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Case 1:09-cv-03955 Document 31 Filed 11/13/2009 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

David Blockowicz, Mary Blockowicz, and Lisa )


Blockowicz, individuals, )
) Civil Action No. 1:09-cv-03955
Plaintiffs, )
) Judge Holderman
v. )
) Magistrate Judge Cox
Joseph David Williams and Michelle Ramey, )
individuals, )
)
Defendants. )

REPLY BRIEF IN SUPPORT OF MOTION FOR


THIRD PARTY ENFORCEMENT OF INJUNCTION

The Court’s injunction explicitly orders Defendants to remove their defamatory

statements from the websites where they were posted. (Dkt. No. 19.) Consistent with their

declaration that “the postings will remain,” (Dkt. No. 16, p. 2), Defendants are violating the

injunction with the assistance of Xcentric. Rule 65(d) provides the Court the power to order

Xcentric, which is in privity with Defendants, to stop this flagrant violation of its order. Xcentric

has not identified a single case which suggests otherwise. Instead, Xcentric improperly attempts

to place itself into the shoes of the Defendants, so that it can try to shield itself with an overbroad

reading of the Communications Decency Act (CDA). However, the Seventh Circuit has rejected

overly broad constructions of the immunity provided to website operators by the CDA.

I. Xcentric Is In Privity With The Defendants.

Rule 65(d) “is derived from the common law doctrine that a decree of injunction not only

binds the parties defendant but also those identified with them in interest, in ‘privity’ with them,

represented by them or subject to their control.” Rockwell Graphic Sys., Inc. v. Dev Indus., Inc.,

91 F.3d 914, 919 (7th Cir. 1996) (citations omitted). “[P]arties otherwise without an injunction’s

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coverage may subject themselves to its proscriptions should they aid or abet the named parties in

a concerted attempt to subvert those proscriptions.” Id. “[T]he reach of an injunction will

accord with its purpose(s), subject to the limitations of due process.” Id. “Nonparties who reside

outside the territorial jurisdiction of a district court may be subject to that court’s jurisdiction if,

with actual notice of the court’s order, they actively aid and abet a party violating that order.

This is so despite the absence of other contacts with the forum. Jurisdiction over persons who

knowingly violate a court’s injunctive order, even those without any other contact with the

forum, is necessary to the proper enforcement and supervision of a court’s injunctive authority

and offends no precept of due process.” S.E.C. v. Homa, 514 F.3d 661, 674-75 (7th Cir. 2008)

(citations omitted). The existence of a contractual relationship such as Defendants’ and

Xcentric’s is more than sufficient to establish the necessary privity for this court to order

Xcentric, pursuant to Rule 65(d), to remove the defamatory statements. Wilder v. Bernstein, 645

F.Supp. 1292, 1319 (S.D.N.Y. 1986).

At oral argument, Xcentric attempted to portray itself as a purely passive party having no

involvement with the Defendants. That is not entirely true. While Xcentric’s employees may

not know the Defendants personally, Xcentric’s website policies and terms of use demonstrate

more than mere passive involvement.

In fact, Xcentric has a “legal agreement” -- a contract -- with the Defendants that relates

specifically to the defamatory statements at issue, and Defendants have granted Xcentric an

exclusive license to “use, copy, perform, display and distribute [the defamatory statements] and

to prepare derivative works of, or incorporate into other works, [the defamatory statements] and

to grant and authorize sublicenses of the foregoing.” (Terms of Service, Ex. D) Defendants

agreed “to be bound by the terms and conditions” of that legal agreement each time they

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registered for their multiple accounts at <RipoffReport.com> -- i.e., before they made the

defamatory posts at issue. (Id.) Pursuant to their agreement with Xcentric, Defendants agreed

that:

(a) They are “solely responsible for the content or information [they] publish or
display” on <RipoffReport.com>;

(b) They “will NOT post on ROR any defamatory, inaccurate, abusive, obscene,
profane, offensive, threatening, harassing, racially offensive, or illegal material.”

(c) They “warrant and represent that the information is truthful and accurate.”

(d) They will “defend, indemnify, and hold harmless Xcentric, its officers, directors,
employees, agents and third parties, for any losses, costs, liabilities and expenses
(including reasonable attorney’s fees) relating to or arising out of your use of
ROR, including, but not limited to, any breach by you of the terms of this
Agreement.”

(e) They have provided Xcentric “an irrevocable, perpetual, fully-paid, worldwide
exclusive license to use, copy, perform, display and distribute [Defendants’ posts]
and to prepare derivative works of, or incorporate into other works, [Defendants’
posts] and to grant and authorize sublicenses of the foregoing.”

(Id. (final emphasis added).) In consideration for Defendants’ promises, Xcentric promises that

“material will not be removed even at your request.” (Id.)

This legal agreement between Defendants and Xcentric is more than mere passive

behavior – it is a contractual relationship, wherein Xcentric makes the rather extraordinary

promise to never remove Defendants’ posts, in exchange for Defendants’ warranty of accuracy,

its agreement to indemnify Xcentric, and an exclusive license to Defendants’ copyright rights in

the posts that Defendants authored.1 This is more than mere passive behavior on Xcentric’s part,

and it is sufficient to establish active concert and participation in Defendants’ ongoing violation

of the Court’s injunction.

1
Xcentric has asserted its copyright rights in users’ postings and obtained injunctions against use of those postings
by third parties. Xcentric Ventures, LLC v. Stanley, No. CV-07-954-PHX-GMS, 2009 WL 113563 (D. Ariz. Jan. 16,
2009) (Ex. S).

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As Plaintiffs argued in their opening brief, they are skeptical whether Xcentric actually

cares whether its customers post accurate, non-defamatory information, since its profit motive

actually increases when defamatory information is posted. But the Court need not delve into

Xcentric’s motives. Instead, the Court need simply take Xcentric’s Terms of Service, and its

actions, at face value. Xcentric promised the Defendants never to take down their posts, in

consideration for Defendants’ significant concessions to Xcentric. Xcentric appears to be

making good on its promise by attempting to raise defenses on Defendants’ behalf and refusing

to take down Defendants’ defamatory posts even while the Court considers this Motion.

The contract between Defendants and Xcentric relates specifically to each of the posts

that the Court held to be defamatory. Xcentric did not receive the defamatory information from

some third party, but from the Defendants themselves. Moreover, the Defendants have a duty to

indemnify Xcentric for any damaged caused by those statements, and Xcentric holds the

worldwide, exclusive copyright rights to those statements. Accordingly, Xcentric’s contractual

relationship with Defendants is sufficient to establish the necessary privity for Rule 65(d).

II. The Court Has Authority To Order Xcentric To Remove The Defamatory Posts.

The Court has the power to enforce its injunction by ordering Xcentric to remove the

defamatory posts. Rockwell Graphic, 91 F.3d at 919. Plaintiffs need not file separate suit

against Xcentric in order for the Court to have this authority. Indeed, that is the point of Rule

65(d) -- i.e., to ensure that the Court has the authority to prevent Defendants from circumventing

its orders by entering into agreements with third parties. It is significant that other websites have

had no objection to removing the defamatory material. Both <complaintsboard.com> and

<myspace.com> have removed the defamatory posts, without question or opposition. Both of

those websites are more “passive” than Xcentric because they do not actively promote policies

stating that they will “never” remove defamatory statements. And yet, they stated no objection

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to removing the offending material. Moreover, if the Court does not have the authority to ensure

the Defendants’ compliance with the injunction through third party enforcement, then the Court

would be effectively powerless to combat defamation. That is, if Xcentric is immune from even

having to take down statements found to be defamatory, then it will essentially be a safe haven

for defamers. Xcentric has not identified a single case suggesting that either the tort of

defamation or the Court’s power to enforce its orders has been gutted in such a manner.

III. The Communications Decency Act Does Not Apply To This Case.

The cases relied upon by Xcentric notably do not address the question of the Court’s

authority under Rule 65(d) but, instead, address only whether websites themselves can be sued

for statements posted by third parties. But whether a website can face liability for the statements

of third parties is a separate question from the question before the Court, namely whether, having

ordered a third party to take down those statements, a Court can turn to the website for assistance

when the third party ignores the order. The cases relied on by Xcentric simply are not relevant to

the issue before the Court.

The Communications Decency Act (“CDA”) was enacted to encourage “Good

Samaritan” blocking and screening of offensive content. 47 U.S.C. § 230; Chicago Lawyers

Comm. for Civil Rights Under Law v. Craigslist, 519 F.3d 666, 669 (7th Cir. 2008). It prohibits

state-law claims that are “inconsistent” with the CDA. 47 U.S.C. § 230(e)(3). It also states that

websites shall not be held liable for (a) voluntarily removing material the “provider or user

considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise

objectionable,” 47 U.S.C. § 230(c)(2)(A), or (b) providing users with the technical means to

remove content, 47 U.S.C. § 230(c)(2)(B).

The CDA further states that “No provider or user of an interactive computer service shall

be treated as the publisher or speaker of any information provided by another information

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content provider.” 47 U.S.C. § 230(c)(1). Seventh Circuit has noted that this particular

subsection provides for a quid pro quo -- so long as website operators undertake reasonable

screening efforts, they will enjoy immunity from liability for users’ improper posts. Chicago

Lawyers Comm., 519 F.3d 668-69. Based on the Supreme Court’s Grokster decision, the

Seventh Circuit rejected arguments that the CDA provides broad, unfettered immunity to

websites. Id. at 670 (citing Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913

(2005)). Rather than define the scope of immunity provided by the CDA, the Seventh Circuit

has instead limited its holdings to reading the CDA to “do exactly what it says.” Id. For

purposes of the present case, that simply means that the Court cannot treat Xcentric as the

publisher or speaker of the defamatory statements posted by Defendants. 47 U.S.C. § 230(c)(1).

Plaintiffs are not asking the Court to treat Xcentric as either the publisher or speaker of

Defendants’ defamatory statements. In defamation law, and before the Internet age, “publishers”

and “distributors” ordinarily could be held as liable for defamation as the “speaker” or “author”

of the defamatory statements. The CDA has changed that, eliminating “publisher” liability for

websites. Chicago Lawyers Comm., 519 F.3d at 670. But Plaintiffs are not asking the Court to

hold the Defendants liable as either a publisher or speaker; Plaintiffs are merely asking the Court

to ensure the Defendants’ compliance with a Court order, wherein Xcentric is essentially the

custodian of the defamatory statements.

Unsurprisingly, the cases relied on by Xcentric deal with the issue of civil liability, and

do not deal with the issue of Rule 65 enforcement. For example, in Zeran v. America Online,

Inc., 129 F.3d 327 (4th Cir. 1997), the plaintiff sued AOL directly, alleging that AOL did not

remove misleading, harassing content fast enough – exactly the type of claim the CDA was

designed to prevent. And Gentry v. eBay, 99 Cal.App.4th 816, 121 Cal.Rptr.2d 703, 707-18

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(2002) dealt with an allegation that eBay “failed” to provide certificates of authenticity for goods

sold by third parties on its website (the goods purchased by the plaintiff had turned out to be

counterfeit). In these cases, like the other cases cited by Xcentric, each of the plaintiffs was

attempting to impose liability on the website provider itself, based on each website’s alleged

failure to meet an alleged “duty” to the plaintiff. Notably, even though Courts have generally

found websites immune to such direct liability, in nearly all of the cases Xcentric cites, the

websites removed or altered the content at issue, without a court order requiring such action.

Xcentric does not identify a single case that holds or even suggests that the CDA protects

websites from having to remove or alter content that has been adjudged defamatory. In fact, that

would run contrary to the very purpose of the Communications Decency Act. As noted by the

Seventh Circuit, the purpose of the CDA was to encourage blocking and screening of offensive

material, not discourage it, much less allow website operators to provide a haven for defamers.

Chicago Lawyers Comm., 519 F.3d at 669-670. Yet Xcentric is taking the position that no Court

has the authority to order it to remove even content that is defamatory per se.

Xcentric relies heavily on the argument that “claims for…injunctive relief are no less

causes of action than tort claims for damages…” citing Kathleen R. v. City of Livermore, 87

Cal.App.4th 684, 698, 104 Cal.Rptr.2d 772 (Cal.App.4th 2001). But that argument assumes its

conclusion; requiring a website in privity with Defendants to assist in enforcing an injunction,

pursuant to Rule 65(d), is not the same thing as seeking an injunction against the website.

Plaintiffs are not seeking an injunction against Xcentric but, rather, the cooperation

necessary to ensure the injunction against the Defendants is enforced. The plaintiff in Kathleen

R. filed suit claiming that the local library had failed to take sufficient steps to prevent her son

from downloading pornography on library computers. As in other CDA cases relied upon by

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Xcentric, she sought to impose the kind of affirmative, general duties on the library that the CDA

was designed to avoid. Here, Plaintiffs are not attempting to impose any ongoing duties on

Xcentric; Xcentric is free to post whatever content it wishes, and need not begin screening future

posts regarding Plaintiffs or any other subject matter (the injunction provides that Plaintiffs shall

approach the Court if further enforcement is required). Nothing in Kathleen R. suggests that a

Court cannot order a third party website to remove defamatory statements that are the subject of

an injunction issued against a different party with whom the website is in privity.

IV. Xcentric’s Remaining Arguments Are Meritless.

As stated at oral argument, the sole question is the Court’s authority pursuant to Rule

65(d); the remaining arguments raised by Xcentric simply do not merit any significant

discussion.

At the outset, Xcentric’s argument that Defendants were purportedly never served with

the injunction is incorrect. Because Xcentric had never raised this issue in its prior

correspondence with Plaintiffs’ counsel, Plaintiffs did not believe this issue to be in dispute when

they filed their Motion. Nonetheless, as shown in Ex. P, Plaintiffs’ counsel did in fact serve the

Defendants with a copy of the injunction more a month ago, at the email address used for the

Defendants throughout this case (the Defendants implicitly acknowledged receiving pleadings

relating to this lawsuit via that email address when they later posted comments about this lawsuit

on the Internet).

This is not a free speech case. Xcentric has no interest in Defendants’ statements,

whether defamatory or not. And, of course, there are no free speech rights in defamatory

statements such as those posted by Defendants. Int’l Profit Assoc., Inc. v. Paisola, 461 F. Supp.

2d 672, 679 (N.D. Ill. 2006). Nor do the individuals who post comments on Xcentric’s websites

have free speech rights in discussing Defendants’ defamatory statements.

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This is likewise not a due process case. As indicated during oral argument, Plaintiffs

agree that an order to a third party website might raise due process concerns – for example, the

third party website might be able to establish that removing statements is burdensome or costly,

on which subjects the third party should be entitled to be heard. And because of those potential

due process concerns, Plaintiffs did not immediately seek an order of contempt. But Xcentric

has had an opportunity to be heard, and made every use of that opportunity. Moreover, it

appears undisputed that removing the defamatory statements at issue comprise nothing more than

a few keystrokes and mouse clicks.

To the extent Xcentric tries to raise broader due process concerns, such concerns are

speculative at best. Xcentric argues that if it takes the very reasonable action requested in this

case, it will be inundated with similar such requests. There is little harm in that, for if “hundreds

or thousands” of other courts find, after due consideration, that there are defamatory statements

on Xcentric’s website, then those statements should be removed. The concern that other

defamation defendants are not able to defend themselves is a stretch at best; courts regularly

entertain arguments from pro se defendants. Moreover, the argument that default judgments

would routinely be entered against defamation defendants because those defendants would not

appear in court presumes that courts do not undertake any consideration of the facts of a case

before entering a default judgment and issuing an injunction. That is simply not true. In any

event, speculation about what claims might, or might not, be brought against yet other third

parties in the future is no reason to deny the Blockowicz family the relief provided for under the

law.

Xcentric’s attempt to create doubt as to the authorship of the defamatory statements is

inadequate. Contrary to Xcentric’s argument, there is ample evidence that the Defendants are in

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fact the authors of the statements in question. As set forth in Plaintiffs’ Motion for Preliminary

Injunction, (Dkt. No. 5), evidence of authorship includes common themes, common dates,

common modes of attack, the nexus with statements against other individuals (such as Defendant

Williams’ own daughter), common geographical addresses, and the coincident nature of all of

this with voice mails left for Williams, the audio of which he posted on the Internet. (See, e.g.,

Motion for Preliminary Injunction, Dkt. No. 5, Ex. E.) Xcentric attempts to rebut this evidence

(which it refuses to acknowledge) with a declaration from Mr. Magedson, but Mr. Magedson

does not provide supporting documentation, does not examine other posts on his website (such as

the one about Mr. Williams’ daughter, or the comments believed to also be submitted by

Defendants), and does not compare the IP addresses of the various posts with Defendants’

known physical addresses. Moreover, Xcentric has no basis for raising this authorship defense

on behalf of the Defendants, who openly flouted this Court’s jurisdiction and refused to appear in

their own defense.

Xcentric’s arguments regarding the statute of limitations were fully addressed in

Plaintiffs’ opening brief. Even if Xcentric had standing to raise this issue, it cannot be said that

the statute of limitations definitively applies. The webpages where the defamatory statements

were made were in fact updated in 2009. While Xcentric characterizes those updates as “not

related” to the defamatory statements, that is not the relevant standard under the single

publication rule. The pages themselves were updated, including updated titles, to create new

relevance in search engines and to reach new audiences, and each page encourages uses to search

for yet other “Blockowicz” reports. There has also been a further new publication of these

statements in 2009 – a website called “scamfound.com” has recently picked up the defamatory

statements and is now linking to them, resulting in yet a further new publication. (Ex. Q.)

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Finally, to the extent it remains relevant, it appeared at oral argument that Xcentric

concedes that it does in fact receive funds from companies who join its “corporate advocacy

program,” a fact which Mr. Magedson’s declaration seems to contest, but is nevertheless a matter

of public record. Whitney Information Network v. Xcentric Ventures, 2008 WL 450095, *6 (Ex.

R.)

V. Conclusion

Xcentric has not presented any reason why, pursuant to Rule 65(d), it should not be

ordered to remove the defamatory statements that Defendants themselves are unwilling to

remove. Removing the defamatory statements present no burden whatsoever to Xcentric as

doing so involves little more than a few minutes’ work -- the type of work other websites

routinely perform in this situation and, indeed, several other websites have undertaken this

simple effort in this case. Xcentric is in privity with Defendants insofar as it is hosting

Defendants’ statements pursuant to a legal contract with Defendants. Requiring Xcentric’s

assistance in enforcing the injunction is simply not the same thing as enjoining Xcentric, so its

arguments under the CDA are also misplaced. Further, Xcentric has had an opportunity to object

to enforcement of the order pursuant to Rule 65(d) and has not raised any meritorious due

process concerns. Accordingly, the Court should order Xcentric to immediately remove the

reports identified in the proposed order, and insert the necessary “noindex” and “noarchive” meta

tags necessary to clear these defamatory statements from search engines.

Dated: November 13, 2009 /s/ Cameron M. Nelson


Cameron M. Nelson
Kevin J. O’Shea
Greenberg Traurig, LLP
77 West Wacker Drive, Suite 3100
Chicago, IL 60601
Telephone: 312-456-8400
Facsimile: 312-456-8435
Attorneys for Plaintiffs

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CERTIFICATE OF SERVICE

The undersigned hereby certifies that on November 13, 2009 this REPLY BRIEF IN
SUPPORT OF MOTION FOR THIRD PARTY ENFORCEMENT OF INJUNCTION was
served filed via the Court’s CM/ECF System which will provide notice to the following parties
by email :

Matthew Patrick Connelly


Garrett Cleland Carter
Connelly, Roberts & McGivney
55 W. Monroe Street
Suite 1700
Chicago , IL 60603
(312) 251-9600
Email: mpconnelly@crmlaw.com
Email: gcarter@crmlaw.com
ATTORNEY TO BE NOTICED

With additional copies by email to:

Michelle Ramey and Joseph David Williams


loyalpatriot@gmail.com

Dated: November 13, 2009 By:/s/ Cameron M. Nelson


Cameron M. Nelson
GREENBERG TRAURIG, LLP
77 West Wacker Drive
Suite 3100
Chicago, IL 60601

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