Negative Blogging Cost this person 20 Million

[Jesse & Ana Cordova]

I came across this today just wanted to share

A Cold Call, a Blog, and a $20 Million Lawsuit
By JESS MCCUAN, INC.COM
Posted: 2008-12-17 00:21:57
Filed Under: Small Business, Online Business

A North Carolina entrepreneur blogs a warning to her industry -- and gets sued for her troubles.

In January, Leslie Richard got a call from a man from Vision Media Television. The Boca Raton, Florida, TV production company wanted to know if Richard would agree to be interviewed for a documentary on eco-fashion. According to Richard, the caller implied that the film might air on PBS or possibly on CNN.

"I was nervous, but I was totally, like, Yeah -- I'll do it," says Richard. A TV appearance promised to be a huge PR boost for her two-year-old Asheville, North Carolina, company, The Oko Box, which sells clothing made of organic cotton, hemp, and bamboo.


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As talks progressed, however, Richard, 31, grew increasingly skeptical about the documentary. She says another Vision Media employee told her that Oko Box would be charged $22,900 to cover some production expenses, plus $3,000 for travel costs. Feeling "creeped out," Richard called the Better Business Bureau and posted a message about her experience on her company's blog. "Look alive small eco business owners," she wrote, " 'cause there is a new scam targeting us. [U]sing television lingo, an entire team of people, a website, video footage, and [a] whole bag of lies to cover their scheme."

As cathartic as this blog post may have been, it put Richard's business at risk. Anything posted on a CEO's blog -- including reader comments -- can be construed as carrying the weight of a company's endorsement, says Marc Zwillinger, an attorney in the Washington, D.C., office of Sonnenschein Nath & Rosenthal. "Blogging is a cheap and scalable way to talk to interested people," adds Seth Godin, an avid blogger and the author of 10 books on marketing. "But understand that while you advocate for your company, you are also walking a tightrope from a legal and business point of view."

Initially, Richard says, her blog elicited responses from more than 50 business owners who said they had dealt with Vision Media and shared her concerns. One person sent Richard a statement found on PBS's website from 2004 that said the network was "not associated with and does not endorse" a list of companies that included Vision Media. When the production company threatened to sue Richard if she didn't take down her blog, she wrote: "Um, yeah VMT your scam is being posted & has already been reported, and your imaginary lawyers can't do anything about it."

In July, Vision Media made good on its threat and filed a lawsuit in Florida against Richard and her company, asserting that the comments on Oko Box's blog (which Richard reposted in a members-only chat room maintained by a group for social entrepreneurs) had directly resulted in $5 million in lost business. The suit also asked the court to award Vision Media $15 million in punitive damages.

Mark Miller, an executive producer at Vision Media, denies that his company claimed to work with PBS. He also says Vision Media has a good rating with the Better Business Bureau, contrary to a post published in the comments section of Richard's website. "We've lost a lot of business as a result of her blog," Miller says.

After the initial shock wore off, Richard found a lawyer in Florida who was willing to work with her pro bono. At presstime in late September, Richard was close to a settlement with Vision Media, and she said she was prepared to take down the blog posts.

Richard says the nine-month standoff could have been avoided if Vision Media had just said, "We're a video company that does advertorials; you can use it however you want, and this is how much it costs." Miller asserts that his company does, as a policy, mention fees in the first phone call and that Richard misunderstood the pitch. "Our presentation is crystal clear," he says. (PBS declined to elaborate on its statement concerning Vision Media.)

As CEO blogs proliferate, so will the legal issues. "My sense is that she could have written her warning post in a more careful way," Godin says. "I want to push CEOs to be authentic on their blogs and to be selfless in trying to help readers. But they also have to understand that their words will be out there and widely seen. So they owe it to their stakeholders to act responsibly."


2008-12-16 23:06:04

[CoachDalton]

thanks for sharing this, Jesse.
I learned a long time ago, that if your post anything on the internet, you have to remind yourself that the whole world can see it...and that means milions and millions of perspectives in response. Blogs have become a powerful medium that people pay attention to. They have changed the way news is perceived and even the political outcome of elections.

I always "legal proof" anything I post. I often use words like "in my opinion" or pose questions, as opposed to statements. "Is this is a scam?" instead of "This is a scam". Yup, there are companies who employ search engine experts to find whatever they can on their own business that may be floating in cyberspace.

Be careful out there!

-CoachDalton

[Jesse & Ana Cordova]

Yea I was blown away the other day when some writing very d derogatory words against a individual trying to market on the old CASA site. what a shame.

[Ken Hendricks]

Well, um... "in my opinion"... the article states that Leslie Richard has been sued for $20 million. From what I got out of the article, this lawsuit hasn't cost her anything at all. Her lawyer is not charging her and "at presstime" a settlement had not been made.

I hope that she comes out on top in this deal. If Vision Media Television did indeed indicate some connection with PBS or CNN, then they are making it harder for us REAL PBS people to do what we do.

Ken Hendricks
Director of Photography
REDRUM Digital Cinema Production

[Leigh Ann Otte]

This is scary and a good lesson. I agree with Ken, though, that the article doesn't indicate she lost $20 million. For all we know, the settlement could just consist of her taking down the posts. But it's a good reminder. Thank you for posting it.

As a magazine editor, I feel compelled to mention gently that posting an entire article like this is normally considered copyright violation, so, as a reminder to everyone (you're not the first nor the last to post a whole article somewhere), it's best to post links to articles you find online. Argh, the many legalities of the online world! I think even the courts haven't figured it all out yet.

Best,

Leigh Ann Hubbard

[Darlene Cypser]

I have to agree with Ken. While I think you do need to be careful about what you post online, I believe Vision Media is the culprit here and if I were Leslie I would not settle. I would have sent all the threatening letters to www.chillingeffects.com

Anyone can sue or threaten to sue without having a good case.

We have had to deal with a number of legal threats over the years. Several have dealt with things online:

BMI threatened to sue Inferno over the music clips on Infernofilm.com and dragonandthehawk.com To that notice they received a very dunning letter from me telling them to mind their own business since we owned all the rights to the music.

Auto-trol Technology Corporation threatened to sue Trygve over his www.autotroll.com humor webpage even though there are several companies of that name and they owned no trademark on it. Their letters were rather amusing. You can read some of the information about that adventure here: http://www.trygve.com/autotrollrelease.html (Trygve did remove Pantea's letter form his website but before doing so it had been picked up by ChillingEffects.com where you can see it to this day. She is welcome to sue Harvard Law School, but they know that their commentary gives them a good "fair use" argument.)

Before you roll over and play dead, forward any cease and desist letter about Internet content to www.ChillingEffects.com They collect them and post legal commentaries on them. That would give you a good idea whether they have any legal leg to stand on, and it doesn't cost you a dime. After that there are several pro bono organizations that work in the area of free speech on the Internet including the ACLU and the Electronic Freedom Foundation.

[CoachDalton]

Thanks Darlene!
This is good stuff to know.

-D