How to Make Money Rebuilding Reputations: Have Them Destroyed First charges businesses to clean up online damage done by its users, but litigation may spell trouble for the free speech law it relies on.

by Dune Lawrence | December 28, 2016

From Bloomberg Businessweek

The headline appeared in January of 2013 on “Dr. John Pitman III, MD Peninsula Plastic Surgery Center, Pitman Surgical Associates, Estranged Ex Husband Key Witness Arrested by 6 Armed Officers at Plastic Surgery Practice, U.S. Army Col.”

Wild allegations followed: Pitman, described as a drug user nearing bankruptcy, supposedly perjured himself for money in a murder case involving his ex-wife, a prosecution stemming from her failed effort to frame him. More inflammatory claims came in updates, as recounted in court filings, with titles like “Dr. John Pitman and Michael Roberts, Vegas orgies, she/he and he/he twister, doctor prescribing pain pills for sex fueled nights.”

Pitman, 59, had run a successful plastic surgery practice in Virginia for more than 15 years and won military commendations for treating wounded soldiers. But in the era of Google-as-due diligence, none of that mattered. “Ripoff Report” and its bizarre headlines figured prominently in search results for Pitman’s name. Now his practice really tanked: Patients who’d booked surgeries canceled, new business dried up, and his caseload plummeted from 90 patients in 2012 to just 15 in 2013.

In October of this year, Pitman sued the website and the man who runs it (among others), seeking more than $60 million in damages for conspiring to destroy his business and reputation. Pitman alleges that when he asked the site to take the posts down, Ripoff refused, and instead tried to sell him reputation management services for $10,000 to clean up the mess.

The Ripoff-posted complaints still show up at the top of Google searches for Pitman’s name and continue to harm his business, according to the suit. The plastic surgeon’s litigation, however, faces one huge obstacle: the powerful free speech protections that created the Internet as we know it.

“I see people whose lives and businesses are destroyed, and there’s really no recourse.”

Ripoff Report, owned by Tempe, Arizona-based Xcentric Ventures LLC, has been online since 1998 and bills itself as a consumer champion under the tagline “Don’t let them get away with it!® Let the truth be known!™” It’s also a powerhouse in court: The website has built an extraordinary record of wins in defending online free speech under Section 230, a key provision of the Communications Decency Act of 1996.

“A dozen years ago, if you were to ask me, who’s going to be the best spokesperson for Section 230, I would have said Google or Yahoo or EBay,” said Eric Goldman, a Section 230 expert who helps direct the High Tech Law Institute at Santa Clara University. “It turns out, instead, that Ripoff Report has done all the hard work for the rest of the community.”

That’s one way of saying that Ripoff has crushed many a John Pitman in court with these 26 words: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

This language protects websites, search engines, and social media platforms from liability for things that third parties, collectively, put online. It also sits at the heart of wrenching debates about hate speech, online harassment, and the corrosive effect fake news is having on the 240-year-old American experiment. While Ripoff says posts on the site are free speech and that it will sometimes voluntarily redact them, Pitman’s experience is emblematic of the extremes to which Section 230 has brought us, now 20 years on.

“There needs to be some sort of recalibration with regard to internet speech,” said Erik Syverson, a lawyer at Raines Feldman LLP in Los Angeles who specializes in internet and technology law. “I see people whose lives and businesses are destroyed, and there’s really no recourse.”

“We don’t want to assume that because somebody wrote something really outlandish it’s false, because it might be true”

Despite its “let the truth be known” mantra, Ripoff takes no responsibility for the accuracy of what’s posted on it. Here’s how it works: Anyone can post for free—anonymously. The target can post a rebuttal, also free. Users must agree not to lie, defame, or harass in the guise of a complaint, but plenty do. This is a gripe site, after all.

And that’s where Ripoff’s business gets interesting. The site’s terms of service don’t allow defamation, and Ripoff reviews new posts for obvious violations before they go online, according to in-house counsel Anette Beebe. But reality is often stranger than fiction, she says. “We don’t want to assume that because somebody wrote something really outlandish it’s false, because it might be true,” Beebe said.

So, once a complaint goes up, true or false, it’s up for good: Ripoff has a policy of never removing reports entirely. And that policy drives Ripoff’s fee-based services for businesses desperate to fix the damage done by having “Ripoff Report” associated with their name. Ripoff calls this its “Corporate Advocacy Business Remediation & Customer Satisfaction Program.”

After signing up, companies submit to an on-site inspection, fill out a questionnaire, and pledge to “make things right” with customers, according to the website. Ripoff uses the information to create a positive review; crucially, reassuring language replaces negative headlines in search results, and any new complaint gets put on hold, giving the business a chance to resolve it first. (While Ripoff doesn’t post its rates, founder and editor Ed Magedson sent one potential customer the following in 2013: a base fee of $7,500 plus $600 per report up to 20 reports, plus a minimum of three years of monitoring at a minimum of $100 a month, or $3,600.)

For those with just one or two reports, Ripoff suggests its arbitration option, starting at $2,000. The website says it will hire an independent arbitrator to weigh evidence of factual inaccuracies, and will redact details found to be untrue. There’s even an option for companies that have never experienced a Ripoff complaint to get “verified,” ensuring that they will have a chance to resolve any gripes before anyone can post about them.

Such prices aren’t penny ante when one considers that it’s smaller companies that are most susceptible to reputational damage. Ripoff pretties up the fact that it profits from occasionally fake, harassing, and defamatory posts by spinning it as a character test: “True or false, good or bad, right or wrong, complaints are complaints,” the website reads. “We believe businesses need to adopt a ‘whatever it takes to make the customer happy’ approach. It’s not easy and sometimes it’s not always fair, but as they say, ‘that’s business.’”

“If you file a lawsuit simply to harass us, not only will this not work, it will very likely end up being EXTREMELY expensive for you”

Dealing with collateral damage wrought by postings on Ripoff Report has become something of a cottage industry.

“I'm just constantly hearing from businesses saying, ‘Oh my gosh, this is ruining my business, ruining my life,’” says Whitney Gibson, a lawyer who runs a practice specializing in online reputation issues at Vorys, Sater, Seymour and Pease LLP in Cincinnati.

Gibson says he’s never sued Ripoff directly—it’s impractical under the CDA; Ripoff gets most cases dismissed under Section 230. Instead, he helps clients sue the author of a posting, though it isn’t always easy to figure out who that is. Ripoff will provide information in response to a subpoena issued out of an Arizona court, and if a plaintiff gets a finding of defamation, the website will consider redacting information—but it doesn’t always do so. It also won’t act on default judgments, which courts issue when a defendant hasn’t shown up to defend himself; Ripoff’s Beebe says the concern is defendants may not know about the lawsuit or lack money for a lawyer to defend truthful statements. Gibson also goes directly to Google to request that it de-index material so it won’t turn up in searches, but it too isn’t obligated, thanks to Section 230.

Ripoff now has two pilot programs to redact content for free, without a court order, under limited circumstances, Beebe says. In response to allegations of harassment or cyber bullying, technical staff can check for red flags, like multiple complaints tracked to the same internet address. Ripoff may choose to cut parts of the report or de-index it. The second program addresses situations in which a post makes inflammatory claims that can be checked, such as falsely accusing someone of being a registered sex offender.

When it comes to court challenges, though, Ripoff is much less accommodating. On its site, it asserts that, because of Section 230, lawsuits against Ripoff Report over posts on its site are, by definition, without probable cause: “You need to be aware that if you file a lawsuit simply to harass us, not only will this not work, it will very likely end up being EXTREMELY expensive for you.”

These are not empty threats. In 2011, after Los Angeles lawyer Lisa Borodkin represented plaintiffs in a lawsuit against Ripoff (which Borodkin lost), Ripoff turned around and sued her and the clients for malicious litigation. Though Ripoff lost that case, its appeal dragged on for four years. A federal appeals court eventually affirmed that Borodkin’s clients had probable cause to sue for extortion and racketeering. The clients urged the court, successfully, to publish the decision: “Xcentric has been successful in shaping an appearance of unanimous victory in the courts and twisting the law to their own ends,” the plaintiffs wrote. “Ambushing the courts and the victims with voluminous filings is one tactic. Suing the victims’ lawyers for baseless claims is another. Criminals use these tactics to send a message: ‘Don’t come forward.’”

“It is reasonable to infer that the very raison d’etre for the website was to commercialize on its ability to sell its program to counter the offensive content”

An early dent in Section 230’s armor came back in 2008. The U.S. Court of Appeals in San Francisco found that Section 230 did not shield from potential liability for soliciting what might be discriminatory content in its effort to match roommates with landlords, or each other. The court ruled that, by creating a questionnaire that required users to give their preferences for potential roommates’ gender, sexual orientation and family status, the site was more “than a passive transmitter of information.”

More recent court rulings suggest other judges are willing to consider limits on Section 230. In Utah, for example, a home security company attacked on Ripoff Report got the author to recant his statements. Ripoff refused to remove them, and the company sued. The judge in the case twice denied Ripoff’s attempts to toss out the suit, writing in August 2015 that “It is reasonable to infer that the very raison d’etre for the website was to commercialize on its ability to sell its program to counter the offensive content the Ripoff Report encouraged.”

The plaintiffs in that case agreed to a dismissal in October. But the questions raised by the court animate other challenges to Section 230: When has a site, through the way it deals with users and handles or encourages certain kinds of content, played enough of a role in creating the material that it becomes potentially liable for it?

Last year, the Washington State Supreme Court let stand a lawsuit against advertising site, which has long fought allegations that it facilitates human trafficking. Section 230, the justices held, didn’t block the litigation. And in a case brought in California state court, Yelp Inc. lost a bid to use Section 230 to block a judge’s order that it take down defamatory reviews of an attorney (it’s appealing).

“The company has for all intents and purposes become the publisher of those posts”

All of this may be catching up to Ripoff Report in the shape of, strangely enough, Dr. Pitman.

Their collision course began in 2001, in Sac County, Iowa, where Pitman’s ex-wife shot and killed a neighbor. The wife, Tracey Richter, said she was defending herself against a home invasion. While an initial inquiry was eventually shelved, a new prosecutor, Ben Smith, reopened the case a decade later. In 2011, he charged Richter with murder, alleging she lured the victim into her scheme to frame Pitman, with whom she was embroiled in a custody battle. At trial, Pitman provided testimony for the prosecution; Richter was subsequently convicted and sentenced to life without parole.

Nine months later, a series of posts related to the case began appearing on Ripoff Report. The first painted Richter as a victim of an overzealous Smith. Later accusations were leveled at Pitman and other trial witnesses. They included suggestions that they possessed child pornography, depictions of child torture, and bomb-making recipes.

Smith began to investigate the man whose name appeared on some of those Ripoff posts: Darren Meade. In September 2014, he charged Meade with witness tampering and obstruction.

Dr. Pitman.

In court filings, Smith submitted evidence that Ripoff parent Xcentric paid Meade more than $100,000 between 2011 and 2013, and that Meade and Ripoff founder Magedson were in close contact. E-mails filed in the case showed Meade seeking legal representation in a planned suit against Ripoff, alleging that Magedson had directed his activities and even wrote parts of reports himself. (Smith later dropped the charges against Meade, who had denied the allegations. Magedson, who wasn’t charged in the case, also denied any wrongdoing.)

In 2015, Xcentric jumped into the fray by suing Smith, portraying his investigation as retaliation for legitimate criticism and an assault on free speech. Last summer, the company won a preliminary injunction freezing his probe while its lawsuit proceeds: U.S. District Judge Leonard Strand in Iowa ruled Aug. 19 that Xcentric was likely to prevail on its First Amendment claims.

However, Strand’s opinion simultaneously blew a hole in Xcentric’s Section 230 defense. He said Magedson’s claims that he had nothing to do with Meade's reports on Ripoff weren’t credible, and that “it is more likely than not that” Ripoff and Magedson would be found to have been “more than a neutral conduit” for the allegedly harassing content about witnesses such as Pitman, and to have “materially contributed” to the alleged illegality of the statements. Trial is scheduled for May.

He just took too long to sue.

As for Pitman’s lawsuit against Xcentric, it’s shaping up to test the weakness in Section 230 laid bare by Strand. Pitman’s complaint alleges that the posts on were intended to force him to recant his testimony in Richter’s murder trial, and to extort money from him through Ripoff’s corporate advocacy program. The company, “in deciding to keep knowingly false statements made by users and those on its payroll, has for all intents and purposes become the publisher of those posts,” Pitman alleges.

His case has since been moved from state to federal court, which is often more hospitable to civil defendants. Pitman is fighting to move the case back. His lawyer, Aaron Houchens, declined to comment.

Today, if you search for “Dr. John Pitman” on Google, Ripoff Report is still a top result. Most of the content has been redacted, though, and what’s left makes little sense. A note dated Aug. 25, 2015, explains that Ripoff, after multiple efforts to reach the author of the Pitman complaint, has removed statements it couldn’t verify.

Nevertheless, in its response to Pitman’s litigation, Ripoff argues that the allegations against him cited in his lawsuit are, in fact, true. The company also relies on the defense that Section 230 forestalls any liability on its part, anyway.

Finally, Ripoff also contends the case should be thrown out because Pitman—who spent much of 2015 in Afghanistan at a forward surgical unit, and who received the Purple Heart—just took too long to sue.

Editor: David Rovella
Photo Illustration: James Singleton