xcentric ventures, llc v. scaminformer.com (karsen, ltd.) - motion to determine sufficiency of...
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8/6/2019 Xcentric Ventures, LLC v. Scaminformer.com (Karsen, Ltd.) - Motion to Determine Sufficiency of Service
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MOTION TO DETERMINE SUFFICIENCY OF SERVICE
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G I N G R A S
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David S. Gingras, #021097Gingras Law Office, PLLC3941 E. Chandler Blvd., #106-243Phoenix, AZ 85048Tel.: (480) 668-3623Fax: (480) 248-3196
David@GingrasLaw.com
Attorney for Plaintiff Xcentric Ventures, LLC
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
XCENTRIC VENTURES, LLC, anArizona limited liability company,
Plaintiff,
vs.
KARSEN, LTD., a foreign entity of unknown origin d/b/a Scaminformer.com;DOES 1-10, inclusive,
Defendants.
Case No: 11-cv-1055-FJM
MOTION TO DETERMINE
SUFFICIENCY OF SERVICE
OR
FOR LEAVE TO PERFORM
ALTERNATIVE SERVICE
Plaintiff Xcentric Ventures, LLC (“Xcentric”) respectfully moves this Honorable
Court for an order determining whether Xcentric has effectively accomplished service of
process upon the Defendant Karsen, Ltd. (“Karsen”) in this matter and, if not, Xcentric
respectfully seeks leave of Court to perform service via alternative means. The basis for
this request is explained fully herein.
I. INTRODUCTION
This is a relatively straightforward action seeking monetary damages and
injunctive relief for various acts of copyright infringement under the copyright laws of
the United States (17 U.S.C. § 101 et seq.) and for various acts of trademark infringement
in violation of the Lanham Act, 15 U.S.C. § 1051, et seq., and related state law claims. In
short, Xcentric is the operator of a consumer complaint website located at
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www.RipoffReport.com (the “Ripoff Report”) which was founded in December 1998
During more than a decade in operation, the Ripoff Report has grown to become one of
the most popular and frequently visited sites of its kind.
Just as Facebook’s popularity arises from its vast membership of more than 500
million active users, the Ripoff Report’s popularity and high levels of traffic are largely
based on the massive volume of information contained on the site. As of June 2011, the
Ripoff Report site has in excess of 600,000 original consumer complaints, and many
millions upon millions of responses/rebuttals/replies. Over the past decade, Xcentric has
spent millions of dollars compiling and defending this vast database of valuable content
and in recent years Xcentric has been the victim of various forms of piracy by
competitors who have copied vast amounts of information from the Ripoff Report
website in an effort to “pre-populate” their competing sites with content.
For example, in 2008 Xcentric discovered that a new competing website –
www.ComplaintsBoard.com – had stolen large amounts of content from the Ripoff
Report site, including not only user-submitted complaints, but also material generated by
Xcentric such as the site’s Terms of Service and various related trademarks. This
resulted in Xcentric commencing a federal copyright and trademark infringement action
in this court in Xcentric Ventures, LLC v. Elizabeth Arden d/b/a ComplaintsBoard.com
Case No. 08-cv-2299 (D.Ariz. 2008) which eventually resulted in a judgment awarding
damages in favor of Xcentric and a permanent injunction against the defendant.
In the spring of 2011, Xcentric discovered yet another competing website –
www.ScamInformer.com (“Scam Informer”) which is allegedly owned and operated by
the defendant in this matter—Karsen, Ltd. Although the Scam Informer site was firs
recently created on January 31, 2011, Xcentric discovered that the site contains tens of
thousands of unlawfully copied pages pirated from the Ripoff Report website, many of
which include Xcentric’s registered trademarks and registered copyrighted works.1
1As alleged in Paragraphs 16 & 20 the Complaint filed in this matter on May 26, 2011,
Xcentric is the owner of two registered copyrights for material appearing on the Ripoff Report website.
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Immediately upon discovering this, Xcentric attempted to remedy the unlawful
conduct by sending a series of take-down notices to non-party Google, Inc., pursuant to
the Digital Millennium Copyright Act, 17 U.S.C. § 512, et seq. (the “DCMA”). See
Exhibit A, Declaration of David S. Gingras (“Gingras Decl.”) submitted herewith. In
short, these notices informed Google that Defendant Karsen was infringing Xcentric’s
exclusive rights under the Copyright Act, and the notices demanded that Google remove
the infringing content from its search index as required by 17 U.S.C. § 512(c)(i)(C). On
May 11, 2011, Google responded by stating that it had substantially complied with
Xcentric’s notices by disabling access to each infringing page located on the Scam
Informer site as identified in the notices. See Gingras Decl. Exhibit B.
Shortly thereafter, on May 24, 2011, Google contacted Xcentric and stated that
pursuant to 17 U.S.C. § 512(g)(3), it had received a DMCA counter-notice from
Defendant Karsen. See Gingras Decl. Exhibit C. Although it listed an address in St
Petersburg, Russia, the counter-notice was written in English and signed on behalf of
Defendant Karsen by an individual using the name “Irakly Brodskih”.
For the Court’s information, when a copyright owner demands that a third party
(such as Google) remove or disable infringing material under the provisions of the
DMCA, the responding party (generally the alleged infringer) may serve a counter -notice
on the third party which contests the accuracy of the initial notice. In order to be
effective, 17 U.S.C. § 512(g)(3) requires that counter-notice must contain each of the
following things:
(A) A physical or electronic signature of the subscriber.
(B) Identification of the material that has been removed or to which access has beendisabled and the location at which the material appeared before it was removed or
access to it was disabled.
(C) A statement under penalty of perjury that the subscriber has a good faith belief
that the material was removed or disabled as a result of mistake or misidentification of
the material to be removed or disabled.
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(D) The subscriber's name, address, and telephone number, and a statement that the
subscriber consents to the jurisdiction of Federal District Court for the judicial district
in which the address is located, or if the subscriber's address is outside of the United
States, for any judicial district in which the service provider may be found, and that
the subscriber will accept service of process from the person who provided
notification under subsection (c)(1)(C) or an agent of such person.
17 U.S.C. § 512(g)(3) (emphasis added); see also Vernor v. Autodesk, Inc., 621 F.3d
1102, 1106 n.4 (9th
Cir. 2010) (describing DMCA counter-notice provisions).
Initially, it was unclear whether the counter-notice provided by Defendant Karsen
to Google contained each of the required elements. As such, on May 24, 2011
undersigned counsel sent an email to Google seeking clarification. See Gingras Decl
Exhibit D. Google responded later that same day. See Gingras Decl. Exhibit E.
In its response, Google explained that it offers users a “webform” which produces
a counter-notice based on input from the user. With regard to the question of whether
Defendant Karsen had agreed to jurisdiction in the United States and had agreed to accept
service of process as required by 17 U.S.C. § 512(g)(3)(D), Google’s webform result
contained two responses which indicated that Karsen had, in fact, checked boxes giving
such consent: “dmca_consent_statement: checked dmca_consent_statement twochecked”. See Gingras Decl. Exhibit E.
Based on Google’s determination that it believed Defendant Karsen had submitted
a valid DMCA counter-notice (including affirmatively agreeing to accept service of
process and to be subject to jurisdiction in the United States), Google informed Xcentric
that it intended to restore the previously-disabled material within 10 days unless Xcentric
commenced litigation against Karsen as contemplated by the counter-notice provisions of
17 U.S.C. § 512(g)(2)(C). As a result, Xcentric commenced this action two days later on
May 26, 2011 and provided notice to Google that same day. See Gingras Decl. Exhibit F.
In subsequent correspondence, Google represented that Mr. Brodskih had agreed
to accept service on behalf of Defendant Karsen and that Google provided copies of the
Summons and Complaint to him via email. See Gingras Decl. Exhibits G–I. In addition
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Xcentric subsequently provided copies of the Complaint, Summons, and related
documents to Mr. Brodskih via email, see Gingras Decl. Exhibit K and via Federal
Express delivery to the address provided by Karsen in St. Petersburg, Russia. See
Gingras Decl. Exhibits L and M. According to tracking information provided by FedEx
delivery of the Complaint and Summons at the Russian address provided by Defendant
was attempted on June 20, 2011, but was unsuccessful because “customer not available
or business closed”. According to FedEx’s website, as of June 22 the package was not
delivered to the Russian address provided in Defendant Karsen’s DMCA counter-notice,
because the address is “incorrect”. See Gingras Decl. Exhibit N.
In addition, on June 13, 2011, Defendant Karsen set an email to undersigned
counsel (again, written in English) which purported to include a “brief reply to frivolous
lawsuit your [sic] bought [sic] against our website.” Gingras Decl. Exhibit J. The
following day, on June 14, 2011, Defendant Karsen sent another email apparently
attempting to revoke its representations to Google regarding its submission to jurisdiction
in the United States and its willingness to accept service of process. See Gingras Decl
Exhibit O.
Based on these events, Xcentric requests that the Court issue an order finding that
effective service of process was completed as to Defendant Karsen as of June 13, 2011
by virtue of the pleadings sent to Defendant by both Xcentric and Google. In th
alternative and in the event the Court does not find that Defendant Karsen’s agreement to
accept service was effective, then Xcentric respectfully requests leave to perform service
of the Complaint and Summons via alternate means.
II. ARGUMENT
a. By Expressly Agreeing To Accept Service, Defendant Karsen Has
Waived Any Right To Personal Service
As explained above, this case initially began as a result of Xcentric’s efforts to
obtain relief from Defendant’s unlawful actions using the takedown provisions provided
by the DMCA. By design, a DMCA removal notice such as that sent by Xcentric is no
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necessarily the final step in the process. Rather, the DMCA allows alleged infringers to
“challenge” the accuracy of a DMCA takedown notice, but the right to use this challenge
comes at a price and with specific strings attached. Specifically, in order to invoke the
counter-notice provisions of the DMCA, the alleged infringer is required to, among other
things, “consent[] to the jurisdiction of Federal District Court for the judicial district in
which the address is located, or if the subscriber’s address is outside of the United States
for any judicial district in which the service provider may be found, and that the
subscriber will accept service of process from the person who provided notification under
subsection (c)(1)(C) or an agent of such person.” 17 U.S.C. § 512(g)(3)(D).
In this matter, Defendant Karsen invoked the counter-notice provisions of the
DMCA on May 24, 2011 when it submitted a counter-notice to Google which contained,
among other things, statements expressly consenting to personal jurisdiction in the United
States and agreeing to accept service of process. In response, Xcentric relied on these
representations when it decided to commence litigation in this Court. Indeed, because
Google stated that it viewed Defendant’s counter-notice as valid, Xcentric had no choice
but to promptly commence litigation. If it had failed to do so, Google would hav
restored the infringing content to its index within 10 days, as permitted by 17 U.S.C. §
512(g)(2)(C).
Under these circumstances, the Court should find that by agreeing to accept
service of process as a condition to its right to provide a DMCA counter-notice to
Google, Defendant Karsen has waived the right to personal service and that as a result
Xcentric has effectively served Karsen pursuant to 17 U.S.C. § 512(g)(3)(D). Although
no published decision has ever interpreted the specific counter-notice service provisions
of the DMCA, as a long-standing rule courts have always recognized that despite the
mandatory requirement of personal service under Fed. R. Civ. P. 4, a defendant is always
free to waive/accept service of process; “As a rule, a party may waive the service of
process.” 62B Am. Jur. Process § 103 (citing Petrowski v. Hawkeye-Security Ins. Co.
350 U.S. 495, 76 S. Ct. 490, 100 L. Ed. 639 (1956)). When, as here, a party has agreed to
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waive personal service and accept service via other means, due process does not require
personal service; “If the court has jurisdiction over the subject matter, a defendant who
has accepted service waives objection to personal jurisdiction and cannot afterwards
object to the proceedings.” 62B Am. Jur. Process § 100 (citing State Sav. and Loan Ass'n
of Lubbock v. Anderson, 106 N.M. 607, 747 P.2d 253 (1987)).
Of course, Xcentric recognizes that a party’s agreement to accept service may not
necessarily equate to an actual acceptance of service. See 62B Am. Jur. Process § 103
(explaining, “A defendant may waive service of process by signing an acknowledgment
that he or she received a copy of the petition starting an action against him or her, if the
acknowledgment states that he or she waives all other and further service.”) (citing Jones
v. Jones, 209 Ga. 861, 76 S.E.2d 801 (1953)). Here, although Defendant Karsen agreed
to accept service of process, it has apparently attempted to renege on that agreement.
Thus, the question becomes: what happens if a party makes a written agreement to accept
service but then subsequently refuses to do so?
Case law on this issue is surprisingly sparse and, in most normal instances,
Xcentric might concede that if a party makes an agreement to execute a waiver service
but then later reneges, the plaintiff’s remedy would normally be to simply effect personal
service via standard means. The unique facts of this matter, however, present several
strong justifications for a different result. First and foremost, Defendant Karsen plainly
invoked the counter-notice provisions of the DMCA in order to force Xcentric to
commence litigation, which it promptly did. Had Karsen not submitted a DMCA
counter-notice to Google, the infringing material removed by Google would have
remained de-listed from Google’s index, effectively minimizing the damage to Xcentric.
By invoking the DMCA’s unique statutory scheme to its advantage, Defendant
Karsen was required to submit itself to jurisdiction in the United States and it was
required to agree to accept service of process. Given that Xcentric relied on these facts
when it commenced this action, no legitimate reason exists to permit Karsen to later
withdraw its agreement to accept service. On the contrary, the Court should find tha
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Karsen has waived any right to personal service under Fed. R. Civ. P. 4 and that
Xcentric’s efforts to provide copies of the Complaint and Summons via email and FedEx
were sufficient to effect service on Karsen as of June 13, 2011 – the date that Karsen was
last provided copies of the pleadings in this matter via email – and that Karsen is
therefore obligated to answer and defend within 90 days from that day (meaning by Sept
12, 2011).
b. If Karsen Has Not Already Been Served, Leave To Serve Via
Alternate Means Should Be Granted
As the Court is likely aware, the Ninth Circuit has determined that District Courts
have broad discretion to determine whether and how to permit service via alternative
means under Fed. R. Civ. P. 4(f)(3). See generally Rio Properties, Inc. v. Rio
International Interlink , 284 F.3d 1007, 1016 (9th
Cir. 2002) (explaining, “we hold that
Rule 4(f)(3) is an equal means of effecting service of process under the Federal Rules of
Civil Procedure, and we commit to the sound discretion of the district court the task of
determining when the particularities and necessities of a given case require alternate
service of process under Rule 4(f)(3).”)
Here, assuming the Court does not agree that Karsen has waived the right to any
further service, in an abundance of caution, Xcentric respectfully requests leave to serve
Karsen via the only known medium available—email. Given the ex parte nature of this
motion, in order to ensure that the Court is provided with all relevant information
necessary to make that determination, Xcentric offers the following information.
First, as explained in Rio Properties, email service is permissible under Rule
4(f)(3) provided that it does not contravene an international agreement such as the Hague
Convention. See Rio Properties, 284 F.3d at 1015 n. 4. Here, as noted above, Defendant
Karsen initially provided Google with an address in St. Petersburg, Russia, and unlike the
country at issue in Rio Properties (Costa Rica) Russia is a signatory to the Hague
Convention. See http://www.hcch.net/index_en.php?act=states.details&sid=64. Of
course, because Karsen agreed to accept service, this point should be irrelevant.
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In addition, after agreeing to accept service, on June 14, 2011, Defendant sent an
email to undersigned counsel which feigned ignorance of the English language (a dubious
point given that the email was written in English and all content located on th
ScamInformer.com website is exclusively written in English) and which stated as
follows: “As far as we are located in Russia and do not have any assets in US we request
all documents to be served in compliance [sic] and authorized by Hague Service
Convention.” Gingras Decl. Exhibit N.
On the other hand, substantial reasons exist to believe that Defendant is lying as to
its true whereabouts. Among other things, Defendant’s website –
www.ScamInformer.com – lists no physical address whatsoever. See Gingras Decl. ¶ 18
Next, a FedEx delivery to the Russian address provided by Defendant reflected that the
address is apparently invalid or that Defendant is simply not located at such address. See
Gingras Decl. ¶ 17, Exhibit O. Finally, according to a WHOIS search, the current
registered owner of the from the domain name www.ScamInformer.com is an Australian
entity which claims to be based in Queensland, Australia, but which purports to refuse to
accept correspondence at the only address provided (a PO box in Australia). See Gingras
Decl. ¶¶ 19–20, Exhibit P. Each of these points suggests that Karsen may not actually be
located in Russia; indeed, the true owners of the site could be located anywhere
including the United States.
No legitimate business would undertake such extensive efforts to conceal its true
location. Indeed, such actions make it readily apparent that Defendant knows its conduct
is illegal and that Defendant has no respect for the law or for the legal rights of Xcentric.
Under these circumstances, unless and until Defendant crawls out from the shadows and
reveals its true location, there is no reason to conclude that Karsen is actually located
outside the U.S. or in a Hague Convention signatory country. As such, leave to serve
Defendant via email should be granted; “Indeed, when faced with an international e-
business scofflaw, playing hide-and-seek with the federal court, email may be the only
means of effecting service of process.” Rio Properties, 284 F.3d at 1018.
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Here, because email appears to be the only reliable means for communicating with
Karsen, and because both Google and Xcentric have provided Karsen with copies of the
Summons and Complaint (most recently on June 13, 2011), the Court should permit
service via email. Of course, Xcentric will also provide service via any other means as
directed by the Court.
III. CONCLUSION
For the reasons stated herein, Xcentric respectfully requests an order determining
that Xcentric has effectively accomplished service of process upon the Defendant Karsen
Ltd. as of June 13, 2011 or, in the alternative, Xcentric respectfully seeks leave of Court
to perform service via alternative means including via email or any other such method as
the Court may direct.
DATED June 22, 2011.
GINGRAS LAW OFFICE, PLLC
/S/ David S. Gingras
David S. Gingras
Attorneys for Plaintiff
XCENTRIC VENTURES, LLC
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G I N G R A S
L A W O
F F I C E , P L L C
3 9 4 1 E . C H A N
D L E R B L V D . , # 1 0 6 - 2 4 3
P H O E N I X , A Z 8 5 0 4 8
CERTIFICATE OF SERVICE
I hereby certify that on June 22, 2011 I electronically transmitted the attached document
to the Clerk’s Office using the CM/ECF System for filing, and for transmittal of a Noticeof Electronic Filing to the following:
Irakly BrodskihKarsen, Ltd.
bronskihirixaty@mail.ru
scaminformer@yandex.ru
And a courtesy copy of the foregoing delivered to:
HONORABLE FREDERICK J. MARTONE
United States District CourtSandra Day O’Connor U.S. Courthouse, Suite 526
401 West Washington Street, SPC 62
Phoenix, AZ 85003-215
/s/David S. Gingras
Case 2:11-cv-01055-FJM Document 6 Filed 06/22/11 Page 11 of 11
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