searches of Plaintiffs. See FAC at Ex. 22 at 9. Defendants were aware of the employment relationships between Plaintiffs and others because Defendants admit that their content monitors review the contents of Reports before they are posted. See Smith Aff. [DN-148]¶ 18; Declaration of Amy Thompson [DN-147]; Declaration of Kim Jordan [DN-151]; Declaration of Lynda Craven [DN152]. Disputed. Mobrez was willing and able to complete his earlier answers at his deposition but Defendants' attorney at several points in the deposition cut short his answers and refused to permit Mobrez to supplement his earlier answers. Defendants have not put the entirety of Mobez' deposition transcript into the record. Irrelevant. Prospective and past employees claim that the Reports influenced their decision to "blow off" employment with Plaintiffs Mobrez and AEI or not to pursue work with Plaintiffs. Report # 502429 itself states that "I . . . googled his name, and found all these bad reports" and "as a result of these reports I am going to blow him off." FAC at Ex. 22 at 1 [DN-96-22]; Report # 571232 states "I googled him
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immediately . . . and found this site" and "I should have googled him sooner and saved myself the trip over there" and otherwise describing that potential employees or contractors were dissuaded from working with Plaintiffs as a result of the Reports on the Website retrieved by Google searches of Plaintiffs. See FAC at Ex. 22 at 9. Plaintiffs also contend that the following other material facts are in dispute: MATERIAL FACTS 35. Report #502429 on the Website and the comments thereto are about individual plaintiffs Mobrez and Llaneras as well as plaintiff AEI. 36. Report #457433 on the Website and the comments thereto are about individual plaintiffs Mobrez and Llaneras as well as plaintiff AEI. 37. Report #423987 on the Website is primarily about individual plaintiffs Mobrez and Llaneras and only secondarily about plaintiff AEI. 38. Report #571232 on the Website is about individual plaintiff Mobrez as well as plaintiff AEI. 39. Report #564331 on the Website is about plaintiff Mobrez primarily and about plaintiff AEI secondarily. 40. Report #417493 on the Website is about plaintiffs Mobrez and Llaneras as well as plaintiff AEI. 41. AEI was not the only victim of Defendants' conduct. Mobrez and Llaneras also suffered harm in their individual businesses as licensed commercial real estate brokers that coincided with the appearance of Reports on Defendants' Website about them. 42. According to Charlie Yan, groups and entities that were previously interested in attending conferences organized by Mobrez lost interest after they became aware of derogatory statements about Plaintiffs on the Website Ripoffreport.com.
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EVIDENCE FAC Ex. 22 at 1-2 [DN-96-22] FAC Ex. 22 at 3-5 [DN-96-22] FAC Ex. 22 at 6-8 [DN-96-22] FAC Ex. 22 at 9-10 [DN-96-22] FAC Ex. 22 at 11-12 [DN-96-22] FAC Ex. 22 at 13-17 [DN-96-22] Mobrez Declaration [DN-160] at ¶¶3-15; Llaneras Declaration [DN-161] at ¶¶3-11. Declaration of Charlie Yan at ¶¶2-4 [DN-59].

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43. According to Israel Rodriguez, he planned to introduce Mobrez to the Board of Mission College but declined to do so after learning of the Reports about Mobrez on Ripoff Report.com. 44. According to Justin Lin, he does not want to work with Mobrez on commercial real estate transactions because he is afraid his clients will not want to work with him after they see Reports about Mobrez at the top of search engine results about Mobrez. 45. Defendants do not disclose to the general public that membership in the Corporate Advocacy Program can mean changing negative Google search results to positive results. 46. This action is not treating Defendants as the speakers of third party content. This action concerns Defendants' electronic communications through Defendants' website, ripoffreport.com (the "Website"), undisclosed business agenda in soliciting fresh content for their Website and Defendants' conduct in selectively altering the HTML for certain web pages of the Website affecting Plaintiffs. 47. The gravamen of Plaintiffs' claims is Defendants' conduct in transmitting 5 web pages with associated HTML code concerning Plaintiffs (out of a database of over 627,870 web pages containing "Rip-off Reports") to Internet search engines. 48. Defendants selectively encode the HTML for the web pages concerning Plaintiffs and others to cause "positive" or "negative" snippets of text to appear in search results yielded by queries on Google and otherwise. 49. Defendants have strategically designed the HTML encoding and server directory structure for the web pages for the majority of Rip-off Reports, including those about Plaintiffs, so that negative statements in the text submitted by users appear in the Google search results for those subjects. 50. By contrast, for certain subjects of Rip-off Reports who have settled lawsuits with Defendants or paid consideration to Defendants pursuant to a program called
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Declaration of Israel Rodriguez at ¶¶3-5 [DN-60]. Declaration of Justin Lin [DN-62] at ¶¶3-6.

See the "Second Questionnaire", 8/16/10 Borodkin Dec. [DN-121, DN-121-1] ¶ 3, & Ex. 1 See FAC ¶¶16-21, 69136, 138-169, 196246.

See FAC ¶¶10, 19, 2122, 30, 33, 35, 38, 6999, 106-120, 138-179, 247-253. See Reed Dec. [DN96-25] at ¶¶5-19 & Ex. C.

See Reed Dec. [DN96-25] at ¶¶20-23 & Ex. D; See Defendants
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the Corporate Advocacy Program "CAP"), Defendants insert blocks of positive statements of 250 to 350 words submitted by the settling party or paying CAP members into a strategic meta tag in the HTML encoding for the web pages concerning them, in a manner that is known to "push" the negative content in the meta tag so far down in the HMTL that it become insignificant to search engines.

manually alter the meta tags of some of the pages on the Website, for members in the Corporate Advocacy Program, those who have reached private settlements with Defendants and otherwise. See Reed Dec. [DN-96-25] at ¶¶16-23, Exs. C & D; 8/16/10 Borodkin Dec. ¶3 & Ex. 1; ¶5, Ex. 3. In particular, Defendants have expressly agreed that "Xcentric will insert into the body of Report number 311070, Report number 254798, and report number 261756 up to 250 words of content provided by QED." See FAC ¶175 and Ex. 8.

51. This practice is not disclosed to the public. The Website appears to be a totally impartial review site motivated solely by consumer advocacy, and the stigma of having a Rip-off Report appear in Google search results is especially damaging to its subjects. 52. During the time covered by this action, Defendants renamed their server directories and took other deliberate actions that raise the page ranking of the Rip-Off Reports in search queries.

See August 3, 2010 Declaration of Lisa Borodkin [DN-101] ("8/3/10 Borodkin Dec.") at ¶¶-1615 and Ex. 5 [DN-101-5] and
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53. Defendants entice the unknowing subjects of Reports to file rebuttals, which has the effect of refreshing the Website with search engines and otherwise increasing the prominence of the Reports and the Website. 54. The negative Google search results about Plaintiffs resulting from the HTML for the reports on the Website are themselves damaging. 55. Unbeknownst to the victims, a rebuttal is likely to make the negative content in a [Rip-off] Report go up in page rank in search engine queries. 56. In or around May 2010, Plaintiffs observed a major change occur to the Google search results for reports from Defendants' Website ("Rip-off Reports" or "Reports").

Ex. 6 [DN-101-5]; Reed Dec. [96-25] at ¶13; 7/30/10 Reed Dec. ¶¶14-15 and Exs. C & D [DN-102, DN102-3, DN-102-4]. See Howard Dec. at ¶¶10-16 [DN-96-24]. See FAC at Ex. 22; Lin Dec. [DN-62] at ¶¶3-6. Howard Dec. at ¶¶1516 [DN-96-24].

See August 3, 2010 Declaration of Lisa Borodkin [DN-101] ("8/3/10 Borodkin Dec.") at ¶15 and Ex. 5 [DN-101-5]. 57. On March 4, 2009, the first page of the Google search See August 3, 2010 results for the query "Raymond Mobrez" yielded a search Declaration of Lisa Borodkin [DN-101] result (consisting of a title, snippets of text and the URL www.ripoffreport.com/reports/0/417/RipOff0417493.htm) ("8/3/10 Borodkin Dec.") at ¶15 and Ex. in the fourth page rank (position from the top) with the 5 [DN-101-5]. title "Rip-off Report: Asia Economic Institute, AEI, WorldEcon: Raymond. . ." 58. Since in or about May 2010, the first page of the Google search results for the query "Raymond Mobrez" has yielded a revised search result with the revised URL www.ripoffreport.com/.../asia-economic-institute-aeief3f4.htm and pointing to the revised URL http://www.ripoffreport.com/Employers/Asia-EconomicInstit/asia-economic-institute-aei-ef3f4.htm, with the revised title "Asia Economic Institute, AEI, World Econ Review|Rip-off Report . . ."
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See 8/3/10 Borodkin Dec. at ¶16 and Ex. 6 [DN-101-6].

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59. Defendants will not follow a Court order demanding that they remove content that has been adjudicated defamatory.

See Request for Judicial Notice ("RJN") Ex. 3 (Nov. 10, 2009 Oral Argument in Blockowicz v. Williams) [DN-159-3] at 3:9-4:25. 60. Defendants are aware of what a "no-follow" tag or See RJN Ex. 3 at 4:19"do not crawl" code is. 25. 61. Defendants are aware of and do assert short statutes of See RJN Ex. 3 at limitations periods against subjects of Reports that delay 22:14-21. in naming them as defendants in lawsuits. 62. Defendants make statements that deter laypeople from Borodkin Dec. Ex. 1 at 137:17-25, 138:5-13 promptly pursuing all available legal remedies against and Ex. K; 7/30/10 Defendants, including by stating on the Website in a Reed Dec. ¶16 and Ex. section called "Want to sue Ripoff Report" that "one E [DN-102, DN-102thing you can't do is sue Ripoff report." This statement 5] at 4. was written by Defendants' attorney, David Gingras. 63. Subjects cannot always post rebuttals. There have See August 23, 2010 been reported instances where a subject of a Report has Declaration of Tina been unable to post rebuttals. Norris [DN-126] at ¶7. 64. Defendant Magedson is aware that Ripoff Reports are Borodkin Dec. Ex. 2 well known among purported SEO and reputation repair at 149:5-154:5 [DNspecialists and that such entities "inundate" subjects of 162-2]. Ripoff reports offering to sell them services with email blasts, just like they did to Raymond Mobrez. 65. Defendants redacted reports about Shawn Richeson. RJN Ex. 3 [DN-159-3] at 15:1-3. 66. Defendants concede that having negative Google, RJN Ex. 3 at 18:21Yahoo or Bing search results can deter a potential 25-19:1-5 [DN-159business partner or client from doing business with the 3]. subject of such negative reports. 67. Defendants themselves are advancing the theory that See RJN at 14:12-19 having negative Google, Bing and Yahoo search results [DN-159-3]. can sustain a claim for intentional interference with economic relations. 68. Defendants "Verify Safe" on the Website John Beck, See FAC at ¶¶24, 40,
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who was reported by the FTC to be under investigation, and fail to disclose to the public that members in the Corporate Advocacy Program pay many thousands of dollars for Defendants' endorsement. The only investigations Defendants do of these endorsees is by email. Defendant stated that he does not physically go anywhere to go to a business. 69. Defendants sued a blogger, Sarah Bird, who wrote about lawsuits against them in federal court in Arizona. Defendants appealed the dismissal of the suit on jurisdictional grounds. The appeal was dismissed by the Ninth Circuit. DATED: October 6, 2010 By:

41, 62-68, 183-184, 267-270. Exs 16-17 [DN-96, DN-96-16, DN-96-17] and Ex. 18 at ¶¶4-5 & Ex. A at 15:13-22. See RJN at Ex. 2 [DN159, DN-159-2]

Respectfully submitted, /s/ Lisa J. Borodkin Daniel F. Blackert Lisa J. Borodkin Attorneys for Plaintiffs Asia Economic Institute LLC, Raymond Mobrez, and Iliana

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