Re: 8/11/00 - Dendrite International to Use Web as Post for Legal Notice
August 11, 2000
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Dendrite International to Use
Web as Post for Legal Notice
By AARON ELSTEIN
WSJ.COM
How does a company notify anonymous online critics that it is suing them and get them to show up in court? A New Jersey state judge offered Dendrite International an unusual solution that touched some thorny issues involving cyberlibel suits against message-board posters.
Judge Kenneth C. MacKenzie instructed the Morristown, N.J., software maker to post legal notice on the same message board that was used by a group of unknown persons it had sued for defamation. The judge wanted to give the posters a chance to present arguments in court to block a subpoena that Dendrite was seeking -- as part of its lawsuit -- to unmask their identities.
The decision appears to be the first time a court has refused to automatically grant a company a subpoena to get information from a message-board operator that would help identify its online critics. Some experts say it also could help resolve another big problem in these cases involving companies and their online critics: Informing people whose names and whereabouts are unknown that they are in a legal fight.
Paul Levy, a lawyer at Public Citizen, a Washington consumer group that has filed a friend-of-the-court brief in the Dendrite International case, says he endorses the idea of companies and lawyers posting information on message boards to inform unknown parties that they seek to bring them to court. "It seems like a sensible way to go," he says.
But other lawyers question whether Judge MacKenzie's approach could have any broad significance.
Merely posting court papers online doesn't necessarily mean they reach the desired audience, says Patrick Carome, a lawyer at Wilmer, Cutler & Pickering in Washington. "There's no ironclad guarantee that the people you want to see the message will see it," says Mr. Carome. And unless companies can prove such postings were seen by the desired parties, they can't establish that they have notified them of legal action.
Dendrite International has sued 15 "John Does" whom it alleges defamed management and leaked proprietary information in postings on a Yahoo! message board (messages.yahoo.com). After filing suit, Dendrite, which makes software for the pharmaceuticals industry, asked Judge MacKenzie for a subpoena to get information on the writers' identities from Yahoo, where the allegedly defamatory postings about the company were made.
But rather than grant the request for a subpoena, as is ordinarily done, the judge instructed Dendrite International publish a copy of an order requiring four of the anonymous critics to appear in his court to argue against the subpoena. He ruled that posting a copy of his order on Yahoo was "the most effective and appropriate" way to notify unknown parties about the matter. Dendrite posted notice on the Yahoo board on June 23.
Two of the posters responded by hiring lawyers, who argued at a 90-minute hearing July 29 that the judge shouldn't honor Dendrite's request for court-sanctioned help in identifying their clients. While Dendrite has sued 15 anonymous posters, only four were involved in the matter before Judge MacKenzie because the company believes they live in New Jersey.
Critics have argued that companies have gotten subpoenas too easily from judges to gather confidential information from message boards without the anonymous posters getting a chance to oppose the subpoenas in court. Some contend companies are abusing the system to silence their critics. Increasingly, companies have filed "John Doe" lawsuits to get a subpoena and unmask their critics -- eventually pressuring them into a settlement.
Most posters learn about a subpoena after it is served on a message-board operator -- giving them limited opportunity to fight it.
Some board operators have only recently begun notifying posters before they turn over information -- giving them days to hire a lawyer and contest the subpoena. Sometimes, posters don't even know they are the target of a lawsuit suit until their identities have been revealed to the companies and they are served with court papers. This lack of warning has made it difficult for them to defend themselves, either by hiring a lawyer or taking other steps to guard their anonymity.
These issues have come to the forefront as more and more companies head to court to fight their online critics. These lawsuits were almost unheard of a few years ago. But more than 100 cases have been filed in the last two years, with the pace picking up substantially in the past six months. The increase has become a concern for free-speech advocates because of the potential ramifications for chatter among individuals on the Internet.
Dendrite sued its critics May 24 in State Superior Court in Morristown, N.J. The company is seeking unspecified damages. The four posers whose identities the company was trying to unmask by seeking a subpoena from Judge MacKenzie are: "implementor_extrodinaire," "ajcazz," "xxplrr" and "gacbar."
Of the four, only "ajcazz" responded online to Dendrite's notice requiring them to appear in court. "Nice try. This is so funny," ajcazz said in a message posted June 26, three days after Dendrite's notice.
Gene Reynolds, a lawyer for "xxplrr," and attorney Randy Pearce, who represents "gacbar," argued that their clients' names shouldn't be revealed until Dendrite International has better established a case that their messages actually harmed the company.
Reached by telephone, Mr. Reynolds declined to comment on the case. Mr. Pearce wasn't available for comment. Dendrite International officials didn't return calls, and their attorneys declined to comment.
The Dendrite case isn't the first time the Internet has been used by companies or their lawyers to pursue matters pertaining a lawsuit or to gather information related to message-board chatter against a company.
Daniel Becka, a lawyer from Boca Raton, Fla., posted a message on several boards recently on Raging Bull (www.ragingbull.com) saying he is "in the process of gathering information" about the online critics of Computerized Thermal Imaging, a Layton, Utah company whose management has been pummeled lately by online attackers.
"It's very unusual for a lawyer to publicize an investigation -- on the Internet or anywhere else," says Public Citizen's Mr. Levy.
Mr. Becka said that his client wants to find out if the critics paid a reporter at Bloomberg News, a unit of Bloomberg LP, to write a June 29 article that detailed Computer Thermal Imaging's recent difficulties in raising money and gaining acceptance in the medical community for a breast-cancer diagnostic device it is developing. Mr. Becka asked people to notify him by e-mail and identify themselves "if possible."
Mr. Becka said in an interview that his firm hasn't filed suit against Bloomberg or the unknown attackers, but would consider doing so after it reviews the information it gathers from online volunteers. "People are being responsive" to his request, he says.
A Computerized Thermal Imaging spokesman declined to comment, as did a spokesman at Bloomberg News.
While Mr. Becka wouldn't describe the nature of his investigation, Computerized Thermal Imaging has posted letters on its Web site demanding a short-seller who goes by the name of Steve Pluvia retract a report he published on Silicon Investor (www.siliconinvestor.com) in mid-June criticizing the company and its management.
Write to Aaron Elstein at aaron.elstein@wsj.com
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