Re: 3/30/00 - Kellstrom Demands Yahoo! Name Anonymous Online Critics
Kellstrom Demands Yahoo! Name Anonymous Online Critics
By Patrick Danner
Miami Daily Business Review
March 30, 2000
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Anonymous postings critical of Kellstrom Industries Inc. on an online investor forum have earned the wrath of the Sunrise, Fla., company.
Kellstrom, in the aircraft and engine sales and leasing business, last week sued Yahoo! Inc. to have the Internet portal reveal the identities of two individuals who Kellstrom claims have left defamatory statements on a Yahoo message board.
Other South Florida companies have attempted to silence online critics by taking their detractors to court. Among them are Sunbeam Corp. and Hollywood.com of Boca Raton, Ocwen Financial Corp. of West Palm Beach, Technical Chemicals & Products Inc. of Pompano Beach, and CyberGuard Corp. of Fort Lauderdale.
Kellstrom's suit, filed in Broward Circuit Court, appears to be a precursor to suing the individuals to prevent them from continuing to post such remarks. Michael Shokouhi, Kellstrom's director of investor relations, wouldn't comment on the matter.
Wishing "to protect the company from further damage," Kellstrom didn't attach with its lawsuit the derogatory e-mails left by "Xybermike" and "fpc42" on the message board. A perusal of postings left by the pair turned up ethnic bashing aimed at Kellstrom executives, aspersions about the company's accounting practices, as well as the usual crass language and banal chatter that litter such boards.
In one of Xybermike's more tame diatribes, he writes Kellstrom chief executive Zivi Nedivi "is running this business into the ground."
Fpc42 was more prolific in a January posting. "Puffery in spring 99 by principal execs precedes sell-off by same principal execs to the tune of a million five in stock at big numbers which precedes the revelation that things can't continue on track with a JV money partner which precedes the big summer slide [in the stock price]. Now we still have no JV partner -- probably because potential partners found something horrible that we retail shareholders have been, as yet, unable to ascertain."
Attempts to reach Xybermike and fpc42 were unsuccessful.
The criticism on the message boards is, in part, fueled by the rapid descent in the stock price. Kellstrom's shares this month hit a new 52-week low of $6. It has traded as high as $20.63 in the last year.
The company requested biographical information on fpc42 and Xybermike from Yahoo. "However, Yahoo indicated that it cannot disclose this information to the company without appropriate court process," the suit states.
Kellstrom is represented by Michael D. Ehrenstein of Kluger Peretz Kaplan & Berlin in Miami. He declined comment.
Yahoo will comply with any subpoenas or court orders it receives on such matters, a spokeswoman said, adding Yahoo doesn't police its message boards, but it can terminate members whose postings violate the terms of service.
Thus far, it doesn't appear South Florida companies have been too successful in recovering damages against their online critics. CyberGuard dropped its suit. Ocwen's suit stalled. TCPI's suit is ongoing and Hollywood.com just filed its suit last week. A lawyer for Sunbeam didn't respond to an inquiry about the status of that case.
"My impression is the suits are not about defamation as much as they are about learning the identity of critics," said Chris Hansen, a senior staff counsel with the American Civil Liberties Union in New York. "We know, anecdotally, some get dismissed once the identity of the poster is revealed."
But Tamara Carmichael, a partner in Broad and Cassel's Miami office, suspected there were other reasons why similar cases haven't gone far.
"The economics of it make it so difficult," she explained. Besides the cost associated with unmasking the culprits, she said there's the uncertainty whether a company could ever collect any money.
Other obstacles include trying to convince courts that the remarks are defamatory, malicious or untrue, rather than being harsh -- but fair -- comment protected by constitutional free speech guarantees under the First Amendment.
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