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Whitney Information Network, Inc. v. Xcentric Ventures, LLC, et al.

Defamation Claim Against Operator Of Complaint/Gripe Site Proceeds

Eleventh Circuit holds that plaintiff's defamation claims against operators of consumer complaint sites arising out of the posting on those sites of allegedly defamatory complaints purportedly authored by third parties is sufficient to survive a motion to dismiss predicated on the immunity afforded the operators of interactive computer services under the Communications Decency Act ("CDA").  The complaint alleged that defendants edited consumer complaints to include words such as "ripoff" and "scam", and fabricated others.  The ultimate resolution of defendants' entitlement to immunity for their involvement in the publication of the posts at issue will have to await the trial of this matter.

As a result of this determination, the Eleventh Circuit reversed the decision of the District Court, which had dismissed the action for want of personal jurisdiction.  The lower court's decision was grounded on its determination that no tort was committed by defendants in Florida, due to the application of the CDA.   The Eleventh Circuit rejected this determination, and remanded the matter to the District Court to determine whether the Court could appropriately exercise personal jurisdiction over the defendants consistent with the strictures of the Due Process clause of the United States Constitution.

Plaintiff Alleges Complaint Site Edits Third Party Complaints To Include Words Such As "Ripoff" And "Scam"

Plaintiff Whitney Information Network ("Whitney") conducts monthly real estate training programs, which it advertises both online and via infomercials.

Defendants Xcentric Ventures LLC ("Xcentric"), badbusinessbureau.org and Ed Magedson operate consumer complaint sites at the domains ripoffreport.com and ripoffrevenge.com, at which they post complaints authored by third party consumers about companies or individuals with whom they are dissatisfied.

Claiming that it was defamed in postings found on these sites, Whitney commenced suit. In its amended complaint, Whitney alleged that the defendants edited reports found on their sites to include words such as "rip off," "dishonest" and "scam."  According to the Court, the amended complaint further alleged "that Defendants knowingly fabricated entire consumer complaints 'which were then attributed to people with false names or 'anonymous' titles from fictional locations around the United States … and were false and slanderous.'"  Finally, plaintiff alleged that defendants "seek to 'extort' money from companies complained about on Defendants' website by offering to cease publication of the complaints in exchange for a fee."

The out-of-state Defendants moved to dismiss on the ground that the court lacked personal jurisdiction over them.  Plaintiff had predicated jurisdiction on Florida's long arm statute, which permits Florida to assert jurisdiction over out-of-state defendants who commit a tortuous act in Florida.  Defendants argued that they did not commit a tort in Florida because of the immunity afforded them as providers of interactive computer services by the Communications Decency Act ("CDA").  The District Court agreed, and dismissed the action.  The Eleventh Circuit reversed.

No Immunity Under Communications Decency Act At Motion To Dismiss Stage 

Section 230 of the CDA immunizes providers of interactive computer services from liability "as the publisher or speaker of any information provided by another information content provider" that is posted on their site.  The Eleventh Circuit held that the allegations of the amended complaint were sufficient to draw into question defendants' involvement in the creation of the reports at issue, and hence their entitlement to the immunity afforded by the CDA.  Under § 230(f)(3), an 'information content provider'  is defined as "any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the internet or any other interactive computer service."  As such, if defendants were responsible "in whole or in part" for the creation of the statements at issue, they are one of the information content providers of such statements, and hence not entitled to immunity therefor.

Defendants contested the allegations of the amended complaint, and submitted affidavits averring that they did not author the statements in question.  However, at this stage of the proceeding, the Court held this evidence insufficient to warrant dismissal.

The Eleventh Circuit accordingly reversed the decision of the District Court, and held that its exercise of personal jurisdiction over the defendants would be consistent with Florida's long arm statute.  On remand, the Eleventh Circuit directed the District Court to determine whether the exercise of such jurisdiction would also comport with the strictures of the Due Process clause of the United States Constitution.