Filing Bogus Lawsuits As Part Of A 'Reputation Management' Strategy Costs Firm $71,000

from the making-the-internet-worse-by-making-the-judicial-system-worse dept

Because abusing the DMCA process only goes so far, some reputation management entities have begun exploiting an inattentive legal system to push lawsuits past judges. In some cases, these suits have featured fake plaintiffs filing bogus libel lawsuits against fake defendants and using a fake affidavit to fraudulently obtain court orders requiring Google to delist URLs.

Those engaged in this fraudulent behavior aren't likely to get away with it for much longer. Paul Alan Levy and Eugene Volokh managed to track down the person behind one set of bogus lawsuits and get the presiding judge to take a closer look at the bogus documents he was being handed. Pissed Consumer has also been reporting on others using the same MO, and has headed to court to get these suits examined and tossed.

The end of line for supposed reputation manager Richart Ruddie came at the hands of Volokh and Levy, with the judge granting discovery to the defendant after being apprised of the apparently fraudulent filings. Now that Richart Ruddie of Profile Defenders has been exposed, it looks as though he's given up the fight. Levy reports Ruddie has settled anti-SLAPP claims brought against him and is paying restitution for his reputation mismanagement.

The deal has now been signed, the $71,000 settlement sum has been paid in full, and the settlement agreement filed with the court along with a proposed order under which the Judge Smith would retain jurisdiction to enforce Ruddie’s obligation to move to get the fraudulent state court orders lifted, as well as to ensure that the former customers (that is to say, Smith, Rescue One Financial, and Financial Rescue) cooperate in Ruddie’s efforts in that regard. Their cooperation will likely be needed because they, not Ruddie, were the plaintiffs in the state-court litigation and hence the motions to lift the orders will have to be made in the names of those parties companies. It appears at the moment that the threat of being dragged back into the Rhode Island anti-SLAPP litigation has been sufficient to induce the companies and Smith to allow counsel retained by Ruddie to proceed in their names to get the fraudulent order lifted.

While that helps the defendant and partially takes care of Ruddie's liability (not to mention acts as a deterrent against future efforts of this sort), it doesn't do much to deter the other parties listed, who apparently knew Ruddie's courtroom efforts were shady and may have been fully complicit in the fraud. This settlement leaves them pretty much unscathed. There's still the possibility more fees are on their way from others involved in Ruddie's black hat SEO BS. But for now, it's all in Ruddie's name.

Levy's post provides a ton of background info behind the settlement he just collected, including this wonderful paragraph, in which an opposing lawyer claims Levy has an "ethical" obligation to put the opposition's interests ahead of his own.

Apparently, Hirschhorn [attorney for Richart Ruddie representing him for a criminal investigation brought by the state at the request of Judge Smith] was sharing some of the details of our negotiations, because when Rescue One [Ruddie's SEO client] lawyer Michael Mallow learned that I was still pursuing his client’s liability for an anti-SLAPP violation, he hit the roof. He demanded that I call him and, when I did, he began yelling into the telephone that it was my ethical responsibility to reach a complete settlement with Ruddie so that his client would not have to produce any documents. He brought Hirschhorn into the call and demanded that I give Hirschhorn a settlement number that included claims against his clients as well as Ruddie. When I explained that I did not have any basis to set a proposed compensatory damages figure because I had not completed a sufficient analysis to specify a number that I felt I could defend in litigation, Mallow said that this didn’t matter and that I should just make up a number so that there could be a settlement. Hirschhorn indicated that he would take a specific number with that disclaimer; when I articulated a number that was considerably higher than what Hirschhorn said he could get from his client, Mallow told me that it was possible that his own client might contribute to the settlement, but “if that happens you will never know.” That is, the deal would be structured to give his client deniability of any responsibility for the fraud.

The whole post by Levy is amazing and should be read in its entirety to get a better grasp on the cast of characters in this courtroom charade. It initially appeared as though Ruddie's reputation management scheme consisted of filing bogus lawsuits without his SEO clients' knowledge. That no longer appears to be the case. At least a couple of his clients appear to have known exactly how this was being handled and had zero problem with participating in Ruddie's fraudulent filings. The settlement may be an attempt to staunch Ruddie's bleeding, but it's pretty difficult to pitch reputation management services when yours is swirling the drain.

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Filed Under: defamation, fake lawsuits, reputation management, richart ruddie

Companies: profile defenders