Hollywood Extortion II: “Bachelor” Producers vs. “Reality Steve” Lawsuit Follow-up

This article is Part 2 of ongoing coverage of the Reality Steve Extortion Lawsuit.


It seems that no matter what I write, thoughts will hit me AFTER I finish writing a post. That is the case with my previous post “Bachelor” TV Producers Extortion Lawsuit Against “Reality Steve”. And here I am, writing a follow-up to get it out of my system. As was the case with the last post, I am not a lawyer but I have represented myself in a number of legal matters and I know just enough to be dangerous. That is my disclaimer.

It has been stunning to me the superficial coverage given to the “Reality Steve” lawsuit despite his huge readership and the amount of coverage by the entertainment/tabloid websites. So much focus has been given to Carbone’s alleged emails and the “juicy” gossip angle of Carbone allegedly offering money in exchange for information in an industry that does this as a matter of course. But there has been almost nothing about the larger and more serious ramifications of this lawsuit.

It is quite apparent with the entertainment/tabloid reporting I see that there is ZERO discussion on what the truly important fundamental issues are.  The issue of freedom of speech, free press, reporters privilege, and his right to engage in free, open speech, and free reporting is at stake here.  The legalities and circumstances of this case are of public interest and there is no question that Carbone is a victim of heavy-handed “Hollywood extortion”.  For years, media companies of all kinds have continued their extortionate, bullying assault and tactics on individuals. (Righthaven lawsuits, P2P/Bittorrent lawsuits,  RIAA lawsuits, etc.) This one is no different.

There are the plaintiff arguments of “continued interference” designed to squelch Carbone into silence by grinding him away on the defense legal fees. But there has been no direct evidence or even claims of direct evidence I can see that Carbone was ever successful in his attempts. The alternative “victory” the “Bachelor” producers are looking for is to force Carbone to give up his confidential sources which is a clear violation of his reporters privilege.

Carbone is very much a Hollywood outsider messing up the Hollywood “natural order” where everyone falls into line within that monolithic industry. Carbone has uprooted the entertainment reporting/tabloid industry by showing everyone that a single individual can make a HUGE difference and he is making up his own rules as he goes.

If I were to accept Carbone’s claims as fact regarding the last few years of receiving spoiler information, it appears that Carbone has accidentally tapped into the power of Internet crowdsourcing. From Wikipedia, “Crowdsourcing is a distributed problem-solving and production process that involves outsourcing tasks to a network of people, also known as the crowd. This process can occur both online and offline. The difference between crowdsourcing and ordinary outsourcing is that a task or problem is outsourced to an undefined public rather than a specific other body.”

In simple terms, Carbone’s huge readership acts as his eyes and ears and does a lot of the footwork for him gathering information and emailing it to him. He organizes, corroborates, and comments on information to the best of his abilities. He knows his reputation is at stake and there is no incentive to get it wrong. To people’s amazement, he has foot-soldier fans that do this “work” happily, freely, voluntarily, and anonymously. They do this because they believe in Carbone’s stated cause and mission: spoiling and making fun of the “Bachelor Series” reality shows.

Hollywood, with its dictatorial power structure, gets power from strict organizational hierarchy by appealing to people’s inherent desires of greed, fame, and fortune with the nice insurance policy of heavy-handed confidentiality agreements. Because of the enormous wealth, fame, and fortune that Hollywood can bestow, no Hollywood attorney is going to beat down Carbone’s door to represent his relatively small blogging interests. In fact, even if Carbone offered to pay money, it wouldn’t be enough for most Hollywood lawyers because it would be political and financial suicide to undercut the Hollywood entertainment machine.

On the opposite end, Carbone with relatively little help, guidance, and legal representation, despite his sarcastic “Reality Steve” persona, gets his primary power by appealing to and entertaining his readership and tapping into the crowdsourcing phenomenon.  He is the figurehead that people look to fulfill the mission and they are more than willing to help him do it. There is the inner gratification of being a team player in a community for a person they like and respect.  I consider myself a faceless reader that decided to do something more than sit on the sidelines watching him get slowly and silently tortured by the legal process while the lawyers profit from this.

The reason why I can comfortably claim crowdsourcing is that ELI is a beneficiary of this phenomenon. People email me nearly every day about their extortion letter cases. All that collective information gives me an insight most individuals don’t have and allows me to be a strong advocate and figurehead for them.  I take this role seriously and do not abuse that privilege. In other “amateur” investigations I previously led, all kinds of people approached me through email and phone calls with their “secret” information. It’s amazing the information you get and what people will tell you if you are a figurehead of a cause and promise and respect confidentiality.

Hence, it’s irrational to think that with such open, on-location, continent-jumping production of the “Bachelor Series” shows that bystanders and fans would not get wind of which show participants are left standing and tell Carbone about it. Ben Flajnik’s season was clear evidence of this. Let’s face it, people will innocently gossip, which will make its way outwards.  It is also irrational to think that Carbone doesn’t have access to thousands of foot-soldier fans volunteering to be his eyes and ears.  Someone should go check out his incredible Alexa ratings. Don’t take my word for it regarding the Reality Steve traffic.

Quite simply, what “The Bachelor” producers are doing is trying to destroy this Internet crowdsourcing effort that Carbone harnessed whose simple mission is to find out what happens next on the “Bachelor Series” reality shows.

As a fan of superhero and science-fiction movies where secrecy is the norm and paramount (no pun intended), NONE of the movie production companies seem to sue bloggers, even those that spoil the movies. Witness the recent photo leaks of Star Trek 2. The producers led by JJ Abrams are upset, but they don’t seem to be on a rampage to go suing someone. You know why?  It isn’t smart, they aren’t that insecure, and they know that it is based on LOVE and PASSION of the movie, not hatred.  In fact, owners of the Star Trek franchise have gone out of their way to embrace bloggers who talk about them and intentionally “leak” information to them. There is a peaceful co-existence. Contrast that to how Carbone is being vilified and attacked. How insecure, childish, and short-sighted the producers are.

It is also plain bad PR to sue one of your largest readership and fans just because you don’t like the way they express their opinions.  A casual visit to RealitySteve.com shows that even his harshest critics read and visit his site.  That says something when even haters feel compelled to tune in and comment to Carbone’s online musings. Just like Carbone says in his blog, the Bachelor shows may get trashed all the time but, guess what? They get the viewership anyway.  Yes, even Carbone’s viewership when he does his reviews.  In many ways, Carbone is probably the singular most powerful blog marketing machine for the “Bachelor” reality shows but the producers are too dumb and short-sighted to see this. They cannot see “Reality Steve” for what it is: another entertainment reporting/tabloid outlet with a very loyal and niche following.  Most people and businesses would kill to tap into that readership but the not the producers.  Because they are so wonderfully smart and insightful.  They are even smarter than the producers of the movie franchises.

I was talking to a lawyer friend about the worst-case scenario for Carbone. From what little I know of Carbone (I have never met or spoken to the man only what he shares on his entertainment site), Carbone doesn’t strike me as a wealthy guy.  He is a middle-class guy with maybe some savings in a retirement account and maybe a few bucks for a rainy day.  Assuming Carbone did lose, what does that truly mean?  If “Bachelor” producers score a court win, how does that translate into reality? (no pun intended). I took the time to revisit the original legal complaint and played a “what if” game if Carbone lost on ALL counts.

Certainly, it would send a chilling message and legal precedent to others who want to be in the spoiling (behind-the-scenes entertainment reporting) business.  But then, the “Bachelor” producers would also kill off one of their best and largest “Bachelor” blog marketing machines on the Internet.  Do they truly care about legal precedent or keeping the “Bachelor” franchise going?  My guess is the franchise is more important.  The aftermath would certainly send ripples of negative publicity of their “winning victory” over one-man show and clear underdog Carbone.

Every season of the “Bachelor Series” shows, going forward, would inevitably be tainted by gossip of how the “Bachelor” producers killed off and squashed Reality Steve with their extortion and bullying tactics.  And I guarantee you, all the tabloids would pick up the story.  This would probably be a case study discussed for years to come in journalism and law classrooms.  It would be a marketing and PR case example of what NOT to do with the biggest blogger of your fan base. The blogging community would be up in arms about one of their own being brought to financial ruin and silenced by “Hollywood extortionists” who had such poor organizational management skills to contain their own show production.

Although I have never met or spoken with Carbone, I very much consider Carbone a kindred spirit as a blogger. Certainly, his online reach and stature is far greater than mine, but we are fellow bloggers and entrepreneurs who use the power of the Internet to serve others. I inform and educate. Carbone is in the entertainment business.

Let’s say “Bachelor” producers won a monetary judgment of anywhere between $1 to $40,000, Carbone could probably pay this off and retain his ability to freely speak out (which is very important).  $40,000 is the price of a luxury car. He could pay this off within a few years assuming he even bothered to cooperate. A monetary judgment would ding his credit but he can join the other millions of people who had their credit dinged living through the recession. If Carbone doesn’t have real estate, that judgment just sits out there without an asset to stick to. Retirement accounts can’t be touched, only accounts in his personal name and Reality Steve LLC could be.

If Carbone does have real estate, the judgment might stick to his property but it would only be an issue if he ever decided to sell the property. If there was equity in the home, he could use that to pay off some or all of the judgment. If there was none, then we have another upside down house on the market to walk away from.

If the monetary judgment including punitive damages and legal fees were $50,000 and higher, it would be a tough call for Carbone whether he would consider bankruptcy.  If it were me, I would seriously consider filing Chapter 7 bankruptcy and clear the financial deck including his credit cards and any other outstanding debts he might have.  As an entrepreneur, you have to be prepared to win some and lose some.  It is all a matter of degree. There is little shame nowadays in bankruptcy given the circumstances and he would simply be another statistic in this massive recession. He could turn a bad situation into one that actually benefited him by disposing any consumer debts.

The injunction the plaintiffs desperately want is probably going to be the easiest part. Carbone doesn’t have to lose the lawsuit to comply. There is no incentive for him to have anything to do with the “Bachelor” shows and he can freely talk about his “loss”. Having a court mandate an injunction is a non-issue.

A win by the plaintiff would probably put Carbone out of business and Reality Steve LLC would become a shell company devoid of any assets.  Most small, closely-held corporate entities don’t hold much assets in them. They are mostly a business front and tax-saving mechanism, not an asset-holding entity.  Certainly, not the visible ones anyway.

So, in my view, even if the “Bachelor” producers win, they could still lose in so many ways. How do I know this? I have won a number of judgments over the years and they weren’t worth much more than the paper they were printed on because you cannot squeeze blood or collect from a rock.  Or if that rock decides to stubbornly burrow underground out of sight, it becomes an unpleasant exercise to collect. Garnishments can be very difficult against self-employed entrepreneurs especially when they work for themselves and have the freedom and ability to move money at a moments notice.

Quite frankly, the “Bachelor” producers aren’t in this lawsuit for the money at all.  That is only a big sledgehammer to hold over Carbone’s head. They want to squeeze him so that he will relinquish his reporters privileges and reveal his sources. They would like for Carbone to give up his Fifth Amendment rights and say something (squeal) that will damage and incriminate himself. They want to subvert his reporting at nearly all costs even if it tramples his First Amendment rights.  Obviously, I am not an attorney of any kind but that sounds very similar to what a SLAPP lawsuit is all about.

There is no question that there are Reality Steve critics and naysayers. But I would venture to say that, by and large, most of his readership are moderate people such as myself who simply enjoy the entertainment provided by Carbone through the “Reality Steve” persona. And most of them really dislike the Goliath vs. David fight. It is disgusting and distasteful to watch. That is the reason why the court docket bears watching and monitoring and the complaint bears reading. Unlike most reporters who don’t know how to interpret the docket, I am following that docket closely.

I know there is little money and little excitement to actually look at the legalities of this very important and potentially precedent-setting case but I think it’s important for people to know there are wider implications. If they can do this to Carbone, who else can they do this to?

The freedom for an individual blogger to exercise his right to free speech and become a member of the  free press, if he chooses to, is at stake. Somehow, the plaintiffs are painting themselves as these helpless victims who cannot control their own show participants and Carbone is being vilified as a person who allegedly influenced and paid money for information.  The show participants could have easily said no and delete any alleged emails and messages from Carbone. Where is the personal responsibility in all this? Why is all the blame being laid at Carbone’s feet? His biggest crime is simply being too good at his job.

This post has gotten long and I think I am done with the legal arguments/analysis for now.

But I want to do an outtake post “What I Would Do If I was Steve Carbone”. I think he and other bully victims need to pay attention.


Read Article #3 in Reality Steve Lawsuit Series: Matthew Chan Response to “Reality Steve” Lawsuit Update & Link Referral Explosion




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