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news.cnet.com
Yahoo message board suit continues
By Courtney Macavinta
Staff Writer, CNET News.com
March 1, 1999, 4:00 a.m. PT
A publicly traded Internet company that sued 100 "John Does" for allegedly posting
false and defamatory statements about it on a Yahoo Finance message board has
narrowed its case to a handful of individuals.
ITEX Corporation of Portland, Oregon, operates an online trade center that lets users buy
goods and services with cash or through a barter system. The company filed the lawsuit in
September 1998 after Yahoo Finance users called the company's management "blind, stupid,
and incompetent," among other things.
The case involves a range of legal issues from freedom of speech to manipulating the stock
market.
ITEX wants the message board users held liable for their comments, which the company
claims are false. And now ITEX is one step closer to pushing the case forward--it has identified
some of the "John Does" in seeking a minimum of $500,000 in damages from each defendant.
The company said it served Yahoo with a subpoena and obtained the message board users'
email addresses. Using the email accounts, ITEX got a court order to get the Yahoo users'
personal contact information from their Net service providers.
"We've only been interested in individuals who were making unprotected defamatory comments
about ITEX," said Stephen Pearson, assistant general counsel for the company. "From the
people we've identified, they have some history with the company, except for one person."
Yahoo does not comment about lawsuits, and a spokeswoman would not confirm or deny that
it had complied with a subpoena from ITEX.
Yahoo's message board terms of service states that it "will take reasonable measures not to
disclose information about you or the contents of your communications...except that Yahoo
may do so in the good faith belief that such action is reasonably necessary (a) to comply with
the law; (b) to comply with legal process; (c) to enforce these terms and conditions; (d) to
respond to claims that any content violates the rights of third parties; or (e) to protect the
interests of Yahoo or others."
ITEX is in the process of serving legal papers to the following five alleged message board users,
who the company charges in its amended complaint used the following aliases:
• Nick Lindesay, whose Yahoo aliases listed in the complaint are "ibc96" and "Orangemuscat."
ITEX says that Lindesay used to work for the company.
• Joe White, alias "colojopa," who ITEX says had an account with the firm for about two years.
White said he doesn't remember if he had an individual account, but that he did have a
corporate account. He declined to comment further on the matter.
• Leslie French, alias "Whadayaknow." ITEX says French and the company were involved in
separate litigation and reached a settlement last summer.
• Michael Bilben, alias "SNYDERDatITEX." ITEX says it has no prior relationship with Bilben
and alleges that he impersonated the company's general counsel while using Yahoo message
boards.
ITEX can still pursue action against the remaining 90-plus "John Does" if it so chooses.
When the lawsuit was first filed, Yahoo said it would only reveal the email addresses if legally
required to do so. However, the lawsuit sparked the popular portal to adopt a new message
board policy and to try and confirm who uses its public forums by authenticating their email
addresses.
Brokers' online posts are regulated by the National Association of Securities Dealers
Regulation. The Securities and Exchange Commission also patrols for fraud and has filed
charges against online newsletter publishers who allegedly profited from stock they inflated
with upbeat news.
However, most Net users can freely post random and anonymous remarks about companies as
long as they don't fall under SEC jurisdiction, such as in the case of insider trading.
High-tech firms seem especially vulnerable to the online buzz about their stock or company.
Legal experts say companies should monitor information on the Net and report potential fraud
to the SEC.
But observers also say that the beauty of the Net is that it can be used as a sounding board to
complain about public companies' decisions or to challenge statements made by firms about
their revenues and investments.
For example, in late December the ITEX message board on Yahoo Finance was jumping with
posts about the company being delisted from the Nasdaq Stock Market. The company was
delisted because it had yet to file its annual report, which was related to an ongoing
investigation by the SEC.
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