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Quixtar, Inc. has insisted that Scott Larsen and
other Internet critics stop circulating false and
misleading information that has the potential for
harming the entire IBO world and, of course, Quixtar
itself. Following is an exchange initiated by
attorney James Sobieraj on behalf of Quixtar,
Larsen's pretty abject apology, and a follow-up
letter from Sobieraj, all of which make it perfectly
clear that Mr. Larsen has been allowing his website
to be used as a bulletin board for totally
unverified and usually false information, regardless
of the consequences to others.
April 28, 2006
Dear Mr. Larsen:
We are outside counsel for Quixtar Inc. We have been
retained to address the recent posting you placed on
your website entitled "Do Mona-Vie products Compete
with Quixtar's?" It contains numerous false and
misleading statements. We demand that you take
immediate corrective action.
You state that Amway paid the Recording Industry of
America ("RIAA") $13.5 million to settle a copyright
suit. This is false. You then falsely state that the
reason for the settlement was "so that the King Pins
books would not be opened up in discovery." In fact,
the RIAA did take and receive discovery before the
case was settled. You then describe what happened
during a JAMS arbitration between Mr. Gooch and Mr.
Anderson, as if you were a first-hand observer to
the whole process. In fact, the Gooch-Anderson
arbitration process was confidential. You do not
know the whole story and have no business falsely
implying otherwise.
You next falsely accuse Quixtar of "using the JAMS
arbitration to keep him (Anderson) from earning a
living." It is very clear in Quixtar's arbitration
demand, which Mr. Anderson published on his website,
and you republished on your site, that Quixtar is
not trying in any way to stop Mr. Anderson from
being a MonaVie distributor. Quixtar only asks that
Mr. Anderson not use Quixtar's trade secrets and not
raid independent Quixtar businesses in building a
new MonaVie distributorship. It is not fair for him
to use the fruits of Quixtar's labor and the labor
of numerous independent Quixtar businesses to try
and jumpstart a MonaVie business in a matter of
months.
You then suggest that there is no real competition
between Quixtar and MonaVie. Your uninformed and
incorrect statements ignore the reality that Quixtar
and MonaVie are both multi-level marketing
businesses ("MLMs"). They directly compete in their
efforts to recruit and retain persons who chose to
participate in an MLM. You also completely overlook
the harm to Quixtar when it loses prospective and
current IBOs because of exaggerated earning claims
by other MLMs. You also mislead by failing to
mention that several of Quixtar's Nutrilite-brand
nutritional products that are competing alternatives
to MonaVie's nutritional drinks.
Please take immediate action to correct your website
and retract these false and damaging statements in
writing with each person to whom you have made them,
online or offline, to include all who have already
published these statements. Furthermore, please
immediately confirm your agreement to cease and
desist from making these and similar false
statements.
We look forward to receiving your response and
evidence of your steps to correct these statements
within 24 hours.
Sincerely,
James R. Sobieraj
BRINKS HOFER GILSON & LIONE
April 29, 2006
Dear Mr. Sobieraj,
Thank you for your note expressing your client's
concerns. In my effort to educate readers about
matters of public interest and concern, I strive to
be as accurate as possible. I speak with sources and
review documents and sincerely believed that
everything I had published was truthful.
Especially since I have not received any complaints
for over a year (my understanding of Michigan's
statute of limitations for defamation), this only
further strengthened my belief that what I had
published was truthful and accurate.
Now that you have raised concerns, however, I want
to make sure that I have the right information and
am hopeful that you and/or your client will help me
in that effort.
Let me explain some of the reasons I published the
information. When I spoke with Mr. Luster on the
phone in March of 2005, he told me the total paid to
all parties in the lawsuits was about $13.5 million.
I'm not mistaken there was the RIAA and the National
Music Publishers Association, and possibly others.
If I was mistaken as to how much each party received
then I want to correct that information. In other
words, it does appear as if the RIAA may not have
received the full $13.5 million.
Since your note I have reviewed the documentation on
the web and found that the RIAA received $9 million
alone. I went to the Associated Press website
http://www.ap.org/ and found this headline.
"Amway pays $9 million to settle copyright
infringement suit Associated Press. New York: Mar
25, 1998" As requested I will modify the page to
reflect the $9 million paid to the RIAA. I will
assume that information is correct unless I hear
otherwise from you. I could not find out how much
the National Music Publishers Association was paid.
Can you please provide me with that information or
tell me how I can obtain it? I searched the website
http://www.brinkshofer.com/resources.cfm?case_id=16
and found the Amway case. It stated "In September of
1997, after some discovery was completed, the
parties entered into a confidential settlement
agreement." I assume that after all these years
there is no need to continue to keep that
information confidential.
I also spoke with Bruce Anderson this morning. He
restated again that he clearly remembers being in a
meeting in Atlanta in the presence of Doug DeVos
saying, "if there was not a settlement soon, the
Judge would allow discovery into everybody's books".
Anderson stated to me that Foley's and Gooch's books
were not yet reviewed. In order to [prevent this
discovery, Amway settled.] Mr. Luster also told me a
similar story during my March 2005 phone call with
him. To avoid any further issues, however, and in
the spirit of cooperation, I will remove the
statement "that the King Pins books would not be
opened up in discovery." from my page.
I'm sorry if was I interpreted to be an expert in
the Gooch-Anderson Case-that was obviously not my
intent. I am not an expert, but I did spend a lot of
time reading all the documents that were on Mr.
Anderson's web site. I believe Mr. Anderson had
published all of these documents on his site and I
am in possession of all the files from his website.
To my knowledge the arbitration documents are also
on file with Florida 17th Judicial Circuit court and
some are now on my website. I reviewed the documents
and Mr. Anderson's site and wrote my analysis of
them. Mr. Anderson's case is very unusual, and I
believe that it would be beneficial if there were
more public debate on the subject as it is my
opinion that a great injustice was done to him.
I am sorry if I did not expressly state it here but
in this case, as with much of my writing, I am
expressing my opinion. Most readers are able to
glean that easily from the tone, tenor and content
of my website. And while I believe that I am well
within my First Amendment rights to do so, again in
the spirit of cooperation and the desire to be as
accurate as possible, I will remove the wording and
highlight the "raiding issue" and state that "Quixtar's
complaint does have some exhibits with E-mails about
Anderson prospecting Quixtar existing IBOs for his
new venture." I expanded my reporting on nutritional
benefits of MonaVie, and also added some notes on
the three anti-oxidant pills Quixtar has that might
be substitutes for the MonaVie whole fruit drink
product. Additionally I have clearly noted where I
state my opinion to avoid any future issues.
When writing about any subject, including the
public-figure corporation Quixtar, it is not my
intent to make any false statements and I didn't
make any knowing false statements here and do not
intend to do so in the future. It seems that other
than perhaps a minor mix-up with the RIAA settlement
figure - which clearly did not alter the "gist or
sting" of my posting, the only thing that perhaps I
can be even more clear on is what was my opinion and
what was not.
I will repost the revised page with a note on my
"what's new page" as being updated. Those who read
the page before will have an opportunity to see the
changes. I hope and trust the revised page will meet
your client's expectations. I further hope and trust
that these good-faith efforts on my part, coupled
with the First Amendment protections applicable here
(statute of limitations, opinion, actual malice),
would preclude any threat of litigation.
Should you have any other concerns, please do not
hesitate to write.
Best Regards,
Scott Larsen
May 4, 2006
Dear Mr. Larsen:
Thank you for promptly removing from your web site
false information which you published without
confirmation of the truth.
It is surprising that, as someone who holds himself
out as a careful and thorough researcher of Quixtar,
you would rely on Mahaleel Lee Luster as a trusted
source for information concerning the RIAA
litigation. If you had made any effort to research
Mr. Luster's credentials, you would have found that
Luster has been guilty of felony perjury and a
misdemeanor obstruction for lying to police in an
official investigation. I have
attached .pdf files
with some examples of references found in the public
domain about Luster's criminal activities.
One of the articles recounts a number of criminal
charges against Luster, including that he was a
"registered ex-felon in California for perjury."
These articles are just a sampling of the extensive
publicly available information on Mr. Luster that
would lead any fair-minded person to doubt his
credibility. Is a person found guilty of multiple
crimes, including perjury and obstruction, the type
of person you trust to tell the truth?
If you had done a fair and reasonable investigation
you also would have learned that Mr. Luster was
directly responsible for copyright infringement in
the RIAA case. He was the producer who copied music
onto videotapes, and misrepresented to IBOs that he
had permission to do so. Claims of legal liability
against them in the case were derived from Luster's
copying, when he pointed the finger at them to avoid
legal liability.
It also is interesting that you seek to shield
yourself from liability by invoking the statute of
limitations for defamation. Does this mean that you
believe it is appropriate to republish false
information simply because you think you're less
likely to be prosecuted? If so, you are mistaken. We
will demand that you correct statements when we feel
it is necessary.
We cannot provide you with information that is
subject to a confidential settlement agreement, as
you have requested. It is not for you to decide when
the information is no longer confidential. If you
induce someone else to release information to you,
in violation of a confidentiality agreement, you may
expose yourself to liability.
Sincerely,
James R. Sobieraj
BRINKS HOFER GILSON & LIONE
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