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Court papers filed by Ripoffreport.com against Russ Whitney 2

B. Legal Arguments Raised by Defendants' Motion

Defendants, in their Motion to Dismiss, claim that Plaintiffs have failed to plead sufficient facts supporting personal jurisdiction over Defendants in Florida. Defendants claim that Plaintiffs' allegations fail to satisfy Florida's long-arm statute and the Constitutional Due Process Clause. Specifically, Defendants' Motion states that this Court does not have specific jurisdiction over Defendants as Defendants do not "operate, conduct, engage in, or carry on a business or business venture in the State of Florida." Further, Defendants claim they have not committed a tort cognizable in Florida sufficient to satisfy specific jurisdiction pursuant to Florida's long-arm statute. Defendants also contend that this Court lacks any basis to exercise general jurisdiction over Defendants as they have not been engaged in "continuous and systematic" and "extensive and pervasive" activity in Florida as required by the statute. Finally, Defendants claim that the Due Process analysis prevents this Court from exercising jurisdiction over Defendants. Defendants are wrong. Moreover, Defendants' Due Process argument and affidavit in support are woefully insufficient as Defendants fail to recognize that even if the "minimum contacts" test has not been met, and it has been in the case sub judice, due process standards permit consideration of "fair play and substantial justice" in addition to minimum contacts in establishing personal jurisdiction over an out of state defendant. Because Defendants' Motion to Dismiss for lack of personal jurisdiction and affidavit in support thereof fails to adequately controvert the well-pled facts in Plaintiffs' Complaint, Defendants' Motion should be DENIED.

C. Defendants' Affidavit is Insufficient to Support the Motion to Dismiss

Defendants filed the affidavit of Defendant, Ed Magedson, in an attempt to controvert allegations in the Complaint. However, Defendant Magedson's affidavit does not sufficiently refute all of Plaintiffs' jurisdictional allegations set forth in Plaintiffs' Complaint; thus those uncontroverted allegations must be taken as true. This fact alone undermines the Defendants' argument. Thus, Defendants' burden has not and cannot be met.

Defendant Ed Magedson's affidavit avers that he does not reside in Florida, does not own assets in Florida and has not visited Florida since 1973. (Magedson Aff. &Mac182; &Mac182; 2-5). Further, Defendant Magedson avers that Defendant Xcentric does not transact business in Florida, does not have any agents in Florida, nor does it maintain any offices in Florida. (Magedson Aff. &Mac182; 7). Defendant alleges that "Xcentric merely operates a website which allows consumers the ability to post complaints against companies with which they have done business." (Magedson Aff. &Mac182; Cool

. "The website contains over 90,000 reports and the operators of the website cannot monitor all of these reports." (Magedson Aff. &Mac182; 9). Finally, Defendant avers that "Badbusinessbureau.org was an Arizona Corporation that has never published Articles of Incorporation and which was administratively dissolved. Defendant further avers that it has no involvement in the website at issue and it has never transacted business anywhere, including in the state of Florida." (Magedson Aff. &Mac182; 10).

While Defendants' affidavit attempts to controvert Plaintiffs' allegations that Defendants operate, conduct, engage in or carry on a business or business ventures within this state through their Internet websites, Defendants completely fail to controvert the remaining factual allegations supporting personal jurisdiction in Plaintiffs' Complaint, set forth below.

D. Uncontroverted Jurisdictional Allegations in Plaintiffs' Complaint

Plaintiffs' Complaint sets forth the following uncontroverted jurisdictional allegations against Defendants.

5. Defendant, XCENTRIC VENTURES, LLC., is subject to the jurisdiction of this Court because it:

(a) Operates, conducts, engages in or carries on a business or business ventures within this state through its Internet websites;

(b) Infringed upon Plaintiffs valid trademarks in violation of 15 U.S.C. ß 1114 and 15 U.S.C. ß 1125 and published and continues to publish infringing marks in Florida; and

(c) Committed and continues to commit a tort in Florida by publishing false and defamatory information on its websites about Plaintiffs, directed at Florida and causing injury in Florida that gives rise to a potential claim cognizable in Florida.

6. Defendant, BADBUSINESSBUREAU.ORG, is subject to the jurisdiction of this Court because it:

(a) Operates, conducts, engages in or carries on a business or business ventures within this state through its Internet websites;

(b) Infringed upon Plaintiffs valid trademarks in violation of 15 U.S.C. ß 1114 and 15 U.S.C. ß 1125 and published and continues to publish infringing marks in Florida; and

(c) Committed and continues to commit a tort in Florida by publishing false and defamatory information on its websites about Plaintiffs, directed at Florida and causing injury in Florida that gives rise to a potential claim cognizable in Florida.

7. Defendant, ED MAGEDSON, an individual, is subject to the jurisdiction of this Court because he:

(a) Operates, conducts, engages in or carries on a business or business ventures within this state through his Internet websites;

(b) Infringed upon Plaintiffs valid trademarks in violation of 15 U.S.C. ß 1114 and 15 U.S.C. ß 1125 and published and continues to publish infringing marks in Florida; and

(c) Committed and continues to commit a tort in Florida by publishing false and defamatory information on his websites about Plaintiffs, directed at Florida and causing injury in Florida that gives rise to a potential claim cognizable in Florida.

8. This Court has personal jurisdiction over all Defendants as they infringed on Plaintiffs' trademarks by intentionally publishing Plaintiffs' trademarks in Florida on their Internet website. Defendants' use of Plaintiffs' trademarks is for interstate commercial activity and such use is a substantial aspect of Defendants' conduct giving rise to plaintiffs' claims.

(See Com. &Mac182; &Mac182; 5-8.)

Further, the following allegations in Plaintiffs' Complaint under the Venue heading, more appropriately allege additional jurisdictional facts against Defendants. Plaintiffs' allege:

10. Defendants intentionally and/or recklessly published defamatory information about Plaintiffs, a Florida corporation and Florida resident, and published same via the Internet within Lee County, Florida.

11. Defendants intentionally and/or recklessly published defamatory information and clearly directed said information at a corporation in Florida, via their Internet websites, regarding Plaintiffs' business, resulting in significant injury and harm to Plaintiffs and their reputation. The bulk, if not all of the harm has occurred and will continue to occur in Florida.

12. Defendants infringed on Plaintiffs' Marks in Florida by intentionally publishing Plaintiffs' Marks in Florida causing injury to Plaintiffs in Florida.

(See Com. &Mac182; &Mac182; 10-12.)

As discussed above, Defendants' affidavit only controverts the jurisdictional allegations set forth in paragraphs 5(a), 6(a) and 7(a) of Plaintiffs' Complaint. Defendants' affidavit completely fails to controvert the remaining jurisdictional allegations in paragraphs 5(b)-(c), 6(b)-(c), 7(b)-(c), 8, 10, 11 and 12 of Plaintiffs' Complaint. Further, Defendants' Motion to Dismiss completely ignores Plaintiffs' allegation for personal jurisdiction over Defendants based on Defendants' illegal use of Plaintiffs' trademarks. Based on the uncontroverted jurisdictional allegations set forth in Plaintiffs' Complaint, the Court must accept these facts as true and in the light most favorable to the Plaintiffs when applying jurisdictional analysis.

III. FLORIDA'S LONG ARM STATUTE

Defendants Have Committed a Tortious Act within Florida Sufficient to Satisfy Florida's Long-Arm Jurisdiction

In order for Defendants to fall within the ambit of Florida's long-arm statute, their acts must fall within one of the enumerated acts in Fla. Stat. ß 48.193. Specifically, Florida's long-arm statute states, in pertinent part:

(1) Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the following acts:

(b) committing a tortious act within this state...

Fla. Stat. ß 48.193 (West 2003) (emphasis added).

"Florida courts subscribe to the rule that the tort of libel occurs wherever the offending material is circulated." Achievers Unlimited, Inc. v. Nutri Herb, Inc., 710 So. 2d 716, 719 (Fla. 4th DCA 1998); citing Madara v. Hall, 916 F.2d 1510, 1515 (11th Cir. 1990)(finding jurisdiction over nonresident defendant for libel action on the basis that the libelous material was circulated in Florida, even though defendant was an individual and not the publisher of libelous information). Florida courts have consistently allowed personal jurisdiction over nonresident defendants in libel actions when alleged libelous material was circulated in Florida, especially when the libelous material was directed at a Florida entity and/or resident. Id. at 1515. Physical presence in Florida is not required to "commit a tortious act" for purposes of Florida's long-arm statute. Wendt v. Horowitz, 822 So. 2d 1252 (Fla. 2002)(finding that telephonic, electronic, or written communications into Florida may form the basis for personal jurisdiction under 48.193(1)(b) if the alleged cause of action arises from the communication). Furthermore, committing a tortious act under Florida's long-arm statute does not require that a physical tort occur in this state. Id. at 1258. As clearly set forth in Plaintiffs' Complaint, Defendants facilitate the publication of defamatory material and disseminate this defamatory material in Florida, which is specifically directed at Plaintiffs, Whitney, a company with its principal place of business in Florida, and Russ Whitney, a Florida resident.

Florida courts have uniformly found that they have an interest in adjudicating disputes arising from publication, dissemination or communication of defamatory information in Florida. See, e.g., Becker v. Hooshman, M.D., 841 So. 2d 561 (Fla. 4th DCA 2003) (finding jurisdiction over nonresident moderator of an Internet chat room for posting numerous defamatory comments about a Florida resident, causing injury to a Florida resident); Silver v. Levinson, 648 So. 2d 240 (Fla. 4th DCA 1994) (mailing a letter into the State of Florida was sufficient).

Further, the United States Supreme Court created an "effects test" to determine whether a district court had jurisdiction over a nonresident defendant in a defamation action. In Calder v. Jones, the Court held that a California court could constitutionally exercise personal jurisdiction over a Florida citizen whose only material contact with California was to write a libelous story in Florida, directed at a California citizen, for a publication circulated in California, knowing that the "injury would be felt by [the Californian] in the State in which she lives and works." 465 U.S. 783, 104 S.Ct. 1482 (1984)(stating the article concerned the California activities of a California resident and the alleged harm, injury to reputation and career and emotional distress, would occur in California); see also ALS Scan, Inc. v. Digitial Service Consultants, Inc., 293 F.3d 707, 714 (4th Cir. 2002). This is exactly what has occurred in the instant case. Defendants, Xcentric Ventures and Badbusinessbureau.org, Arizona companies and Ed Magedson, an Arizona resident, published libelous information in Florida, directed at a corporation with its principal place of business in Florida, and at a Florida resident, knowing that the bulk of the injury would be felt by Plaintiffs in Florida where Plaintiffs' business is based.

In ALS Scan, Inc., supra, the Fourth Circuit Court of Appeals adopted the Calder decision, holding that "specific jurisdiction in the Internet context may be based on an out-of-state person's Internet activity directed at [[Florida] and causing injury that gives rise to a potential claim cognizable in [Florida]." Id. at 714 (finding that the court did not have personal jurisdiction over the defendant since the defendant was only an Internet Service Provider ("ISP") and not the actual publisher of the infringing website). The false and defamatory information is accessible to Florida consumers through Defendants' website in Florida, which is marketed toward Floridians, and is causing injury to Plaintiffs in Florida.

The website operated by Defendants is not akin to an Internet search engine such as the defendant in ALS Scan. Defendants' business is to provide information to consumers about corporations through their website, which it accomplishes every day. Defendants intentionally seek Florida consumers to research their database for the "Rip Off Report." Defendants' website convinces Florida consumers that the information published in the "Rip Off Report" is correct and reliable. However, the information published in the "Rip Off Report" regarding Plaintiffs is false and libelous and damaging to the Plaintiffs' reputation. Thus, Defendants should not be permitted to escape liability for the publication of the defamatory information published in the "Rip Off Report" in Florida, which is accessible only through Defendants' website. Therefore, as clearly alleged in Plaintiffs' Complaint, Defendants disseminated libelous material in Florida and specifically directed such libelous information toward Plaintiffs, a Florida resident and a company with its principal place of business in the State of Florida, thereby satisfying the requirements of Florida's long-arm statute.

Further, in a recent opinion regarding personal jurisdiction and venue as it pertains to Internet law, the Supreme Court of North Dakota adopted the "effects test" outlined in Calder and found personal jurisdiction over a defendant who published defamatory information on her Internet website that featured articles about plaintiff, his trial attorney and the ensuing litigation. The court found that jurisdiction existed because the articles defendant published did particularly and directly target North Dakota on her website, specifically targeting a North Dakota resident, the plaintiff. Wagner v. Miskin, 2003 WL 21006217 (N.D. 2003).

The libelous information published in the "Rip Off Report" is expressly aimed at Plaintiffs in Florida. The only access to the "Rip Off Report" is through Defendants' website. The false and defamatory information contained in the "Rip Off Report" directly targets Plaintiffs' business operations in the State of Florida and claims that Plaintiffs are crooks and rip consumers off. Defendants are aware that the information published in the "Rip Off Report" is defamatory. However, Defendants continue to provide Florida consumers with the only known access to this false and defamatory information. Clearly, Defendants are directly targeting Plaintiffs, a Florida resident and a corporation with its principal place of business in Florida. Further, Defendants' website directly solicits and sells their "Rip Off Revenge" services and materials to Florida residents. As a direct result of Defendants' website, Plaintiffs have suffered and will continue to suffer significant damage to their business and reputation. Therefore, for all the reasons set forth herein, Defendants are subject to the jurisdiction of this Court for the tortious act of disseminating defamatory information in the State of Florida directed at Plaintiffs, a Florida resident and a corporation with its principal place of business in Florida.

To dispute personal jurisdiction for the publication of false and defamatory information disseminated through their Internet website, Defendants claim that they merely operate a website which allows consumers the ability to post complaints against companies with which they have done business. (Magedson's Aff. &Mac182; 7). Further, Defendants claim that their website contains over 90,000 reports and the operators of the website cannot monitor all of these reports. (Magedson's Aff. &Mac182; Cool

. However, Defendants, without monitoring the reports or verifying their veracity, hold Plaintiffs out as crooks and as ripping consumers off and then attempt to claim that they are not responsible for publishing such reports in Florida. This argument is nonsensical. The purpose for Defendants' website is to provide consumers access to the "Rip Off Report" on their website about companies and to provide a vehicle through which consumers can report complaints about companies they think have wronged them. Further, Defendants sell their "Rip Off Revenge" products and services through their Internet website to Florida residents. Defendants knowingly provide this access to Florida consumers and corporations through their Internet website in Florida.

As discussed more fully above, and proved in the exhibits and affidavit proffered by Plaintiffs, Defendants' website is the only access Florida consumers have to find a "Rip Off Report" about Florida companies or to purchase "Rip Off Revenge" products or services from Defendants. Defendants' website provides Florida consumers with online access to research information on Plaintiffs, a Florida resident and a corporation located in Florida. Defendants' website leads consumers to the "Rip Off Report." The "Rip Off Report" contains false and defamatory information regarding Plaintiffs. See Exhibit "A" &Mac182; 14. Therefore, Defendants do, in fact, disseminate the false and defamatory information in the "Rip Off Report" regarding Plaintiffs in the State of Florida.

Furthermore, Defendants rely on cases that apply a "sliding scale" for defining when electronic contacts with a state are sufficient to subject a nonresident defendant to a state's jurisdiction. See Hartoy Inc. v. Thompson, 2003 WL 21468079 (S.D. Fla. 2003); Miller v. Berman, 2003 WL 22462296 (M.D. Fla. 2003). These courts held that at one end of the spectrum is a defendant that clearly conducts business over the Internet and knowingly and repeatedly transmits computer files over the Internet, whereby personal jurisdiction is proper. At the opposite end is a defendant who posts informational, non-interactive websites designed solely to provide information to people who are interested in it, which is not enough to establish personal jurisdiction. Id. These websites have been termed "active" and "passive" respectfully.

Defendants claim that their website is merely a "passive" website that provides information to people who are interested in it. While this argument may sound persuasive, it is illusory. Defendants do in fact provide information over the Internet to people looking for it; however, Defendants are in the business of providing information on corporations for people searching for it. Providing information, supplying an avenue for consumers to file complaints, and providing dispute resolution products and services for such complaints is Defendants' business; it is the lifeblood of Defendants' business. Further, Defendants sell their "Rip Off Revenge" products and services to consumers via their Internet website, which is clearly for commercial and economic gain. By facilitating the gathering of information on Florida corporations and providing Florida consumers access to "Rip Off Reports" through Defendants' interactive website and subsequently selling Florida consumers their "Rip Off Revenge" products and services, Defendants have created more than a merely "passive" website. Rather, Defendants' website is an "active" website designed to conduct its specialized commercial activity over the Internet.

Defendants have clearly and repeatedly directed an undeterminable number of Florida consumers to the false and defamatory statements contained in the "Rip Off Reports" regarding Plaintiffs for the purpose of and with the direct and proximate result of damaging Plaintiffs' business and reputation in the State of Florida. Thus, Defendants have committed a tort in Florida and are subject to Florida's long-arm statute. Simply, since Plaintiffs' principal place of business is in Florida and Plaintiff, Russ Whitney, is a Florida resident, the bulk, if not all, of the financial damage as a result of the false and defamatory information published in the "Rip Off Reports" have and will occur in the State of Florida. For all of the reasons stated above, Defendants have clearly committed a tortious act within Florida sufficient to satisfy specific jurisdiction pursuant to Florida's long-arm statute, Fla. Stat. ß 48.193(1)(b).