Med Express faces $20,000 sanctions award for frivolous libel suit against eBay buyers

by Paul Alan Levy

Med Express, a Medina Ohio company that faced serious and widespread online obloquy during the spring of 2013 for filing a libel suit against two eBay users who posted mildly negative (but entirely truthful) feedback, has been ordered to pay nearly $20,000 in attorney fees and expenses for the work of Tom Haren and the Jeff Nye, the two Ohio lawyers who stepped forward to provide the users with a pro bono legal defense.  Although Ohio does not have an anti-SLAPP statute, the Court of Common Pleas for Medina County held this week that the lawsuit was frivolous in several ways – (1) the choice among overall positive, negative and neutral ratings, as well as the detailed seller ratings, are so clearly matters of constitutionally protected opinion that basing a lawsuit on them was legally frivolous; (2) to the extent that the two eBay buyers had made factual statements in their prose feedback, the statements were undeniably true, and Med Express had no tenable basis for believing the statements to be false; and (3) the entire purpose of the lawsuit was improper:  “to thwart eBay’s seller ranking system for financial gain by obtaining an injunction against out of state defendants unlikely to be able to defend themselves.”  The Magistrate Judge made clear that Med Express owner Richard Radey had compounded the situation when he presented false testimony, gave "testimony [that] was not credible," and made "misrepresent[ations] to the court" at both sanctions trials.

During the second sanctions hearing, by which time Med Express was on its fifth lawyer in the case, testimony from both Radey and James Amodio, the lawyer who had originally filed the lawsuit on behalf of Med Express, made clear the serious impact that the reactions of the Internet community to news of the litigation had had. The criticism persuaded them to drop the litigation — they had not anticipated the Streisand Effect, they were taken aback with the harsh criticism directed at them personally, and Med Express saw its business, which was wholly dependent on eBay sales, plummet to nearly nothing. As a previous blog post noted, Med Express threw its first lawyer, the one who filed the complaint on its behalf, under the bus, blaming him for allegedly including some of the outrageous claims in the complaint, in violation of instructions and without telling Med Express.  Of course, the company’s owner had verified the complaint, so either he lied about reading the complaint before he signed it, or he lied about not having seen it.  Med Express changed its eBay moniker from Med Express Sales to Medical Specialists, apparently to try to avoid the negative associations caused by its lawsuit; a recent check of eBay suggests that, although Med Express was still in business as of the second sanctions trial this past spring, it has changed its selling name again.

During and after the second sanctions trial, the lawyer who had filed the suit on Med Express’ behalf made clear that he recognized that he had made mistakes, and offered to settle the sanctions motion with a payment of some attorney fees.  In light of his acceptance of responsibility, we agreed to allow him to keep the monetary amount confidential.  My take on the situation is that his intentions were not evil, but, rather, that he got in a bit over his head in a kind of lawsuit that he didn’t understand.  It is also quite possible that Radey lied to his lawyer just as he lied to the court about what he saw on his "seller dashboard," although the attorney-client privilege was invoked to prevent us from asking questions about lawyer-client communications.

I see Med Express in a different light – Radey has made clear at every stage of the litigation that he is prepared to say whatever seems to be useful at the time, without regard for truth or falsity and regardless of whether he is signing statements under oath or making them on the witness stand.  The substantial award of sanctions is a proper consequence for his refusal to accept any responsibility for how he wronged two former customers, and stands as a warning to companies that are tempted to file such lawsuits, as well as to the lawyers who consider representing them.  Links to critical material appeared at the top of search engine listings for both the company and the lawyer for months and even years. 

At the same time, the sanctions provide just reward for two junior Ohio lawyers who volunteered their services to the defendants.  Tom Haren and Jeff Nye, and the relatively small law firms that allowed them to take the case without any likelihood of financial recompense, deserve our thanks.  Thanks as well to Ken White, whose issuance of the Popehat Signal helped bring these two lawyers on board.

0 thoughts on “Med Express faces $20,000 sanctions award for frivolous libel suit against eBay buyers

  1. Ed says:

    The one to blame is eBay and their DSR rating system. Punishing a seller by having them pay more because of a disgruntled buyer is ridiculous, especially now that sellers can’t leave negative comments to defend themselves. One of the reasons I quit selling on eBay and only buy there.

  2. Phil says:

    Whether or not Janey is right, I think she misses the point: it doesn’t _matter_ whether the buyer was right or wrong.
    This is 100% unambiguously constitutionally-protected opinion. Using the legal system to silence critics — even misguided or under-informed critics — is shameful, and not how the system is (theoretically) supposed to work.
    The buyer has the right to express opinions about the seller, even if those opinions are “wrong”. The correct response to inaccurate speech is more speech, not a chilling lawsuit.
    Unfortunately it’s all-too-often successful, which is why we need robust anti-SLAPP laws. This one ended well, but it required far too much effort for such an open-and-shut situation.

  3. Escher says:

    Me thinkst Janey doth protest too much.
    Every situation is different. Just as there are many legitimate sellers and buyers on eBay along with the shady, unscrupulous, and vindictive; so does real life. Welcome to humanity, we have some great and awful people.
    Why are you so keen on finding the seller blameless? Unless you personally know him, or are pushing your agenda, then take it for what it is: a seller who was too zealous and found that, yes, there are people who do in fact fight back.
    This was not the seller’s first rodeo pulling this stunt.

  4. Janey says:

    Did she contact him to say she’d been dinged $1.44? Did he refuse to compensate her for it? They had some sort of communication or she wouldn’t have been able to leave a 1 on Communication rating.
    Did Radey say he used USPS to improve his profits or did he say it was because it was less costly? Depending on the item size, weight, etc. I sometimes offer buyers a choice of UPS or USPS. They almost always choose whichever is cheapest. Since buyers often shop on the basis of price+shipping, a low cost shipper is also a competitive advantage in the Ebay search engine. The lower cost for the customer and the better competitive search advantage for the seller should make it a win-win for both parties — unless you’re opposed to profits in general, in which case I’d guess you’ll be donating that $20K to charity.
    The business about the USPS dinging isn’t something that happens every day. I’ve heard from one customer in 2 years. Did you get a deposition from a representative of USPS as to how often it happened on this seller’s shipping? The packages are all tracked so USPS has the information. If this desperado’s incidence of USPS recalculating its cost after the fact is similar to my own, he can’t be blamed for not having guessed which 1% of his shipments it happened on. When it last happened to me I toyed with the idea of putting something in my item descriptions to the effect that customers should contact me if they get hit up by USPS for more money. Problem with that is that in my experience 5-10% of the buyers will cheat the seller if they can. Not pulling that number out of my ear. Before I shipped everything with delivery confirmation, depending on the year, 5-10% of my customers claimed they hadn’t received the item. When I started shipping everything with delivery confirmation that number dropped to less than 1%. Delivery confirmation doesn’t require a signature and my product is small so gets left on the doorstep. My USPS carrier confirmed there is nothing different in the way they deliver DR packages to explain the drop in claimed non receipt. I Figured if I mentioned USPS extra charging in lists, the same 10% would be claiming they’d been overcharged and I’d have no way to dispute it.
    By the way, Radey may not have been lying when he said he saw the numbers go to 1’s. Ebay went through a period a few years ago in which DSR numbers were reported in ways that confused many sellers. There’s a difference between being mistaken and lying. Calling someone a liar when you don’t know if they intentional told a falsehood might make you guilty of defamation, mightn’t it?
    Last question: was the attorney who did most of the sellers filings for FB removal his brother in law? Must have been selling some high end products for the math to work.

  5. Paul Levy says:

    Yes, in fact, eBay’s records were subpoenaed (the document was submitted at the trial), and the contents of the records were confirmed in a deposition: Med Express’s claim about the numbers left in the DSR’s was shown to be false. The facts are recounted in detail in the judge’s opinion (linked from the post above). The pages of the opinion are un-numbered, but look on the 11th page of the PDF, paragraph number 36, and the 13th to 14th page, paragraph number 1.
    As for the USPS issue, Radey testified that he used USPS because it was cheapest (thus giving him more profit), even though he was aware of the problems with inaccurate shipping cost estimates; he also admitted that these problems are widely discussed among eBay sellers. “Janey”‘s comment confirms that admission. So it was, it seems to me, entirely fair for Nicholls to hold Med Express responsible for the problem and fault Radey for poor communication. And, in any event, as the judge ruled, a rating is inherently subjective, an opinion, that cannot properly be the basis for a defamation claim, because defamation claims can be brought only over false statements of FACT.

  6. Janey says:

    So was Ebay compelled to reveal the DSR feedback left by those buyers? Textual feedback on Ebay is irrelevant. Lots of folks name calling the seller for being overly vain about their feedback. Mostly revealing ignorance about how Ebay works.
    It’s all about the ratings on the DSR stars. A buyer can, for example, leave textual feedback that is accurate, “Had to pay $1.44 in shipping due” but then leave the lowest possible ratings, 1’s, for all four stars, and there’s nothing to prevent them from lying their heads off on any or all of them and, as Ebay has repeatedly stated, the only way they will remove such feedback is with a court order. Sellers who receive many feedback a day have no idea who diced and slashed their star ratings but low volume sellers are often able to figure it out pretty easily if they’ve only received 3 feedbacks in the last few days, one from a customer who left textual feedback indicating unhappiness. 1’s and 2’s on DSR stars impact what a seller pays in fees and search positioning of items. Agents of an Ebay sellers competitors sometimes purchase low priced items, leave happy dappy textual feedback, then leave 1’s in the DSR’s, fully intending to damage the seller’s discount qualifications and, more importantly, the search position standing of their items on Ebay. Seller can’t prove it, Ebay only gives lip service to investigating suspects. I know of one seller who gave himself a Christmas present three years in a row by having someone leave negative feedback on all his competitors accounts in the last few weeks of December. A few of the sellers got together, compared notes, figured out that though the negatives came from different buyers trading names, they all came from within an hour of that seller’s location.
    One 2013 forum on this case lambasted the seller for estimating that the damaged feedback would cost him $5k. There they were, running their calculators, weeding through Ebay’s fee structure, trying to find fault with his calculation, totally disregarding the most important financial consequence of trashed DSR ratings, that not he, or the calculator warriors could do anything but guess at: search position. Anyone who thinks that’s unimportant to a company’s sales might want to go consult with some SEO professionals. If you drop deep in the Ebay stacks, your sales can nose dive.
    For those who think the seller should have known USPS was nickeling and diming his customers for extra shipping, think again. Happens all the time. USPS does not inform the shipper thus the seller has NO WAY of anticipating it or knowing when it happens unless they hear it from their customer. You can take a package to the post office, watch them weight it, pay the postage they say is required, watch them slap on the postage and then somewhere between that USPS outlet and the final destination, some other USPS person decides the something about the package or postage amount was incorrect and hits the recipient up for a little extra. Why? Ask USPS. They know it happens, USPS counter personnel admit it It is in part the result of USPS codes that are so convoluted that USPS employees are hard put to keep up with all the regulations and changes thereto as to size, thickness, rigidity, weight, when confirmation is included or extra, etc. So what goes into the sausage machine smells sweet but something happens along the way and it comes out smelling like dog doo for everybody involved. Maybe a worker at another USPS outlet is a new employee and following rules no one else follows, or has/hasn’t read the newest bulletin about change #9,254.300, or just got up on the wrong side of the bed and looks for a reason to penalize the first 10 packages that come through his station that day. You think I jest? Not a bit. Want some fun? Search the web to see the 1,256 ways USPS outlets handle hand stamped envelopes such as wedding invitations. It’s snowflake land, no two USPS offices or personnel do it the same way or follow the same rules. Many Ebay sellers know more about USPS requirements and regulations than the counter people at USPS.
    Should the seller have sued the buyer? None of us can possibly know the answer to that without knowing if DRS ratings left by the buyer were truthful and I’m betting no one involved attempted to determine the answer to that. Friend of mine once had all her DSR stars slashed by a buyer who was angry because she bought an armoire with her cell phone, didn’t bother to read the whole description – including the part that said it was 9 ft high. She had 8 ft ceilings. Thing got there, wouldn’t fit in her house, was sitting out in the hallway, doorman was ticked, and she wanted the seller to pay the return freight. In the interests of customer relations, seller offered to split the cost but the buyer didn’t want her husband to find out she’d been so stupid, admitted it to the seller, then left 1’s in every one of the seller’s stars. That too happens all the time. Buyers, especially telephone shoppers,do not read descriptions, not even common sense things like the dimensions of furniture. Then they expect sellers to absorb the costs of their negligence and there is little sellers can do to protect themselves from it. As an Ebay seller for 18 years I could tell you stories about the John Q consuming public that would give you a whole new view on this seller would think deserves castration.

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