Ventures v. King

131 F. Supp. 3d 677, 2015 U.S. Dist. LEXIS 124896, 2015 WL 5545066
CourtDistrict Court, W.D. Kentucky
DecidedSeptember 18, 2015
DocketCivil Action No. 4:15CV-28-JHM
StatusPublished
Cited by4 cases

This text of 131 F. Supp. 3d 677 (Ventures v. King) is published on Counsel Stack Legal Research, covering District Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ventures v. King, 131 F. Supp. 3d 677, 2015 U.S. Dist. LEXIS 124896, 2015 WL 5545066 (W.D. Ky. 2015).

Opinion

MEMORANDUM OPINION AND ORDER

Joseph H. McKinley, Jr., Chief Judge, United States District Court

This Matter is' before the Court on cross-motions by Plaintiffs, Finance Ventures, LLC (“Finance Ventures”) and its founder, Rick Maike (“Maike”), and Defendant Charles “Chuck” King (“King”). Plaintiffs' move for, partial summary judgment on their defamation claim (Count I) [DN 13] and Defendant moves to dismiss Plaintiffs’ Verified Complaint [DN 12]. Fully briefed, these matters are ripe for decision.

I. BACKGROUND

Finance Ventures is a multi-level marketing (“MLM”) company formed in Wyoming as a Limited Liability Company with its principal place of business in Daviess County, Kentucky. The company also has several registered trade- names ‘in Wyoming, including “Global 1 Entertainment,” or “G1E,” and “Infinity 2 Global,” or “I2G.” Plaintiff Maike resides in Daviess County, Kentucky- and is Finance- Ventures’s founder as well as a member of the, company.

As an MLM, Finance Ventures utilizes distributors, referred to as “mdependerit business owners” or “IBOs,” to sell products and services to consumers. According to Finance Ventures, it maintains a network of approximately 18,000 IBOs worldwide who earn a commission based on their marketing of Finance Ventures’s [682]*682products and services. Defendant King became an IBO with Finance Ventures on January 7, 2014. [Answer, DN 7, at ¶ 4] (admitting that King “became an IBO on or around January 7, 2014”). In doing so, King also signed Finance Ventures’s standard IBO Agreement. Id.

A. King’s “Side Operation”

Beginning in April 2014, King, without the approval of Finance Ventures, launched a “side operation” in which he used direct mail solicitation to obtain leads from consumers who might be interested in Finance Ventures’s products. [Compl., DN 1, at ¶ 16]. Then, King contacted other IBOs who were interested in using these leads and charged them to be part of this direct mailer group. Id. The direct mailer focused on promoting Songstagram, a music video application, and an online gaming application. Id. at ¶¶ 18, 20. The success of King’s direct mailer is unclear but the ultimate outcome is. Id. at ¶ 22. Several of the individuals who joined King’s mailer group sought refunds from him. Id. In turn, this seemed to have prompted King to create http://i2gfullrefund.com, an interactive website, and to upload numerous videos on YouTube. Id. at 24. The claims made by King on his website and in the videos form the basis of Plaintiffs’ Verified Complaint [DN 1].

Defendant’s website encourages current IBOs to join his group arbitration against Finance Ventures in order to . obtain a refund from the company. [Ex. Al-web-page from http://i2gfullrefund.com, DN 13-2]. The website includes a section where interested IBOs can fill out a form with their mailing information and state why they want to arbitrate with Finance Ventures. Id. According to the website, interested IBOs are required to pay Defendant a nonrefundable fee, calculated based on the number of IBO positions they purchased,1 in order to join the group arbitration. Id. Although the text of the website does not fully explain the extent of the refund being sought, King’s YouTube videos indicate that he intends to recover for “(1) money IBOs paid to King for his direct mail solicitation side operation... (2) initial and monthly payments made to Finance Ventures ..., and (3) additional amounts from Finance Ventures for commission from applications .... ” [Mem. in Support of Pis.’ Mot. for Partial Summ. J., DN 13-1, at 5].

B. King’s Alleged Defamation and Libel

In Count I of Plaintiffs’ Verified Complaint, they allege that Defendant King, by way of a website, e-mails, and YouTube videos, has disseminated defamatory statements and libelous material about Finance Ventures and Maike. [Compl., DN 1, at ¶¶ 53-57]. Based on a review of all the material circulated by Defendant, Plaintiffs believe that King’s alleged defamatory and libelous statements fall within one of five themes. Plaintiffs describe those themes as follows:

(1) that the company’s online gaming application is deceptive and had ceased to exist ...; (2) that Plaintiffs used the Songstagram application as a “bait-and-switch” and that Plaintiffs did not have the right to promote Songstagram; (3) that Finance Ventures fraudulently recreated the “Infinity 2 Global” trade name as “Global 1 Entertainment” in an effort to steal IBOs’ funds and keep its products, and services hidden; (4) that Finance Ventures does not provide any products or services, but rather is sell[683]*683ing illegal investments; and (5) that Maike, and- others affiliated with Finance Ventures, were personally responsible for the sudden shutdown of another MLM operation known as Bidxcel.

[Mem. in -Support of Pis.’ Mot. for Partial Summ. J., DN 13-1, - at 11-12], At various times in Defendant’s YouTube videos, he has assured viewers that the statements he is making are true. See, e.g., [Ex. B, Video 36, at 2:15] (“Everything I said was 100% true: Everything I state on my videos is 100% fact. ... I have the right to call you whatever I want to in my opinion. ... This is my opinion, and my opinion only. And it will show up that I was ip.0% correct.”). Accordingly, Plaintiffs move for partial summary judgment for alleged defamatory statements made by King.

II. Motion to Dismiss [DN 12]

This Opinion involves three different matters raised by the parties’ two cross motions. The first two issues are those raised solely by Defendant King. In his motion to dismiss, Defendant asserts that Plaintiffs’ Verified Complaint must be dismissed for lack of personal jurisdiction. Additionally, Defendant raises the question as to whether some or all of Plaintiffs’ claims are barred by the arbitration-section contained in the IBO Agreement. Lastly, both parties seek summary resolution as to Plaintiffs’ defamation claim. Defendant moves to dismiss the claim while Plaintiffs believe that summary judgment should be granted in their favor.

A. Personal Jurisdiction

The Court will first address the Defendant’s motion that the complaint should be dismissed for lack of personal jurisdiction. The burden is- on Plaintiffs to demonstrate that jurisdiction exists. See Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). To make such a showing, “the plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction.” Id. Further, when presented with a Rule 12(b)(2). motion, “the court has three procedural alternatives: it may , decide the motion upon the affidavits alone; it may permit discovery in aid of deciding the motion;- or it may conduct an evidentiary hearing to resolve any apparent factual questions.” Id. (citation omitted).

Plaintiffs have not sought an evidentiary hearing nor does the Court believe the facts require one. If the court determines the. jurisdictional issue on written submissions-only, the plaintiff “need only make a prima facie showing of jurisdiction.” Compuserve, Inc, v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996).

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Cite This Page — Counsel Stack

Bluebook (online)
131 F. Supp. 3d 677, 2015 U.S. Dist. LEXIS 124896, 2015 WL 5545066, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ventures-v-king-kywd-2015.