|EcommerceBytes-NewsFlash, Number 2807 - May 18, 2012 - ISSN 1539-5065 1 of 6|
An eBay drop off store has sued an online discussion board and one of its posters for defamation, trade libel and common law trademark infringement, as well as for tortious interference. eDrop-Off Chicago LLC and its owner, Corri McFadden, filed the lawsuit against Nancy Burke and Midley Inc. dba PurseBlog.com for posts Burke allegedly made on the PurseBlog.com forums.
McFadden owns the Chicago eBay drop-off store, which she founded 2004. She was featured in eBay Style Stories, is an eBay Green Team seller, and stars in a reality television program on VH1 called "House of Consignment," which premiered in March. She is represented in the lawsuit by a Beverly Hills law firm.
McFadden claims that Nancy Burke posted on PurseBlog.com accusations that eDrop-Off engaged in shill bidding, a practice that drives prices up and is against eBay's policies. A long post by the title, "Another cheating shill bidder big time seller," can be found on the PurseBlog.com fourm containing the shill-bidding allegations.
A user named "BeenBurned," whom McFadden says is Burke, wrote on the forum:
"Over the last few months, the seller, edropoff with over 67K feedbacks has posted on various "deals" and AT requests for his/her own listings. Each TPF poster is a brand new ID promoting only this seller's items. And when caught and reported, the IDs are sofa king banned. Now, in looking at edropoff 's listings, it's obvious that he's shilling too!"
A long discussion ensues, with various posters writing they also believe the seller had engaged in shill bidding on eBay.
eDrop-Off originally filed its lawsuit in California on May 10th. The next day, it filed to dismiss the case in California and filed suit against Burke and PurseBlog in Illinois.
In the lawsuit, McFadden said the discussion on the Purse Blog hurt her business and claims at least one of her customers wanted to return their purchase because of concerns over the shill bidding allegations. She also said eBay had vindicated her of any shill bidding activities, claiming that her eBay account manager wrote to one of her customers who was concerned about the shill bidding accusations.
According to the lawsuit filing's Exhibit F, Chris Van Wagoner wrote a letter to the customer, including the following paragraphs: "I'd like to start by saying that, as eDropoff's Account Manager at eBay, we regret losing your valuable business. We pride ourselves on the many repeat buyers that we continue work with (sic) on a daily basis. I'd also like to make you aware that as eDropoff is one of our Top sellers on eBay, we work with them to ensure that not only are they delivering top experiences, but that they are also adhering to the many policies we have established, including shill Bidding. As a result, they routinely undergo policy investigations to allow for us to make certain of their compliance.
"With that said, we at eBay have thoroughly investigated the eDropoff account and currently have no reason to believe that a Shill Bidding violation has taken place."
The exhibit shows the email is signed "Chris Van Wagoner, eBay Strategic Account Manager." It's not clear from the exhibit how McFadden obtained the original email (it's possible she was blind copied), but it shows she forwarded the email to Monique Huey-Jones of MoniqueJonesPR.com, who then forwarded it to Dominque Shelton at McFadden's law firm.
McFadden filed an emergency motion for a temporary restraining order (TRO) with the California court requesting it restrain the defendants from posting and hosting comments about it on PurseBlog.com or anywhere else. After it was denied on Friday, she filed the second lawsuit and a motion for a TRO in Illinois.
In the motion, she claimed that Burke's comments about eDrop-Off on PurseBlog.com has "spawned an unwarranted outcry against Plaintiffs, which has caused, and is continuing to cause, irreparable harm and damage to their business, brand and reputation. As a direct result of the defamation, trade libel, and trademark infringement perpetuated by Defendants, existing clients have already rescinded and/or terminated their relationship with eDrop-Off, and prospective clients have decided not to transact business with Plaintiffs going forward."
PurseBlog.com (Midley Inc.) filed an opposition to the plaintiff's motion for a temporary restraining order. It argues that the plaintiff is forum shopping (the practice adopted by some litigants to have their legal case heard in the court thought most likely to provide a favorable judgment).
PurseBlog says it is protected from litigation thanks to the CDA and planned to file an anti-SLAPP motion in California, and objected to the second lawsuit filed in Illinois. It wrote to the California court:
"Purseblog asked plaintiffs to dismiss it from this improper action, but instead plaintiffs filed an ex parte application in Los Angeles seeking dismissal of that lawsuit over Purseblog’s objection (which Purseblog assumes will be denied since there is no basis to seek such relief on an emergency basis, as opposed to a regularly noticed motion, the Los Angeles action was the first case filed and the Chicago action was brought for the sole purpose of obtaining the relief denied to plaintiffs on Friday, and there is case law holding that a plaintiff may not avoid sanctions under California's anti-SLAPP statute by attempting to dismiss a lawsuit brought in violation of the statute)."
PurseBlog said it consented to personal jurisdiction in California (it is based in Florida) by filing an answer and seeks an order under California's anti-SLAPP statute dismissing the action with prejudice and awarding fees.
"Comparable relief may not be available in Chicago under Seventh Circuit or Illinois law," it wrote. In a footnote, PurseBlog said California's anti-SLAPP law is "generally recognized as one of the broadest anti-SLAPP statues in the country." It accused the plaintiff of "scrambling to quickly forum shop for better law and a different judge."
Comment on the EcommerceBytes Blog.
Update: Also see Judge Grants Restraining Order against eBay Sellers Critic.
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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