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ConsumerAffairs.com presents itself as a forum for consumers to air their gripes about everything from allegedly explosive Martha Stewart patio furniture to predatory lenders. James Hood, a former reporter, launched the Web site a decade ago and was shrewd about naming it — given there are dozens of public “consumer affairs” agencies around the country that levy fines against offending businesses or shovel complaints to attorneys general for legal action. ConsumerAffairs.com’s answer is to pipe the complaints to lawyers at the Chicago-based law firm Horwitz, Horwitz & Associates, who pick through them for potential class actions. There are some — namely, Tom Nemet, owner of Nemet Motors in Jamaica, Queens — who say the Los Angeles�based Web site is more interested in helping lawyers find leads than in serving consumers. Earlier this month, Nemet filed a defamation suit against ConsumerAffairs.com in U.S. District Court for the Eastern District of Virginia, alleging that the Web site has been publishing “false, malicious and libelous” complaints about his business. He has sued ConsumerAffairs.com twice before in New York federal court, but dropped the suits before they were dismissed on jurisdictional grounds. This time, Nemet says he’s got the jurisdiction problem licked. Outside of California, ConsumerAffairs.com Inc. has offices in Fairfax, Va., and in Washington, D.C. Most of the editorial staff — there are about 10 writers — are based there. Nemet has hired a team of D.C.-based lawyers at Patton Boggs to help him recover $2 million in monetary relief and punitive damages, and he wants the court to make Hood remove the complaints. “My competitors started using [the complaints] against me,” Nemet says. “I knew I had to do something, and I got a very, very powerful law firm.” Nemet met Thomas Boggs about 30 years ago, when the famed lawyer-lobbyist was working on behalf of Auto Dealers and Drivers for Free Trade, or Autopac. Nemet was the organization’s chairman at the time. Hood, a former Associated Press reporter and vice president at United Press International, says the complaints against Nemet are protected speech. He will not take them off the site, unless ordered to by the court, he says. “They’re pretty much up there forever,” he says. Hood says Stephen Shannon, special counsel at Odin, Feldman & Pittleman in Fairfax, will handle his defense. In one of seven complaints cited in the lawsuit, “Esther of Jamaica, N.Y.” says she was told by a salesman that she had to buy a $2,500 extended warranty and a $1,195 alarm system. “Now I am stuck with a car loan for $28,500 for a car that is worth about $23,500,” she wrote on the Web site. “These statements are false,” the lawsuit states. Esther signed a contract with Nemet and “now suffers from buyer’s remorse.” The lawsuit also accuses the Web site of tortious interference and a violation of the Lanham Act, a law often used when false or misleading statements are alleged to have harmed a business. Nemet and his lawyers say that ConsumerAffairs.com’s name is likely to deceive consumers, who can’t tell it apart from the state agencies, like the New York City Department of Consumer Affairs. “ConsumerAffairs.com misleads the public because its actual purpose appears to be to sell online advertising and refer matters to attorneys for litigation rather than assist the consumer,” says Patton Boggs partner Benjamin Chew. The Web site survives on ad revenue, some of which is generated by consumer attorneys. But Hood says he and the lawyers who review the complaints stay out of each other’s affairs. “We don’t split fees; we don’t have any kind of commission or bonus agreement with any law firm of any kind,” he says. Hood declined to name the lawyers associated with the site, but Horwitz, Horwitz & Associates advertises on its Web site that it “works closely with ConsumerAffairs.com.” The firm declined to comment on its work for the Web site. Hood estimates that complaints on ConsumerAffairs.com have spawned 50 or 60 class actions. (They have also drawn heat. “We get sued with regularity,” Hood says, though he wouldn’t give a figure.) Horwitz lawyers are currently handling a class action against Martha Stewart Living Omnimedia Inc., and KMart Corp. over shattering glass-top patio tables. The plaintiffs were recruited on ConsumerAffairs.com.
Joe Palazzolo can be contacted at [email protected].

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