xcentric ventures v. borodkin - magedson affidavit re jx

8/3/2019 Xcentric Ventures v. Borodkin - Magedson Affidavit Re JX

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AFFIDAVIT OF EDWARD MAGEDSON

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David S. Gingras, #021097Gingras Law Office, PLLC3941 E. Chandler Blvd., #106-243Phoenix, AZ 85048Tel.: (480) 668-3623Fax: (480) 248-3196

[email protected]

Attorney for Plaintiff Xcentric Ventures, LLC

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

XCENTRIC VENTURES, LLC, anArizona limited liability company,

Plaintiff,

v.

LISA JEAN BORODKIN et al .,

Defendants.

Case No.: 11-CV-1426-GMS

AFFIDAVIT OF EDWARD

MAGEDSON IN SUPPORT OF

PLAINTIFF’S RESPONSE TO

DEFENDANTS’ MOTION TO

DISMISS

I, Edward Magedson, declare as follows:

1. My name is Ed Magedson. I am a resident of the State of Arizona, am over

the age of 18 years, and if called to testify in court or other proceeding I could and would

give the following testimony which is based upon my own personal knowledge unless

otherwise stated.

2. I am the manager of Xcentric Ventures, LLC (“Xcentric”) and the founder

and “ED”itor of the website www.RipoffReport.com which I started in 1998.

3. I am aware that Xcentric has commenced this lawsuit against Defendants

Lisa Jean Borodkin, Daniel Blackert, Raymond Mobrez, Iliana Llaneras, and Asia

Economic Institute, LLC. Before this lawsuit was filed, I personally reviewed Xcentric’s

Complaint and I executed a verification page affirming that all of the allegations in the

Complaint were true and correct. That verification was accurate at the time I executed it

and it remains accurate as of the date of this affidavit.

Case 2:11-cv-01426-GMS Document 26-1 Filed 10/12/11 of 14



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4. I am aware that on September 30, 2011, Defendants Raymond Mobrez

Iliana Llaneras, and Asia Economic Institute, LLC (the “Mobrez Defendants”) filed a

Motion to Dismiss this case arguing that they were not subject to personal jurisdiction in

Arizona. Among other things, I am aware that as part of their argument, the MobrezDefendants suggest that Xcentric has “not alleged what effects it felt in Arizona, if any”

as a result of their unlawful conduct. Mot. at 25–26.

5. I believe that the harmed caused to Xcentric in Arizona by the Mobrez

Defendants’ unlawful actions is identified in numerous ways as outlined in ¶¶ 72(a)–(h)

of Xcentric’s Complaint.

6. However, to clarify and illustrate how much direct economic harm was

actually caused by the Mobrez Defendants to Xcentric in Arizona, attached hereto as

Exhibit A is an invoice summary sheet reflecting the total amount of attorney’s fees

($92,578) and the total costs ($6,330.12) that Xcentric paid to its Arizona litigation

counsel, Jaburg & Wilk for the defense of the action filed by the Mobrez Defendants

against Xcentric in California.

7. This total ($98,908.12) represents only the amount paid by Xcentric to the

Arizona law firm of Jaburg & Wilk for the work of my long-time attorney, Maria Crimi

Speth, who was admitted pro hac vice as counsel for Xcentric in the California action

This figure does not include any of the additional amounts that Xcentric paid to hire local

California counsel for that action, nor does it include the amount that Xcentric paid to its

general counsel, David Gingras, who works for Xcentric in Arizona but who is also

licensed to practice law in California and who represented Xcentric in that action, nor

does it include the value of the hundreds of hours of time that Xcentric’s Arizona-based

employees (including myself) spent dealing with the California action.

8. The nearly $100,000 in fees and costs Xcentric paid to Jaburg & Wilk, and

the additional fees paid to Xcentric’s general counsel David Gingras, was paid from

Xcentric’s bank account in Arizona to Jaburg & Wilk’s bank account in Arizona and Mr

Gingras’ bank account in Arizona. These funds represent significant economic losses




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that Xcentric incurred in Arizona that would not have been suffered but for the unlawful

actions of the Mobrez Defendants.

9. Prior to and during the course of the California lawsuit, the Mobrez

Defendants had significant contacts with me and with Xcentric in Arizona. Specificallyin April and May 2009, Defendant Raymond Mobrez called me in Arizona at Xcentric’s

primary phone number (602) 359-4357 on seven different occasions while attempting to

get me to remove several derogatory complaints about Mr. Mobrez and his business

which a third party posted on Xcentric’s website, www.ripoffreport.com. It is my

understanding that Mr. Mobrez’s wife, Ms. Llaneras, secretly listened to several of these

conversations without my knowledge. During this same time period, Mr. Mobrez also

sent me numerous emails inquiring about the same issues.

10. After the California lawsuit was commenced, the Mobrez Defendants and

their counsel served Xcentric with process in Arizona, and they traveled to Arizona on

several occasions as part of that case. Specifically, during the case I was deposed twice

in Arizona by the Mobrez Defendants’ counsel, and on a separate occasion Mr. Mobrez

and his wife Ms. Llaneras travelled to Arizona to meet with me to discuss settlement of

the action.

11. In addition, during the course of the California lawsuit, the Mobrez

Defendants, through counsel, sent numerous threatening letters to Xcentric in Arizona

which demanded that Xcentric remove information about Mr. Mobrez and his business

from the Ripoff Report website. These letters, examples of which are attached hereto as

Exhibit B and C, also demanded that Xcentric make other major changes to the Ripoff

Report website, as well as making substantial changes to Xcentric’s business practices in

Arizona.

12. In one such letter dated April 21, 2010, counsel for the Mobrez Defendants

demanded that Xcentric drastically change its business practices in Arizona by:

a. Ceasing the “continued publication of statements or posts that you have

solicited and published with reckless disregard for their truth or falsity”;




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b. “When a business or individual informs you of the false nature of posts, we

ask that you investigate to confirm the content or simply remove the post … .”

c. “Voluntarily remove the portion of your website which cautions its readers

against suing Rip-Off Report.”d. “Voluntarily remove the portion of your website that refers complainants to

class action attorneys.”

e. “Voluntarily refrain from encouraging, soliciting, and assisting users in

writing the most defamatory posts possible.”

f. “Voluntarily refrain from manipulating search results through the use of meta-

tags.”

g. “Negotiate with my clients in good faith for reasonable monetary damages to

compensate for injuries caused by your … business practices.”

13. The April 21, 2010 letter from counsel for the Mobrez Defendants

concluded with the following threat: “Please contact us as soon as possible if you would

like to discuss settlement and reformation of your client’s business practices. If not, we

will continue to litigate under the assumption that nothing short of a lawsuit will cause

your client to amend its business practices.” Exhibit B (emphasis added).

14. Although the vast majority of these demands were based on blatantly false

assumptions (i.e., Ripoff Report has never “encourag[ed], solicit[ed], and assist[ed] users

in writing the most defamatory posts possible”, so it could not agree to “refrain” from this

conduct), the demands made by the Mobrez Defendants generally attempted to force

Xcentric to change major aspects of the way it operates its business in Arizona

Specifically, each of the Mobrez Defendants’ demands required Xcentric and its Arizona-

based employees to take action (or refrain from taking action) in Arizona.

15. One obvious example of this was the Mobrez Defendants’ requirement that

Xcentric somehow “investigate” every disputed posting on the Ripoff Report website

As of October 2011, the Ripoff Report website contains more than 700,000 unique posts

with many millions of comments from users. Given the nature of these complaints, many




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are based on disputed facts. If Xcentric and its staff were required to “investigate” each

and every such dispute, this would require Xcentric to incur millions of dollars in

investigative expenses or simply cease its operations.

16. To be clear—Xcentric is based in Arizona, I live in Arizona and havecontinuously lived in Arizona for more than 20 years. In addition, all of Xcentric’s

employees live in Arizona. Xcentric has no offices outside of Arizona and no employees

in any state other than Arizona.

17. After I refused to comply with the Mobrez Defendants’ demands, they

continued to pursue their claims against Xcentric as aggressively as possible which

resulted in even greater harm to Xcentric in Arizona. As part of that effort, I am aware

that in October 2011, Mr. Mobrez and one of his attorneys, Lisa Borodkin, contacted my

former personal assistant, James Rogers, in Arizona and asked him to “load up a suitcase

with documents” (meaning to steal Xcentric’s confidential business documents) in

Arizona and to fly from Phoenix to Los Angeles with those documents. I am aware that

Mr. Mobrez and Ms. Borodkin actually purchased a plane ticket for Mr. Rogers in

anticipation of this trip despite knowing that Mr. Rogers had entered into a non-

disclosure agreement with Xcentric which would have precluded him from providing any

of Xcentric’s documents to the Mobrez Defendants without a court order.

18. After disclosing these events to me and realizing that his actions were

wrong, Mr. Rogers declined Mr. Mobrez’s and Ms. Borodkin’s efforts to induce him to

breach his non-disclosure agreement with Xcentric and Mr. Rogers ultimately did no

travel to Los Angeles.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the

United States of America that the foregoing is true and correct.

EXECUTED ON: October 12, 2010.

______________________________________ Edward Magedson




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CERTIFICATE OF SERVICE

I hereby certify that on October 12, 2011 I electronically transmitted the attached

document to the Clerk’s Office using the CM/ECF System for filing, and for transmittalof a Notice of Electronic Filing to the following:

Hartwell Harris, Esq.LAW OFFICE OF HARTWELL HARRIS

1809 Idaho AvenueSanta Monica, CA 90403Attorney for Defendants

Raymond Mobrez

Iliana Llaneras andAsia Economic Institute, LLC

John S. Craiger, Esq.David E. Funkhouser III, Esq.

Krystal M. Aspey, Esq.Quarles & Brady LLP

One Renaissance SquareTwo North Central Avenue

Phoenix, Arizona 85004-2391Attorney for Defendant Lisa J. Borodkin

And a courtesy copy of the foregoing delivered to:HONORABLE G. MURRAY SNOW

United States District CourtSandra Day O’Connor U.S. Courthouse, Suite 622

401 West Washington Street, SPC 80Phoenix, AZ 85003-215

/s/David S. Gingras




Exhibit A




3200 N. Central Avenue, 20th Floor, Phoenix, AZ 85012

jaburgwilk.com

10297-70/MCS/DAG/928863_v1

Gary J. Jaburg

Lawrence E. Wilk

Roger L. Cohen

Mitchell Reichman

Beth S. Cohn

Kraig J. Marton

Scott J. Richardson

Ronald M. Horwitz

Kathi M. SandweissMervyn T. Braude

Lauren L. Garner

Maria Crimi Speth

Michelle C. Lombino

Neal H. Bookspan

Janessa E. Koenig

Mark D. Bogard

David N. Farren

Valerie L. Marciano

David L. Allen

Laurence B. Hirsch

Susan E. Wells

Bridget O'Brien Swartz

Jennifer R. Erickson

Kelly Brown

Adam S. Kunz

Laura A. Rogal

Sharon R. Sprague

Amy M. Horwitz

Nichole H. Wilk

October 5, 2011

Re: Asia Economic Institute, LLC, et al. v. XcentricVentures, LLC, et al.

Total Billed:

Fees $92,578.00

Costs $ 6,330.12




Exhibit B




Exhibit C




ASIA ECONOMIC INSTITUTEDaniel F. Blackert

1

Lisa J. Borodkin

1766 Wilshire Blvd., Suite 260

L

Tel. 25

os Angeles, CA 90025

(310) 806 3000 ext. 2‐

Fax (310) 826‐4448

July 10, 2010

David Gingras, Esq.

selGeneral Coun

Xcentric Ventures, LLC

.O. Box 310

280

P

Tempe, Arizona 85

Maria Crimi Speth

Jaburg & Wilk P.C.

3200 N. Central Avenue

uite 2000

85012

S

Phoenix, Arizona

Re: Asia Economic Institute, LLC v. Xcentric Ventures, LLC

Central District California Case No. 10 CV 1360 (SVW PJW)

D a d Maria:

Further to our letter of April 21, 2010, am writing pursuant toalifornia Code of Civil Procedure Section 1021.5 in an effort to settle aspects of this

ear D vid an

C

case without need for future litigation.

In addition to the business practices identified in our April 21, 2010

etter, we also demand that Defendants Xcentric Ventures LLC, Edward Magedsonl

and their attorneys immediately:

1. Permanently cease making statements to the effect of “WE DO

NOT remove any Rip‐off Reports” or “we do not remove a submitted Rip‐Off Report ,

and we never will,” whether by email, on the Internet or otherwise, particularly in

connection with mention of the Corporate Advocacy Program. We have reason toelieve that these statements are false, misleading, and designed to distress and

nfluen e the p lic t

b

i c ub o consider paying money to your clients.

2. Redact any unsubstantiated references to “tax fraud” in

eports, consistent with the testimony of Xcentic’s 30(b)6 witness.r

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We make this demand on behalf of our clients, Asia Economic

nstitute, Raymond Mobrez and Iliana Llaneras, and an unknown number of affectedi

residents of the State of California.

If you do not voluntarily amend your business practices, we intend to

pursue all available remedies, which may include (as we discussed in our April 21,

2010 letter and our Rule 16 conference on June 24, 2010) attorneys’ fees underCalifornia Code of Civil Procedure 1021.5, which permits a Court to “award

attorneys' fees to a successful party … in any action which has resulted in the

nforcement of an important right affecting the public interest … .”e Vasquez v. State

o of Calif rnia, 45 Cal. 4th 243, 250 (Cal. 2008).

This action is in the public interest and enforces the public’s right not

ecklessly or maliciously defamed or put into a false light, amongto be unfairly, r

ther t ings.o h

This letter is not a waiver or admission of any right, remedy, claim or

defense, all of which are hereby expressly reserved.

Very truly yours,

/s/ Lisa J. Borodkin

Lisa J. Borodkin

Daniel F. Blackert

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