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

Filing 71

NOTICE OF ERRATA filed by Plaintiffs Asia Economic Institute, Iliana Llaneras, Raymond Mobrez. correcting Objection/Opposition (Motion related) 64 Plaintiffs' Statement of Genuine Issues (Attachments: # 1 Exhibit 1 of Plaintiffs' Notice of Errata)(Blackert, Daniel)

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DANIEL F. BLACKERT, ESQ., CSB No. 255021 LISA J. BORODKIN, ESQ., CSB No. 196412 Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Telephone [phone] Facsimile [phone] [e-mail] [e-mail] [e-mail] [e-mail] Attorneys for Plaintiffs, Asia Economic Institute, LLC Raymond Mobrez, and Iliana Llaneras UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) ) ) ) ) ) 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. ) ASIA ECONOMIC INSTITUTE, a California LLC; RAYMOND MOBREZ an individual; and ILIANA LLANERAS, an individual, Case No.: 2:10-cv-01360-SVW-PJW
The Honorable Stephen Wilson PLAINTIFFS' STATEMENT OF GENUINE ISSUES IN OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Date: June 28, 2010 Time: 1:30 p.m. Ctrm: 6 Discovery Cut-off.: None Pretrial Conf. Date: August 2, 2010 Trial Date: August 2, 2010

Statement of Genuine Issues - 1

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Pursuant to Central District of California Local Rule 56-2, Plaintiffs Asia Economic Institute, LLC, Raymond Mobrez, and Iliana Llaneras respectfully submit the following Statement of Genuine Issues in Opposition to Defendants' Motion for Summary Judgment.

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Facts 1 through 92 below correspond to the facts and supporting evidence presented in the Defendants' Statement of Uncontested Facts. These facts are followed by additional material facts and supporting evidence showing a genuine issue.

DEFENDANTS' ALLEGED UNCONTESTED FACTS 1. Defendant XCENTRIC VENTURES, LLC ("Xcentric") operates the website www.RipoffReport.com. 2. Defendant EDWARD MAGEDSON ("Mr. Magedson") is the manager of Xcentric and the founder and "ED"itor of the Ripoff Report site which he started in 1998.

RESPONSE TO OPPOSITION Undisputed.

Undisputed.

3. Plaintiffs RAYMOND MOBREZ Undisputed. ("Mobrez") and his wife ILIANA LLANERAS ("Ms. Llaneras") are the principals of ASIA ECONOMIC INSTITUTE, LLC ("AEI"). 4. AEI was formed as a California LLC on February 7, 2007. Undisputed.

5. According to Mr. Mobrez, before it Undisputed. became an LLC in 2007, AEI existed as an unincorporated entity of some nature for approximately six years. 6. AEI's business was intended to focus on producing "seminars" of some type. Disputed and inaccurate. The testimony reads: "Q: How did AEI make money or try to make money?

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A: AEI was in the R and D stage, and practically they reached the finish line. We were about to put our seminars, conferences, perhaps selling a membership to some of the programs." See Mobrez Deposition at 42:19-24.

7. At its peak, AEI employed approximately 27 people. 8. However, during its nine years in operation, AEI never actually produced any seminars nor did it even attempt to do so.

Undisputed but irrelevant. Disputed and inaccurate. Mr. Mobrez testified that AEI was in the process of developing these seminars. See Mobrez Deposition at 43:19-20. See also Declaration of Israel Rodriguez ¶¶ 4-5; Declaration of Charlie Yan ¶¶ 3-5.

9. During its nine years in operation, AEI's total revenues were $0 and its total profits were $0. 10. AEI ceased all business operations (to the extent it ever had any) in June 2009.

Undisputed. Undisputed.

11. According to Mr. Mobrez, AEI's Disputed and inaccurate. The inability to succeed was the result of testimony reads: only one thing ­ a series of negative comments which appeared on the Ripoff Report website beginning with " Q: Is there some specific event the first posting on January 28, 2009. that sticks out in your mind as the day that you closed the doors or turned off the lights? Is there something that happened in June that made you make a decision to stop doing business with AEI? A: We were basically this reports, Ripoff Report, was in our throat and we were suffocating. I don't know what time the last breath came out. You're asking me when
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was the last breath, I don't know exact moments of it. But it did die, yes." Mobrez Depo. at 5:515. 12. Postings about Plaintiffs appeared Undisputed. on the Ripoff Report on January 28, 2009. 13. Report #417493 was posted on the Ripoff Report site on January 28, 2009. 14. Report #423987 was posted on the Ripoff Report site on February 13, 2009. 15. Report #457433 was posted on the Ripoff Report site on June 1, 2009. 16. Report #502429 was posted on the Ripoff Report site on September 30, 2009. 17. Report #564331 was posted on the Ripoff Report site on February 3, 2010. 18. Report #571232 was posted on the Ripoff Report site on February 19, 2010. Undisputed. Undisputed. Undisputed. Undisputed. Undisputed. Undisputed.

19. After AEI ceased operations in Undisputed. June 2009, more posts were made to the Ripoff Report on September 30, 2009, February 3, 2010, and February 19, 2010. 20. Negative postings about Mr. Mobrez were also made on other websites, including two on Mr. Mobrez;s own websites. 21. Mr. Mobrez first attempted to address these posts by sending an email to Ripoff Report on February 15, 2009. 22. He received no response. Undisputed but irrelevant.

Undisputed.

Undisputed to the extent that Mr. Mobrez never received a response to the February 15, 2009 e-mail.

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23. Several months later, Mr. Mobrez again tried to contact the Ripoff Report, this time by phone. 24. As reflected in his own telephone records, on April 27, 2009, Mr. Mobrez placed three separate calls to the main phone number listed on the Ripoff Report website; (602) 3594357.

Undisputed. Undisputed.

25. According to these phone bills, Undisputed. the first call (Call #1) lasted 3.5 minutes, the second call (Call #2) was 1.0 minute, and the third call (Call #3) was 2.9 minutes. 26. In a declaration filed in this matter on May 3, 2010, Mr. Mobrez testified that during Call #1 to the Ripoff Report, he spoke to a man who identified himself as the "ED"itor. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See Declaration of Raymond Mobrez filed on May 20, 2010. [DN-38] ("RM Dec 2")

27. Mr. Mobrez testified that "[t]he Disputed and inaccurate. speaker immediately inquired into the Raymond Mobrez filed a size and profitability of my business." Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. 28. Mr. Mobrez also testified that the speaker asked "whether my company was internationally based, the size of the company, and how we were making money." Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2.

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29. Finally, Mr. Mobrez testified that the speaker "boasted that Ripoff Report was at the top of all search engines."

Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20,2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic

30. The call was disconnected immediately thereafter.

31. Mr. Mobrez testified that he called back two other times on April 27, 2009 and had two other conversations (Calls #2 and #3) with the same person.

32. In these brief conversations, Mr. Mobrez claimed that speaker asked if he (Mr. Mobrez) had heard about the site's Corporate Advocacy Program.

33. After Mr. Mobrez responded that he was not aware of the program, he testified that the speaker directed him to more information about the program online and instructed him to complete an application form for the program.

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communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. 34. Mr. Mobrez followed upon these calls by sending an email to the Ripoff Report on April 28, 2009. Undisputed, but incomplete. Mr. Mobrez also followed up with other calls and emails.

35. As before, he never received any response from Defendants.

Disputed. Mr. Mobrez received responses later by email that referred to sections of the Ripoff Report Web site under circumstances that Plaintiffs content constitute attempted extortion. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed. Mr. Magedson testified there are one of two standard emails. See Borodkin Declaration, ¶ 8, Ex. 5.

36. About a week later, on May 5, 2009, Mr. Mobrez called the RIpoff Report again (Call #4) and reached a person who identified himself as "Ed Magedson."

37. During this conversation, Mr. Mobrez claimed that Mr. Magedson discussed the CAP program, explained that Ripoff Report "has immunity under the law and therefore could not be sued[]" and thus "it was best to just go with the [CAP] program."

38. After Mr. Mobrez's first conversation with Mr. Magedson on May 5, 2009, Mr. Magedson sent a lengthy email to Mr. Mobrez which is a standard form that Mr. Magedson sends to anyone who contacts the site asking about how to remove or respond to reports. 39. The email contained no threats, did not ask for money, and explained that Ripoff Report allows anyone to

Disputed, inaccurate, incomplete, and calls for a legal conclusion. The e-mail describes the "Rip-off

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post responses to complaints for free.

Report's Corporate Advocacy, Business Remediation and Customer Satisfaction Program" which offers to change "the negative listings on search engines into a positive..." Declaration of Raymond Mobrez filed on May 3, 2010 ("RM Dec 1") at 4:20-5:2; Exhibit A to RM Dec 1. The e-mail also referred Plaintiffs to Defendants' Web site which clearly states that a "[f]ees for enrolling in the program are based upon the number of Reports filed and in some cases, the number of offices you have. Additionally, there is fa flat setup fee to offset the costs associated with programming and contract legalities. Rate sheets will be sent upon completion and verification of the intake questionnaire." See Rough

Deposition Transcript of Xcentric Ventures which took place on June 2, 2010 ("Xcentric Depo.") at page 37.

40. After receiving this email, Mr. Mobrez called Mr. Magedson back on the afternoon of May 5, 2009 (Call #5). 41. During this call, Mr. Mobrez and Ms. Llaneras both claim that Mr. Magedson demanded "at least `five grand' [$5,000] plus a monthly maintenance fee of a couple hundred dollars" to enroll Mr. Mobrez in the Corporate Advocacy Program.

Undisputed. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic

42. Mr. Mobrez also claimed that Mr. Magedson told him during this call that the amount of money charged would be based on the amount of profit earned by the company, so "the more money a company made, the more they would be charged."

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communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. 43. A week later, on May 12, 2009, Mr. Mobrez claimed that he spoke to Mr. Magedson by phone again (Call #7). During this call, which was the last one between the parties, Mr. Mobrez claims that he asked Mr. Magedson what he would receive if he paid the fee to participate in the CAP program. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Undisputed. Disputed. Plaintiffs have not yet received Mr. Magedson's cell phone records and a dispute exists as to whether additional conversations took place. See Rough Transcript of Deposition of Edward Magedson, which took place on June 8, 2010

44. In response, Mr. Mobrez claims that Mr. Magedson told him that once Mr. Mobrez completed the CAP application form and entered the program, "all the negative goes away and you see the positive."

45. Again, Ms. Llaneras claims she overheard this discussion.

46. Mr. Mobrez never completed the CAP application form and never paid anything to Defendants. 47. In April and May 2009, Mr. Mobrez called Mr. Magedson a total of seven times.

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("Magedson Depo.") at pgs. 8689. 48. Mr. Magedson never called Mr. Mobrez. Disputed. Plaintiffs have not yet received Mr. Magedson's cell phone records and a dispute exists as to whether Mr. Magedson called Mr. Mobrez. See Magedson Depo. at pgs. 86-89. Disputed. Plaintiffs have not yet received Mr. Magedson's cell phone records and a dispute exists as to whether additional conversations took place. See Magedson Depo. at pgs. 86-89. Disputed. Plaintiffs have not yet received Mr. Magedson's cell phone records and a dispute exists as to whether additional conversations took place. See Magedson Depo. at pgs. 86-89. Disputed. Defendants refused to disclose the service used to record these conversations See Magedson Depo. at pgs. 86-89.. Moreover, Defendant stated that he had no knowledge of this system. See Magedson Depo. at pgs. 126-130. Disputed. Defendants refused to disclose the service used to record these conversations See Magedson Depo. at pgs. 86-89.. Moreover, Defendant stated that he had no knowledge of this system. See Magedson Depo. at pgs. 126-130. Disputed. Defendants refused to disclose the service used to record these conversations See Magedson Depo. at pgs. 86-89.. Moreover, Defendant stated that he had no knowledge of this system. See Magedson Depo. at pgs. 126-130.

49. Table 1 (below) reflects the date, time, and duration of every call according to telephone bills produced by Mr. Mobrez. 50. With the exception of Call #2, all of these calls were automatically recorded for Xcentric.

51. Apparently, Call #2 was not recorded because when a person calls Xcentric's main telephone number, they are required to navigate through a series of menus before they are connected to Mr. Magedson.

52. Completing this process takes between one minute and two minutes on average, and the recording process does not begin until the caller is actually connected to Mr. Magedson.

53. Because Call #2 lasted only 1.0 minute according to Mr. Mobrez's phone bill, it appears that this call was not successfully connected, dropped, or Mr. Mobrez simply hung up before he reached Mr. Magedson. For that reason and as confirmed by a search of Xcentric's business records which revealed no recording of this call, Call #2 was not recorded because Mr. Mobrez never spoke to

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Mr. Magedson during this call. 54. This point is not significant, however, because Mr. Mobrez does not allege that any threats or demands for money occurred during the 1.0 minute of Call #2. Disputed and inaccurate. Raymond Mobrez filed a Declaration on May 20, 2010, correcting his previous testimony. The Declaration explains Mr. Mobrez's admitted confusion between the telephone conversations and electronic communication between Mr. Mobrez and Mr. Magedson. See RM Dec 2. Disputed. Defendants refused to disclose the service used to record these conversations See Magedson Depo. at pgs. 86-89.. Moreover, Defendant stated that he had no knowledge of this system. See Magedson Depo. at pgs. 126-130. Disputed, lacks foundation, is in admissible pursuant to California Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. Disputed, lacks foundation, is in admissible pursuant to California Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. Disputed, lacks foundation, is in admissible pursuant to California Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. Disputed, lacks foundation, is in admissible pursuant to California Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. Disputed, lacks foundation, is in admissible pursuant to California
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55. Excluding Call #2, all of the other calls were recorded. A summary of dates, ending times, and caller id information captured by Xcentric's phone system is reflected in Table 2 (below).

56. Call 1 Transcript

57. Call 2 Not Recorded

58. Call 3 Transcript

59. Call 4 Transcript

60. Call 5 Transcript

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Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. 61. Call 6 Transcript Disputed, lacks foundation, is in admissible pursuant to California Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. Disputed, lacks foundation, is in admissible pursuant to California Penal Code § 623, and was not disclosed in Defendants' Initial Disclosures. See Plaintiffs' Evidentiary Objections. Undisputed. Disputed. Defendants have not yet disclosed the identity of the posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed. Defendants have not yet disclosed the identity of the posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed. Defendants have not yet disclosed the identity of the posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed, irrelevant for purposes of the bifurcated trial and lacks

62. Call 7 Transcript

63. As of May 2010, there are six reports about AEI on the Ripoff Report site. 64. All of these reports were created by third parties, not by Defendants.

65. Before it appeared on the site, each report about AEI was reviewed by one of Xcentric's staff of content monitors.

66. Xcentric's servers automatically record the name of each content monitor who reviews a post made to the site.

67. Each content monitor who reviewed the posts about AEI has

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testified that no changes, additions, or deletions were made to any of these reports, nor were any changes, additions or deletions made to the comments/rebuttals. 68. The text of each report and each comment/rebuttal originated entirely with the third party author.

foundation. The content monitors do not purport to have any knowledge of HTML source coding and do not offer any testimony regarding changes, additions, or deletions of text within each reports' meta tags. Disputed and irrelevant for purposes of the bifurcated trial. Defendants have not disclosed the identity of these supposed "third party author[s]" and Defendants' relationship with these authors. Disputed, irrelevant for purposes of the bifurcated trial, and inaccurate. When a user submits a report, they are required to disclose certain information regarding an individual or company at the Web site's direction. See Smith Aff. ¶ 5. Disputed, irrelevant for purposes of the bifurcated trial, and inaccurate. Users are required to submit information such as the name, address, and phone number of the person or company they wish to write about during Step 1 of the report creation process. See Smith Aff. ¶ 5. Disputed, irrelevant for purposes of the bifurcated trial and incomplete, The site also asks users to "be creative."

69. 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.

70. 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.

71. During this process, the author is asked to prepare a title for their report by entering data into four boxes. The first box asks for the name of the company being reported, the second box asks for "descriptive words" explaining what the report is about, the third box asks for the city, and the fourth box asks for the state. 72. During this process, the site explains "The title of your report is divided into four boxes below but will appear as one line after your report is submitted."

Disputed. Defendants have not yet disclosed the identity of the posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed. Defendants have not yet disclosed the identity of the

73. The site also shows the author a sample of how the report title would

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appear based on the data they have entered.

posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed. Defendants have not yet disclosed the identity of the posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed. Defendants have not yet disclosed the identity of the posters. Discovery is ongoing and Plaintiffs have a pending motion to compel and motion to bifurcate discovery. [DN 52] See also Plaintiffs' Evidentiary Objections. [DN 61]. Disputed. Users are required to select from a predetermined list of topics and categories before proceeding to the next step of the report creation process. See Smith Aff. ¶ 7. Undisputed but irrelevant for purposes of the bifurcated trial. Disputed and irrelevant for purposes of the bifurcated trial. Defendants advertise and sell a book entitled, "Ripoff Revenge," which advises readers on how to respond to these alleged "Ripoffs." S Disputed, irrelevant for purposes of the bifurcated trial and inaccurate. Although this text appears on the Defendants' Web site, Defendants do not enforce their Terms of Service.

74. The author is also asked to select a topic and category for their report.

75. The list of topics and categories includes hundreds of choices some of which are entirely benign (i.e., electronics) while some are more critical (i.e., Unusual Rip-Off).

76. Xcentric does not make any suggestion as to what topic or category an author should select.

77. At the screen where the actual report text is entered, the author is presented with a blank box. 78. Xcentric makes no suggestion as to what the author should say other than offering generic comments about style such as "DO NOT use ALL CAPITAL LETTERS, it makes it hard to read." 79. Before the author is allowed to submit their report, they are required to review and agree to certain terms which state, among other things, "By posting this report/rebuttal, I attest this report is valid." The author must also separately agree to Xcentric's Terms of Service which state, among other things, "you will NOT post on ROR any defamatory, inaccurate, abusive, obscene, profane, offensive,

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threatening, harassing, racially offensive, or illegal material, or any material that infringes or violates another party's rights (including, but not limited to, intellectual property rights, and rights of privacy and publicity)." 80. 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. 81. 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 to index the contents of the specific page at issue. 82. The meta tags for each page are not normally visible to viewers, but they can be seen by individuals with basic technical knowledge who choose to view the actual HTML code for a report's webpage. 83. The term "Ripoff Report" is a federally registered trade. 84. Every report page on the Ripoff Report site includes meta tags based on unique keywords supplied from the author such as the name of the company involved and other words used by the author to create the title for their report. 85. Xcentric's servers also automatically include three different keywords ­ rip-off, ripoff, rip off ­ into the meta tags of every page on the site. 86. Again, these words are not visible in the title or body of any particular report; they are simply indexing references used by search engines in order to accurately reflect the source of the indexed page. Disputed and incomplete. Defendants also add the term "Ripoff Report" to the text supplied by the author. See Jahnke Declaration ¶ 5. Disputed to the extent that these keywords are used for "keyword meta tags" but Defendants do not proffer any evidence regarding the creation of the site's title and description meta tags. Disputed. Title and description meta tags are displayed on search engines and visible to individuals conducting Internet searches of any business or individual subject to a "Ripoff Report." Disputed. USPTO records indicate only a registered mark for "Ripoff Report Verified Safe" Disputed and inaccurate. At the time Plaintiffs' Complaint was filed, Defendants themselves added the term "Ripoff Report" to each report's title meta tag. Moreover, the terms "rip-off, ripoff, and rip off" are added to the keyword meta tags. Disputed to the extent that these keywords are added to the "keyword" meta tags for each page. Disputed. At the time Plaintiffs' Complaint was filed, Defendants themselves added the term "Ripoff Report" to each report's title meta tag. Title meta tags are displayed as search engine results

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and are visible to users of Internet search engines. 87. If they keywords "rip-off, ripoff, rip off" were removed from the meta tags for each report page, the page would appear physically unchanged to anyone viewing it. 88. Plaintiffs never joined the Corporate Advocacy Program. 89. Mr. Mobrez admitted in his deposition that he had no evidence Defendants created or altered any of the postings about AEI. Disputed. If Defendants removed "Ripoff" from the page's title meta tags, search engine results would appear differently. Undisputed. Disputed. Mr. Mobrez lacks foundation to admit whether Defendants created or altered any of the postings regarding AEI.

90. Neither Xcentric nor Mr. Disputed and irrelevant for Magedson had any knowledge of purposes of the bifurcated trial. Plaintiffs' relationships with their employees at the time each report was posted. 91. Defendants did not conspire with anyone to harm Plaintiffs. Disputed and calls for a legal conclusion. Furthermore, Defendants would not disclose the owners and other persons responsible for Defendant Xcentric Ventures and its parent company, Creative Business Investments. See Xcentric Depo. at pages 12-13, 18, 20 Disputed and inaccurate. Mr. Mobrez was not asked to identify such employees anywhere in Mobrez Depo. at 174:12-178:2.

92. At this deposition, Mr. Mobrez was unable to identify a single employee of AEI who quit as a result of any actions of Xcentric or Magedson.

Plaintiffs also contend that the following other material facts are in dispute:

MATERIAL FACTS

EVIDENCE

1. Defendants' Web site, Ripoff Defendants' Website, Report, is a "consumer reporting Web www.ripoffreport.com site and publication, by consumers, for consumers, to file and document complaints about companies or individuals." (emphasis added). 2. Only complaints are published. Positive reports will not be posted.
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Declaration of Patricia Brast ("Brast") ¶ 10.

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3. To draft a complaint, users of the Defendants' Web site are guided through a five-step process. 4. In Step 1 the Web site requires users to input certain information about the business or individual that is the target of the report such as its name, address, and telephone number.

Smith Aff. ¶ 5 Smith Aff. ¶ 5

5. In Step 2, the Web site requires Smith Aff. ¶ 6 users to create a "title" for their report. The title is composed of four parts: (1) the name of the company or individual that is the target of the report, (2) a "creative" description of the target's alleged wrongdoing, (3) the city in which the target is located in, and (4) the sate in which the target is located. 6. Later in Step 2, the user is required to categorize the complaint into one of many predetermined categories such as "Con Artists" and "Court Judges." 7. In Step 3, the Web site provides users with a blank text box in which to draft the body of the report. 8. In Step 4, users have the option of including photographs with their reports. 9. Step 5 allows users to finally submit their report. 10. After this information is submitted, Defendants automatically combine the text supplied by the author with various HTML codes. This combined effort appears in the "meta tags" and are "used by search engines to index the contents of the specific page at issue." 11. Specifically, Defendants input original content into the "title meta tag" of the particular webpage. Defendants create the title meta tag for each report by adding the phrase "Ripoff Report:" to the beginning of Smith Aff. ¶ 7

Smith Aff. ¶ 8 Smith Aff. ¶ 9 Smith Aff. ¶ 10 Smith Aff. ¶ 13

Declaration of Kristi Jahnke ("Jahnke Declaration") ¶¶ 7, 3

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the title created in Step 2. This title appears as a search result on Internet search engines such as Google and is visible to anyone conducting an online search of the target. 12. Defendants also create "description meta tags" using the four-part title developed by the original poster. The description meta tag is displayed on Internet search engines in two lines beneath the title tag. Thus, the description meta tag is visible to anyone conducting an online search of the target. Jahnke Declaration ¶ 5

13. Finally, Defendants create Smith Aff. ¶¶ 14, 15, 16 "keyword meta tags" using the "unique keyword supplied by the author such as the name of the company" and three unique keywords ­ "rip-off, ripoff, rip off." These keyword meta tags are "used by search engines in order to accurately reflect the source of the indexed page." 14. To date, the Defendants have published six reports referencing the Plaintiffs. Magedson Aff. ¶ 58

15. The title, description and keyword Jahnke Declaration ¶ 7 meta tags of these reports are attached as EXHIBIT 1 to the Declaration of Kristi Jahnke. 16. Because of the combined efforts Jahnke Declaration ¶ 3 of the Defendants and the anonymous users of the Defendants' Web sites, anyone conducting an online search of the Plaintiffs will see: "Ripoff Report: Asia Economic Institute, AEI, WorldEcon: Raymond ... Asia Economic Insitute, AEI, WorldEcon: Raymond Mobrez And Iliana Llaneras Complete Exploitation as an employee. Do not work for the Asia Economic..." 17. The appearance of this text on Internet search engines has caused See also Declaration of Israel Rodriguez ¶¶ 4-5; Declaration of

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certain individuals to refuse to engage Charlie Yan ¶¶ 3-5; Declaration in or discontinue engaging in of Justin Lin ¶ 6. business with the Plaintiffs. 18. Moreover, the appearance of this text on Internet search engines have caused others to decline employment offers from the Plaintiffs after conducting online searches of the Plaintiffs. Plaintiffs' Opposition to Defendants' Special Motion to Strike [DN 11] Exhibit B

RM Dec 1 ¶ 4 19. On February 15, 2009, Mobrez sent an e-mail to Ripoff Report informing the Defendants of the "outlandish lies" published on their Web site. In an effort to avoid the judicial process, Mobrez simply requested that the Defendants remove the posts from their Web site and identify the individuals responsible. Likewise, Mobrez informed Defendants "Your false publishing has caused me and others that you have named hardship and enormous loss." At this time, Mobrez made Defendants aware of the damage we were suffering because of these posts. 20. After there had been no response, RM Dec 1 ¶ 5 AEI filed a "Rebuttal" on April 3, 2009 for each report listed on the Ripoff Report Web site at that time. These "rebuttals," however, do not appear as "results" on Internet search engines such as Google and Yahoo. 21. A business or individual may file a rebuttal for free. However, as Magedson admits, these rebuttals do not appear as Internet search results. (Paragraph 22 deleted) 23. On May 5, 2009, Mr. Magedson Declaration of Tina Norris ("Norris Declaration") ¶ 14; Blackert Declaration ¶¶ 34, 44

RM Dec 1 ¶ 12

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made a lengthy response describing, among other things, the "Rip-off Report's Corporate Advocacy, Business Remediation and Customer Satisfaction Program." The program, as described by Mr. Magedson's email, promised to change "the negative listings on search engines into a positive along with all the Reports on Rip-off Report." Mobrez never threatened to sue Mr. Magedson or his company; yet, the email warned that a lawsuit against the Web site was a losing battle. The email boasted that the Web site "NEVER lost a case" and that suing would "only get [us] more publicity and additional listings on search engines." 24. This e-mail is one of two standard Declaration of Lisa Borodkin ("Borodkin Declaration") ¶ 8, e-mails sent to targeted businesses Exhibit 5. and individuals who express interest in removing or remedying the reports. 25. The hyperlink included in the Blackert Declaration ¶10; RM May 12, 2009 e-mail from Mr. Dec. 1 ¶ 15. Magedson directed Mr. Mobrez to apply for Defendants' Corporate Advocacy Program. The application form requires targeted businesses or individuals to fill in certain information, such as the name of the business/individual, number of offices, average sales, and the number of complaints published by the Defendants. 26. Once this application is completed, applicants are sent a second generic e-mail. Among other things, the e-mail demonstrates that title and description meta tags of all reports regarding CAP members are changed. The e-mail states: "See how other Corporate Advocacy Program member listing look on search engines. Then look at the beginning Norris Declaration, Exhibit 4

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of the reports that are listed on the search engines. You will see about 250 words injected into the beginning of the Report with your stated commitments." This statement is followed by several hyperlinks exemplifying the final result. 27.The e-mail includes their standard "Rate Sheet." According to this document, fees for the CAP are calculated in three ways: (1) calculation by amount of reports filed, (2) by the number of offices, or (3) by gross sale of a product or service. Which methodology is chosen is dependent on which calculation is higher. Norris Declaration Exhibit 5; Borodkin Declaration, Exhibit 6

28. According to the Defendants' rate Norris Declaration Exhibit 5 sheet, fees are calculated using the amount of reports filed using the following standard: "1 to 20 Reports One time charge $7,500 Programming Plus $600 Per Report..Then Monthly Monitoring Fee 36 month minimum. $40.00 per Report times the Reports originally filed. Minimum $100.00 per month monitoring. NOTE: no matter how many Reports you have, ..the first 20 Reports will still cost $600 per Report then the balance of the Reports will be calculated as stated below. 21 to 50 Reports One time charge $7,500 Programming Plus $500 Per Report.. Then Monthly Monitoring Fee 36 month min. $35.00 per Report times the Reports originaly filed..
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51 to 150 Reports One time charge $7,500 Programming Plus $425 Per Report.. Then Monthly Monitoring Fee 36 month min. $25.00 per Report times the Reports originally filed.. 151 to 350 Reports One time charge $7,500 Programming Plus $400 Per Report.. Then Monthly Monitoring Fee 36 month min. $20.00 per Report times the Report originally filed. 351 to 500 Reports One time charge $8,500 Programming Plus $350 Per Report.. Then Monthly Monitoring Fee 36 month min. $15.00 per Report times the Reports originally filed.. 501 to 1000 Reports One time charge $15,500 Programming Plus $300 Per Report.. Then Monthly Monitoring Fee 36 moth min. $15.00 per Report times the Reports originally filed.. 1001 to 1500 Reports One time charge $20,500 Programming Plus $250 Per Report.. Then Monthly Monitoring Fee 36 month min. $10.00 per Report times the Reports originally filed.." 29. The initial fee of $7,500 is based Xcentric Depo. at pg. 39;

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on what Mr. Magedson thought was "fair." 30. It also appears that the more defamatory reports that appear on the Defendants Web site, the higher the cost of the CAP program. 31. Furthermore, Magedson admits that the longer a target waits, the more expensive it will be to join the CAP.

Blackert Declaration ¶ 18. Norris Declaration Exhibit 5

Magedson Depo. at pgs.100-104; Borodkin Declaration Exhibit 7

Norris Declaration Exhibit 5 32. If higher, fees will be calculated based on the amount of offices is calculated using the following standard: "There will be a minimum one time charge for each office location of $2,500. Monthly monitoring fees will be $100 per month per office for a minimum of 36 months from date of our agreement. If you want our services after that time, a new rate can be negotiated. **initial programming and setup fees to apply. $5,500" Norris Declaration Exhibit 5 33. If higher, fees will be based on gross sale of a product or service. According to the Defendants' rate sheet, Defendants "will look at the average cost of the product you sell (that was complained about) or the cost of the service you may provide and multiply that times an amount equal to one month of sales (in other words, your average monthly revenue from the product) as the down payment plus $5,500 programming fee plus % per month for minimum 36 months thereafter." 34. Monthly fees for the CAP must be Norris Declaration Exhibit 5
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paid by the 8th of each month. If not paid, "all privileges incorporated within the Business Remediation Program will cease after 30 days." Judicial Notice 35. Had the Plaintiffs been accepted into the CAP, they would be required to pay an initial fee of $11,100 ($7,500 + $600 times 6 reports). They would also be required to pay $240 a month for 36 months. At the end of these 36 months, Plaintiffs would have spent $19,740. Norris Declaration Exhibit 4

36. For this cost, Mr. Magedson sends a generic e-mail to the authors of the reports, commending the CAP member for wanting to "make it right."

37. In addition, Mr. Magedon adds a Norris Declaration Exhibit 4 generic statement to the beginning of each report in red, bold lettering. This statement discredits the report and praises the CAP member for its dedication to customer satisfaction. 38. The title meta tags of each report are then changed to include the positive affirmations. The once negative title meta tags no longer appear on Internet search engines. Because Ripoff Report "gets a good ranking" on search engines, there is an added value to joining CAP. 39. Complaints made against CAP members are prevented from publication. Norris Declaration Exhibit 4

Declaration of Daniel Blackert ("Blackert Declaration"), Exhibit 17

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40. No "investigation" takes place. No third parties are hired to conduct an investigation into the truth or falsity of the postings.

Blackert Declaration ¶ 36, Exhibit 35

Blackert Declaration ¶ 43, 41. If a targeted business or individual declines to pay this fee, the Exhibit 41 defamatory meta tags continue to appear on Internet search results and the damage incurred as a result of this image remains. 42. Although the Plaintiffs feared RM Dec 1 ¶ 18 continued economic loss, they refused to join CAP. As such, the content of the search result remains negative and more defamatory reports appear on the Defendants' Web site. 43. Because of these reports, Plaintiffs continue to lose business opportunities and are unable to hire new employees. Plaintiffs' Opposition to MTS, Exhibit A See also Declaration of Israel Rodriguez ¶¶ 4-5; Declaration of Charlie Yan ¶¶ 3-5; Declaration of Justin Lin ¶ 6.

44. Mr. Magedson admits that Magedson Depo. at pg. 211-212; targeted business and individuals may Borodkin Declaration, Exhibit 8 be too intimidated to bring a suit against the Defendants.

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