RedTube Drops $6M Suit Over Traffic Redirection

May 27, 2010 10:30 AM PST
SAN JOSE, Calif. — RedTube has dropped its legal quest to seek out the parties that redirected all of its traffic last July, XBIZ has learned.

RedTube parent company Bright Imperial Ltd. of Hong Kong had waged a $6 million suit in damages against the unknown defendants named as John Does 1-20 who may have been responsible for the July 24 incident.

In its complaint, RedTube said defendants hacked in “with malice, ill will and intent to harm [the tube site].” RedTube said it lost “millions of visits” by its customers by the hackers’ efforts, as well as lost value to advertising rates that are dependent upon its traffic.

Thayer Preece, an attorney with the Menlo Park, Calif., office of Sheppard Mullin Richter and Hampton, which handles all of RedTube’s civil litigation, was not immediately available to answer XBIZ queries on why the tube site decided to retreat.

Preece became central to the case last year after she received an email threat over her litigation work with RedTube.

The threat to Preece on Oct. 18 said, "Anyone who works with them or an attorney who represents them should ask themselves who they're working for and what they're being paid to do — it really just might not be worth it in the end.”

But Preece, in an interview with XBIZ earlier this year, said RedTube had trouble identifying the perpetrators of the July 24 redirection and was seeking to subpoena 20 John Doe defendants named in the suit filed at U.S. District Court in San Jose.

At one point, RedTube attorneys were able to subpoena Chad Taylor, aka Gunner, over his possible involvement. RedTube wanted to depose Taylor because it was he who sent Preece the threatening email.

His attorney, Michael Fattorosi, told XBIZ that Taylor sent the email because he was "annoyed at RedTube's business model."

"I did what I felt is right; my convictions are strong," said Taylor in a statement provided by his attorney. "[RedTube's decision to drop the case] brings closure."

The suit claimed violation of the federal Computer Fraud and Abuse Act, unfair competition, tortuous interference with prospective business advantage and trespass.

RedTube, which said it lost “millions of visits” by its customers by the hackers’ efforts as well as lost value to advertising rates that are dependent upon its traffic, has about 7.5 million daily users in the U.S.

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