FREEHOLD, N.J. - An amended and supplemental complaint was filed in federal court this week in NR Media's lawsuit against Too Much Media, creator of the NATS back-end affiliate program software, and Chief Executive Officer John Albright.
The original suit, filed in August 2006 by NR Media subsidiary Naked Rhino, claims the defendants are responsible for destroying Naked Rhino's business through "intentional and reckless online Internet verbal assaults concerning the reputation and operation of Naked Rhino, as well as [Too Much Media's] suspension of Naked Rhino's online payment processing, reporting and affiliate management system (NATS)."
At the center of the dispute is a post Albright made on GFY.com's message board. In the post, he said he had suspended the NATS license for XclusiveCash, Naked Rhino's affiliate program, because he believed the company was shaving, or altering sign-up and re-bill statistics in order to cheat affiliates, after a discrepancy between the number of re-bills reported by payment processor CCBill and the number reported to the NATS system.
Too Much Media filed its own suit that same month, directly accusing NR Media of fraud, an allegation based on a discrepancy between the number of re-bills reported in NATS and the number reported by payment processor CCBill during the same time period. The filing says Too Much is "bringing this action to restrain apparent fraud by NR Media and ascertain the extent of that fraud."
Charles Carreon, general counsel for NR Media, told AVN Online the new information filed in federal court this week was necessary because since the original complaint was filed, "things have happened that affect the disposition of this case."
Of note, he said, was Too Much Media's recent annoucement of a security breach in December 2007. The breach of Too Much Media computers allowed hackers to access various adult websites' subscriber lists. Personal and company information was used to bombard subscribers with junk emails advertising sexually explicit images from competitors. No credit information appears to have been stolen.
But that breach, Carreon said, adds to NR Media's claim that Albright's statement was used to not only ruin NR Media's reputation, but also deflect attention away from NATS, which has been heavily marketed as shave-proof. The original complaint reads, in part, "the 'shave-proof' NATS program was the real likely cause of the missing re-bills."
The court has not scheduled a hearing for the amended claim.
