Lilly Industries sues anonymous Internet critics
By Emily Kaiser
CHICAGO, July 28 (Reuters) - Industrial coatings maker Lilly Industries Inc. (NYSE:LI - news) said Wednesday it sued five people, claiming they anonymously posted defamatory comments about the company and its executives on an Internet message board.
Indianapolis-based Lilly Industries joined a growing list of companies who have taken action against people who post derogatory remarks about them on the Internet.
John Elbin, a spokesman for Lilly Industries, declined to comment further on the lawsuit.
Lilly Industries and one of its executives, Lawrence Dalton, filed the suit in Indiana, alleging that five ''John Does'' posted defamatory statements about the company and its executives. Dalton is the target of negative comments in some of the Internet messages.
The lawsuit asks the court to force the defendants to stop posting defamatory statements and seeks unspecified compensatory damages.
Lilly Industries' share price has fallen by about $1.20 since the Internet messages started heating up in mid-June. The stock was off 6 cents at $17.88 in midday New York Stock Exchange trading.
Internet postings have been a contentious issue for several publicly traded companies that claim to have been defamed by anonymous messages posted on services such as online portal Yahoo! Inc. (Nasdaq:YHOO - news), which has thousands of message boards for discussion of publicly traded companies.
A spokeswoman for Santa Clara, Calif.-based Yahoo said the company complies with validly issued subpoenas seeking the identity of anonymous message posters, but would not confirm or deny whether it had received subpoenas from Lilly Industries.
Banking software maker Phoenix International Ltd. Inc. (Nasdaq:PHXX - news) said this month that it filed a civil complaint in Florida against a former employee the company thinks is responsible for negative message board postings.
Leading U.S. turf grass seed maker AgriBioTech Inc. (Nasdaq:ABTX - news) said last August that negative messages about it and its executives sent its shares tumbling more than 20 percent.
The chief executive of ImaginOn Inc. (Nasdaq:IMON - news) even posted his own message on a chat room last month, quashing an Internet rumor that his company was involved in a possible transaction with America Online Inc. (NYSE:AOL - news).
In the Lilly Industries messages, posters identified only by screen names such as ''thebigbubba69'' and ''wolrahds'' and claiming to be Lilly Industries employees, complained about working conditions, stock performance, and the actions of certain executives -- notably Dalton.
''These chat rooms are going to be where the real company news will be reported by the actual employees,'' one poster identified as ''billdana17f'' wrote. ''Open message boards are revolutionary. We are living in the communication age.''
Some Lilly Industries chat room regulars, however, said the negative comments went too far.
''It is unfortunate that the board has had so many personal attacks on current Lilly personnel recently,'' said one poster who used the name ''firstkatmando.''
''I can see no useful purpose in such a course of action. These are opinions, not facts,'' the poster said, but added that ''changes are needed'' at Lilly Industries.
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