Corporations hiding in cyberspace

Paul has often posted on (and is one of the leading experts on) protecting consumers' anonymity in speaking online. (A good example is the Hadeed case, which you can read more about here.)

But cyberspace offers opportunities for companies to hide also, and it can be a barrier to holding them accountable for wrongdoing. For instance, we've posted about KlearGear, an online retailer that demanded that a Utah couple who posted an unflattering online review pay KlearGear $3500 as a penalty for violating a "non-disparagement clause"; when the couple, John and Jen Palmer, refused to pay, KlearGear reported the debt to the credit agencies with serious and ongoing consequences for the Palmers and their young son. The Palmers have sued KlearGear for damages. (Disclosure: Public Citizen represents the Palmers.) It may sound to many of you like the Palmers have a good case (we certainly think they do).

But first they have to find the company, and that is harder than it sounds.

In November, the company's website listed an address in Grandville, Michigan, on Sanford Avenue. That's where Public Citizen sent a demand letter to KlearGear. No response. So we filed suit on the couple's behalf in December. In the intervening three weeks, the company's website reflected that it had moved to a different address in Grandville, on Wilson Avenue. (WOOD-TV Grand Rapids filed this report after trying — and failing — to track KlearGear down.) A mailing to KlearGear at the Wilson Avenue address was returned undelivered because the address lacked a suite number; KlearGear's website did not list a suite number. Also the Michigan Department of Licensing and Regulatory Affairs doesn't contain a listing for the company, suggesting they aren't registered to do business in the state. Multiple calls to the numbers on KlearGear's website yielded no response, and at least one of the numbers was disconnected. I called another tenant at Wilson Avenue to find out what was going on and if he'd heard of KlearGear. He hadn't. There's a post office, too, at that address, so I called it. Never heard of KlearGear. I ultimately reached the landlord just last week, on January 3. He hadn't head of KlearGear either, and expressed concern that there might be something fishy going on. Then on January 6 (because the landlord had been trying to get to the bottom of things? who knows?), KlearGear's address on its website changed yet again — back to Sanford Avenue. Meanwhile, if you click "print" on one of the pages where KlearGear lists its address, on the print screen next to the company's logo there appears a third address — this one in San Antonio, Texas. (A call to the Texas Secretary of State's office revealed that KlearGear is not listed as licensed to do business there either.)

As another example, consider Paul's post last week about Accessories Store (the post's title says it all: "Accessories Store: A Nondisparagement Clause Even Worse than Kleargear"). Paul recounts (emphasis mine):

After Murakami came to Public Citizen for help, we concluded that the non-disparagement clause was so excessive as to be unenforceable, just as in the Kleargear case.  We contacted the company (which does not appear to have any public street address – even its domain names have been registered anonymously) to let it know that she was represented by pro bono counsel.  Accessories Store never responded, but also stopped threatening to take action against Murakami.

The fact that we seem to have gotten Accessories Store to back off is great, but what if they had done more than threaten Karen, and she had wanted to sue to enforce her rights? Where would she have found them to sue them?

None of this is to cast doubt on the value of online anonymity generally — as Paul's cases demonstrate in the context of consumer speech, anonymity can be invaluable in fostering discourse that might otherwise be silenced by community pressure. (A particularly good example is the Thomas Cooley case, discussed here.) Nor am I suggesting that the internet itself needs more regulation. What might need more regulation is corporations that do business online and use their exclusive presence in that medium to try to avoid accountability for abusive practices. The effort involved in finding and serving online companies drives up the expense of suing them and could even deter attorneys from taking on suits against them at all. Congress should consider a requirement that companies doing business online maintain a physical address for service, much as the DMCA does for companies hosting comments.

0 thoughts on “Corporations hiding in cyberspace

  1. L. Davis says:

    Their physical hosting is at Yahoo! Public Citizen should contact Yahoo! legal with their subpoena for further discovery.

  2. Alice M Wallack says:

    Is this the new next game. Fake cyber stores. When you write a not so flattering comment about them you get sued. I always say “what will they think of next” and someone always does. Remarkable!

  3. j says:

    I suggest that you contact for their location
    Their website is registered under
    or contact their Shipper – FedEx or UPS ? they would have the pick up and billing addresses.
    the wayback archive lists them as a division of Chenal Brands, Inc. which is based in Germany
    LOS ANGELES, Aug. 24, 2012 /PRNewswire/ — Chenal Media (, trans media division of private equity-backed Chenal Brands (CBI)
    chenal brands does have a SEC listing offer that has the San Antonio address.
    Business Address 7122 OAKLAWN DRIVE SAN ANTONIO TX 78229 (210) 519-2010

  4. Louise says:

    These are “Fly-by-night” fraudsters and they probably do not have a designated office or a valid DBA either. They may rent rooms temporarily under a different name than the one used to sell on the Internet, thus having total mobility to move or disappear if needed.
    The usual consumer protection of creating a black list will not even work here, these people are professional chameleons.
    The only protection against these outfits is to stress on people not to do business with unknown entities, and when I say “unknown” that does not mean that they do not advertise extensively with all sorts of lies. On the contrary, that is what they do well since it is probably their only major expense along with a couple of phones. Alleged “Customer reviews” are also self-written
    What people need to do is to look in the BBB, FTC and local trade registration websites. If that company is not listed anywhere, KEEP away no matter how enticing the product may be. It is better to miss an apparent deal than to end up being a loser. This sounds logical to me.
    One last thought. Since such purchases are made by credit card, any reputable credit card company will help their client to trace the vendor not just by name or address but by the institution where the funds were paid. They can play dominos with that too by using off shore banking of course.

  5. Bernard Pierre says:

    People opposed to regulations seem to forget/ignore how these came to be: Because of egregious abuses from the very businesses complaining. Of course, DCMA and extended copyrights are NOT regulations 😉 and I still have to see a corporation committing suicide over them.
    The same remarks can be made on whistle blowing: Depending on who commits the crime, one could land in jail for (not) reporting it.
    Morality, the laws do not apply to those who make them.

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