xcentric ventures, llc v. scaminformer.com (karsen, ltd.) - motion to determine sufficiency of...

8/6/2019 Xcentric Ventures, LLC v. Scaminformer.com (Karsen, Ltd.) - Motion to Determine Sufficiency of Service

http://slidepdf.com/reader/full/xcentric-ventures-llc-v-scaminformercom-karsen-ltd-motion-to-determine 1/11

MOTION TO DETERMINE SUFFICIENCY OF SERVICE

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

David S. Gingras, #021097Gingras Law Office, PLLC3941 E. Chandler Blvd., #106-243Phoenix, AZ 85048Tel.: (480) 668-3623Fax: (480) 248-3196

[email protected]

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

Case 2:11-cv-01055-FJM Document 6 Filed 06/22/11 of 11



2


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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.




3


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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.




4


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

(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




5


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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




6


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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




7


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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




8


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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.




9


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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.




10


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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




11


1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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.

[email protected]

[email protected]

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


xcentric ventures, llc v. scaminformer.com (karsen, ltd.) - motion to determine sufficiency of...

Documents