Re: 12/5/00 - Law.com: Cybersmearer Defendants Can Keep Anonymity by Appearing in Court; Ruling breaks new ground in litigation over online defamation
Cybersmearer Defendants Can Keep Anonymity by Appearing in Court
Ruling breaks new ground in litigation over online defamation
Mary P. Gallagher
American Lawyer Media
December 5, 2000
In a case of first impression, a Morris County, N.J., judge Nov. 28 gave half a victory to free-speech advocates opposing discovery of the identities of four anonymous posters to a Yahoo! bulletin board, who are sought as potential defendants by a company that claims to have been injured by their postings.
In short, the John Does who appeared in the case will keep their anonymity; those who didn't, won't.
Chancery Judge Kenneth MacKenzie granted plaintiff Dendrite International Inc.'s request for limited, expedited discovery to identify Does 1 and 2, who MacKenzie said "must assert a right before the Court will recognize and assess it." But he denied the request for discovery as to John Does 3 and 4, who had retained attorneys to oppose it.
The complaint, Dendrite International Inc. v. John Does, C-129-00, accuses Does 3 and 4 of misappropriating trade secrets and Does 1, 2 and 3 of defamation. The complaint also alleges that Does 1 and 2 are current or former employees who breached their employment contracts by the postings.
The messages criticized the management and products of Dendrite, a Morristown, N.J., provider of pharmaceutical software, and expressed doubts about its ability to attract and keep customers.
The unpublished opinion applies the balancing test of Columbia Ins. Co. v. Seescandy.com, 185 F.R.D. 573 (N.D. Cal. 1999), which requires that a plaintiff seeking disclosure establish that its claims could withstand a motion to dismiss.
On the defamation claim, MacKenzie found Dendrite had shown no harm. "[T]he Court will not 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," he wrote .
MacKenzie also labeled Dendrite a public figure that must prove actual malice, based on the company's ability to rebut defamatory statements and the nature of its business activities. But he held that Dendrite did not have to accomplish the impossible task of showing the malice of an unknown speaker.
Dendrite also failed to show that the messages discussed anything that qualified as a trade secret, or that Does 3 and 4, as nonemployees, would have acquired confidential information.
In addition, MacKenzie rejected the argument that Yahoo's privacy policy -- which informed users that it would disclose information about them only under exceptional circumstances, including legal proceedings -- lowered the Does' expectation of privacy.
Michael Vogel, of Princeton's Allegaert Berger & Vogel, says Dendrite is considering its appellate options.
John Does 3 and 4, respectively, were represented by Eugene Reynolds, a partner in the Morris Plains firm of Wacks, Mullen & Kartzman, and Randy Pearce, a partner in Hackensack's Pearce & Fleisig. Pearce says he argued not for absolute anonymity on the Internet, but for the Seescandy balancing test that MacKenzie adopted.
"This decision is a tremendous victory for free speech," said Paul Levy, an attorney for Public Citizen, a Washington, D.C., watchdog group. His organization has been monitoring similar litigation around the country and appeared as an amicus to oppose Dendrite's application.
"Several other courts have articulated similar standards for deciding whether to compel the identification of anonymous Internet speakers, but MacKenzie's decision marks the first time that a judge has rejected a request for identification," adds Levy.
This is the second time MacKenzie has broken new ground in the case. On June 20, he ordered that notice of Dendrite's order to show cause be posted on the Yahoo! bulletin board "as the most effective and appropriate means of providing actual notice to the defendants," obviating due process concerns raised in similar cases.
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