Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-00954/USCOURTS-azd-2_07-cv-00954-4/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1964 Racketeering (RICO) Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

XCENTRIC VENTURES, LLC, and

Arizona corporation, d/b/a

“RIPOFFREPORT.COM”; ED

MAGEDSON, an individual, 

Plaintiffs, 

vs.

WILLIAM “BILL” STANLEY, an

individual; et al.,

Defendants. 

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No. CV-07-954-PHX-GMS

FINDINGS OF FACT AND

CONCLUSIONS OF LAW RE:

CONTEMPT OF DEFENDANT

WILLIAM STANLEY (SECOND)

On November 11, 2008, Plaintiffs Xcentric Ventures, LLC, and Ed Magedson filed

their Motion for Order to Show Cause why Defendant William Stanley should not be held

in contempt for failure to comply with both the June 21, 2007, Preliminary Injunction (Dkt.

# 33) and the February 19, 2008, Order of Contempt (Dkt. # 176). (Dkt. # 235.) On January

9, 2009, the Court held an order to show cause hearing during which Plaintiffs presented

evidence supporting contempt. The Court now issues the following findings of fact and

conclusions of law in support of a finding of contempt against Defendant Stanley. 

I. FINDINGS OF FACT

(1) Plaintiff Ed Magedson is an Arizona resident and the manager of Plaintiff Xcentric

Ventures, LLC, a company that operates a website known as “Ripoff Report” at

www.ripoffreport.com. The site allows visitors to post and review disparagements about

Case 2:07-cv-00954-GMS Document 260 Filed 01/16/09 Page 1 of 9
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In addition to the Preliminary Injunction, the Court entered an order of contempt

against Defendant Stanley on February 19, 2008. (Dkt. # 176.) In their motion for an order

to show cause, Plaintiffs state that Defendant Stanley has also violated the order of contempt

by failing to send weekly reports to Plaintiffs’ counsel detailing his efforts to comply with

the order. Despite this assertion and the presentation of one unauthenticated e-mail allegedly

from Defendant Stanley, Plaintiffs have failed to produce any evidence upon which the Court

could find that Defendant Stanley has violated the order of contempt by failing to send

weekly e-mails to Plaintiffs’ counsel. 

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companies and individuals. Because the complaints are searchable in various search engines,

they can draw significant attention to targeted businesses.

(2) Defendant Stanley does business under the trade name “Reputation Management”

and operates numerous websites, including www.complaintrepair.com,

www.defamationaction.com, www.defamationremoval.com, www.defamationremover.com,

www.defamationrepair.com, www.remove-rip-off-reports.com, www.remove-ripoffreport.com, www.removedefamation.com, www.removenegativelinks.net,

www.removeripoffreports.com, www.repprotector.com, www.repsaver.com, and

www.shield-reputation.com. Defendant Stanley is a member of the Defamation Action

League, an unincorporated association. His place of residence is unknown and he uses

aliases “Jim Rickson,” “Matt Johnson,” and “Maxwell Tarczynski.” Stanley has been placed

on the Register of Known Spam Operations (“ROKSO”) as a professional spam operator who

has been terminated by a minimum of three internet service providers for spam offenses. 

(3) A Preliminary Injunction and Findings of Fact and Conclusions of Law were

entered by this Court on June 21, 2007.1

 (See Dkt. ## 32, 33.) The Order applies to all

Defendants and “their officers, agents, employees, independent contractors, or other persons

acting under the supervision and control or at their request.” (Dkt. # 33 at 2.)

(4) Defendant Stanley received the Preliminary Injunction promptly from Plaintiffs’

counsel.

(5) Defendant Stanley was required to comply with the language of the Preliminary

Injunction.

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Copyright protection is available for “original works of authorship fixed in any

tangible medium of expression, now or later developed, from which they can be perceived,

reproduced, or otherwise communicated, either directly or with the aid of a machine.” 17

U.S.C. § 102(a). “Works of authorship include . . . literary works.” Id. Copyright

protection does not, however, “extend to any idea, procedure, process, system, method of

operation, concept, principle, or discovery.” Id. § 102(b). The United States Supreme Court

held that copyright protection only extends to “original” works. Feist Pubs., Inc. v. Rural

Rel. Serv. Co., 499 U.S. 340, 345 (1991). “Original, as the term is used in copyright, means

only that it possesses at least some minimal degree of creativity.” Id. It follows from this

authority that copyright protection does extend in some degree to customers’ writings posted

on Ripoff Reports which were copied verbatim by Defendant Stanley. 

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A. Use of Material Owned by Customers of Xcentric or Ripoff Report

(6) The Preliminary Injunction enjoined Defendant Stanley from “[w]illfully using

without authorization copyrighted material owned by . . . [a]ny customer of Xcentric or

Ripoff Report. (Dkt. # 33 at 5.) 

(7) As of December 10, 2008, copyright protected material2

 composed by customers

of Xcentric or Ripoff Report appeared on the following websites:

www.complaintremover.com, www.complaintremovers.com, www.complaintrepair.com,

www.defamationaction.com, www.defamationactionleague.org,

www.defamationremoval.com. As of January 5, 2009, copyrighted material owned by

customers of Xcentric or Ripoff Report appeared on the following websites:

www.defamationremover.com, www.defamationrepair.com, www.remove-negativelistings.com, www.remove-negativelistings.com, www.remove-rip-off-reports.com,

www.remove-ripoff-report.com, www.remove-ripoff-reports.com,

www.removedefamation.com, www.removenegativelinks.net,

www.removeripoffreports.com, www.repprotector.com, www.repsaver.com,

www.repsavior.com, www.reputationsavior.com, and www.shield-reputation.com. These

uses were not authorized by Plaintiffs or its customers. The websites listed in this paragraph

will collectively referred to as “the offending websites.” 

(8) Each of the offending websites contains the identical contact phone number.

Additionally, the content of each website is similar. 

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(9) The following websites are registered to Defendant Stanley:

www.defamationaction.com, www.defamationremoval.com, www.defamationremover.com,

www.defamationrepair.com, www.remove-rip-off-reports.com, www.remove-ripoffreport.com, www.removedefamation.com, www.removenegativelinks.net,

www.removeripoffreports.com, www.repprotector.com, www.repsaver.com, and

www.shield-reputation.com.

(10) The following websites are registered to Andrea Schurz:

www.complaintremover.com, www.remove-ripoff-reports.com, and www.repsavior.com.

Andrea Schurz is Defendant Stanley’s girlfriend and the mother of three of Defendant

Stanley’s children. The registered address, phone number, fax number, and e-mail address

for the websites www.complaintremover.com and www.remove-ripoff-reports.com is the

same contact information as recorded on other websites registered to Defendant Stanley. The

registered address is the address Defendant Stanley is known to use in Austria.

(11) Lea Schurz is the named registrant of the website www.complaintremovers.com.

Schurz is the last name of Defendant Stanley’s girlfriend. The registered phone number for

this website is linked to other websites registered to Defendant Stanley. The registered email address for this site is linked to the website www.complaintremover.com which is

registered to Andrea Schurz.

(12) William Schurz is the registrant of the website www.complaintrepair.com. The

registered address, phone number, fax number, and e-mail address for this website is the

same as other websites registered to Defendant Stanley. 

(13) Maxwell Tarczynski is the registrant of www.defamationactionleague.org.

Maxwell Tarczynski is an alias for Defendant Stanley. The registered phone number and email addresses for this website is the same as other websites registered to Defendant Stanley.

(14) Radu Nuna is the registrant of the website www.remove-negative-listings.com

and www.remove-negativelistings.com. The registered e-mail addresses for these websites

is a known e-mail address for Defendant Stanley. 

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(15) The registration information for the website www.reputationsavior.com is

unknown.

(16) The offending websites are either registered to or under the control of Defendant

Stanley. Defendant Stanley is responsible for the content appearing on each of the offending

websites.

(17) Defendant Stanley willfully and knowingly violated the terms of the Preliminary

Injunction by posting or causing to be posted, without authorization, copyrighted material

owned by the customers of Xcentric Ventures or Ripoff Report.

B. Use of Private Information of Xcentric’s Business Partners

(18) The Preliminary Injunction enjoined Defendant Stanley from “[p]ublicizing

online any private information pertaining to the personal residence or financial affairs of . . .

[a]ny individual that provides a business or legal service to Xcentric Ventures.” (Dkt. # 33

at 6.) 

(19) PMGI is a service provider of Xcentric Ventures.

(20) On October 8, 2008, the personal address of the owner of PMGI appeared on the

website www.defamationaction.com. 

(21) The website www.defamationaction.com is registered to and under the control

of Defendant Stanley.

(22) Defendant Stanley willfully and knowingly violated the terms of the Preliminary

Injunction by publicizing private information pertaining to the personal residence of an

individual that provides a business service to Xcentric Ventures.

C. Use of the Website www.pmgisucks.com

(23) The Preliminary Injunction ordered Defendant Stanley to take down the website

www.pmgisucks.com so that the domain name would no longer exist. (Dkt. # 33 at 7.)

(24) On or about March 27, 2008, the website www.pmgisucks.com was active and

contained pornographic images.

(25) Defendant Stanley willfully and knowingly violated the terms of the Preliminary

Injunction by failing to take down the website www.pmgisucks.com.

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II. CONCLUSIONS OF LAW

A. Persons Bound By the Preliminary Injunction

(26) Federal Rule of Civil Procedure 65(d) provides that: “Every order granting an

injunction . . . is binding only upon the parties to the action, their officers, agents, servants,

employees, and attorneys, and upon those persons in active concert or participation with them

who receive actual notice of the order by personal service or otherwise.”

(27) Defendant Stanley received actual notice of the Preliminary Injunction and was

therefore bound by the provisions of the Preliminary Injunction.

(28) Defendant Stanley was enjoined from “[w]illfully using without authorization

copyrighted material owned by . . . [a]ny customer of Xcentric or Ripoff Report.” (Dkt. #

33 at 5.) Defendant Stanley violated this provision by, without authorization, either posting

or causing to be posted copyrighted material owned by customers of Xcentric Ventures or

Ripoff Report on a variety of websites either registered to or controlled by Defendant

Stanley.

(29) Defendant Stanley was enjoined from “[p]ublicizing online any private

information pertaining to the personal residence or financial affairs of . . . [a]ny individual

that provides a business or legal service to Xcentric Ventures.” (Dkt. # 33 at 6.) Defendant

Stanley violated this provision by publicizing the residential address of the owner of a

business which provides business services to Xcentric Ventures. 

(30) Defendant Stanley was affirmatively obligated to take down the website

www.pmgisucks.com. (Dkt. # 33 at 7.) Defendant Stanley, to whom this website is

registered, violated this provision by failing to permanently take down the website.

B. Civil Contempt

(31) “The moving party has the burden of showing by clear and convincing evidence

that the contemnors violated a specific and definite order of the court. The burden then shifts

to the contemnors to demonstrate why they were unable to comply.” FTC v. Affordable

Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999) (citations omitted).

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(32) Defendant Stanley has disobeyed specific and definite orders by failing to take

all reasonable steps within his power to comply. In re Dual-Deck Video Cassette Recorder

Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 1993). Contempt does not need to be willful

and there is no good faith exception to the requirement of obedience to a court order. Id.

(33) Sanctions for civil contempt may be imposed to coerce obedience to a court

order, or to compensate the party pursuing contempt action for injuries resulting from the

contemptuous behavior, or both. United States v. Mine Workers, 330 U.S. 258, 303-04

(1947); Perry v. O’Donnell, 759 F.2d 702, 705 (9th Cir. 1985).

(34) Plaintiffs are entitled to coercive sanctions to require Stanley to comply with the

Preliminary Injunction.

(35) Plaintiffs are entitled to compensatory sanctions to compensate them for the

injuries suffered as a result of Stanley’s contemptuous behavior.

C. Criminal Contempt

(36) “Criminal contempt is established where there is a clear and definite order of the

court, the condemnor knows of the order, and the contemnor willfully disobeys the order.”

United States v. Doe, 125 F.3d 1249, 1254 (9th Cir. 1997) (quoting United States v. Powers,

629 F.2d 619, 627 (9th Cir. 1980)).

(37) The purpose of the criminal contempt sentence “is punitive, to vindicate the

authority of the court.” Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 441 (1911).

(38) “While a court has the authority to initiate a prosecution for criminal contempt,

its exercise of that authority must be restrained by the principle that ‘only the least possible

power adequate to the end proposed should be used in contempt cases.’” Young v. U.S. ex

rel. Vuitton et Fils S.A., 481 U.S. 787, 801 (1987) (quoting United States v. Wilson, 421 U.S.

309, 319 (1975)). 

(39) Federal Rule of Criminal Procedure 42 details the procedure for prosecuting

criminal contempt. “Any person who commits criminal contempt may be punished for that

contempt after prosecution on notice.” Fed. R. Crim. P. 42(a). After proper notice, “[t]he

court must request that the contempt be prosecuted by an attorney for the government, unless

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the interest of justice require the appointment of another attorney.” Id. Additionally, Rule

42(a) requires a trial and disposition in all cases of criminal contempt. See 3A C. Wright, N.

King, & S. Klein, Federal Practice and Procedure § 709, at 489 (3d ed. 2004) (“Rule 42(a),

requiring notice, appointment of a prosecutor, and trial and disposition, applies to all criminal

contempt proceedings except those which may be punished summarily [under Rule 42(b)].”).

Depending on the nature of the punishment, a jury trial may be required. See id. §712, at 505

(explaining when a criminal contempt jury trial is required). 

(40) However, the Court declines to commence criminal contempt proceedings against

Defendant Stanley because, at this time, it is not the “least possible power adequate to the

end proposed,” Young, 481 U.S. at 801, and because, in light of Defendant Stanley’s selfimposed exile, the contempt does not merit the use of the limited resources of the United

States government. The remedy Plaintiffs seek may be achieved through civil contempt both

to coerce Defendant Stanley’s voluntary compliance with the Preliminary Injunction and to

compensate them for damages incurred due to his noncompliance. The denial of criminal

contempt proceedings at this time is without prejudice to a renewed request upon further

application proving recurrence of willful and knowing violation of the Preliminary Injunction

of Defendant Stanley.

IT IS THEREFORE ORDERED that Plaintiffs submit by January 23, 2009, a form

order finding Defendant Stanley in civil contempt, with supporting evidence of damages and

attorneys’ fees. The Court is inclined to grant Plaintiffs’ request to transfer registration of

the offending websites to Plaintiffs. However, the Court is disinclined to make this transfer

permanent, but rather contingent upon the affirmative ability of Defendant Stanley to purge

his contempt. See Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 828

(1994) (“In these circumstances, the contemnor is able to purge the contempt and obtain his

release by committing an affirmative act, and thus carries the keys of his prison in his own

pocket.”) (quotations omitted). Consequently, Plaintiffs are advised to suggest appropriate

contingencies within their proposed form of order, the satisfaction of which would allow

Defendant Stanley to regain registration and control of the offending websites.

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DATED this 16th day of January, 2009.

 

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