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Judge vacates order shutting down anti-Burfoot website
By Louis Hansen
The Virginian-Pilot
© April 23, 2010
NORFOLK
A Circuit Court judge reversed his own decision Thursday to shut down a website criticizing Vice Mayor Anthony Burfoot, clearing the way for the site to reactivate.
Circuit Court Judge Charles E. Poston reconsidered the day-old motion without legal prompting and concluded "that the temporary injunction should not have been granted."
Burfoot, seeking a third term on City Council, sued Wednesday to take down the website, May4thcounts.com.
The website appeared last week and detailed alleged business dealings of downtown clubs and bars. Several bars and restaurants closed last year during an aggressive city code enforcement campaign.
Fellow council members criticized Burfoot for having the city attorney's office respond to the attack. A city lawyer filed suit on Burfoot's behalf against the website and its registered owner, "disgruntled citizen."
Burfoot said Thursday he eventually will hire a personal lawyer and find out who is behind the anonymous website. "After the election, I plan on giving it my full attention," he said. "I'm pursuing this on my own money."
The site's host, GoDaddy.com, said in a statement the website will go back online if the company receives an exact copy of the new order.
City Attorney Bernard Pishko said Burfoot asked for legal advice after the website appeared. Pishko said Burfoot, as a City Council member, was his client and he was obliged to help. He added that other city employees, although not parties to the lawsuit, were damaged by the accusations.
Burfoot sued only after failing to discover who was behind the campaign, Pishko said. He added that the suit cost taxpayers only his time.
In the suit, Burfoot contends that several sections of the website were untrue, "slanderous and libelous" and would harm his re-election campaign. The suit attached a 30-page printout of the entire site as it appeared April 20.
Poston granted an injunction Wednesday, stating that other legal actions were inadequate in the case. But on Thursday, Poston reconsidered.
He quoted the Virginia Constitution stating that freedom of the press and speech are "among the great bulwarks of liberty."
"In our world, the Internet, just as radio and television, are subsumed in the word 'press' as used in the Constitution," Poston wrote.
He noted that speech concerning the official conduct of public figures is especially protected. Public figures must prove "malicious intent" in published materials. Poston said he was unable to find, without additional information, actual malice in the published material.
Although Burfoot's distaste for the unsigned and unacknowledged material is understandable, Poston wrote, it did not justify closing the website. He added that the Federalist Papers, advocating the ratification of the U.S. Constitution, were published anonymously.
"Historically our Commonwealth has placed a great premium on the ability of the citizens to make reasonable decisions about public matters," Poston wrote.
Pishko disagreed with the judge's decision. "I don't see a First Amendment issue here," he said. "I see it tried and true - you don't have a right to slander."
The decision drew interest from legal advocacy groups and political bloggers.
Jim Hoeft, a conservative blogger on the site bearingdrift.com, praised the judge's reversal.
"Ethical and responsible information online has transformed politics and political accountability, so any threat to restrict that speech is a potential threat to our First Amendment freedoms," said Hoeft, a board member of the Blogs United, an association of about 30 Virginia bloggers.
Speculation about unethical behavior by public figures should be investigated, he said, not brushed aside.
Burfoot said he would push forward with his campaign. "People understand this is an election year," he said. "Most people can see through it."
Three challengers also are running in Ward 3 - Mamie Johnson, William E. "Billy" Mann Jr. and Donna Fay Smith.
Another hearing on the suit is scheduled for July 7 - two months after city elections.
Louis Hansen, (757) 446-2341, louis.hansen@pilotonline.com
Stevens: Independent view of First Amendment
By Tony Mauro
First Amendment Center legal correspondent
04.09.10
WASHINGTON — Supreme Court Justice John Paul Stevens wrote in 1993 that the five clauses of the First Amendment “combine to form a whole larger than its parts” in a way that advances “a broader concept of liberty.”
Stevens, who announced his retirement today, was widely viewed as a strong friend of the First Amendment over his 34 years on the Court. But his embrace was typically nuanced and independent, and not without exceptions — especially when First Amendment free-speech values came in conflict with symbols of patriotism and protecting the integrity of elections.
Overall, says University of Georgia law professor Sonja West, Stevens had “a strong, consistent First Amendment jurisprudence, but it was not an absolutist one.” A former law clerk to Stevens, West teaches media and constitutional law.
Stevens’ free-speech decisions range from FCC v. Pacifica Foundation in 1978, upholding the ban on broadcasting George Carlin’s “seven dirty words,” to Reno v. ACLU in 1997, which gave the Internet broad First Amendment protection. In 44 Liquormart v. Rhode Island in 1996, Stevens struck down a state law banning liquor-price advertising, and in 1982, he authored NAACP v. Claiborne Hardware, protecting a boycott of white businesses from government restriction.
In Bartnicki v. Vopper in 2001, Stevens reversed a verdict against the news media for publishing contents of a private discussion in a labor dispute. “Privacy gives way when balanced against the interest in publishing matters of public importance,” Stevens wrote for the majority.
His pragmatic approach to speech cases — insuring the public has means to participate in political debate — came through in City of Ladue v. Gilleo in 1994. Striking down an ordinance that banned residential lawn signs, Stevens said, “Residential signs are an unusually cheap and convenient form of communication.” In Reno v. ACLU, Stevens made a similar point about the “relatively unlimited, low-cost capacity for communications of all kinds.”
As for the religion clauses, Stevens has been a steady vote in favor of separation of church and state, and against many accommodations of religion in public life.
Stevens struck down an Alabama “moment-of-silence” law for public schools in Wallace v. Jaffree in 1985, and in Santa Fe Independent School District v. Doe in 2000, he wrote that public schools could not precede football games with student-led prayer.
Douglas Laycock, a leading scholar of church-state issues, wrote in 2004 that Stevens’ stands reflected an apparent “hostility to religion. Religion in his view is subject to all the burdens of government, but entitled to few of its benefits.”
Stevens’ defenders say he is not hostile to religion, pointing to his votes in favor of religious groups in the Church of the Lukumi Babalu Aye Inc. v. City of Hialeah and Lamb’s Chapel v. Center Moriches Union Free School District, both 1993 cases. “A careful look at his voting in religion cases suggests that he has a healthy respect for religious thought, although this respect is tempered by a fear of the divisive power of religious disputes in public life,” wrote Eduardo Penalver, a former Stevens clerk who teaches at Fordham University School of Law, in a law-review appraisal of Stevens.
Some of Stevens’ best-known First Amendment statements came in dissents from decisions in which the majority ostensibly expanded First Amendment protections.
In 1989 Stevens, a World War II veteran, objected to the majority’s view in Texas v. Johnson that laws that criminalized burning the American flag violated freedom of speech. Reading from his dissent on the bench, Stevens said, “The value of the flag as a symbol cannot be measured … . Sanctioning the public desecration of the flag will tarnish its value — both for those who cherish the ideas for which it waves and for those who desire to don the robes of martyrdom by burning it.”
Stevens has since observed that the majority’s ruling had the effect of making flag-burning less potent as a political act. “Nobody burns flags anymore,” Stevens told The New Yorker recently. “As long as it’s legal, it’s not a big deal.”
In January, Stevens announced from the bench an angry dissent in Citizens United v. Federal Election Commission, in which the majority had ruled that corporations, like individuals, could not be restricted in their campaign spending without running afoul of the First Amendment. Stevens said the Court had long restricted corporate involvement in elections and had no reason to shrink from that task now.
“The Court’s blinkered and aphoristic approach to the First Amendment may well promote corporate power at the cost of the individual and collective self-expression the Amendment was meant to serve,” said Stevens.
Stevens’ consideration of other societal values besides free speech led him to shy away from carving out bright-line or categorical exceptions from First Amendment protections for expressions such as obscenity. Instead, he preferred a balancing approach that takes into account the value and, to a degree, the content of the speech at issue. Enforcing all-or-nothing categories, Stevens said in R.A.V. v. City of St. Paul in 1992, “sacrifices subtlety for clarity” and is “ultimately unsound.”
In the religion arena, Stevens dissented sharply when the majority in Zelman v. Simmons-Harris OK’d a school voucher program that included parochial schools.
“Whenever we remove a brick from the wall that was designed to separate religion and government,” Stevens warned, “we increase the risk of religious strife and weaken the foundation of our democracy.”
Ive been reading all these cases and think what EFF has been doing is great. I dont know if people realize the ability to provide free thought on the web is constantly under attack and groups like this are around to help and fight back when needed. I highly reccommend donating to this group as the funds are used to protect our freedoms as online personalities. GL!
NORTHERN DISTRICT OF FLORIDA
UNITED STATES DISTRICT COURT
TALLAHASSEE DIVISION
IN RE: )
)
SUBPOENA ISSUED TO )
INVESTORSHUB.COM ) Case No. 4:10-MC-00031
on behalf of the United States District )
Court for the Northern District of )
Indiana in the case of Michiana Dairy )
Processors, LLC v. All Star Beverages, Inc. )
Case No. 2:09-CV-0039-PRC )
NOTICE OF WITHDRAWAL OF SUBPOENA
THUS MOOTING MOTION TO QUASH [DOCKET ENTRY 1]
John Doe, Jim Doe, Jack Doe, Jason Doe, Jed Doe, and Joshua Doe, by counsel, hereby
advise the Court that the subpoena sought to be quashed by their motion [Docket Entry 1] has
been withdrawn, as shown on the letter from opposing counsel attached as Exhibit A. Therefore,
the motion to quash has been mooted and requires no action from the Court.
Respectfully submitted,
s/ William L. Wilson
William L. Wilson, Indiana Bar No. 16245-71
ANDERSON, AGOSTINO & KELLER, P.C.
131 South Taylor Street
South Bend, IN 46601
(574) 288-1510 Tel.
(815) 550-9947 Fax
wilson@aaklaw.com
Attorney for Messrs. Doe
1
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF FLORIDA
TALLAHASSEE DIVISION
IN RE: )
)
SUBPOENA ISSUED TO )
INVESTORSHUB.COM )
on behalf of the United States District )
Court for the Northern District of )
Indiana in the case of Michiana Dairy )
Processors, LLC v. All Star Beverages, Inc. )
Case No. 2:09-CV-0039-PRC )
MOTION TO QUASH,
OR IN THE ALTERNATIVE TO STAY SUBPOENA
John Doe (identified in the subpoena as “Risicare”), Jack Doe (identified in the subpoena
as “wicke”), Jim Doe (identified in the subpoena as “greedy_malone”), Jason Doe (identified in the
subpoena as “dollarwize”), and Jed Doe (identified in the subpoena as “LVTruthseeker”) by
counsel, move pursuant to Fed.R.Civ.P. 45(c) to quash a certain subpoena issued on March 18,
2010 on behalf of Donna Mohlman. For the reason set forth below, the subpoena should be
quashed.
Alternatively, this Court may choose to stay the subpoena as to the five Doe movants while
they seek a protective order from the United States District Court for the Northern District of
Indiana. This Court should also be aware that, by agreement with counsel issuing the
subpoena, this motion is also being filed with the United States District Court for the
Northern District of Indiana, where the underlying lawsuit is pending.
FACTS
1. John Doe, Jack Doe, Jim Doe, Jason Doe and Jed Doe are members of an Internet
web site known as InvestorsHub.com. A feature of this web site is a forum where members may
engage in discussion and debate about investment opportunities, stocks, and other topics of interest
to them (see http://investorshub.advfn.com/boards/hubstocks.aspx). The members commonly use
“screen names” to identify themselves to other members of the forums.
2. John Doe uses the alias “Risicare” when he posts messages to the forums at
InvestorsHub.com.
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3. Jim Doe uses the alias “greedy_malone” when he posts messages to the forums at
InvestorsHub.com.
4. Jack Doe uses the alias “wicke” when he posts messages to the forums at
InvestorsHub.com.
5. Jason Doe uses the alias “dollarwize” when he posts messages to the forums at
InvestorsHub.com.
6. Jed Doe uses the alias “LVTruthseeker” when he posts messages to the forums at
InvestorsHub.com.
7. Messrs. Doe, among others, have participated in a discussion regarding a certain
stock, Prime Star Group, Inc. (PSGI). In this discussion, they have raised questions of legitimate
concern to investors and potential investors concerning the business operations of Prime Star
Group, Inc. These questions include whether regulatory authorities are investigating the company,
the backgrounds of the company’s leadership, and possible ties to other companies that have been
the target of investigations. This information, if true, would be of concern to potential investors in
that the value of the stock of Prime Star Group, Inc. could be adversely affected.
8. The discussions of Prime Star Group, Inc. have been very critical of the company.
Not surprisingly, the company’s leadership is unhappy about the negative comments.
9. The company’s leadership has embarked upon a scheme to silence its critics at
InvestorsHub. The company has used various means in an effort to unmask the identities of its
critics for the purpose of filing lawsuits against them or seeking other forms of punishment.
10. In one instance, the company’s leadership identified one of its critics as an
individual employed in a government position. The company’s leadership complained, and the
critic was disciplined. See http://www.marketwire.com/press-release/Prime-Star-Group-
Uncovers-Identity-of-Anonymous-Basher-1096791.htm; http://abclocal.go.com/wls/story?
section=news/iteam&id=7227821 [both last visited March 31, 2010].
11. Donna Mohlman is, on information and belief, the former spouse of Roger
Mohlman, the chief executive officer, chairman and president of Prime Star Group, Inc.
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12. On March 18, 2010, Ms. Mohlman caused a subpoena to be issued by an officer of
this Court to InvestorsHub.com. The subpoena requires InvestorsHub.com to produce
information, including the names, email addresses, and Internet protocol (IP) addresses of seven
individuals, including Messrs. Doe. The subpoena was signed by J. Craig Knox, Andrews, Crabtree,
Knox & Andrews, 1558 Village Square Boulevard, Tallahassee, FL, 32309. It was not signed by the
Clerk of this Court. A copy of this subpoena and its exhibits is attached to this motion as Exhbit
A.
13. The subpoena was issued by this Court because its recipient, InvestorsHub.com, is a
business located in the Northern District of Florida. The subpoena was issued under the auspices
of a case pending before the United States District Court for the Northern District of Indiana,
Michiana Dairy Processors, LLC v. All Star Beverages, Inc., et al. Case No. 2:09-CV-0039-PRC. In that
case, Donna Mohlman alleges that Michiana Dairy Processors and its attorneys have conspired
with others to “ruin the names” of Roger Mohlman, Donna Mohlman and the defendant
companies through a series of postings at InvestorHub.com. Presumably, Ms. Mohlman believes
Messrs. Doe are part of the conspiracy.
14. The underlying lawsuit involves a claim by Michiana Dairy Processors that various
defendants breached a contract, fraudulently transferred assets, and that Donna Mohlman
committed fraudulent acts. Donna Mohlman has filed a counter claim against Michiana Dairy
Processors, LLC, alleging that it and its attorneys have conspired with others to “ruin the names”
of Donna Mohlman, her former spouse, Roger Mohlman, and the various companies involved in
the lawsuit.
15. Messrs. Doe request that the Court quash the subpoena, or in the alternative, to
stay the subpoena while Messrs. Doe seek a protective order from the U.S. District Court for the
Northern District of Indiana.
16. This subpoena is not the first effort Ms. Mohlman has made to reveal the identity
of her critics. As shown by the affidavit of Sonya Branstine, the president of InvestorsHub.com,
Ms. Mohlman has tried to have other subpoenas issued for this information, using different courts
and a different lawsuit. [See Exhibit B.]
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17. Messrs. Doe have had no communications with Michiana Dairy Processors, LLC or
its counsel concerning the issues in this litigation or any messages that they may have posted to
discussion forums on the Internet. [See Exhibits C, D, E, F and G.]
ARGUMENT
I. Legal Standard
Under the Federal Rules of Civil Procedure, this Court may quash a subpoena if it
“requires disclosure of privileged or other protected matter” or “subjects a person to undue
burden.” Fed.R.Civ.P. 45(c)(3)(A)(iii) and (iv). This Court is the appropriate venue for this motion
because subpoenas must be challenged before the issuing court. Fed.R.Civ.P. (c)(3)(A) (“On timely
motion, the issuing court must quash or modify a subpoena…”) (emphasis added).
II. Anonymous speech is protected by the First Amendment
The First Amendment to the Constitution provides broad protection to persons engaged in
speech. The protection is broad enough that it encompasses anonymous speech. The Supreme
Court of the United States has consistently defended the right to engage in anonymous speech in
many situations, noting that “[a]nonymity is a shield from the tyranny of the majority…[that]
exemplifies the purpose [of the First Amendment] to protect unpopular individuals from
retaliation…at the hand of an intolerant society.” McIntyre v. Ohio Elections Comm’n, 514 U.S. 334,
357 (1995). The Court in McIntyre also stated that, “an author’s decision to remain anonymous, like
other decisions concerning omissions or additions to the content of a publication, is an aspect of
the freedom of speech protected by the First Amendment.” 514 U.S. at 342. This protection of
anonymous speech is hardly new; in 1960 the Supreme Court struck down an ordinance requiring
identifying information on handbills as a violation of the First Amendment. The Court observed,
“[a]nonymous pamphlets, leaflets, brochures and even books have played an important role in the
progress of mankind.” Talley v. California, 362 U.S. 60, 64 (1960).
Anonymous speech receives the same constitutional protection regardless of the means of
communication. Speech on the Internet does not receive a different level of protection. Reno v.
ACLU, 521 U.S. 844, 870 (1997). As the U.S. District Court for the Western District of
4
Washington noted in 2001, “The right to speak anonymously extends to speech via the Internet.
Internet anonymity facilitates the rich, diverse, and far ranging exchange of ideas.” Doe v.
2theMart.com, 140 F.Supp.2d 1088, 1093 (W.D. Wash. 2001).
The courts have also held that state action is implicated in cases involving subpoenas and
other court orders. See New York Times v. Sullivan, 376 U.S. 254 (1964). Thus, First Amendment
protections are triggered, and this Court must ensure those protections are enjoyed by Messrs.
Doe.
III. Anonymous speakers enjoy a qualified privilege under the First
Amendment.
It is well settled that not all speech is protected by the First Amendment. Material that is
obscene does not enjoy protection, nor does speech that is defamatory. See, e.g., Columbia Ins. Co. v.
Seescandy.com, 185 F.R.D. 573, 578 (N.D. Cal. 1999). The courts have taken an approach to cases
where a party desires to unmask an anonymous critic that balances the First Amendment interests
of the speaker with the rights of the allegedly aggrieved party. Sony Music Entm’t, Inc. v. Does 1–40,
326 F.Supp.2d 556, 565 (S.D.N.Y. 2004). This approach fulfills the caution raised by the Supreme
Court in Buckley v. American Constitutional Law Foundation: Courts must “be vigilant…[and] guard
against undue hindrances to…the exchange of ideas.” 525 U.S. 182, 192 (1999). Thus, even while
certain classes of speech do not receive any protection from the First Amendment, litigants may
not use a court’s discovery powers to uncover the identities of people who have simply made
statements the litigants dislike.
IV. The law imposes a high burden on those seeking to unmask critics.
The first state case to analyze the issues present in this motion—a litigant’s ability to
compel a provider of Internet services to reveal an anonymous speaker’s identity— is Dendrite
Int’l, Inc. v. Doe No. 3, 775 A.2d 756 (N.J. App. 2001). The New Jersey Court of Appeals fashioned a
set of factors that has been used by courts around the country. 1 The factors are as follows:
5
1 See, e.g., Independent Newspapers, Inc. v. Brodie, 966 A.2d 432 (Md. 2009); Doe I v. Individuals, 561
F.Supp.2d 249 (D.Conn. 2008); Quixtar, Inc. v. Signature Management Team, LLC, 566 F.Supp. 1205
(D.Nev. 2008); Mobilisa, Inc. v. John Doe 1, 170 P.3d 712 (Ariz. App. 2007); Greenbaum v. Google, Inc.,
845 N.Y.S.2d 695 (N.Y.Sup.Ct. 2007); Highfields Capital Management, L.P. v. Doe, 385 F.Supp.2d 969
(N.D.Cal. 2005).
(a) Has the litigant made reasonable efforts to notify the accused Internet user
of the pendency of the identification proceeding and explain how to present a defense?
(b) Has the litigant set forth the exact statements that she contends constitutes
actionable speech?
(c) Has the litigant alleged all elements of the cause of action and introduced
prima facie evidence within her control sufficient to survive a motion for summary
judgment; and
(d) If the court concludes the litigant has made a prima facie case, what is the
balance between the speaker’s First Amendment right to speak anonymously and the
strength of the prima facie case, along with the necessity for the disclosure of the
anonymous defendant’s identity to allow the litigant to properly proceed?
This approach balances the First Amendment rights of the speaker with the interests of a litigant
who may have a legitimate cause of action.
One of the early federal decisions to examine the issues presented by this motion is Doe v.
2themart.com, Inc., 140 F.Supp.2d 1088 (W.D. Wash. 2001). In that case, the court addressed a set of
facts that is almost identical to this case. A corporation was sued by some of its shareholders in a
derivative action. The corporation issued a subpoena to an Internet service provider seeking the
identification of people who had posted anonymous messages critical of the corporation. The
anonymous critics sought to quash the subpoena on the grounds that their messages and identities
were protected by the First Amendment. The District Court agreed and quashed the subpoena.
Notably, the critical statements posted by the anonymous users were very harsh:
Some of the messages posted on the [2themart] site have been less than flattering to
the company. In fact, some have been downright nasty. For example, a user calling
himself “Truthseeker” posted a message stating “[2themart] is a Ponzi scam that Charles
Ponzi would be proud of…. The company’s CEO, Magliarditi, has defrauded employees
in the past. The company’s other large shareholder, Rebeil, defrauded customers in the
past.” Another poster named “Cuemaster” indicated that “they were dumped by their
accountants…these guys are friggin liars…why haven’t they told the public this yet???
Liars and criminals!!!!!” Another user, not identified in the exhibits, wrote “Lying,
cheating, thieving, stealing, lowlife criminals!!!!” Other postings advised [2themart]
investors to sell their stock. “Look out below!!!! This stock has had it…get short or sell
your positions now while you still can.” “They [2themart] are not building anything,
except extensions on their homes…bail out now.”
140 F.Supp.2d at 1090. Although counsel for Messrs. Doe has not reviewed every message
identified in Ms. Mohlman’s subpoena, there is no dispute that some of the messages she has
pointed to are equally harsh in their criticism of PSGI and those affiliated with it.
In 2themart.com, the court used a balancing test that differs somewhat from the Dendrite
test. The court analyzed four factors:
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1. Whether the subpoena was issued in good faith and not for any improper purpose;
2. Whether the information sought relates to a core claim or defense;
3. Whether the identifying information is directly and materially relevant to that
claim or defense; and
4. Whether the information sufficient to establish or to disprove that claim or defense
is unavailable from any other source.
140 F.Supp.2d at 1095. The court explained it adopted this test because:
This test provides a flexible framework for balancing the First Amendment rights of
anonymous speakers with the right of civil litigants to protect their interests through
the litigation discovery process. The Court shall give weight to each of these factors as
the court determines is appropriate under the circumstances of each case. This Court is
mindful that it is imposing a high burden. “But the First Amendment requires us to be
vigilant in making [these] judgments, to guard against undue hindrances to political
conversations and the exchange of ideas.” Buckley, 525 U.S. at 192, 119 S.Ct. 636.
Id. Whether this Court adopts the Dendrite test or the 2themart.com test, the inescapable conclusion
is that this subpoena must be quashed.
V. Ms. Mohlman’s subpoena fails the Dendrite balancing test.
1. Ms. Mohlman has not made reasonable efforts to alert Messrs. Doe of the pendency
of the identification proceeding nor explained how to present a defense.
In this instance, Ms. Mohlman has not made reasonable efforts to alert the anonymous
Internet users that she intends to discover their identities. Nevertheless, Messrs. Doe acknowledge
they were aware of Ms. Mohlman’s efforts in light of the fact that this is the third attempt she has
made—with each attempt using some other lawsuit as a tool to attempt to discover the identities
of these individuals.
Ms. Mohlman first attempted to unmask her critics (none of whom have filed this motion
to quash) by having a subpoena issued on July 23, 2008 by the California Superior Court in the
case of Mohlman, et al. v. Mary Miller Kervosh, et al., Case No. 37-2008-86707-CU-PO-CTL. In
that instance, InvestorsHub.com refused to produce the subpoenaed records because the California
court lacked jurisdiction. Several weeks later, on September 5, 2008, Ms. Mohlman’s attorneys had
another subpoena issued in a difference case: Michiana Dairy Processors, LLC v. Roger Howard
Mohlman, Case No. 08-03780-7, pending in the United States District Court for the Southern
7
District of California. InvestorsHub.com again refused to comply with the subpoena based upon
the fact that the subpoena violated the 100-mile limit. Now, Ms. Mohlman again seeks to discover
the identity of her critics, and again she uses a lawsuit that is unrelated to the criticism leveled by
Messrs. Doe. In each instance, the service provider—InvestorsHub.com—has received the
subpoenas without any advance notice to Messrs. Doe. It is only because the service provider has
advised its subscribers targeted by the subpoena that they have any direct knowledge at all.
Similarly, Ms. Mohlman has not provided any of her targets with information on how to
resist or object to the subpoena, as established by the affidavits of Messrs. Doe.
With these facts, the first factor weighs in favor of Messrs. Doe.
2. Ms. Mohlman has not identified the specific statements that she claims constitute
actionable speech.
The Court should bear in mind that Ms. Mohlman has not filed a claim before any state or
federal court that pleads a proper cause of action for defamation against Messrs. Doe or any other
individuals. The sum total of her “claim” for defamation is found in four short paragraphs Ms.
Mohlman filed as a counterclaim against Michiana Dairy Processors, LLC in the underlying
litigation.
Most notably, Ms. Mohlman has not identified any statements attributed to Messrs. Doe
that allegedly form the basis for her counterclaim. She merely asserts that she “has had her name
defamed on the Internet.” Indeed, Ms. Mohlman does not even state whether Michiana Dairy
Processors, LLC made the purportedly defamatory statements.
The only information Ms. Mohlman has provided that could be interpreted as identifying
the allegedly defamatory statements is found on the exhibit to her subpoena: the message numbers
of literally hundreds of messages posted to the discussion forums at InvestorsHub.com. She has
provided these message numbers, according to her subpoena, for the purpose of obtaining the
name, email address, and Internet protocol addresses for each of the posts. She has not, so far as
anyone can tell, claimed that any of these messages are defamatory. Indeed a most cursory review
of the messages reveals that some of them simply quote or link to online news reports of criminal
charges being filed against Roger Mohlman and do not mention Ms. Mohlman at all. Even if there
are allegedly defamatory statements buried somewhere within all of those messages identified in
8
the subpoena, the burden is on Ms. Mohlman to identify specific defamatory statements allegedly
made by Messrs. Doe. The Court is not required to sift through her offering to determine whether
Ms. Mohlman has met her burden, nor should the Court require Messrs. Doe to sift through every
message to determine whether any of them could constitute defamatory speech under Indiana law.
For these reasons, the second factor weighs in favor of Messrs. Doe.
3. Ms. Mohlman has not set forth the elements of a defamation claim or come forward
with admissible evidence to establish a prima facie case.
In this case, as noted above, Ms. Mohlman has not provided this Court (or any other court)
with any evidence at all to establish a prima facie case. Again, she has merely said that her name has
been ruined. She has not alleged that the individuals she seeks to unmask (specifically Messrs. Doe)
made any statements, she has not alleged that any such statements were untrue or made with
reckless disregard to their falsity, that the statements were published, and that she has been damaged
as a result. The lack of specific evidence requires that this factor weigh in favor of Messrs. Doe.
4. The Court need not review the fourth factor because Ms. Mohlman has not
established a prima facie case.
The Dendrite test requires the Court to balance the interests of the litigant with the
interests of the anonymous critics only if the litigant has established a prima facie case. Ms.
Mohlman has not met this standard, so the Court’s analysis ends here. Assuming for the sake of
argument that Ms. Mohlman did establish a prima facie case, the balancing test still weighs in favor
of Messrs. Doe, as will be explained in the analysis of the 2themart.com balancing test.
VI. Ms. Mohlman’s subpoena fails the 2themart.com balancing test.
1. Ms. Mohlman’s subpoena was not issued in good faith.
The question concerning the good faith of Ms. Mohlman is a close one, but the Court
should still conclude that the subpoena was not issued in good faith. In this underlying lawsuit, the
plaintiff has charged Mr. Mohlman and his companies with breach of contract and fraud. Ms.
Mohlman was also named as a defendant, and she asserted a counter counterclaim against
Michiana Dairy Processors, LLC. In her claim, Ms. Mohlman charges that Michiana Dairy
Processors, LLC conspired “with others” to ruin her name.
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Despite the allegations in her counter claim, Ms. Mohlman has not named any of the Doe
recipients that are the subject of the subpoena as third-party defendants. Instead, she has tried for a
third time to strip them of their anonymity. The experience of the Mohlman critic who has
already been unmasked suggests that Ms. Mohlman has no interest at all in seeking redress for any
alleged defamation in a proper court. Rather, the actions of Roger Mohlman and PSGI indicate
that they are more likely to use extra-judicial means to inflict some punishment on Messrs. Doe—
and then issue a press release about it.
2. The subpoenas have nothing to do at all with the underlying litigation.
For purposes of expediency, Messrs. Doe believe the Court can dispense with parts two,
three and four of the 2themart.com test. These factors examine whether the subpoenaed
information is related to a claim or defense in the case, whether the information goes to the core
of the claims or defenses, and whether the information is available from any other source.
In this instance, each of the Doe subpoena recipients has testified through his affidavit that
he has had no communications with counsel for Michiana Dairy Processors, LLC other than to
respond to counsel’s request for a copy of the subpoena or with respect to any issues involved in
the lawsuit. There have been no such communications with the attorneys or anyone otherwise
connected with Michiana Dairy Processors, LLC. In the absence of any connection with that
plaintiff, the Doe subpoena recipients cannot have any information that remotely or directly relates
to any claim or defense in the underlying lawsuit. Therefore, the only reasonable conclusion that
can be reached is that Ms. Mohlman is once again using a lawsuit as an opportunity to issue a
subpoena for her own purposes—purposes that are unrelated to the underlying lawsuit.
Given that the information sought by this subpoena has nothing at all to do with the issues
involved in the federal lawsuit, this Court should quash the subpoena.
VII. Conclusion.
The First Amendment’s protection for free speech erects a high barrier for those who
desire to unmask an anonymous critic. This constitutional privilege, of course, is not absolute, and
plaintiffs may properly seek information necessary to pursue meritorious litigation. See Columbia
Ins. Co. v. Seescandy.com, 185 F.R.D. 573, 578 (N.D.Cal. 1999). Nevertheless, litigants are not entitled
10
to use the discovery tools and their power to uncover the identities of people who have simply
made statements that litigants dislike.
In this case, Ms. Mohlman has not come close to clearing the barrier required by the First
Amendment. She has not made any allegation in her counter claim that the people she seeks to
unmask have been working in concert with Michiana Dairy Processors, LLC. She has not alleged
that Messrs. Doe have made any defamatory statements at all. Given that this is Ms. Mohlman’s
third attempt to strip Messrs. Doe of their anonymity, the burden is upon her to satisfy the courts
that her need for this information outweighs the First Amendment rights of Messrs. Doe.
VIII. Certification.
I hereby certify pursuant to N.D. Fla. Loc. R. 7.1(B) that on April 6, 2010, I spoke with
Lyle R. Hardman, Esq., identified on the subpoena in question as the attorney requesting the
issuance of the subpoena, to confer about the possible agreed withdrawal of the subpoena. Mr.
Hardman and I discussed the issues presented by the subpoena, and both sides maintain that this
issue is best resolved by the Court.
Respectfully submitted,
s/ William L. Wilson
William L. Wilson, Indiana Bar No. 16245-71
ANDERSON, AGOSTINO & KELLER, P.C.
131 South Taylor Street
South Bend, IN 46601
(574) 288-1510 Tel.
(815) 550-9947 Fax
wilson@aaklaw.com
Attorney for Messrs. Doe
11
CERTIFICATE OF SERVICE
I hereby certify that a copy of the following was served upon:
J. Craig Knox, Esq. Lyle R. Hardman, Esq.
Andrews, Crabtree, Knox & Andrews Hunt Suedhoff Kalamaros, LLP
1558 Village Square Boulevard P.O. Box 4156
Tallahassee, FL 32309 South Bend, IN 46634-4156
cknox@ackalaw.com lhardman@hsk-law.com
by electronic mail delivery and United States Mail, postage prepaid, on April 6, 2010.
s/ William L. Wilson
William L. Wilson
12
S.D. lawmakers scrap bill targeting anonymous online commenters
By The Associated Press
02.23.10
PIERRE, S.D. — A move to help identify people who anonymously post libelous messages on blogs and other Internet sites was rejected yesterday by South Dakota lawmakers after opponents said the state would have trouble regulating the worldwide network.
The House State Affairs Committee voted 10-3 to kill a bill that would have required those who operate Internet sites to keep logs of Internet Protocol addresses so they could identify people who post libelous messages anonymously or under false names.
House Republican Leader Bob Faehn of Watertown, the committee’s chairman, said he agreed with the measure’s intent but doubted it would accomplish much.
“This is a global issue, and I doubt that South Dakota is going to have an effect,” said Faehn, a longtime radio broadcaster.
Committee members said current law already allows people to seek the identity of those who have libeled them anonymously.
The bill’s main sponsor, Rep. Noel Hamiel, R-Mitchell, said his measure would not limit free-speech rights.
Many comments posted on blogs and other Internet sites are written by people who remain anonymous or use false names, Hamiel said. If those comments amount to libel or slander, a victim might have a tough time finding out the writer’s real identity, he said.
“If you anonymously write something on the site and it’s defamatory, the person you defame must have recourse in finding out who you are,” Hamiel said.
The bill would have required operators of Internet sites to keep logs that would provide the identification and location of those who post comments without giving their true names. They would have been compelled to provide that information only in response to a court order in a libel lawsuit.
Hamiel and other lawmakers said a federal law protects operators of Internet sites from liability in lawsuits dealing with defamation.
Pat Powers of Brookings, operator of the South Dakota War College blog, said the government should not force bloggers to keep information on those who post comments because that could discourage people from debating political ideas. The bill also could have forced children to keep records to identify those who visit their blogs, he said.
“Much of the concern is this is a government mandate to collect the information of people who come on your Web site,” Powers said. “We’re not a totalitarian society. We’re not China. We expect a little freer discourse than that.”
Steve Sibson of Mitchell, operator of a blog called Sibby Online, said he supported the bill because it would protect anonymous free speech while holding accountable those who commit libel.
Dave Bordewyk of the South Dakota Newspaper Association spoke against the bill. The state’s 11 daily newspapers generally allow readers to comment anonymously on news stories, but the papers block those comments that are profane, contain threats or are libelous, he said.
Bob Miller, a lobbyist for South Dakota Funeral Directors, said funeral homes also do not want to collect Internet addresses to identify those who post anonymous messages of sympathy when someone dies.
Rep. Brock Greenfield, R-Clark, said state law should help hold people accountable if they libel others under the cloak of anonymity. He said a blogger falsely accused him of throwing someone out of the family convenience store because the person wore a T-shirt carrying the name of a Democratic candidate, but he was unable to get that blogger to retract the incorrect report.
“I think the players in the game have to be held to some journalistic standards,” Greenfield said.
Government Backs Down in Yahoo! Email Privacy Case, Avoids Court Ruling on Important Digital Civil Liberties Issue
News Update by Kevin Bankston
In the face of stiff resistance from Yahoo! and a coalition of privacy groups, Internet companies and industry coalitions led by EFF, the U.S. government today backed down from its request that a federal magistrate judge in Denver compel Yahoo! to turn over the contents of a Yahoo! email user's email account without the government first obtaining a search warrant based on probable cause.
The EFF-led coalition filed an amicus brief this Tuesday in support of Yahoo!'s opposition to the government's motion, agreeing with Yahoo! that the government's warrantless seizure of an email account would violate both federal privacy law and the Fourth Amendment to the Constitution. In response, the Government today filed a brief claiming that it no longer had an investigative need for the demanded emails and withdrawing the government's motion.
While this is a great victory for that Yahoo! subscriber, it's disappointing to those of us who wanted a clear ruling on the legality and constitutionality of the government's overreaching demand. Such demands are apparently a routine law enforcement technique. If the government withdraws its demand whenever an objection is raised by an email provider or a friend of the court like EFF, however, it robs the courts of the ability to issue opinions on whether the government's warrantless email surveillance practices are legal.
This is not the first time the government has evaded court rulings in this area. Most notably, although many federal magistrate judges and district courts have ruled that the government may not conduct real-time cellphone tracking without a warrant, the government has never appealed any of those decisions to a Circuit Court of Appeals, thereby preventing the appeals courts from ruling on the issue. Similarly, a federal magistrate judge in New York, Magistrate Judge Michael H. Dolinger, has twice invited EFF to brief the court on applications by the government to obtain private electronic communications without a warrant, and in each case, the government withdrew its application rather than risk a ruling against it (in one case the government went so far as to file a brief anticipating EFF's opposition before finally dropping the case).
The government's unwillingness to face off with EFF in these cases is certainly flattering, and it speaks volumes about their view of whether what they are doing is actually legal. But the right answer here is to let the courts decide, not to have the government turn tail and run whenever someone seeks real judicial review of their positions.
So while it is a big victory for the Yahoo! customer, today's capitulation by the government is a profound disappointment to those of us seeking to clarify and strengthen the legal protections for your private data. Court rulings are needed to keep the government within its legal bounds when it comes to warrantless communications and location surveillance. Next time, the government should stay in the fight, because EFF isn't going to back down when it comes to protecting your privacy.
Ky. newspaper commenter to remain anonymous for now
By The Associated Press
04.09.10
RICHMOND, Ky. — A judge has ruled that the Richmond Register newspaper does not have to turn over the identity of an anonymous person accused of posting defamatory statements on its Web site unless the plaintiff meets some conditions first.
The March 26 ruling was part of a lawsuit brought by a woman who claims she was defamed on the site in 2008.
The Courier-Journal of Louisville reported that Madison Circuit Judge Jean Chenault Logue's ruling may be a temporary victory for the anonymous poster. Logue adopted a multipart test that allows for the person to be identified if certain criteria are met.
In order to identify the poster, according to Logue's ruling, Kymberly Clem would have to make a reasonable effort to locate and notify the anonymous commenter and give appropriate time for the poster to respond; submit sufficient and specific evidence of defamation; and prove that the information being sought is necessary for the lawsuit to proceed.
The poster commented on a Register story on the site about Clem, who says she was removed from the Richmond Mall for wearing an inappropriate dress.
Clem's attorney, Wesley Browne, says he will begin taking the steps necessary to satisfy the test and identify the anonymous poster.
Clem sued the anonymous person, who posted as "l2bme" on the Richmond Register Web site. Browne filed a subpoena against the newspaper to provide the poster's identity.
But the Register cited the First Amendment rights of the newspaper and the poster to speak freely in a public forum. The Register also claimed that l2bme was a protected source under the Kentucky Reporter's Shield Law because one of its reporters wrote a story about Clem's lawsuit and mentioned the comment.
The shield law protects journalists from having to disclose confidential sources of published information.
But Logue disagreed, saying the comment was not protected under the shield law as it was not obtained by a reporter for the newspaper.
"Mere posting on a newspaper Web site does not grant the poster immunity," the judge wrote.
Anonymous sender of beer pong email gets to remain unknown
March 19th, 2010 No Comments
By Evan Brown
A.Z. v. Doe, 2010 WL 816647 (N.J. Super. App. Div. March 8, 2010)
Even if you do just a cursory review of cases that deal with online anonymity, you are bound to come across a 2001 New Jersey case called Dendrite v. Doe. That case sets out a four part analysis a court should undertake when a defamation plaintiff seeks an order to unmask an Internet user who posted the offending content anonymously.
Under Dendrite, a court that is asked by a defamation plaintiff to unmask an anonymous speaker must:
* require the plaintiff to try to notify the unknown Doe speaker that he or she is the subject the unmasking efforts, and give him or her a reasonable opportunity to oppose the application;
* require the plaintiff to identify and set forth the exact statements purportedly made by each anonymous poster that plaintiff alleges constitutes actionable speech;
* require the plaintiff to produce sufficient evidence supporting each element of its cause of action, on a prima facie basis; and
* balance the defendant’s First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure.
The state appellate court in New Jersey recently had occasion to revisit the Dendrite analysis in a case called A.Z. v. Doe. It found that a defamation plaintiff was not entitled to learn the identity of a person who anonymously sent an email that had content and attached photos that allegedly defamed plaintiff. The court found that plaintiff failed to meet the third factor in the Dendrite analysis, i.e., failed to present a prima facie case of defamation.
Beer pong is not for honor students
Someone took pictures of plaintiff playing beer pong at a party and posted them on Facebook. That’s all in good fun, except that plaintiff was a minor and belonged to her high school’s “Cool Kids & Heroes” program. Kids get into that program by making good grades and promising to refrain from bad behavior.
A purported “concerned parent” set up a Gmail account (anonymously) and sent an email to the faculty advisor for the Cool Kids & Heroes program. The email had photos attached showing several of the program’s kids doing things they shouldn’t be doing like drinking and smoking pot. In all fairness it should be noted that the picture of plaintiff only showed her playing beer pong — it didn’t actually show her drinking or smoking, though there were cups and beer cans on the table in front of her.
The faculty advisor forwarded the email and images on to school administrators, and the school also notified the police. But law enforcement apparently took no further action.
Plaintiff filed a defamation lawsuit against the anonymous sender of the email and sent a subpoena to Google to find out the IP address from which the message was sent. Google notified plaintiff that it came from an Optimum Online IP address. So plaintiff sent a subpoena to Optimum Online for the identifying information. The ISP notified its customer Doe, and Doe moved to quash the subpoena.
The trial court granted the motion to quash, concluding that plaintiff failed to meet the fourth Dendrite factor (dealing with the First Amendment). Plaintiff sought review with the appellate court, which affirmed but on different grounds.
Why the defamation claim failed:
The appellate court agreed that the motion to quash should be granted (that is, that the anonymous sender of the email message should not be identified). But the appellate court’s reasoning differed. It didn’t even need to get to the fourth Dendrite factor, because it held that plaintiff didn’t meet the third factor (didn’t present a prima facie defamation case).
The big problem with plaintiff’s defamation claim came from the requirement that the statement alleged to be defamatory (in this case, that plaintiff had broken the law) needed to be “false.” The court found five reasons why this element had not been met:
* Plaintiff submitted no evidence (like an affidavit) that she wasn’t drinking the night the photo was taken.
* Plaintiff submitted no evidence that law enforcement actually concluded to take no further action. Plaintiff argued their lack of action showed she didn’t break the law.
* Even if there was evidence that law enforcement decided to take no action, that would not have been relevant to the truth of the question of whether plaintiff was drinking. That would only go to show that law enforcement decided not to do anything.
* The photograph attached to the email showing plaintiff playing beer pong would lead one to conclude that she was in “possession” of the alcohol on the table, and that was a violation of the law.
* Doe submitted other photos from Facebook in connection with the motion to quash which showed plaintiff actually holding a beer.
So the court never got to the question of the First Amendment and how it related to the anonymous email sender’s right to speak. The court concluded that because plaintiff had not put forth a prima facie case of defamation, the anonymous speaker should stay unknown.
Dollar General drops lawsuit versus message board writer
Read more: Dollar General drops lawsuit versus message board writer - Nashville Business Journal:
Friday, July 16, 2004
Dollar General Corp. has dropped its lawsuit against an individual who posted closely held financial information about the retailer on a Yahoo! message board.
The Goodlettsville-based company (NYSE: DG) on July 1 filed a motion for voluntary dismissal without prejudice against Yahoo! user dolgeniv, ending the seven-month-old case.
Dollar General disclosed in a filing with Davidson County Chancery Court that dolgeniv hadn't been served with the case or received a summons.
Spokesperson Emma Jo Kauffman declined to give a reason for the voluntary dismissal, citing company policy not to comment on lawsuits. Doug Pierce, the King & Ballow attorney who represented Dollar General in the case, was out of town and couldn't be reached.
The original lawsuit stemmed from comments dolgeniv posted on Oct. 29, Nov. 3, Nov. 6, Nov. 7, Nov. 16, Dec. 4 and Dec. 12. Dolgeniv, whose true identity isn't known, said sales were falling below estimates going into last year's holiday season and that the company was planning steep discounts, among other information.
Accusing the poster of "willfully and maliciously" misappropriating and disclosing financial data and proprietary information, Dollar General filed suit in Nashville late last year. The company wanted an injunction against dolgeniv and reimbursed court costs.
Since the suit was filed, no messages from the dolgeniv user name have been posted on the Yahoo! message board.
Some in the legal community questioned the strength of Dollar General's argument, saying it would have a hard time obtaining prior restraint if the poster wasn't an employee.
The case against dolgeniv resembled another filed by Dollar General in July 2002. The company then sought an injunction against Yahoo! user mslefxr, but dropped its case in January 2003.
Read more: Dollar General drops lawsuit versus message board writer - Nashville Business Journal:
OSC says Agoracom rigged forum discussions
2010-04-05 21:53 ET - Street Wire
by Janice Shell
http://www.stockwatch.com/newsit/newsit_newsit.aspx?bid=Z-C:*OSC-1706033&symbol=*OSC&news_region=C
Last year, stock promoter Charles Desjardins was unusually excited. His company, North American Gem Inc., had just appointed Agoracom its investor relations firm. He said Agoracom had replaced the telephone and e-mail as IR devices.
The year before, Robert Bick of Evolving Gold Corp. was almost giddy. His company would even be named as one of the prestigious Agoracom 100, an elite and exclusive group of great Canadian small-cap companies. "With $18 million in the bank, and a discovery in Western USA, we want as many people as possible to know about EVG."
Other excited companies included African Gold Group Inc., Firestone Ventures Inc., Northern Tiger Resources Inc., Crosshair Exploration and Mining Corp., Nevada Sunrise Gold Corp. and Garibaldi Resources Corp. to name a few.
On April 1, 2010, the OSC had a surprise for Agoracom and its many clients, and it was no joke: it announced an enforcement action against Agoracom Investor Relations Corp., Agora International Enterprises Corp., George Tsiolis and Apostolis (Paul) Kondakos.
The notice of hearing
The OSC will conduct a hearing on this matter on April 26, 2010, in Toronto. The purpose of the hearing is to determine whether the securities registration of Mr. Tsiolis and Mr. Kondakos should be suspended, restricted, or terminated, or that terms and conditions be imposed on the registration. The two men may also be prohibited from trading in or acquiring any securities, temporarily or permanently; they may also be banned as directors or officers in any issuer, and barred from working as promoters as well. They could be fined up to $1-million apiece for their alleged transgressions, should the commission see fit.
The stakes are high for Agoracom, Mr. Tsiolis and Mr. Kondakos. Agoracom could, perhaps, be shut down; its founders might find themselves unemployed and unemployable in their chosen line of work.
The OSC's allegations
The OSC's allegations centre on the Agoracom website, and specifically address management's administration of the discussion forums. According to the statement of allegations, between Sept. 1, 2006, and July 31, 2009, Mr. Tsiolis and Mr. Kondakos required their representatives, as part of their daily responsibilities, to post anonymously to the client forums using aliases. To post anonymously, the representatives created fictitious usernames and posed as investors blending in with other users, investors, and interested persons. Representatives had between 40-50 aliases (some had up to 200) and were required to make a requisite number of posts per hub per day or risk having their pay docked, says the OSC. On occasion, Agoracom staff conversed with themselves on the forums using different aliases.
The OSC explains further that Agoracom management and employees posted more than 24,000 anonymous messages on client and non-client hubs, using more than 670 aliases. The messages were promotional and advised buying or holding the stocks in question.
Some of these posts were made from Mr. Tsiolis's home.
According to the OSC, neither site members nor Agoracom clients knew that Agoracom staff were posting anonymously on the user forums. As part of the company's investor relations services, clients received monthly reports detailing the number of posts made on the client's hub, and the number of shareholder inquiries received. Clients were not told that many of those posts were written, and inquiries made, by Agoracom representatives.
Agoracom attempted to conceal its staff's posting activity, says the regulator. In March, 2009, an employee using the alias Goldilocks accidentally gave himself away. Mr. Tsiolis, pretending shock, put out an official statement in which he assured users that this was an isolated incident, and promised that the miscreant would be punished by a 60-day suspension.
The OSC views the conduct described above as misleading and fraudulent, believing its intention was to persuade clients to renew their contracts, to attract new clients, and to increase the value of Agoracom's stock options. It suggests the client companies would have been unhappy with Agoracom's practices.
Agoracom's response
Hours after the OSC action was made public, Mr. Tsiolis rushed to defend Agoracom, his partner Mr. Kondakos, his staff and himself. Mr. Tsiolis insists that far from engaging in dishonest practices, Agoracom has spoken out against the pitfalls of an industry plagued by fast-money boiler rooms, e-mail and fax spam, and chosen to focus on long-term online investor relations campaigns. He adds that the OSC allegation of fraud pertaining to traffic and activity on client HUBS is unfounded and without merit.
He does not precisely deny the allegations or the activities in question; he objects to their characterization as fraudulent. Explaining that the posts in question were meant to act as catalyst[s] to spark conversation, he offers his personal insight into the minds and habits of message board posters: "From our first days in school, to our first high-school dance, to the local town hall meeting, people are naturally afraid to be the first to speak or act. Small-cap investors are no different. I have heard time and time again about their fear of asking simple questions that might demonstrate a perceived lack of knowledge, or contributing information that isn't smart."
Agoracom was facilitating this.
History of Agoracom
Agoracom International Enterprises was founded in 1997, Agoracom Investor Relations in 2007. Run by Mr. Tsiolis and Mr. Kondakos, both companies are domiciled in Toronto. The investor relations firm contracts with clients, for the most part small companies trading on the TSX Venture Exchange, to provide public relations services. The two companies, known together as Agoracom, maintain a financial website that offers information about small cap companies, and features message boards on which members of the public can discuss their investments. Every company covered has its own hub. Each hub contains links to news, statements by management, press releases, stock quotes, photos supplied by the company, and two discussion boards, one on topic, the other off topic. All Agoracom s clients have hubs; so do many other companies not represented by Mr. Tsiolis and Mr. Kondakos.
The client companies are for the most part distinguished from the non-client companies by their inclusion in the Agoracom 100, a list featured prominently on several pages of the website. Currently, there are only 38 entries. In an accompanying video, Mr. Tsiolis explains that the Agoracom 100 is designed to contain up to 100 wildly promising little companies that are bound to be of great interest to savvy investors.
Agoracom's clients are offered several different pricing models, the most common of which entails payment of a monthly fee, usually $3000, and stock options equaling the greater of 250,000 shares or 0.5 per cent of the company's shares. A few clients prefer to pay a higher monthly fee, with no accompanying options.
Mr. Tsiolis and Mr. Kondakos are also principals in a subsidiary of Agoracom Investor Relations called Agoracom Capital. Agoracom Capital is a fully licensed limited market dealer offering help with private placements. Both Mr. Tsiolis and Mr. Kondakos are registered as dealing representatives and approved as permitted individuals under the category of exempt market dealer.
A nefarious plot
Agoracom is not without its supporters. Chief among them is Dominic Jones, an investor relations professional and founder of IR Web Report. In the wee hours of the morning after the news from the OSC broke, Mr. Jones posted on Twitter that he was so upset he was unable to sleep. Wondering if there was more to the enforcement action that met the eye, he noted: Way I see it, OSC wants to hurt agoracom And who benefits? Well, a couple of Toronto IR firm competitors have close links to OSC brass.
Mr. Tsiolis evidently suspected the same thing. On his blog the evening of April 1, he wrote a piece titled Blackballed by the Big Boys on Bay Street, reminding readers how the Agoracom Noront Shareholder Community had courageously staved off a hedge fund takeover of Noront Resources. Richard Nemis, chairman emeritus of Noront, gave full credit to the investor group, saying, "Without the Agoracom support, we never would have come to a balance with Rosseau and never have been able to negotiate the kind of agreement that we did negotiate."
Mr. Tsiolis further contends that his site's Aurelian Warriors prevented a friendly takeover of Aurelian Resources by Kinross Gold in 2008. He believes that as a result of these two shareholder revolts, Agoracom was blackballed immediately.
This lament has, of course, nothing to do with the OSC's actual allegations.
Commentators and clients
Some fallout from the OSC's bomb has already drifted to earth. On the night of Easter Sunday, Peter Grandich, a paid promoter, investor relations man and Agoracom Chief Commentator, resigned his post, explaining, "In light of the allegations brought by the Ontario Securities Commission against Agoracom and certain of its directors and officers, I felt I had no choice," adding, "What was to be four days of solomn prayer then celebration ended up four of the worse days in my life."
None of Agoracom's 36 current clients (for some reason not all client companies are on the site's Agoracom 100 list, and not all Agoracom 100 companies are clients) has publicly announced a parting of the ways with its investor relations firm.
Several of the company's clients made video testimonials that are posted on the website. David Lucatch, CEO of Intertainment Media, has been with Agoracom since its inception. He could not be happier: "Agoracom provides me access through their web opportunities to things we never originally contemplated when we started our business. That includes the IR Hub, press releases, and quality service that include the Blackberry opportunities, Yahoo, Google, and we're very pleased with the services we receive from Agoracom and I would recommend them to every small cap company in the marketplace today."
Nigel Lees, president and CEO of Sage Gold, is equally impressed: "We've engaged Agoracom for over a year to do our external IR. They work very well with our internal team. They provide, in my view, excellent service. They've got excellent reach, online reach, a very large audience, and basically I think they've been extremely helpful in creating interest and liquidity in our shares."
Evidently some clients remain undismayed by the OSC enforcement action. On his Twitter page, Mr. Tsiolis proudly reports: "Client text message I have no doubt you'll come out the other end ok. You're one of the good guys. Love ya. We have awesome clients."
A final oddity pops up for anyone who goes to the Agoracom website and does a keyword search for Agoracom. The searcher is rewarded with information that Agoracom trades on the U.S. OTCBB with the ticker AGORA. Even more surprisingly, the Agoracom Gold Investment Community is said to trade on the AMEX with the ticker HUI. The Agoracom Silver Investment Community supposedly trades on the AMEX as well, as SLV. The last two tickers do exist, and do trade on the AMEX as indices, but they have nothing to do with Agoracom.
EPIC Online Guide to Practical Privacy Tools
http://epic.org/privacy/tools.html
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[EFF Victories]
Since its founding in 1990, EFF has consistently taken critical cases, challenged tough opponents, and achieved landmark victories. EFF has prevailed in lawsuits against the federal government, the FCC, the world's largest entertainment companies, and major electronics companies, among others. EFF has also beaten bills in Congress and pressured companies to respect your rights.
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Sham Email Subpoena Violates Whistleblower's Constitutional Rights
Federal Appeals Court Should Reexamine Ruling Threatening Email Privacy
Atlanta - The Electronic Frontier Foundation (EFF) and attorney Bryan Vroon asked the U.S. Court of Appeals for the 11th Circuit today to reexamine a panel ruling that violated a whistleblower's Fourth Amendment right to privacy in his email communications.
The whistleblower, Charles Rehberg, uncovered systematic mismanagement of funds at a Georgia public hospital. He alerted local politicians and others to the issue through a series of faxes. A local prosecutor in Dougherty County, Ken Hodges, conspired with the hospital and used a sham grand jury subpoena to obtain Mr. Rehberg's personal email communications. The prosecutor then provided that information to private investigators for the hospital and indicted Mr. Rehberg for a burglary and assault that never actually occurred. All the criminal charges against Mr. Rehberg were eventually dismissed. Hodges is currently running for Attorney General of Georgia in the Democratic primary.
Mr. Rehberg filed a civil suit against the prosecutors and their investigator for their misconduct, but the appeals court erroneously ruled that he did not have a reasonable expectation of privacy in his private email.
"Mr. Rehberg did the right thing and blew the whistle on financial mismanagement," said EFF Civil Liberties Director Jennifer Granick. "In response, he was persecuted by local authorities and his constitutional rights were violated. It's well established that individuals have a right to privacy in the content of their communications, electronic or otherwise. We're asking the court to look at this again and follow the law."
Also at issue in EFF's request for rehearing is the panel's decision to give immunity to county prosecutors and their investigators for manipulating and fabricating "evidence" and defaming Mr. Rehberg as a felon in comments to the press.
"The Supreme Court has ruled that prosecutors are not entitled to immunity when they fabricate evidence during the course of an investigation, knowingly defame an innocent man as a felon to the press, or collude with private parties to retaliate against a critic, as they did here," said Mr. Vroon, who has represented Mr. Rehberg since the beginning of his lawsuit. "This case involves a gross misuse of power which damaged an innocent man who never committed a burglary or assault on anyone."
Well, that's "newsworhty" according to the media.
Se3nsational cases in this are get press. Defamation is not shocking. It is kind of boring to most people.
Also, those who are sued are rarely supported by their message board peers as the majority of people are posting on message boards to make money which means "bashers" interfere with that effort.
I am making it my mission to bring this behavior into the light and show just how abusive the process can be. This new legislation will make SLAPP suits even harder to litigate and win. And, believe it or not, everybody who posts on message boards should support actions that preserve and protect their freedoms.
As long as one posts within the limits of the law there should be no fear of abusive attempts to harass, intimidate or silence criticism.
Thank you. There was news over the past week about some poor child that committed suicide due to other kids bullying her online. I think that gets more headlines and attention that people who post honest reviews of businesses and the like.
No I follow the progress on it here:
http://www.govtrack.us/congress/bill.xpd?bill=h111-4364
It is relatively new. It is in the Referred to Committee stage currently.
As of now it is in the House Committee on the Judiciary.
http://www.govtrack.us/congress/committee.xpd?id=HSJU
The more support we can muster up for it the better. This is really important legislation for anybody who posts on message boards.
Interesting. Thanks for the information. Are there congressional hearings on this topic that you are aware of? Have you searched the C-SPAN archive?
ANTI SLAPP MONTH: Write your Congressman NOW in support of Federal Anti-SLAPP legisation
As Marc noted, Rep. Steve Cohen (D-TN) has introduced The Citizen Participation Act, the first Federal anti-SLAPP legislation, to Congress.
Like any bill, this one needs your help. Yes, you, the internet user whose free speech, financial security and family’s well being are at stake if you find yourself in the crosshairs of such a lawsuit. We don’t do a lot of political grandstanding at The Legal Satyricon, but dammit if we won’t come together like one big dysfunctional family to support the most important free speech legislation to be proposed in a decade.
Please print this letter, sign it and mail it to your congressman.
http://randazza.files.wordpress.com/2010/03/citizen_particiation_act_letter.pdf
Unsure of whom to write? Find your congressman here.
https://writerep.house.gov/writerep/welcome.shtml
Could a National Anti SLAPP Law be on the Horizon?
Congressman Steve Cohen, D-TN is our First Amendment Bad Ass of the week.
Mr. Cohen introduced The Citizen Participation Act, a federal anti-slapp bill. The bill describes its purpose as follows:
To protect first amendment rights of petition and free speech by preventing States and the United States from allowing meritless lawsuits arising from acts in furtherance of those rights, commonly called ‘‘SLAPPs’’, and for other purposes.
It is about time.
SLAPP suits are all-too common and are a scourge on our legal landscape. Personally, they have been good for me, as I earn a significant income by defending these kinds of suits, but as much as I love money, I love free speech more (and I'm sure that I could sell that time elsewhere). A SLAPP suit is a "Strategic Lawsuit Against Public Participation." In other words, it is a lawsuit that some hosebag files against a critic -- not because he hopes to win anything, but because the mere filing of the suit is punishment enough for the critic. Lawsuits are expensive, and when a rich douchebag has plenty of money to spend on attorneys's fees, he can afford to sue a couple of critics, thus scaring the bejesus out of anyone else who might criticize him.
The Public Participation Project had this to say about SLAPPS:
Regardless of who is speaking and who is suing, everyone is losing when SLAPPs are allowed to continue. These meritless lawsuits clog the courts, waste resources and contribute to a general culture of litigousness. Instead of answering speech with speech, SLAPP filers answer speech with subpoenas and spurious claims.
SLAPPs frequently end in settlement, conditioned on silence, apology or retraction, so important ideas are excised from the debate, and critical information - about health, safety, economic security, civil rights and liberties, and government abuse - is withheld from the public. Would-be participants in public life see the devastating effects of lawsuits - on life savings, employment, reputation and even staying insured - and think twice before speaking out.
Judge Nicholas Colabella, Jr., famously said of SLAPPs that a greater threat to First Amendment rights can scarcely be imagined. SLAPPs chip away at the will and ability to speak out, person by person, group by group, issue by issue. James Madison cautioned that "there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations," and his words ring true in the SLAPP context. (source)
About half of the states have some form of legislation against this, but only California and Oregon have anti-SLAPP statutes that are worth a damn. Flori-duh's is so watered down that it may as well only apply when a Unicorn shits on the Defendant's lawn. However, in California and Oregon, if a Plaintiff files a lawsuit that implicates the Defendant's First Amendment rights, the Defendant can file a "special motion to strike." Then, the Plaintiff will need to show that his suit is not just a baseless and harassing claim. If the Plaintiff can't do that, then the case is dismissed and the Plaintiff has to pay the Defendant's attorneys fees.
Congressman Cohen's bill is very similar to the California law (Cal. Code Civ. Proc. 425.16), and provides the right kind of remedies. One would think that the Republicans would line up behind this -- as it provides much-needed "tort reform." The Democrats... well, there was a time when the Democratic party seemed like the party that favored free speech. I am starting to doubt that, but Mr. Cohen should be able to marshall some of his Democratic colleagues to support this bill.
I can not stress how important a bill like this is. If you can, please write a letter to your Representative urging their support for HR 4364.
Copy this post, if you like. You don't even need to attribute, if you don't want to. (I hereby release the copyright in this post to the public domain). Distribute the news far and wide. If you ever use your First Amendment rights, then this bill matters to you.
And... to really make the other congressmen stand up and take notice, if you can afford to, send Congressman Cohen a campaign contribution with a note stating that you only sent it because of his sponsorship of this bill. I sent him a hundred bucks today.
Online Defamation Law
http://www.eff.org/issues/bloggers/legal/liability/defamation
The Bloggers' FAQ on Online Defamation Law provides an overview of defamation (libel) law, including a discussion of the constitutional and statutory privileges that may protect you.
What is defamation?
Generally, defamation is a false and unprivileged statement of fact that is harmful to someone's reputation, and published "with fault," meaning as a result of negligence or malice. State laws often define defamation in specific ways. Libel is a written defamation; slander is a spoken defamation.
What are the elements of a defamation claim?
The elements that must be proved to establish defamation are:
1. a publication to one other than the person defamed;
2. a false statement of fact;
3. that is understood as
* a. being of and concerning the plaintiff; and
* b. tending to harm the reputation of plaintiff.
4. If the plaintiff is a public figure, he or she must also prove actual malice.
Is truth a defense to defamation claims?
Yes. Truth is an absolute defense to a defamation claim. But keep in mind that the truth may be difficult and expensive to prove.
Can my opinion be defamatory?
No—but merely labeling a statement as your "opinion" does not make it so. Courts look at whether a reasonable reader or listener could understand the statement as asserting a statement of verifiable fact. (A verifiable fact is one capable of being proven true or false.) This is determined in light of the context of the statement. A few courts have said that statements made in the context of an Internet bulletin board or chat room are highly likely to be opinions or hyperbole, but they do look at the remark in context to see if it's likely to be seen as a true, even if controversial, opinion ("I really hate George Lucas' new movie") rather than an assertion of fact dressed up as an opinion ("It's my opinion that Trinity is the hacker who broke into the IRS database").
What is a statement of verifiable fact?
A statement of verifiable fact is a statement that conveys a provably false factual assertion, such as someone has committed murder or has cheated on his spouse. To illustrate this point, consider the following excerpt from a court (Vogel v. Felice) considering the alleged defamatory statement that plaintiffs were the top-ranking 'Dumb Asses' on defendant's list of "Top Ten Dumb Asses":
A statement that the plaintiff is a "Dumb Ass," even first among "Dumb Asses," communicates no factual proposition susceptible of proof or refutation. It is true that "dumb" by itself can convey the relatively concrete meaning "lacking in intelligence." Even so, depending on context, it may convey a lack less of objectively assayable mental function than of such imponderable and debatable virtues as judgment or wisdom. Here defendant did not use "dumb" in isolation, but as part of the idiomatic phrase, "dumb ass." When applied to a whole human being, the term "ass" is a general expression of contempt essentially devoid of factual content. Adding the word "dumb" merely converts "contemptible person" to "contemptible fool." Plaintiffs were justifiably insulted by this epithet, but they failed entirely to show how it could be found to convey a provable factual proposition. ... If the meaning conveyed cannot by its nature be proved false, it cannot support a libel claim.
This California case also rejected a claim that the defendant linked the plaintiffs' names to certain web addresses with objectionable addresses (i.e. www.satan.com), noting "merely linking a plaintiff's name to the word "satan" conveys nothing more than the author's opinion that there is something devilish or evil about the plaintiff."
Is there a difference between reporting on public and private figures?
Yes. A private figure claiming defamation—your neighbor, your roommate, the guy who walks his dog by your favorite coffee shop—only has to prove you acted negligently, which is to say that a "reasonable person" would not have published the defamatory statement.
A public figure must show "actual malice"—that you published with either knowledge of falsity or in reckless disregard for the truth. This is a difficult standard for a plaintiff to meet.
Who is a public figure?
A public figure is someone who has actively sought, in a given matter of public interest, to influence the resolution of the matter. In addition to the obvious public figures—a government employee, a senator, a presidential candidate—someone may be a limited-purpose public figure. A limited-purpose public figure is one who (a) voluntarily participates in a discussion about a public controversy, and (b) has access to the media to get his or her own view across. One can also be an involuntary limited-purpose public figure—for example, an air traffic controller on duty at time of fatal crash was held to be an involuntary, limited-purpose public figure, due to his role in a major public occurrence.
Examples of public figures:
* A former city attorney and an attorney for a corporation organized to recall members of city counsel
* A psychologist who conducted "nude marathon" group therapy
* A land developer seeking public approval for housing near a toxic chemical plant
* Members of an activist group who spoke with reporters at public events
Corporations are not always public figures. They are judged by the same standards as individuals.
What are the rules about reporting on a public proceeding?
In some states, there are legal privileges protecting fair comments about public proceedings. For example, in California you have a right to make "a fair and true report in, or a communication to, a public journal, of (A) a judicial, (B) legislative, or (C) other public official proceeding, or (D) of anything said in the course thereof, or (E) of a verified charge or complaint made by any person to a public official, upon which complaint a warrant has been issued." This provision has been applied to posting on an online message board, Colt v. Freedom Communications, Inc., and would likely also be applied to blogs. The California privilege also extends to fair and true reports of public meetings, if the publication of the matter complained of was for the public benefit.
What is a "fair and true report"?
A report is "fair and true" if it captures the substance, gist, or sting of the proceeding. The report need not track verbatim the underlying proceeding, but should not deviate so far as to produce a different effect on the reader.
What if I want to report on a public controversy?
Many jurisdictions recognize a "neutral reportage" privilege, which protects "accurate and disinterested reporting" about potentially libelous accusations arising in public controversies. As one court put it, "The public interest in being fully informed about controversies that often rage around sensitive issues demands that the press be afforded the freedom to report such charges without assuming responsibility for them."
If I write something defamatory, will a retraction help?
Some jurisdictions have retraction statutes that provide protection from defamation lawsuits if the publisher retracts the allegedly defamatory statement. For example, in California, a plaintiff who fails to demand a retraction of a statement made in a newspaper or radio or television broadcast, or who demands and receives a retraction, is limited to getting "special damages"—the specific monetary losses caused by the libelous speech. While few courts have addressed retraction statutes with regard to online publications, a Georgia court denied punitive damages based on the plaintiff's failure to request a retraction for something posted on an Internet bulletin board. (See Mathis v. Cannon)
If you get a reasonable retraction request, it may help you to comply. The retraction must be "substantially as conspicuous" as the original alleged defamation.
What if I change the person's name?
To state a defamation claim, the person claiming defamation need not be mentioned by name—the plaintiff only needs to be reasonably identifiable. So if you defame the "government executive who makes his home at 1600 Pennsylvania Avenue," it is still reasonably identifiable as the president.
Do blogs have the same constitutional protections as mainstream media?
Yes. The US Supreme Court has said that "in the context of defamation law, the rights of the institutional media are no greater and no less than those enjoyed by other individuals and organizations engaged in the same activities."
What if I republish another person's statement? (i.e. someone comments on your posts)
Generally, anyone who repeats someone else's statements is just as responsible for their defamatory content as the original speaker—if they knew, or had reason to know, of the defamation. Recognizing the difficulty this would pose in the online world, Congress enacted Section 230 of the Communications Decency Act, which provides a strong protection against liability for Internet "intermediaries" who provide or republish speech by others. See the Section 230 FAQ for more.
The vast weight of authority has held that Section 230 precludes liability for an intermediary's distribution of defamation. While one California court had held that the federal law does not apply to an online distributor's liability in a defamation case, the case, Barrett v. Rosenthal, was overturned by the California Supreme Court (EFF filed an amicus brief in this case)
Can I get insurance to cover defamation claims?
Yes. Many insurance companies are now offering media liability insurance policies designed to cover online libel claims. However, the costs could be steep for small blogs—The minimum annual premium is generally $2,500 for a $1 million limit, with a minimum deductible of $5,000. In addition, the insurer will conduct a review of the publisher, and may insist upon certain standards and qualifications (i.e. procedures to screen inflammatory/offensive content, procedures to "take down" content after complaint). The Online Journalism Review has an extensive guide to libel insurance for online publishers.
Will my homeowner's or renter's insurance policy cover libel lawsuits?
Maybe. Eugene Volokh's the Volokh Conspiracy notes that homeowner's insurance policies, and possibly also some renter's or umbrella insurance policies, generally cover libel lawsuits, though they usually exclude punitive damages and liability related to "business pursuits." (This would generally exclude blogs with any advertising). You should read your insurance policy carefully to see what coverage it may provide.
What's the statute of limitation on libel?
Most states have a statute of limitations on libel claims, after which point the plaintiff cannot sue over the statement. For example, in California, the one-year statute of limitations starts when the statement is first published to the public. In certain circumstances, such as when the defendant cannot be identified, a plaintiff can have more time to file a claim. Most courts have rejected claims that publishing online amounts to "continuous" publication, and start the statute of limitations ticking when the claimed defamation was first published.
What are some examples of libelous and non-libelous statements?
The following are a couple of examples from California cases; note the law may vary from state to state. Libelous (when false):
* Charging someone with being a communist (in 1959)
* Calling an attorney a "crook"
* Describing a woman as a call girl
* Accusing a minister of unethical conduct
* Accusing a father of violating the confidence of son
Not-libelous:
* Calling a political foe a "thief" and "liar" in chance encounter (because hyperbole in context)
* Calling a TV show participant a "local loser," "chicken butt" and "big skank"
* Calling someone a "bitch" or a "son of a bitch"
* Changing product code name from "Carl Sagan" to "Butt Head Astronomer"
Since libel is considered in context, do not take these examples to be a hard and fast rule about particular phrases. Generally, the non-libelous examples are hyperbole or opinion, while the libelous statements are stating a defamatory fact.
How do courts look at the context of a statement?
For a blog, a court would likely start with the general tenor, setting, and format of the blog, as well as the context of the links through which the user accessed the particular entry. Next the court would look at the specific context and content of the blog entry, analyzing the extent of figurative or hyperbolic language used and the reasonable expectations of the blog's audience.
Context is critical. For example, it was not libel for ESPN to caption a photo "Evel Knievel proves you're never too old to be a pimp," since it was (in context) "not intended as a criminal accusation, nor was it reasonably susceptible to such a literal interpretation. Ironically, it was most likely intended as a compliment." However, it would be defamatory to falsely assert "our dad's a pimp" or to accuse your dad of "dabbling in the pimptorial arts." (Real case, but the defendant sons succeeded in a truth defense).
What is "Libel Per Se"?
When libel is clear on its face, without the need for any explanatory matter, it is called libel per se. The following are often found to be libelous per se:
A statement that falsely:
* Charges any person with crime, or with having been indicted, convicted, or punished for crime;
* Imputes in him the present existence of an infectious, contagious, or loathsome disease;
* Tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects that the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits;
* Imputes to him impotence or a want of chastity.
Of course, context can still matter. If you respond to a post you don't like by beginning "Jane, you ignorant slut," it may imply a want of chastity on Jane's part. But you have a good chance of convincing a court this was mere hyperbole and pop cultural reference, not a false statement of fact.
What is a "false light" claim?
Some states allow people to sue for damages that arise when others place them in a false light. Information presented in a "false light" is portrayed as factual, but creates a false impression about the plaintiff (i.e., a photograph of plaintiffs in an article about sexual abuse, because it creates the impression that the depicted persons are victims of sexual abuse). False light claims are subject to the constitutional protections discussed above.
What is trade libel?
Trade libel is defamation against the goods or services of a company or business. For example, saying that you found a severed finger in you're a particular company's chili (if it isn't true).
Legal Guide for Bloggers
http://www.eff.org/issues/bloggers/legal
Updated Feb 11 2009
Whether you're a newly minted blogger or a relative old-timer, you've been seeing more and more stories pop up every day about bloggers getting in trouble for what they post.
Like all journalists and publishers, bloggers sometimes publish information that other people don't want published. You might, for example, publish something that someone considers defamatory, republish an AP news story that's under copyright, or write a lengthy piece detailing the alleged crimes of a candidate for public office.
The difference between you and the reporter at your local newspaper is that in many cases, you may not have the benefit of training or resources to help you determine whether what you're doing is legal. And on top of that, sometimes knowing the law doesn't help - in many cases it was written for traditional journalists, and the courts haven't yet decided how it applies to bloggers.
But here's the important part: None of this should stop you from blogging. Freedom of speech is the foundation of a functioning democracy, and Internet bullies shouldn't use the law to stifle legitimate free expression. That's why EFF created this guide, compiling a number of FAQs designed to help you understand your rights and, if necessary, defend your freedom.
To be clear, this guide isn't a substitute for, nor does it constitute, legal advice. Only an attorney who knows the details of your particular situation can provide the kind of advice you need if you're being threatened with a lawsuit. The goal here is to give you a basic roadmap to the legal issues you may confront as a blogger, to let you know you have rights, and to encourage you to blog freely with the knowledge that your legitimate speech is protected.
Please note that this guide applies to people living in the US. We don't have the expertise or resources to speak to other countries' legal traditions, but we'd like to work with those who do. If you know of a similar guide for your own jurisdiction or feel inspired to research and write one, please let us know. We can link to it here.
Hey Greedy I like your board here your posts are informative, keep them coming please!
Dendrite International v. John Doe No. 3 (N.J. 2001)
SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION
342 N.J. Super. 134
Argued May 22, 2001
Decided July 11, 2001
FALL, J.A.D.
In this opinion, we examine the appropriate procedures to be followed and the standards to be applied by courts in evaluating applications for discovery of the identity of anonymous users of Internet Service Provider (ISP) message boards.
Information contained in postings by anonymous users of ISP message boards can form the basis of litigation instituted by an individual, corporation or business entity under an array of causes of action, including breach of employment or confidentiality agreements; breach of a fiduciary duty; misappropriation of trade secrets; interference with a prospective business advantage; defamation; and other causes of action.
Plaintiff, Dendrite International, Inc. (Dendrite), on leave granted, appeals from an interlocutory order of the trial court denying its request to conduct limited expedited discovery for the purpose of ascertaining the identity of defendant, John Doe No. 3, from Yahoo!, an ISP. Here, the posting of certain comments about Dendrite on a Yahoo! bulletin board by defendant, John Doe No. 3, forms the basis of the dispute in this appeal in the context of a cause of action based on Dendrite's claims of defamation. We affirm the denial of Dendrite's motion based on the conclusion of the motion judge that Dendrite failed to establish harm resulting from John Doe No. 3's statements as an element of its defamation claim.
We offer the following guidelines to trial courts when faced with an application by a plaintiff for expedited discovery seeking an order compelling an ISP to honor a subpoena and disclose the identity of anonymous Internet posters who are sued for allegedly violating the rights of individuals, corporations or businesses. The trial court must consider and decide those applications by striking a balance between the well-established First Amendment right to speak anonymously, and the right of the plaintiff to protect its proprietary interests and reputation through the assertion of recognizable claims based on the actionable conduct of the anonymous, fictitiously-named defendants.
We hold that when such an application is made, the trial court should first require the plaintiff to undertake efforts to notify the anonymous posters that they are the subject of a subpoena or application for an order of disclosure, and withhold action to afford the fictitiously-named defendants a reasonable opportunity to file and serve opposition to the application. These notification efforts should include posting a message of notification of the identity discovery request to the anonymous user on the ISP's pertinent message board.
The court shall also require the plaintiff to identify and set forth the exact statements purportedly made by each anonymous poster that plaintiff alleges constitutes actionable speech.
The complaint and all information provided to the court should be carefully reviewed to determine whether plaintiff has set forth a prima facie cause of action against the fictitiously-named anonymous defendants. In addition to establishing that its action can withstand a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to R. 4:6-2(f), the plaintiff must produce sufficient evidence supporting each element of its cause of action, on a prima facie basis, prior to a court ordering the disclosure of the identity of the unnamed defendant.
Finally, assuming the court concludes that the plaintiff has presented a prima facie cause of action, the court must balance the defendant's First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure of the anonymous defendant's identity to allow the plaintiff to properly proceed.
The application of these procedures and standards must be undertaken and analyzed on a case-by-case basis. The guiding principle is a result based on a meaningful analysis and a proper balancing of the equities and rights at issue.
With these principles in mind, we now turn to an analysis of Dendrite's action against John Doe No. 3 and the trial court's decision.
* * *
Here, although Dendrite's defamation claims would survive a traditional motion to dismiss for failure to state a cause of action, we conclude the motion judge appropriately reviewed Dendrite's claim with a level of scrutiny consistent with the procedures and standards we adopt here today and, therefore, the judge properly found Dendrite should not be permitted to conduct limited discovery aimed at disclosing John Doe No. 3's identity. Moreover, the motion judge's approach is consistent with the approach by both the District Court in Seescandy.Com, and by the Virginia Circuit Court in the America Online decision.
A defamatory statement is one that is false and 1) injures another person's reputation; 2) subjects the person to hatred, contempt or ridicule; or 3) causes others to lose good will or confidence in that person. A defamatory statement harms the reputation of another in a way that lowers the estimation of the community about that person or deters third persons from associating or dealing with him. "Words that clearly denigrate a person's reputation are defamatory on their face and actionable per se." When determining if a statement is defamatory on its face "a court must scrutinize the language 'according to the fair and natural meaning which will be given it by reasonable persons of ordinary intelligence.'" A plaintiff does not make a prima facie claim of defamation if the contested statement is essentially true.
The motion judge determined that Dendrite failed to demonstrate the statements posted by John Doe No. 3 caused it any harm. The certification of Dendrite Vice-President, Bruce Savage alleges John Doe No. 3's postings "may . . . have a significant deleterious effect on Dendrite's ability to hire and keep employees." Dendrite also contends that John Doe No. 3's postings caused detrimental fluctuations in its stock prices.
Dendrite's NASDAQ trading records were submitted to the court for the period of March 1, 2000 through June 15, 2000. Those records indicate Dendrite experienced gains on 32 days, losses on 40 days, and no change on two days during that period, which overlaps the period when John Doe No. 3 was posting his statements on the Yahoo! bulletin board. Dendrite's total loss during this period was 29/32 of a point.
Moreover, John Doe No. 3 made nine postings, two on the same day. On three of the days that immediately followed a posting by John Doe No. 3, Dendrite's stock value decreased. However, on five of the days that immediately followed a posting by John Doe No. 3, Dendrite's stock value increased. The net change in Dendrite's stock value over those seven days was actually an increase of 3 and 5/8 points.
Although the motion judge stated Dendrite was "entitled to every reasonable inference of fact in this analysis[,]" he refused to "take the leap to linking messages posted on an internet message board regarding individual opinions, albeit incorrect opinions, to a decrease in stock prices without something more concrete." The record does not support the conclusion that John Doe's postings negatively affected the value of Dendrite's stock, nor does Dendrite offer evidence or information that these postings have actually inhibited its hiring practices, as it alleged they would. Accordingly, the motion judge appropriately concluded that Dendrite failed to establish a sufficient nexus between John Doe No. 3's statements and Dendrite's allegations of harm. . . .
Accordingly, we affirm.
Libel Tourism Legislation
H.R. 2765: To amend title 28, United States Code, to prohibit recognition and enforcement of foreign defamation judgments and certain foreign judgments against the providers of interactive computer services
Introduced Jun 9, 2009
Sponsor Rep. Steve Cohen [D-TN9]
Status Passed House
Last Action Feb 23, 2010: Committee on the Judiciary. Hearings held.
6/15/2009--Passed House amended. (This measure has not been amended since it was introduced. The summary of that version is repeated here.) Prohibits a domestic court from recognizing or enforcing a foreign judgment for defamation whenever the party opposing recognition or enforcement claims that the judgment is inconsistent with the First Amendment to the Constitution, unless the domestic court determines that the judgment is consistent with the First Amendment. Prohibits a domestic court from recognizing a foreign judgment for defamation if the party opposing recognition or enforcement establishes that the exercise of personal jurisdiction by the foreign court that rendered the judgment failed to comport with the due process requirements imposed on domestic courts by the Constitution. Prohibits a domestic court from recognizing or enforcing a foreign judgment for defamation against the provider of an interactive computer service whenever the party opposing recognition or enforcement claims that the judgment is inconsistent with the Communications Act of 1934 regarding protection for private blocking and screening of offensive material, unless the domestic court determines that the judgment is consistent with such provisions. Provides that an appearance by a party in a foreign court rendering a foreign judgment to which this Act applies for the purpose of contesting the foreign court's exercise of jurisdiction, moving the foreign court to abstain from exercising jurisdiction, defending on the merits any claims brought before the foreign court, or for any other purpose, shall not deprive such party of the right to oppose the recognition or enforcement of the judgment under this Act. Allows the award of reasonable attorney fees under certain conditions if the party opposing recognition or enforcement of the judgment prevails
Federal Efforts to Protect Free Speech
The Citizen Participation Act of 2009
H.R. 4364: Citizen Participation Act of 2009
Introduced Dec 16, 2009
Sponsor Rep. Steve Cohen [D-TN9]
Status Introduced
Last Action Dec 16, 2009: Referred to the House Committee on the Judiciary.
12/16/2009--Introduced.
Citizen Participation Act of 2009 - Declares that Strategic Lawsuits Against Public Participation (SLAPPs), filed against thousands of individuals, organizations, and businesses based upon their valid exercise of the rights to petition or free speech, are an abuse of the judicial process that waste judicial resources and clog the already over-burdened court dockets. Declares immune from civil liability any act of petitioning the government made without knowledge of falsity or reckless disregard of falsity. Requires a plaintiff (especially in a SLAPP) to prove knowledge of falsity or reckless disregard of falsity by clear and convincing evidence. Provides that any act in futherance of the constitutional right of petition or free speech shall be entitled to the procedural protections provided in this Act. Allows a party to file a special motion to dismiss any claim arising from an act or alleged act in furtherance of the constitutional right of petition or free speech within 45 days after service of the claim if the claim was filed in federal court or, if the claim was removed to federal court pursuant to this Act, within 15 days after removal. Exempts from this Act: (1) certain procedural protections in any action brought solely on behalf of the public or solely to enforce an important right affecting the public interest; and (2) certain claims for relief involving commercial speech.
Added another link to the IBOX
www.anti-slapp.org/
Global Telemedia International, Inc. v. Doe 1 et al.
Cite as: 132 F.Supp.2d 1261
GLOBAL TELEMEDIA INTERNATIONAL, Inc.; Jonathon Bentley-Stevens; Regina S. Peralta, Plaintiffs,
v.
DOE 1 aka BUSTEDAGAIN40; Doe 2 aka ELECTRICK_MAN; Doe 3 aka BDAMAN609;
and Does 4 through 35, inclusive, Defendants.
U.S. District Court, Central District of California
No. SA CV 00-1155 DOC (EEx)
ORDER GRANTING DEFENDANTS' SPECIAL MOTION TO STRIKE
Before the Court are Special Motions to Strike brought by Defendant Barry King aka BDAMAN609 ("King") and Defendant Reader aka ELECTRICK_MAN's ("Reader"). King and Reader filed two separate motions; because they raise the identical legal arguments based on similar facts, the motions will be considered together. The Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; Local Rule 7.11. Accordingly, the hearing scheduled for February 26, 2001 at 8:30 a.m. is removed from the Court's calendar. After consideration of all papers submitted by both Defendants and Plaintiffs, the Court GRANTS Defendant Reader's Motion and GRANTS Defendant King's Motion.
I. Background
Plaintiff Global Telemedia International, Inc. ("GTMI") is a publicly traded telecommunications company trading on the National Association Securities Dealers OTC Bulletin Board ("OTCBB") or the Electronic Bulletin Board. The OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. An OTC company typically is not listed or traded on NASDAQ or a national securities exchange.
While GTMI had been incorporated and operated under various management teams, Plaintiff Jonathon Bentley- Stevens ("Stevens") took over the company in June 1999. The company began trading publicly as GTMI in that month. [FN 1] Its press releases describe it as "a leader in Voice over IP, LAN VPN (Virtual Private Network), ISP, Virtual ISP, and PC-PC, PC-Phone, data and voice, Smart e-Card solutions, (www.smart-e-card.net). It also owns manufacturing, telecom, ISP, and software development facilities in Australia, Malaysia and the Philippines." Gray Decl., Ex. T. It has traded from around $0.80 a share in June of 1999 to a high of around $4.70 a share in March of 2000 to a low of $0.25 share in October 2000. Opp'n to King Mot. at 9. It spiked up to the $2.75 range and back down below $1.00 between approximately March and April of 2000. It has closed at below $1.00 a share since April of 2000. Stevens Decl. in Opp'n to King Mot., Ex. B-1.
[FN 1] As of September 2000, GTMI began trading as GLTI. All parties continue to refer to the company as GTMI. To avoid confusion, the Court will follow suit.
Between March 2000 and the filing of the instant complaint, Defendant Reader and Defendant King posted numerous messages on the Raging Bull Message Boards, an Internet bulletin board. [FN 2] Raging Bull is a financial website that organizes individual bulletin boards or "chat-rooms," each one dedicated to a single publicly traded company. The chat-rooms are open and free to anyone who wants to read the messages; membership is also free and entitles the member to post messages. While the majority of posters appear to be investors in the company or prospective investors, stock ownership is not required to post. Posters typically are not identified by their real names, but by names created by each individual. For example, as noted above, Reader posted under the name of "electrick_man" and King posted under the name "BDAMAN609." Other handles include "foolsfool9," raginghuff," "nvshawty," "akitaman," and "joemeat." Gray Decl., Ex. G.
[FN 2] Raging Bull is not a party to this action.
Unlike many traditional media, there are no controls on the postings. Literally anyone who has access to the Internet has access to the chat-rooms. The chat-rooms devoted to a particular company are not sponsored by that company, or by any other company. No special expertise, knowledge or status is required to post a message, or to respond. The postings are not arranged by topic or by poster. The vast majority of the users are, because of the "handles," effectively anonymous. The messages range from relatively straightforward commentary to personal invective directed at other posters and at the subject company to the simply bizarre. For example, one exchange includes "joemeat, you are one of the stupidest suckers that ever posted here" to which "joemeat" responded "akita: that means so much coming from a degenerate who speaks regularly from his lower orifice." Gray Decl., Ex. G.
It is in this milieu that Reader and King posted messages in the GTMI chat-room. Reader began posting in March 2000 and apparently has continued at least through October 2000. King began posting in March 2000 as well. The postings are the subject of the instant complaint. Both Reader and King posted negative and allegedly libelous comments about GTMI and Stevens. Plaintiffs filed a complaint in state court for trade libel, libel per se, interference with contractual relations and prospective economic advantage against several posters, including Reader and King; Defendants removed the matter to this Court on November 22, 2000. Reader and King filed separate motions to strike pursuant to California Civil Procedure § 425.16.
II. Discussion
Reader and King are being sued as a result of less-than-flattering postings about GTMI on the Internet. In bringing their motions to strike under § 425.16, King and Reader argue that this suit is brought against them as a "transparent effort to intimidate and silence individuals who are critical of Plaintiffs' corporate performance." Reader Mot. at 1.
Section 425.16 was passed in 1992. The California State Legislature found that
[T]here has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, this section shall be construed broadly.
§ 425.16(a).
These disfavored lawsuits are commonly referred to as Strategic Litigation Against Public Participation, or SLAPP, lawsuits. Section 425.16 permits a defendant to dismiss a lawsuit if the alleged bad acts arose from his or her exercise of free speech "in connection with a public issue" and if the plaintiff cannot show a probability of success on the claims. § 425.16(b)(1). Thus, the questions before the Court are (1) whether the postings were an exercise of Defendants' right to free speech "in connection with a public issue," and (2) whether Plaintiffs have a probability of success on their claims.
A. "In Connection with a Public Issue"
Section 425.16(e) provides that an "act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with public issue includes: . . . (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest." Plaintiffs do not argue that Reader and King were not exercising their right to free speech or that their speech did not take place in a public forum. Rather, Plaintiffs argue that King and Reader were engaging in commercial speech, specifically defamatory commercial speech, about a company which is not of public interest but simply has been exposed to media coverage. Plaintiffs argue that to extend the SLAPP provisions to commercial contexts or to commercial speech would eliminate the tort of business defamation. Plaintiffs' arguments are not supported by law or the facts of this case.
GTMI is a publicly traded company with as many as 18,000 investors between March 2000 and October 2000. Stevens Decl. in Opp'n to King Mot. ¶ 12. GTMI itself has inserted itself into the public arena and made itself a matter of public interest by means of numerous press releases issued since 1999. Gray Decl., Ex. P at 97; Ex. Q at 112; Ex. R. at 122; Ex. T at 127-49; Ex. U at 150-53; Stevens Decl. in Opp'n to Reader Mot., Ex. D at 5. Further, a publicly traded company with many thousands of investors is of public interest because its successes or failures will affect not only individual investors, but in the case of large companies, potentially market sectors or the markets as a whole. This is particularly so when the company voluntarily trumpets its good news through the media in order to gain the attention of current and prospective investors. The fact that a chat-room dedicated to GTMI has generated over 30,000 postings further indicates that the company is of public interest.
Its status as a commercial enterprise does not, as GTMI would have it, insulate it from a SLAPP motion. See See Church of Scientology of Cal. v. Wollersheim, 42 Cal. App. 4th 628, 651, 49 Cal. Rptr. 2d 620, 633 (1996) (holding that matters of public interest "include product liability suits, real estate or investment scams, etc."). While of course the Court is not implying that GTMI is connected to a scam, the point is that GTMI is not a matter of public interest merely because of "media attention or "sensation" but rather because it has had over 18,000 public investors and is the topic of literally tens of thousands of Internet postings. [FN 3]
[FN 3] The Court notes that Plaintiffs cite Zhao v. Wong, 48 Cal. App. 4th 1114, 55 Cal. Rptr. 2d 909 (1996) for the proposition that "sensation" or media attention does not create an issue of public interest. Zhao, however, has been specifically disapproved by the California Supreme Court on exactly this point. Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106, 81 Cal. Rptr. 2d 471 (1999) (disapproving of Zhao's reading of "public interest" as too narrow). The legislature amended § 425.16 in 1997 to specifically provide that the section "shall be construed broadly."
The cases cited by Plaintiffs do not suggest otherwise. In Globetrotter Software, Inc. v. Elan Computer Group, 63 F. Supp. 2d 1127, 1130 (N.D. Cal. 1999), the court found that the "'issue of public interest' test is not met by 'statements of one company regarding the conduct of a competitor company.'" The court explicitly rejected applying the anti-SLAPP provisions to cases involving business competitors, but equally clearly did not reject the use of the provisions to all commercial cases or to all cases involving trade libel. Adopting the court's reasoning here, Reader and King are small individual investors who are not in the communications business, or in any business that could be said to be competing with Plaintiffs. They were speaking not as competitors, but simply as investors.
Plaintiffs' assertions to the contrary, applying the anti-SLAPP statute here will not have a chilling effect on business defamation cases in general. This holding does not foreclose defamation cases involving two competitors. Nor does it necessarily foreclose defamation cases against individuals, as not all businesses will be found to be a "public issue." Further, even where a business is found to be of public concern, where there is a probability of success, the claim may proceed.
The Court finds that the anti-SLAPP provisions are applicable in this matter and that Reader's and King's postings were an exercise of their free speech in connection with a public issue.
B. Probability of Success
Once a defendant has established a prima facie case that the basis of the claims against him arose out of acts in furtherance of his right to free speech in connection with a public issue, the burden shifts to plaintiff to demonstrate a probability of success. Globetrotter Software, 63 F. Supp. 2d 1127 at 1129. Here, GTMI has alleged trade libel, libel per se (defamation) and interference with contractual relations and prospective economic advantage.
1. Trade Libel and Defamation
a. Standards
Trade libel requires that Reader and King published a false statement which induced others not to deal with Plaintiffs, knowing it was false or acting with reckless disregard of its falsity, and caused Plaintiff monetary damages. Polygram Records, Inc. v. Superior Court, 170 Cal. App. 3d 543, 548-9 216 Cal. Rptr. 252, 254-55 (1985). Defamation requires a false statement of fact made with malice that caused damage. Ringler Assoc. Inc. v. Maryland Cas. Co., 80 Cal. App. 4th 1165, 1179, 96 Cal. Rptr. 2d 136, 148 (2000).
Both Reader and King argue that their statements were opinion and that opinions are not actionable under either trade libel or libel per se; GTMI responds that statements in a business context which imply dishonesty or incompetence are actionable, and that the opinion/fact distinction as set forth in the media cases cited by Reader and King is irrelevant because it applies only to the media. As to Plaintiffs' first argument, Defendants and Plaintiffs are not competitors and the chat-rooms do not constitute a business context. Rosenberg v. J.C. Penney Co., 30 Cal. App. 2d 609, 86 P.2d 69 (1939) is inapposite here, as it involved two business competitors, with one using artful advertising to convey libelous sentiments about its rival.
As to Plaintiffs' second argument, as Reader and King correctly argue, the fact/opinion distinction does not apply just to media defendants. See Nicosia v. De Rooy, 72 F. Supp. 2d 1093, 1101 (N.D. Cal. 1999) (applying fact/opinion distinction in case alleging that defendant's website postings were libelous); Rudnick v. McMillan, 22 Cal. App. 4th 1183, 1191, 31 Cal. Rptr. 2d 193, 197 (1994) (applying fact/opinion standard in case where defendant wrote an allegedly defamatory letter to the editor of a local newspaper). If the statements are opinion rather than fact, then they are not actionable.
To determine whether a statement is an opinion or fact, the Court must look at the totality of the circumstances. This entails examining the statement in its "broad context, which includes the general tenor of the entire work, the subject of the statement, the setting, and the format of the work." Nicosia, 72 F. Supp.2d at 1101 (citing Underwager v. Channel 9 Australia, 69 F.3d 361, 366 (9th Cir. 1995)). Then, the specific context and content of the statement is examined, "analyzing the extent of figurative or hyperbolic language used and the reasonable expectations of the audience in that particular situation." Finally, the Court must determine whether the statement is "sufficiently factual to be susceptible of being proved true or false." Id.
b. Application
Here, the general tenor, the setting and the format of both Reader's and King's statements strongly suggest that the postings are opinion. The statements were posted anonymously in the general cacophony of an Internet chat-room in which about 1,000 messages a week are posted about GTMI. The postings at issue were anonymous as are all the other postings in the chat-room. They were part of an on-going, free-wheeling and highly animated exchange about GTMI and its turbulent history. At least several participants in addition to Defendants were repeat posters, indicating that the posters were just random individual investors interested in exchanging their views with other investors.
Importantly, the postings are full of hyperbole, invective, short-hand phrases and language not generally found in fact-based documents, such as corporate press releases or SEC filings. For example, in June, King posted the following:
get off my back cowboy I am ready to send that message to the powers that be since you just accused me of being a druGgie, libel slanderous cheap attack. This company has put it up your arse again this week no filing no nothin no chance to buy it OFF SHORE ON INTERNATIONAL EXCHANGES, dill weed I bet you get your frustrations worked out at he YMCA stupid flippin puss I got info comin at you that will make you puke about this stock and then you can thank me.
Stevens Decl. in Opp'n to King Mot., Ex. A at 53.
Or,
nschefet or whatever hey I hold several thousand shares mysefl and I am still in the green but God what a way to make your day go by and watch the soap opera and everyhting is within the electronic world guidelines grow up kids before you fall off your perch Go GTMI ....roflmao again oh too much fun goodbye kids and thanks for the death threat the webmaster will love it :).
Id., Ex. A at 46.
To put it mildly, these postings, as well as the others presented to the Court, lack the formality and polish typically found in documents in which a reader would expect to find facts. It is unlikely, for example, that a corporation would express the view that investors should "up the volume for some of that 2 dollar love" or "gotta love this companies potential." Id., Ex. A at 57. Nor would the SEC ever state that GTMI is "steering the sinking ship but don't worry they are headed for the calmer waters of the carribean where your money will be safe from federal authorities." Id., Ex. A at 39.
In short, the general tone and context of these messages strongly suggest that they are the opinions of the posters. In addition, the content and style of the individual postings support a finding that they are the opinions of the posters.
i. Reader
Reader posted two messages stating that the company's plans were slow, practically non-existent or just plans on a drawing board. Stevens Decl. in Opp'n to Reader Mot., Ex. 1 at 37, 43. In the first, Reader states, "The thing that concerns me is their PR statements give them the appearance of being so high tech, so cutting edge but their real life product is so slow or non-existant." Id. at 37. A day later, on March 26, 2000, he posted a second message in reply to "joemeat$$$" which appears to be a clarification of his first posting: "Restatement[.] The companies statements are so forward looking that: 'Their real life product roll-out is so slow and several of their products are just plans on the drawing board (do not exist).' Thanks for pointing out my error." Id. at 43.
In both messages, Reader uses exaggeration, figurative speech and broad generalities. Nothing in these statements suggests that he is speaking knowledgeably about the company. He does not specify the products or the PR statements. Nor does he say that GTMI says anything contrary to his statement about the products. Rather, Reader appears to be making a broad statement that he does not agree with GTMI's PR statements. The reasonable reader, looking at the hundreds and thousands of postings about the company from a wide variety of posters, would not expect that Electrik_Man$$$ was airing anything other than his personal views of the company and its prospects. See Biospherics v. Forbes, 151 F.3d 180, 184 (4th Cir. 1998) (holding that a column's observation that a company's stock price was based on "hype and hope" was opinion).
In another posting on March 25, Reader posted the following: "SEC link[.] To view Jonathon Bentley Stevens violations: http://www.sec.gov/enforce/litigrel/lr15774.txt[.] He was busted for misrepresentation and overstatement of the facts: Let the truth be told...." Here, his statement about Stevens is clearly based on a public document which he provides for the readers. Thus, any reader may look at the same document and determine what they think of the information. By supplying the underlying document which supports his views, Reader has set forth an opinion, not fact. Nicosia, 72 F. Supp. 2d at 1102.
In addition, despite Plaintiffs' argument to the contrary, "busted" in this context does not mean "arrested." While the average investor may interpret "busted" as "caught" or "found out," that reader is highly unlikely to believe that the SEC has arrested anyone for "misrepresentation" or "overstatement." Reader is simply stating his opinion that the SEC is investigating Bentley-Stevens, which in point of fact it is. Gray Decl., Exs. A, B, C.
ii. King
King posted at least 57 messages between March and October 2000. Stevens Decl. in Opp'n to King Mot., Ex. A at 2-58. Plaintiffs place several at issue in their oppositions.
1) "Sinking Ship"
On June 12, 2000, at approximately 4:37 p.m., King posted the following:
akitaman we did get news today! another board poster says the PR will come out tomorrow....rolfmao that was funnier than some of my jokes today.... another day with GTMI steering the sinking ship, but don't worry they are headed for the calmer waters of the carribean where your money will be safe from federal authorities,,now thats newz, speling was for hyplori :)"
Stevens Decl. in Opp'n to King Mot., Ex. A at 39.
Here, in the context of the full message, King's comments are hyperbolic and figurative. The posting is also in response to another posting, making it less likely to be a statement of fact. Given the tone and context of the message, a reasonable reader would not take this to be anything more than a disappointed investor who is making sarcastic cracks about the company. At this point, the company was trading as low as $0.43 a share and closed at $0.75, so it would not be unreasonable for an investor to be sarcastic about a company he bought at $2.00. Nor are these statements susceptible to proof, as would be a statement of fact.
2) "Fly the Coop"
Plaintiffs identify another message dated June 12, 2000, at 4:48 p.m. which reads in full:
uncle ernie trust your stomach, that feeling that says we are beeing manipulated by the company so that they can fly the coop again, who oh why must we keep saying I hear they are, they said they were, WERE IS THE PR TO THE LONGS SAYING SORRY FOOLS WE WENT BELLY UP SORRY FOR SPOING YOUR WEEKEND, SORRY FOR NOT MEETING OUR TARGET DATES AND OH YEA SORRY WE MISSED THE BOAT IN GETTING OUR PRODUCT OUT. And as for MYIQ, get real that is a shell company and the history is sour, no one is ready for Internet education well maybe hyplori since he/she is the spelling critic."
Stevens Decl. in Opp'n to King Mot., Ex. A at 37.
Plaintiffs argue that "fly the coop again" is stating a fact that "GTMI not only intends to steal investor money, but that such theft is or will be merely a repeat of a previous GTMI theft. This is not opinion, but an outright accusation of criminal intention coupled with proof based on alleged albeit unstated prior criminality." Opp'n to King Mot. at 8. First, the Court notes that "fly the coop" is a colloquial expression meaning "to depart suddenly or surreptitiously, escape, flee." Webster's Third New Int'l Dictionary 879 (1986). There is no implication of theft or criminality. Second, "fly the coop" is part of a rambling sentence full of figurative and expressive language ("trust your stomach," "why oh why") and sarcasm. Given the context and the content, no reasonable reader would believe that King was stating a fact that the company was going to flee or escape. Again, the statement is simply part of a negative rant against a company that on that date closed at $0.75 a share. The posting is written with a great deal of linguistic informality, thus alerting a reasonable reader to the fact that these observations are probably not written by someone with authority or firm factual foundations for his beliefs.
3) "Screwed out of your money"
On October 2, King posted: "Dick T is a done deal you and I don't count, sell tomorrow take your dollars, write off the loss, buy some Krispy Kreme they will do well in the 4th Q as the holidays are a comin.....and by the way if you go to the SHM make sure you take a piece of the furniture its the only gift you will receive from these jokers.....you have been screwed out of your hard earned money here its time to talk about a lawsuit." Stevens Decl in Opp'n to King Mot., Ex. A at 12.
Plaintiffs argue that "Mr. King appears to be soliciting a shareholder lawsuit against GTMI." Opp'n to King Mot. at 8. While the Court disagrees with this interpretation, even if that is the import of the message, then it is simply the opinion of a shareholder who believes a lawsuit may be his only recourse against a company whose stock was then trading at around $0.45 a share. Even if it were a fact that King were actually soliciting a lawsuit, stating that intent is not actionable libel.
4) "Lie"
On October 7, 2000, King posted, "I have never witnessed such blatant mis-management, these people hold our money and they dictate after they lie how it will be used.......greatest joke on the boards." Stevens Decl. in Opp'n to King Mot., Ex. A at 4. This Plaintiffs interpret as King saying, "in essence, that GTMI misrepresents its business intentions, apparently as part of its standard practice to say anything to raise investor funds." Opp'n to King Mot. at 8. Again, while King's sentiments are not positive, the statement contains exaggerated speech and broad generalities, all indicia of opinion. Given the tone, a reasonable reader would not think the poster was stating facts about the company, but rather expressing displeasure with the way the company is run. This is especially the case given that the closing price per share in early October was about $0.45.
In sum, neither Reader's nor King's postings are statements of fact. Given the general context of the postings, the colorful and figurative language of the individual postings, the inability to prove the statements true or false, and in one case, the posting of documents to support the poster's statements, the postings are opinions.
iii. Damages
Even if the statements were actionable statements of fact, and not opinion, Plaintiffs must show damages as a result of the postings. Plaintiffs contend that they were damaged by both Defendants' postings because the postings caused the stock to lose value, and Plaintiffs further contend that Defendants posted their messages with that intent. Opp'n to King Mot. at 1, 9 and 17; Opp'n to Reader Mot. at 13-14. The facts do not support Plaintiffs' contention.
With respect to King, there is no correlation between his postings and the drop in stock prices. King's first posting on March 17, 2000 was a glowing recommendation: "wayitgoes, I am loading up, Schwab won't take my nibbling had to up the volume for some of that 2 dollar love. This and my EDIG will take me to the next level. Gotta love this companies potential. Bdaman with GTMI in his hand!!!." Stevens Decl. in Opp'n to King Mot., Ex. A at 58. GTMI closed on March 13, 2000 at $2.03 after trading as high as $4.76. King's next two postings, dated March 29 and April 4, were also positive. During this time, the stock dropped in value, losing about one third of its value. The stock closed on March 27 at $1.67, and on April 3 at $1.31. Thus, during the time King posted positive comments, the stock had already fallen from a closing high of $2.03 to a close of $1.31. See generally id., Ex. B at 3-4 for share prices.
King posted his first negative comments on May 31. By that time, the stock had slipped even further to $0.68. Thus, prior to King's first negative posting, GTMI's stock had already dropped from a high of $2.03 to a low of $0.68--with no assistance from King. The stock then traded between $0.62 and $0.87 for the period May 31 through August 14. During the time, as the stock moved up and then down, King posted 23 messages, all negative and allegedly libelous. Even if his postings caused downward movements, which given the thousands of postings every day is unlikely, the stock altogether lost four cents (the difference between $0.68 and $0.64)--an insignificant drop compared to the loss in value represented by a drop between $2.00 and $0.68.
Looking more closely at that period of time, causation becomes even more problematic. For example, the stock moved from $0.78 to $0.62 between July 24 and August 14, 2000. During that same period, King posted once. Plaintiffs have not shown any correlation between King's posting and any loss in value, and the opposite conclusion is borne out: GTMI's stock lost significant value entirely unaided by King.
Similarly, damages cannot be shown with respect to Reader's statements. For example, his first negative posting is dated March 25, 2000. By that time, the stock had already dropped from a closing high of $2.67 on March 6 to closing of $1.62 on March 20. A week after his negative posting, the stock closed at $1.68, up six cents.
In sum, the Court finds that Plaintiffs have not satisfied their burden to show a probability of success on their claims for trade libel and defamation. [FN 4]
[FN 4] Claims for interference with contractual relations and interference with prospective economic advantage also have a damage component. For the reasons noted here, Plaintiffs cannot show damages as a result of Defendants' postings, and therefore they cannot succeed on these causes of action.
2. Further Discovery
Plaintiffs argue that if the Court is inclined to grant Defendants' motions, it should stay the decision to allow Plaintiffs limited discovery regarding King's general experience in trading stocks, his over-all knowledge and sophistication regarding valuation of lower-dollar stocks such as GTMI, including the effect of "consumer" comments. Opp'n to King Mot. at , n2. In Rogers v. Home Shopping Network, Inc., 57 F. Supp. 2d 973, 985 (C.D. Cal. 1999), the court held that if a plaintiff requires discovery to oppose a motion brought under § 425.16, the hearing on the motion should be stayed until discovery is completed.
Here, Plaintiffs' request for discovery does not fall within the scope of Rogers. King's experience in trading is irrelevant to the questions raised in this motion, including issues of damage and whether the postings were fact or opinion. Having made the legal determination that the statements must be factual to be actionable, and having further found that the postings are opinions rather than actionable facts, the Court does not require further evidence to evaluate Plaintiffs' claims. Nor do Plaintiffs suggest that further facts are necessary to evaluate whether the postings are indeed fact or opinion. Similarly, Plaintiffs do not suggest any facts which may be relevant to determining the damage caused by the postings. Since both issues are dispositive of Plaintiffs' claims, no further discovery is necessary.
Plaintiffs' request for discovery is DENIED.
III. Disposition
The Court GRANTS Defendant King and Defendant Reader's Motions to Dismiss. The Court DENIES Plaintiffs' request for discovery.
IT IS SO ORDERED.
Ampex Corp. et al. v. Cargle
Cite as: 128 Cal.App.4th 1569, 27 Cal.Rptr.3d 863
AMPEX CORPORATION et al., Plaintiffs and Respondents,
v.
Scott CARGLE, Defendant and Appellant
California Court of Appeal, First District, Div. 4
No. A106345
Filed May 6, 2005
(Appeal from Contra Costa County Superior Ct., C01-03627.)
REARDON, J.
Respondents -- a publicly traded company and its chairman -- brought a defamation action against an anonymous poster on an Internet message board who posted messages critical of them. The poster responded with a motion to strike the complaint under California's anti-SLAPP statute. [FN 1] Once the poster's identity was revealed, respondents dismissed the California action and filed in New York. In the first appeal, we held that the dismissal did not strip the trial court of jurisdiction to rule on the motion and request for attorney fees. (Ampex Corp. v. Cargle (Apr. 30, 2003, A099344, 2003 WL 1986056) [nonpub. opn.].) This time around we reverse the lower court's denial of appellant's motion for attorney fees and conclude that he sustained his burdens under section 425.16. Therefore, appellant is the prevailing party, entitled to attorney fees. (§ 425.16, subd. (c).)
[FN 1] Code of Civil Procedure section 425.16 (§ 425.16). SLAPP stands for strategic lawsuits against public participation.
I. BACKGROUND
A. Factual Background
Appellant Scott Cargle is a former employee of iNEXTV, a wholly owned subsidiary of respondent Ampex Corporation (Ampex). Cargle was laid off in December 2000 for economic reasons, along with approximately 20 other iNEXTV employees.
Ampex is a publicly traded company with 59.9 million shares outstanding as of April 2002. Respondent Edward J. Bramson is the president and chairman of the board of directors of Ampex. We take judicial notice that Ampex maintains a Web site at www.ampex.com. Among other things, the company posts its SEC filings on this Web site. Press releases and letters from the chairman are also available through the Web site. [FN 2]
[FN 2] Ampex is adamant that this and other computer records which were attached to the declaration of Cargle's attorney are not available to him because such evidence was rendered inadmissible on hearsay and authentication grounds by the trial court in the original proceeding. Inexplicably, Cargle did not challenge this ruling in the first appeal, nor did he press the matter in the trial court following our reversal. The trial court's initial rulings were patently wrong. The various computer printouts from Ampex's Web site and the Yahoo! message board were offered to show that they existed in the public eye: They were not offered for the truth of the matter asserted and thus were not hearsay statements. (Evid.Code, § 1200.) Moreover, the records were self-authenticating as computer printouts. (Id., § 1552, subd. (a).) However, because Cargle has not properly preserved his challenge to the evidentiary ruling, we do not disturb it. Nevertheless, to the extent the relevant excluded records "are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy" (Evid.Code, § 452, subd. (h)), we take judicial notice of them (id., § 459, subd. (a)).
In August 2001, Cargle, under the username "exampex" (Exampex), posted messages on the Internet message board for Ampex operated by Yahoo! We take judicial notice that Yahoo! offers financial message boards on the Internet for publicly traded companies where any user can post comments. (See Dendrite Intern. v. Doe No. 3 (2001) 342 N.J.Super. 134, 775 A.2d 756, 761-762.)
Message number 112255, posted by Exampex, read in part: "Well, let me tell you something. I was an employee with INEXTV for a while. Guess what? They did market research AFTER we launched the websites, not before. They spent millions before they even looked for a market. Then the geniuses got about 10 people in a room and asked questions like, 'How would you like to see exciting videos on your computer that will help you make millions of dollars and become fabulously famous?' ... [¶] I just wonder how the crooks fooled everyone for so long. The websites rarely worked. The content was so boring and stale that no one even noticed we existed. The production values sucked because the equipment was cheap (my son has better TV equipment at his high school) and the majority of the production staff were interns.... [¶] All in all, it was the most miserable, sleazy, cheap operation I have ever worked for.... The production department bought studio equipment that couldn't be used (because it was bought on the gray market somewhere and all the operating manuals were in FRENCH, for crying out loud! No one could read them!) During a shoot one day, the VP of Programming stole a Razor scooter from the company who was marketing the toy (he has triplets and tried to steal three -- how cheap is that?)."
The next day Exampex posted message number 112281 under the header "all is true." It read in part: "I can't prove I worked for them without posting a check stub and I'm not that stupid. [¶] I will tell you that Ed said people who smoke marijuana should be taken out and shot; and upon hearing a single mother had contracted AIDS, he said, 'Serves her right.' So not only is he incompetent, he's cruel." The final message, number 112299, under "Re: all is true," contained the following: "I just thought after all this speculation about what happened, it might be interesting to hear from someone who saw. [¶] It was total incompetence. It was a bunch of old guys sitting around trying to make money with a new media that they didn't understand."
B. Procedural History
Respondents Bramson and Ampex filed a libel suit against "Doe 1 aka 'exampex' on Yahoo!" in California. The gist of the complaint was that Exampex posted defamatory messages about Ampex on the Yahoo! message board for that company. Cargle filed a section 425.16 [FN 3] anti-SLAPP motion, coupled with a request for attorney fees and costs.
[FN 3] This statute provides in part: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1).)
Upon learning Cargle's identity in the proceedings, respondents dismissed their complaint. At the subsequent hearing on the motion to strike and for attorney fees, the court ruled that the voluntary dismissal aborted its jurisdiction to consider the motion. Thus the court made no determination as to whether Cargle was the prevailing party entitled to section 425.16 attorney fees. Cargle appealed the order and we reversed. On remand, the trial court denied Cargle's motion to strike and for attorney fees, determining that had the lawsuit not been dismissed, it would have denied the motion on the merits: "Even assuming, arguendo, that Defendant's challenged statements were made 'in connection with a public issue or an issue of public interest' within the scope and meaning of Section 425.16(e), Plaintiffs have demonstrated a probability they will prevail on their claims sufficient to defeat the motion to strike.... [¶] Plaintiffs have established each element of libel per se. [¶] Plaintiffs are not required to show actual damages as there is evidence from which constitutional malice may reasonably be inferred." This appeal followed.
II. DISCUSSION
A. Introduction; Burdens of Proof
Section 425.16 applies to causes of action arising from an act "in furtherance of the person's right of petition or free speech" under the federal or state Constitution "in connection with a public issue." (§ 425.16, subd. (b).) Such acts include "any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest...." (Id., subd. (e)(3).) Claims based on these acts are subject to a special motion to strike unless the court determines that the plaintiff has established that there is a probability of prevailing on the merits. (Id., subd. (b)(1).) We construe section 425.16 broadly in order to encourage participation in matters of public significance. (Id., subd. (a).)
Section 425.16 thus invites a two-part analysis: First, did the challenged cause of action arise from protected activity within the meaning of the statute? The moving defendant bears this threshold burden. Second, if the defendant makes the threshold showing, the burden shifts to the plaintiff to make a prima facie showing of facts which, if credited by the trier of fact, would sustain a favorable judgment. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 999, 113 Cal.Rptr.2d 625.) In opposing an anti-SLAPP motion, the plaintiff cannot rely on allegations in the complaint, but must bring forth evidence that would be admissible at trial. (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212, 12 Cal.Rptr.3d 786.) We do not weigh credibility or evaluate the weight of the evidence. Rather, we accept as true the evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it has defeated plaintiff's submission as a matter of law. (Ibid.)
B. Cargle Has Met His Burden
When Cargle decided in August 2001 to join the conversation about the fortunes of Ampex, he did so by posting messages on the Yahoo! message board for Ampex. The question here is whether such postings were made in a public forum, traditionally defined as " 'a place that is open to the public where information is freely exchanged.' " (ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at p. 1006, 113 Cal.Rptr.2d 625.) The term "public forum" includes forms of public communication other than those occurring in a physical setting. Thus the electronic communication media may constitute public forums. Web sites that are accessible free of charge to any member of the public where members of the public may read the views and information posted, and post their own opinions, meet the definition of a public forum for purposes of section 425.16. (ComputerXpress, Inc. v. Jackson, supra, at p. 1007, 113 Cal.Rptr.2d 625.) Thus the Yahoo! message board maintained for Ampex was a public forum.
But were Cargle's postings made in connection with a matter of public interest? Contrary to Ampex's assertions, they were. Courts have held that Internet postings about corporate activity constitute an issue of public importance upon considering the following pertinent factors: (1) whether the company is publicly traded; (2) the number of investors; and (3) whether the company has promoted itself by means of numerous press releases. (See Global Telemedia Intern., Inc. v. Doe 1 (C.D.Cal.2001) 132 F.Supp.2d 1261, 1265; ComputerXpress, Inc. v. Jackson, supra, 93 Cal.App.4th at pp. 1007-1008, 113 Cal.Rptr.2d 625.)
Ampex is a publicly traded company, with over 59 million shares outstanding at the relevant times. Ampex inserted itself into the public area via press releases issued by the company and made available on the Internet. A July 20, 2001 press release of Ampex announced it was discontinuing the operations of iNEXTV. By the time of Cargle's first posting, the Yahoo! board dedicated to Ampex had generated over 112,000 postings -- Exampex's message was number 112255 -- another indicia of public interest in the company. Cargle's speech addressed the management practices of iNEXTV and its chairman. Exampex's message itself indicates he was prompted by public speculation about iNEXTV: "I just thought after all this speculation about what happened, it might be interesting to hear from someone who saw."
C. Ampex Did Not Demonstrate a Probability of Prevailing on the Merits
1. Limited Public Figure
Since public figures must prove by clear and convincing evidence that an allegedly defamatory statement was made with knowledge of falsity or reckless disregard for truth (New York Times Co. v. Sullivan (1964) 376 U.S. 254, 279-280, 84 S.Ct. 710, 11 L.Ed.2d 686), we must first discern whether respondents were public figures. The characterization of "public figure" falls into two categories: the all-purpose public figure, and the limited purpose or "vortex" public figure. The all-purpose public figure is one who has achieved such pervasive fame or notoriety that he or she becomes a public figure for all purposes and contexts. The limited purpose public figure is an individual who voluntarily injects him or herself or is drawn into a specific public controversy, thereby becoming a public figure on a limited range of issues. (Gertz v. Robert Welch, Inc. (1974) 418 U.S. 323, 351, 94 S.Ct. 2997, 41 L.Ed.2d 789; Reader's Digest Assn. v. Superior Court (1984) 37 Cal.3d 244, 253, 208 Cal.Rptr. 137, 690 P.2d 610.)
Copp v. Paxton (1996) 45 Cal.App.4th 829, 845-846, 52 Cal.Rptr.2d 831 sets forth the elements that must be present in order to characterize a plaintiff as a limited purpose public figure. First, there must be a public controversy, which means the issue was debated publicly and had foreseeable and substantial ramifications for nonparticipants. Second, the plaintiff must have undertaken some voluntary act through which he or she sought to influence resolution of the public issue. In this regard it is sufficient that the plaintiff attempts to thrust him or herself into the public eye. And finally, the alleged defamation must be germane to the plaintiff's participation in the controversy.
Respondents are adamant there is no public controversy, arguing that the Exampex postings spoke to the internal workings of Ampex, which were not subject to controversy, whether public or private. We disagree. Respondents' depiction does not account for the public dimension of the exchanges. First, prior to Exampex's comments there were a number of postings on the Yahoo! message board criticizing the management of Ampex and Bramson. The Yahoo! message board itself is a public forum. Second, the content of Exampex's messages posted on the Internet over a three-day period indicates that each message responded to another poster's message, with over 40 postings occurring in between. Third, with 59,000 shares outstanding, the causes and consequences of discontinuing Ampex's multimillion dollar venture into the Internet television business had foreseeable and substantial ramifications for nonparticipants. All this goes to underscore the public nature of the matter. Ampex's decision and action in discontinuing iNEXTV amounted to a public controversy that elicited concerns about the management of Ampex.
Although respondents deny inserting themselves into the controversy, they did, by way of press releases and letters posed on their Web site. For example, Ampex's July 2001 press release announcing the discontinuance of iNEXTV attributed its decision to "adverse capital market conditions." As well, Chairman Bramson's 2000 annual letter, also posted on the Ampex Web site, touted the significance of iNEXTV to Ampex's success.
Finally, Cargle's comments were germane to respondents' participation in the controversy. These comments were counter to respondents' version of events. They criticized management rather than ascribing iNEXTV's woes to market forces.
D. Malice
Cargle argues that his speech was nonactionable opinion, hyperbole and rhetoric rather than actionable false statements of fact, and we agree that some of the offending speech was just that. However, we are not convinced that all of his speech can be classified as opinion and thus we must determine whether respondents can demonstrate that some of the alleged defamatory speech was uttered with actual malice.
In the context of an anti-SLAPP suit, courts must consider the pertinent burden of proof in ascertaining whether the plaintiff has shown a probability of prevailing. (Annette F. v. Sharon S. (2004) 119 Cal.App.4th 1146, 1166, 15 Cal.Rptr.3d 100.) Thus, limited purpose public figures such as respondents who sue for defamation must establish a probability that they can produce clear and convincing evidence that the allegedly defamatory statements were made with knowledge of their falsity or with reckless disregard of their truth or falsity. (Id. at p. 1167, 15 Cal.Rptr.3d 100; see New York Times Co. v. Sullivan, supra, 376 U.S. at pp. 279-280, 84 S.Ct. 710; Copp v. Paxton, supra, 45 Cal.App.4th at p. 846, 52 Cal.Rptr.2d 831.) To meet the clear and convincing standard, the evidence must be such " 'as to command the unhesitating assent of every reasonable mind.' " (Annette F. v. Sharon S., supra, at p. 1167, 15 Cal.Rptr.3d 100.)
The reckless disregard test requires a high degree of awareness of the probable falsity of the defendant's statement. " 'There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.' " (Reader's Digest Assn. v. Superior Court, supra, 37 Cal.3d at p. 256, 208 Cal.Rptr. 137, 690 P.2d 610, quoting St. Amant v. Thompson (1968) 390 U.S. 727, 731, 88 S.Ct. 1323, 20 L.Ed.2d 262.) This is a subjective test, focused on the defendant's attitude toward the veracity of the published material, as opposed to his or her attitude toward the plaintiff. (Reader's Digest Assn. v. Superior Court, supra, at p. 257, 208 Cal.Rptr. 137, 690 P.2d 610.)
Actual malice may be proved by circumstantial or direct evidence. (Annette F. v. Sharon S., supra, 119 Cal.App.4th at p. 1167, 15 Cal.Rptr.3d 100.) However, we will not infer actual malice solely from evidence of ill will, personal spite or bad motive. (Id. at p. 1169, 15 Cal.Rptr.3d 100.)
Respondents contend there is sufficient circumstantial evidence to infer malice. Specifically, they point out that the statements were posted after Cargle's employment with Ampex was terminated. Further, they posit that the tone and substance of the speech "are hallmarks of ill-will and vindictiveness" and that certain statements indicate Cargle was "angry, hostile and spiteful as to his former employer." Finally, they assert the speech was "completely untrue."
Respondents have not carried their burden. They rely on Cargle's status as a former employee which is not disputed. However, respondents offer nothing to counter Cargle's statement that he was laid off, with 20 others, for economic, not personal reasons. Where is the basis for inferring personal spite? Respondents also assert that Cargle described events and comments that never occurred. However, again, Cargle produced detailed declarations setting forth the basis for his statements and opinions. Respondents' declarations, simply summarizing certain comments and repeating that they were false, were insufficient to establish a prima facie showing of constitutional malice. In short, respondents have not produced any evidence or inferences from evidence concerning Cargle's attitude or a state of mind with respect to the veracity of the messages he posted on the Yahoo! message board.
III. DISPOSITION
We reverse the trial court's order denying Cargle's motion for section 425.16 attorney fees. Cargle was the prevailing defendant on his motion to strike and is therefore entitled to attorney fees and costs pursuant to section 425.16, subdivision (c). We remand solely for determination of reasonable fees and costs.
We concur: KAY, P.J., and SEPULVEDA, J.
Chicago Company Sues Yahoo Over Message Board Post
Win or lose, Internet lawsuits are bad P.R.
By MATT BARTOSIK
Updated 4:20 AM PDT, Thu, Dec 31, 2009
When a financial services company read some recent comments on an Internet chat board, their reaction was far from "Yahoo!"
Advance Equities, Inc. filed suit on Monday, claiming false defamatory statements were posted on Yahoo's financial chat board on November 9, 2009.
As is the nature of a chat board, the statements were only on the site temporarily, but that isn't stopping the company from citing Illinois Supreme Court Rule 224, which allows "a person or entity" to "determine the identity of one who may be liable in damages."
The firm is demanding to know the true identity behind robinlove@yahoo.com, who made the unpleasant remarks about the Loop business.
The lawsuit is just another in a pattern of big businesses attacking individuals for expressing their opinions online.
Advance Equities should have taken a note from similar lawsuits, like when Horizon Realty sued resident Amanda Bonnen for her Tweet complaining about a moldy apartment or when Buffalo Grove trustee Lisa Stone demanded the identity of a snarky Daily Herald commenter. Even if their complaints are legally sound, they don't make any logical sense when it comes to public relations.
What do such parties hope to gain in arguably frivolous lawsuits? These court proceedings certainly don't deter the vast majority of Internet users from typing out their thoughts for the world to see. In fact, they only add fuel to the fire, attracting negative public attention online. Word of the overkill lawsuits spreads even faster than the initial "defamatory" statements.
Many companies have found a way to use social media effectively, engaging in better and instant communication with their customers. For example, Whole Foods responds to customer complaints on their Twitter account, twitter.com/wholefoods.
It would be worthwhile for businesses like Advance Equities and Horizon Realty to respond to the charges directly, rather than try to suppress them. Such overzealous attacks only make themselves look bad.
THE LEGAL PROCESS - DEFENDING A SLAPP
There are several stages to SLAPP litigation. The following is a list of the key events you can expect in defending a SLAPP.
Filing a Response
You have a very limited amount of time (typically, 30 days) to file and deliver "an initial responsive pleading." Often, your "first responsive pleading" will be the Answer to the Complaint. This is a formal document detailing your response to each of the allegations in the Complaint. Or, it may be a document which attacks the Complaint on legal or factual grounds, such as a Special Motion to Strike (described below). Remember that your initial response, whether an Answer, a Special Motion to Strike, or other document, must be filed with the Court and delivered to the other side within the deadline specified on the Summons.
Opposing a Temporary Restraining Order.
A SLAPP filer can ask for a temporary restraining order ("TRO") when the Complaint is filed. A TRO is a court order that temporarily orders or prohibits a specific act or series of acts until the court rules on the matter. A TRO is of limited duration, usually lasting no more than 20 days. You may get very little notice (24 hours) that a TRO is being sought. As a TRO may impact your ability to speak out on an issue or remain active in important public affairs, it must be vigorously opposed.
Opposing a Motion for Declaratory and Injuctive Relief.
he Complaint may seek declaratory relief, which means that the filer has asked the court to make a ruling on the respective rights and duties of the parties under the circumstances. The Complaint may also seek preliminary or permanent injunctive relief; like a TRO, a preliminary injunction is a temporary order which orders or prohibits a specific act or series of acts until trial. A permanent injunction orders or prohibits an act or acts indefinitely.
A motion for declaratory or a preliminary or permanent injunction requires that all interested parties be given notice of the motion (usually 15 days) and an opportunity to be heard. The crucial issues in a SLAPP are frequently decided on such motions. If the SLAPP filer is seeking such a motion, it must be vigorously opposed.
Bringing a Special Motion to Strike.
California's new anti-SLAPP statute, Code of Civil Procedure § 425.16, gives victims an opportunity to have the court rule at the outset whether a SLAPP filer can show a probability of winning the suit. If the judge finds that the filer cannot prove that the case has a probability of winning, the court will "strike" the Complaint, and dismiss the suit. The court will also order the filer to pay to the SLAPP victim his or her attorneys' fees and costs.
This special motion generally must be brought 60 days from the date the Complaint is received, and is the best way to put an end to a SLAPP early in the proceedings. The special motion to strike can be brought later than 60 days after the Complaint is received, but only if a court, in its discretion, allows it to be filed at a later time.
Make sure that there is a good basis for bringing the special motion to strike. If the court finds that it is frivolous, or brought only for purposes of harassment or delay, the court will sanction you, and order you to pay the amount of attorneys' fees and costs incurred by the other side in opposing your motion.
Dealing with Discovery.
Discovery is the term for the process in which parties to litigation gather information from each other. This is accomplished by depositions, in which individuals are orally questioned by lawyers, under oath, as if on the witness stand, or by interrogatories, which are written questions by one party to the other and which require a written answer, also under oath. Parties may also ask that any important documents be turned over; this is known as a request for production of documents. The process of discovery can take months to complete.
Under the special motion to strike procedure of Code of Civil Procedure § 425.16, described above, all discovery is suspended or stayed until a judge rules on the special motion to strike. This means that all discovery must be halted until the judge rules. This is important because even the process of having to answer discovery requests can impact one's willingness to oppose a project or speak out on public issues. However, if you believe the other side has information necessary to your defense, you will be unable to get it once the special motion to strike is filed. Carefully consider whether there is information you may need before filing the special motion to strike. Alternatively, the court, upon a formal request and for good cause shown, may order that a specified course of discovery be conducted.
Arbitration.
In many counties, once discovery is over, cases are ordered to arbitration. Arbitration is a mini-trial or hearing in which the case is presented to a neutral party -- usually another attorney or a private or retired judge -- who makes a determination and an award. The arbitration ruling can be appealed by either party.
Filing a Motion for Summary Judgment
Upon completion of discovery and following arbitration (where the arbitration procedure is used), any party can bring a motion for summary judgment. This is used to inform the court whether there are any material issues of fact in dispute. If there are no factual issues in dispute, and only issues of law remain, the judge decides the case by interpreting the relevant law. If however, factual disputes remain to be decided -- for example, whether one party or the other is telling the truth -- the case must go to a jury, unless the parties agree that a judge may decide the issue.
Preparing for Trial
If the case cannot be resolved by any of the above procedures, it will be considered in a trial. A jury or judge will hear the evidence, which may include live testimony from each side, and present a final ruling or "judgment."
Judgment and Appeal
After trial, a judgment is entered according to the ruling of the jury or trial judge. If the judgment orders the payment of money from one party to another, there are various mechanisms to enforce the judgment to ensure that payments are made. A final judgment may be appealed to a higher court, by either party, but only upon a showing of some legal error. Generally, the filing of an appeal does not render the judgment automatically unenforceable. To pursue an appeal, the losing party must instead post a bond, often in an amount twice that of the judgment, to secure the judgment during the appeal process.
Pursuing Settlement
An agreement among the parties to resolve the case can be reached before the Complaint is filed, at any time during the litigation, or even after trial.
Mapping Out a General Strategy With Co-Defendants
It is very likely that you will not be the only person being sued by a SLAPP filer. A common strategy is for the filer to sue all vocal opposition. In addition, the SLAPP filer can sue numerous (anywhere between ten and several hundred) as yet unnamed "DOE" defendants. This means that the SLAPP filer can, at any time during the case, replace a "DOE" defendant with a named individual. As a result, others who are sympathetic to your position or cause may be fearful of helping you or continuing to speak out on the issue, because of a concern that at any time they, too, may be sued.
If you are one of a number of people being sued, consider a cooperative defense strategy. Cooperation with other defendants can have a number of benefits. Often, it helps to develop a good and successful defense. In addition, cooperation with others can reduce the stress and financial burden of defending a lawsuit by yourself.
The first step is to come to an agreement with co-defendants about what issues to focus on. Does the litigation seek to impede your work or that of your organization? How important are these goals to your work? Would you be willing to give up your work to settle the case? What if others have used alternative or unlawful means to pursue these common goals -- are you willing to stand with these persons, though you differ as to how specified goals should be accomplished? Consider the significance of the suit -- if the SLAPP filer is successful in silencing you and your friends, will others be silenced too?
Decide how litigation expenses and attorney fees are going to be paid and by whom. If money and resources must be raised, agree upon fundraising efforts, who is responsible for these efforts, and how money will be disbursed from such activities.
Decide at the outset who will be the spokesperson(s) for your case. Spokespeople should be selected with extreme care. Public perception is important in generating interest, support, money, and sympathy. You do not want to take the chance of alienating either the judge, who will be ruling on your case, or potential supporters of your work.
If problems or disagreements arise which cannot be resolved in discussion, it is probably a good idea to split from the group and obtain your own lawyer. There is little advantage to being united with others if your own case is going to suffer.
Dealing with the Press
Whether or not your attorney is experienced in dealing with the press, become familiar with The Press Handbook. This handbook, available through the Media Alliance in San Francisco, California, will show you how to generate positive media coverage and support for your case.
What if You File a Lawsuit First?
Often, civic minded citizens who file public interest lawsuits can be hit with a SLAPP "counter- claim." In such a circumstance, the SLAPP filer uses your lawsuit to sue you for claimed damages arising out of the circumstances which lead to you to file your public interest lawsuit.
Before you or your community group chooses to initiate a public interest lawsuit, make sure that you have a good case. Find out what all the possible ramifications are before filing suit. When preparing to initiate litigation, be sure to document everything of significance. Know your facts. You may wish to keep a litigation notebook to include the following:
*
important dates and deadlines
*
referrals and attorneys contacted
*
significant source materials
*
a listing of information you have with the words "confidential" and "attorney-client or attorney work-product privileged" written across each page
*
a confidential listing of key witnesses
*
notes of discussions with the opposite side of the case
The creation of such a notebook will not only help protect you in the event of a SLAPP, it will make you a better advocate in your own case.
Also, consider whether your case will be benefitted by having other groups or organizations join your lawsuit. Often, the mere existence of several groups opposing a single project or opponent can add a note of importance to your lawsuit. Joining with like-minded individuals and groups is also a good way to spread the cost of litigation. Similarly, if the opponent turns around and SLAPPs you and your co-plaintiffs, you will not be alone in defending the SLAPP.
SLAPPing Back
If you are successful in defending a SLAPP, and you can show that the SLAPP was brought for a purpose other than to resolve the issue by legal means -- e.g., the case was filed for the purposes of harassment, needlessly piling up defense costs, silencing opposition, etc. -- seek legal advise about SLAPPing back. A SLAPPback is a way to seek monetary damages, including pain and suffering, from the SLAPP filer on the theory that the original SLAPP constituted an abuse of the legal process.
In the past, juries in some SLAPPback suits have ordered SLAPP filers to pay large sums of monetary and punitive damages to the original SLAPP target. However, the decision to initiate SLAPPback litigation should not be entered into lightly. A SLAPPback, like the original lawsuit, can take years to reach a final resolution.
Moreover, a SLAPPback is itself likely to be subject to the special motion to strike procedure set forth in Code of Civil Procedure § 425.16. This does not mean that SLAPPbacks can never be won. It does mean that you should have enough evidence to prove a probability of winning the suit, before filing the SLAPPback.
HOW TO DEAL WITH SLAPPs
If you find yourself the target of a SLAPP, don't panic! Many other people have been in your position, and there are individuals and organizations out there that can help you.
What to Expect Initially
If you are the target of a SLAPP, you may receive a demand letter from the lawyer representing the SLAPP filer which lists a series of "options" you must meet to resolve the matter before a lawsuit is actually filed. Often, the letter will demand a sum of money, an apology (generally public), your agreement to refrain from speaking out or participating in the future, your agreement not to bring a lawsuit against the SLAPP filer, or a combination of these and other things.
The more likely scenario is that you will learn of the SLAPP when you are personally presented with a "Summons" and "Complaint" at home or work. The Complaint will list the specific "wrongs" you are alleged to have committed. Look for the legal jargon: words like "libel," "slander," "interference with contract," etc., which are briefly defined above.
The Summons is a notice, telling you that you have been sued; it will give a deadline (usually 30 days) within which you must file a formal response to the Complaint with the court.
Locate and Hire an Attorney
It is always best to find an attorney to represent you.. Do not try to handle the case yourself! Being sued, especially with a SLAPP, is very serious business. An attorney may be able to effectively end the litigation at the very beginning of the lawsuit, minimizing the emotional and psychological stress that can result from being sued, and saving you tremendous amounts of time and money.
Act Early. Do not wait until just before the formal response to the Complaint is due to start looking for an attorney. Lawyers are busy, too, and need some time to assess your case. Waiting until the last minute to find a lawyer to help you will only add stress to an already stressful situation.
If you find yourself pressed for time, keep in mind that the attorney who files your formal response to the Complaint does not have to be the attorney who will eventually represent you in court. At the very least, find a lawyer who can help you draft and file a response to the Complaint on time. If you miss this deadline, the Court can enter judgment against you, without first considering all the arguments in your defense. If a judgment is entered against you, you may have to pay the SLAPP filer for any damages that are being claimed as a result of your activities! DEADLINES CONTAIN THE WORD "DEADL[Y]," AND SHOULD BE TREATED AS SUCH. THEY CANNOT BE MISSED.
But Lawyers Cost Money
It should come as no shock that most lawyers expect to get paid for their work. Yet, even without increasing fee rates demanded by attorneys, defending a case is extremely expensive. Costs associated with a typical case include court costs, photocopying services, postage, delivery services, telephone, expert witness fees, deposition fees and other costs. You must consider how these costs will be paid.
The attorney you select should be in a good position to tell you how much he or she estimates defending you will cost. Lawyers are often flexible on how they expect to paid. Do not be afraid to discuss alternative payment terms with the lawyer and with an eye to your pocketbook. Some lawyers will agree to take your case on a contingency basis. This means that the lawyer will be paid only if you either win the case and the court rules that the SLAPP filer must pay your attorneys' fees or you successfully bring a lawsuit against the SLAPP filer for damages suffered by you as a result of being the target of a SLAPP (This is generally referred to as a "SLAPPback.")
If you are sued as a result of expressive activity undertaken on behalf of a group, check on whether the group has insurance which may cover you, maintains a legal defense fund, or is willing to help defray legal costs by doing fundraising on your behalf.
Some attorneys will agree to defend you on a pro bono (free) or low cost (reduced hourly attorney fee rate) basis. One way to find pro bono or low cost legal services is to check the Where To Find Help section of this handbook. Be forewarned, however, that the law requires that you remain responsible for paying all legal costs associated with the case, such as filing fees and court costs. This is true even if the attorney agrees to work for you for free.
Now the good news. Under the new California anti-SLAPP law, you will be entitled to recover legal fees, court costs, and other expenses if the judge rules that the SLAPP filer cannot show a probability of winning the suit. Thus, even if you can't afford to pay hourly attorney fee rates, an attorney will often be encouraged to defend you on a pro bono, contingency, or low cost basis if he or she understands that attorney fees will be paid by the SLAPP filer if you win.
Insurance: Defense vs. Coverage
In many cases, your homeowner's liability insurance policy will require the insurance carrier to defend you if you are sued. Consult your carrier and an outside attorney to see if you are covered. If so, the carrier will provide a lawyer to help you. This will mean you will not be required to pay legal fees for legal representation. Be aware, however, of two consequences of such an arrangement. First, the company attorney will be inclined to reflect the carrier's position, which may not always be in line with what you want. Second, there is a difference between the insurance company providing you with a defense and ultimately paying any judgment entered against you. The company may defend you, but reserve its rights not to pay the judgment if it later determines the judgment is not covered by your policy.
Factors Determining the Right Representation for You
Finding the right attorney will take a little bit of work and energy on your part. There are a number of factors to consider:
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Sympathetic. It is helpful to find a lawyer who shares or understands your politics, or at least someone who will listen and understand why you said or did what you did. Conflicts over differing philosophies, gender bias, or political beliefs are not only time consuming, they may affect the kind of representation you will receive.
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Experienced. Find someone who has experience defending SLAPP victims or who is familiar with the legal and factual issues of your case. This can be critical to your case both in terms of costs and time. Ask the lawyer if he or she has worked on these kinds of cases before, and what kind of experience that lawyer has generally. You may also ask if the lawyer would mind if you speak to other clients and/or SLAPP victims the attorney has represented in the past.
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Willing to Share the Load. It is important to remain involved in the decision-making process throughout all the stages of the lawsuit. Do not be afraid to ask about the potential ramifications of all legal and strategic decisions before authorizing your attorney to take action on your behalf.
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Media Savvy. It may also be helpful if the attorney is used to dealing with the press. Often these kinds of cases generate a lot of media interest. The right kind of media visibility will help your case. The wrong public image, however, could be devastating.
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Compatible. Often, you must ultimately decide if you will be satisfied with the prospective attorney. It is very important that you be able to work with the attorney comfortably. You may well be spending more time with this person than you know.
The Mechanics of Finding a Good Lawyer
Take the time to gather all information you can and present it to prospective attorneys. Ideally, the attorney should have a complete a picture of the relevant facts of the case and any legal matters pertaining to the case that you may be aware of.
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Case package. Create a neat package of information that you can present to potential attorneys; it may include:
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a brief cover letter which is respectful of the attorney's time, focuses on the key issues in your case, and states, specifically, what you would like the lawyer to do for you.
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a copy of the demand letter, Complaint or any other official document you received from the SLAPP filer or his or her lawyer.
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the names of any attorneys who may have advised or represented or advised you in this action, and how to contact them.
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the names of the attorney or attorneys representing the SLAPP filer, and how to contact them.
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the names of important witnesses, if any.
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key newspaper articles or other background information about your case and/or your opponents.
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Attorney interview. Explain your story as succinctly as possible. You may even wish to practice before the first interview. Have you own list of questions ready. The list should include questions about the case, as well as questions about the lawyer's experience and interest in similar suits. Become familiar with California's anti-SLAPP statute and ask the attorney if it applies to your case. You may want to learn as much as you can about SLAPPs in general. Your local library is a good source for current literature on the topic. You can also learn more about SLAPPS by contacting one of the agencies listed in the "Where to Find Help" section of this page.
abusive discovery requests.
http://viewer.zoho.com/docs/zcdvLe
Prime Star Group Retains Counsel
LAS VEGAS, NV--(Marketwire - 03/12/10) - Prime Star Group, Inc. (OTC.BB:PSGI - News) is pleased to announce that it has retained Erik Syverson, an attorney at the forefront of internet and business law, to represent Prime Star Group, its subsidiaries and shareholders for the litigation involving internet defamation and trade libel.
The company is also pleased to announce it has retained Hunt, Suedhoff, Kalamaros, LLP of South Bend, Indiana to assist in the ongoing litigation in Federal Court in the Northern District of Indiana.
Roger Mohlman, Chief Executive Officer, stated, "We are extremely excited to have Erik Syverson, who is known as an internet expert who is a frequent news show commentator, fighting for our Company. We also are very glad to have retained Lyle Hardman and Hunt, Suedhoff, Kalamaros to aid in winding up the litigation in Indiana. We are very confident with our legal team and their expertise which frees us to focus on the great things ahead, including putting together our sales force to pursue 2011 school contracts for our line Geyser Sports drinks. We are also moving forward with sales on our Hemp-C and Private Reserve labels under our wholly owned subsidiary All Star Beverages."
About Prime Star Group
Prime Star Group, Inc. is a holding company that focuses on four areas of business: SmartPax™ Packaging, Premium Food & Beverage Products, and Distribution. The company's operating subsidiaries produce, market, and distribute wines, tea, adult mixed beverages, flavored water, and gourmet seafood products. The company also produces co-brand and co-pack existing high-end beverages and private label liquors for large hospitality and entertainment brands. Prime Star is focused on the food and beverage, entertainment, hospitality, healthcare and disaster relief industries.
Forward Looking Statements - Safe Harbor
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of Prime Star Group, Inc., its directors or its officers with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond Prime Star Group, Inc.'s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. More information about the potential factors that could affect the business and financial results is and will be included in Prime Star Group, Inc.'s filings with the Securities and Exchange Commission.
Court Upholds Message Board Anonymity
LOS ANGELES – A California appellate court has ruled that individuals who post to Internet message boards have a 1st Amendment right to anonymity which can only be overcome in a defamation case if the plaintiff shows that the posts give rise to a viable cause of action.
The ruling stems from a case involving a popular financial forum where stock trading, corporate behavior and other finance-related issues were discussed, often by users hiding behind pseudonyms or "screen names" to protect their true identity.
In Jan. 2006, Lisa Krinsky, former president, chairman of the board, and chief operating officer of SFBC International, a Florida-based drug company, sued 10 "Doe" defendants in a Florida court, alleging that the defendants had made "defamatory remarks" about her on Yahoo! message boards and other sites, using screen names to conceal their identities.
Krinsky subpoenaed Yahoo! in an attempt to discover the identity of the pseudonymous posters – a move which was unsuccessfully contested by defendant "Doe 6" who then subsequently appealed the judgment, contending that he had a First Amendment right to speak anonymously on the Internet.
The defendant's appeal has been successful, with the Sixth Appellate Court opining that "Under the circumstances presented, we agree with Doe 6 that his identity should be protected and therefore reverse the order."
During the litigation, all 10 defendants were accused of intentional interference with a "contractual and/or business employment relationship" between Krinsky and SFBC, with nine of the defendants being accused of libel "based on false and misleading Internet statements imputing dishonesty, fraud, improper professional conduct, and criminal activity to plaintiff."
According to records of the messages posted on Yahoo!'s SFBC message board, Doe 6, who used the screen name "Senor_Pinche_Wey," called former SFBC vice president of legal affairs Jerry 'Lew' Seifer a "mega scum bag" and a "cockroach."
On Dec. 30, 2005, Doe 6 also posted "Jerry 'Lew' Seifer's New Year's resolutions," which included the following statement: "I will reciprocate felatoin [sic] with Lisa [Krinsky] even though she has fat thighs, a fake medical degree, 'queefs' and has poor feminine hygiene."
Krinsky served a subpoena on the custodian of records at Yahoo! which notified Doe 6 that it would comply with the subpoena in 15 days unless a motion to quash or other legal objection was filed.
Doe 6 then moved in superior court to quash the subpoena on the grounds that the plaintiff had failed to state a claim sufficient to overcome his First Amendment rights for either defamation or interference with a contractual or business relationship, and that the plaintiff's request for injunctive relief was an invalid prior restraint.
The court agreed.
Internet Free Speech - Right To Speak Anonymously
http://www.citizen.org/Page.aspx?pid=2702
Kansas Company Backs Away From Attempt to Gain Identities of Online Critics
Home Security Firm Will Not Pursue Case Meant to Curtail Internet Users’ Anonymous Speech Rights
WASHINGTON, D.C. – A Kansas company has backed away from its request to discover the identities of 11 Internet users who anonymously posted criticisms of the company on a Yahoo! message board. The company filed the request in November 2002 in the 162nd Judicial District Court of Dallas County, Texas, but dropped it late yesterday, soon after Public Citizen notified the company that it would be representing one of the posters.
Alluding to defamatory comments, Protection One, a national home security provider based in Topeka, Kan., went to court seeking documents that would reveal the identities of posters who had used the message board to criticize the business operations of Protection One and its parent company, Westar, a Kansas utility company. However, the company did not provide any evidence that the statements were false or actionable, nor did it explain why a Texas court should have jurisdiction over the case. Public Citizen’s client, a former Westar employee, had speculated about whether insider trading was responsible for sharp swings in stock prices, discussed shortcomings in the management of Westar and Protection One, argued that the managers were overpaid and identified specific possible replacements for current management.
"Courts recognize that online speakers have a vital First Amendment right to anonymous speech unless there is good reason to believe the speech is harmful, and it is highly unlikely that the court would have infringed on that right based on Protection One’s weak arguments," said Paul Alan Levy, an attorney with the Public Citizen Litigation Group, who represented one of the anonymous users. "Corporations need to learn that they cannot expect to identify their online critics simply for the price of filing a complaint. They can enforce subpoenas only if they are prepared to go forward with a libel suit. Obviously, Protection One was not ready for that."
Steven Baughman Jensen of the Dallas firm of Baron and Budd was local counsel in the case. Public Citizen was involved in the case because it has a history of defending free speech on the Internet.
http://www.citizen.org/documents/Subpoena%20Opposition%20Extension%20Motion.pdf
Publicly Traded Company Drops Lawsuit Against Online Critic
Public Citizen Helps Protect Speaker's Anonymity
WASHINGTON, D.C. – A publicly traded company’s lawsuit that attempted to identify anonymous critics on Yahoo!’s stock trading message board was an effort to scare critics away from speaking freely and was rightly dismissed at the request of the company by California’s Superior Court today.
Public Citizen and Electronic Frontier Foundation represented one of the anonymous critics and had filed a motion to quash the subpoena for his or her identify and a motion to strike the complaint under California’s anti-SLAPP statute.
IA Global, Inc. (NYSE: IAO), a company that engages in a variety of activities including operating telemarketing call centers abroad, has not only dropped its defamation lawsuit against the anonymous critic known on Yahoo! message boards as “Stillworldly,” but also has agreed to pay Stillworldly for the costs of defending against the lawsuit and to pay some of Public Citizen’s attorney’s fees. As required in the agreement, the CEO of IA Global also issued a public statement that it would respect the First Amendment rights of anonymous message board posters.
“The company was performing poorly, and the message board posters said so. If public discussion of a company’s poor stock performance and debate about the reasons for that poor performance are grounds for a lawsuit, then Wall Street firms could be suing just about everyone,” said Margaret Kwoka, a Public Citizen attorney on the case. “But the truth is, public commentary on an issue of public interest is protected speech.”
As part of the settlement, Stillworldly stated that he or she did not intend to imply that IA Global’s executives broke any securities laws. In the same posting, the critic wrote, “[F]ree speech is a precious gift. It protects all of us when those with more money to pay lawyers than we have, try to intimidate us for speech they just don’t like.”
http://www.citizen.org/documents/IAGlobalRequestDismiss.pdf
Message Board Poster Criticized Illegal Business Practices
WASHINGTON, D.C. – In a victory for free speech on the Internet, Citadel Security Software has dropped a March 2005 lawsuit against an anonymous poster on Yahoo! message boards after the poster complained that Citadel Security Software management had profited at the expense of ordinary investors by dumping nearly 800,000 shares of stock before the company’s stock price collapsed.
Citadel Security Software sued five anonymous posters, alleging defamation and business disparagement, and had asked the District Court of Collin County, Texas, to order Yahoo! to identify the five posters. Citadel Security Software faces several class action suits under securities laws alleging that the company hid bad news while its executives were selling their own stock. Although the dates and volume of the insider trading is undisputed, the company sought to suppress criticism on the Internet message board – a First Amendment violation.
Public Citizen, which has been a strong defender of First Amendment rights on the Internet, represented one of the posters and urged the court to allow the poster to remain anonymous. Citadel sought information that would have infringed upon the poster’s First Amendment right to speak anonymously on the Internet, argued Paul Alan Levy, a Public Citizen attorney. Courts have ruled that subpoenas to reveal the names of anonymous speakers can chill free speech, and those courts have upheld the right to communicate anonymously over the Internet. Further, the suit was filed in the wrong court because the message board poster lives in Minnesota, not Texas.
“We are pleased that Citadel Security Software has stopped this assault on free speech,” Levy said. “Courts across the country have upheld the right for citizens to air their views on the Internet anonymously. The message board poster whom we represented clearly had a First Amendment right to criticize Citadel Security Software on the Web.”
Marc Stanley and Martin Woodward of the Dallas firm of Stanley, Mandel & Iola, LLP, were local counsel for the defendant.
Adding another link to the IBOX
http://www.chillingeffects.org/
In most cases involving anonymous online libel, courts have dismissed the lawsuits and/or have refused to have the identity of the anonymous critic revealed.
The seminal (and only federal) case on this issue is Doe v. 2TheMart.com, Inc. In this 2001 case, shareholders of 2TheMart.com filed suit against the company amid allegations of fraud. Some of the disgruntled shareholders made their discontent known by posting messages critical of 2TheMart.com on Internet bulletin boards. The bulletin boards were created and maintained by InfoSpace, an ISP to which these shareholders subscribed. The messages, one of which referred to officials of 2TheMart.com as “lying, cheating, thieving, stealing lowlife criminals,” were posted anonymously or by people using such pseudonyms as “Truthseeker,” “Cuemaster” and “NoGuano.” 2TheMart.com responded by presenting a subpoena to InfoSpace in an attempt to obtain the identities of these people.
A U.S. District Court in Washington state allowed NoGuano to object to the subpoena (as “John Doe”) and the court sustained the objection. The First Amendment, said the court, protects the anonymity of Internet speech. It called anonymous speech a “great tradition that is woven into the fabric of this nation’s history,” and added that “the ability to speak one’s mind on the Internet without the burden of the other party knowing all the facts about one’s identity can foster open communication and robust debate."
“People who have committed no wrongdoing should be free to participate in online forums without fear that their identity will be exposed under the authority of the court,” the district court said.
2TheMart.com argued that the right to speak anonymously did not create any corresponding right to remain anonymous after speech. Once Truthseeker and his cohorts made public accusations, the company said, they had to own up to them, their identity became fair game, and the company had the right to know who its accusers were.
But the court disagreed, warning that “if Internet users could be stripped of [their] anonymity by a civil subpoena ... this would have a significant chilling effect on Internet communications and thus on basic First Amendment rights . ... Unmeritorious attempts to unmask the identities of online speakers have a chilling effect on Internet speech.”
The court devised a strategy to balance the interests in protecting a party’s online anonymity with preserving an opposing party’s right to sue for libel if warranted. The ruling announced a four-part test, such that the identity of an anonymous Internet user could be disclosed if: “(1) the subpoena seeking the information was issued in good faith and not for any improper purpose; (2) the information sought relates to a core claim or defense; (3) the identifying information that is directly and materially relevant to that claim or defense, and (4) information sufficient to establish or to disprove that claim or defense is unavailable from any other source.”
Applying this test to the facts before it, the district court denied the issuance of the subpoena, concluding that 2TheMart.com’s real purpose in seeking it was to intimidate its critics into silence.
E. Van Cullens v. John Doe
John Doe is an anonymous poster to two Internet message boards who made two statements critical of a publicly-traded company run by Plaintiff Cullens. In an effort to prevent Doe from further posting his opinions about the company on the Internet, Cullens filed a libel suit against Doe in Illinois and asked a California court to force disclosure of Doe's identity. Doe has sought to quash and strike the subpoena, asking the court to grant Doe protection under California's Anti-SLAPP statute. This would force Cullens to establish a probability of success on each of his claims, and if he cannot, would award attorneys fees and costs to Doe.
At issue: Whether California court processes allow the mere allegation of defamation to trump First Amendment right to anonymous online speech. Whether the Illinois case can proceed at all.
EFF Role: Representing Doe in defense of California subpoena along David Greene of the First Amendment Project and Charles Lee Mudd Jr., counsel for Illinois portion of action.
Outcome: Case dismissed and anonymity protected. In response to the motion to quash and motion to strike in California, Van Cullens withdrew his subpoena in California in April, 2003. Cullens persisted in Illinois, but ultimately, the Complaint against Doe was dismissed by the Illinois court in October 2003.
Documents for this case can be seen here:
http://www.eff.org/cases/e-van-cullens-v-john-doe
WHAT ARE SLAPP's?
Generally, a "SLAPP" is a (1) civil complaint or counterclaim; (2) filed against individuals or organizations; (3) arising from their communications to government or speech on an issue of public interest or concern. SLAPPs are often brought by corporations, real estate developers, government officials and others against individuals and community groups who oppose them on issues of public concern. SLAPP filers frequently use lawsuits based on ordinary civil claims such as defamation, conspiracy, malicious prosecution, nuisance, interference with contract and/or economic advantage, as a means of transforming public debate into lawsuits.
Most SLAPPs are ultimately legally unsuccessful. While most SLAPPs lose in court, they "succeed" in the public arena. This is because defending a SLAPP, even when the legal defense is strong, requires a substantial investment of money, time, and resources. The resulting effect is a "chill" on public participation in, and open debate on, important public issues. This "chilling" effect is not limited to the SLAPP target(s): fearful of being the target of future litigation, others refrain from speaking on, or participating in, issues of public concern.
The filing of a SLAPP also impedes resolution of the public matter at issue, by removing the parties from the public decision-making forum, where the both cause and resolution of the dispute can be determined, and placing them before a court, where only the alleged "effects" of the public controversy may be determined. For example, imagine a company asks for a zoning variance to place an incinerator in a residential area. When local residents object to the city council, the company sues them for "interference with contract." The judge hearing the suit cannot decide the real issues -- the location of the incinerator -- but will have to spend considerable judicial resources to decide the side issues of the alleged "damages" or other consequences of the public debate on the real issues.
Every year, thousands of people are sued for participating in government or for speaking out on public issues. SLAPP targets have been sued for engaging in a wide variety of protected speech and protected expression activities, including:
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writing a letter to the editor
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circulating petitions
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calling a public official
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reporting police misconduct
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erecting a sign or displaying a banner on their property
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complaining to school officials about teacher misconduct or unsafe conditions in the school
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speaking at a public meeting
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reporting unlawful activities
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testifying before Congress or state legislatures
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speaking as an officer of an active public interest group
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filing a public interest lawsuit
It's a topic I would think a lot of iHubbers would want to discuss.
Maybe even some legal "experts" (that iHub seems to be so full of over the past year) could offer some important insight and contribute to understanding of the topic of message board lawsuits.
There are already enough boards where people only want to insult each other if they don't agree with their investment sentiment in some pet stock. I am personally sick of all that.
Focus on information that would be helful to the average message board poster, and I bet you get a lot of traffic here.
Good luck.
Yes, I have seen it. I have never signed up for SI. For some reason I do not like the layout of the boards there.
I hope those folks will provide some info here as well.
Are you familiar with the SiliconInvestor board that has a similar topic to your new board here?
Message Boards | Coffee Shop : Investment Chat Board Lawsuits
http://siliconinvestor.advfn.com/subject.aspx?subjectid=28509
USA Technologies v. Stokklerk
In August of 2009, Pennyslvania-based company USA Technologies filed a federal lawsuit against two Yahoo! message board posters who roundly criticized what they claim is the the consistently poor performance of USA Technologies' management. The criticism highlighted plummeting stock prices of the company, shares of which have lost over 99% of their value since their peak in 1999, as well as the high compensation rates for management of the company that has been consistently unprofitable.
In its complaint filed in August in U.S. District Court for the Eastern District of Pennsylvania, USA Technologies curiously alleges without any evidence that the anonymous online statements must have somehow been part of a "scheme" on behalf of the anonymous posters to "enrich themselves through undisclosed manipulative trading tactics" in violation of the Securities Exchange Act. The company also alleges that pointed though legal criticism of the company and its management is defamatory. Following the filing of the lawsuit, USA Technologies issued a subpoena to Yahoo! demanding that the identity of its critics be disclosed.
EFF and the law firm of Philllips, Erlewine & Given LLP are defending "stokklerk," one of the Yahoo! message board posters, against the subpoena seeking his/her identity.
You can get all the documents associated with this case here:
http://www.eff.org/cases/usa-technologies-v-stokklerk
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"Anonymity is a shield from the tyranny of the majority. It thus exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation -- and their ideas from suppression -- at the hand of an intolerant society."
McIntyre v. Ohio Elections Commission, 514 U.S. 334 (1995)
This board is to post information about cases brought against message board posters by penny stock companies. Examples include defamation cases or other legal actions meant to unmask online critics.
You may post in support of the posters or in support of the companies but remember the board is about the legal cases, their merits and the results.
I hope to use this board as a place to discuss issues related to the first amendment.
If you have found yourself on the receiving end of a penny stock company suit or attempt to uncover your true identity there are many resources available to assist you.
www.eff.org
www.aclu.org
www.firstamendmentcenter.org/
www.thefirstamendment.org/antislappresourcecenter.html
www.medialaw.org/
www.chillingeffects.org/
www.citizen.org
www.anti-slapp.org/
www.citmedialaw.org/taxonomy/term/132/blog
www.citmedialaw.org/legal-guide
www.citmedialaw.org/database
Please help support the freedom of speech. Civil liberties are defended by some powerful organizations but those organizations rely on donations from people like us. Please consider donating to one and do your part to help preserve your rights.
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