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Pastimes : Investment Chat Board Lawsuits

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To: dantecristo who wrote (2490)2/17/2002 3:33:43 PM
From: dantecristo  Read Replies (1) of 12465
 
Overstepping legal bounds?
San Francisco Daily Journal (Front Page: FEB 15, 2002)

"Judge Issues Wide ban on Internet Postings

By Craig Anderson
Daily Journal Staff Writer

SAN JOSE--A Santa Clara County judge has ventured into unchartered territory by issuing a sweeping permanent injunction against two research scientists who defamed their former employer on Internet message boards.

Superior Court Judge Jack Komar issued a written order Wednesday that added details to an oral injunction he handed down from the bench in December.

He began crafting the order even before a jury awarded $775,000 in damages to Varian Medical Systems, Varian Semiconductor Associates, and company officials George Zdasiuk and Susan Felch.

The order is unusual on several counts. For one thing, it was rare for such a case to reach a jury. For another, it prevents the pair even from posting information within the public record under certain circumstances.

Delfino and Day contend such limits violate their First Amendment rights. They promise to appeal the decision.

According to Varian's attorney, Lynne Hermle, the defendants already are testing Komar's order.

Thursday, there were dozens of posts on a Yahoo message board devoted to Varian's investment prospects. Some included links to Delfino and Day's Web home page. Several discussed topics Komar has banned.

As is almost always the case on message boards, the postings were not signed. They resemble those the defendants admitted to writing during their trial, but Delfino would not say whether he was the author of any specific post.

One message with a link to Delfino and Day's Web site led to a mock deposition of one of the individual plaintiffs. "The following is an eyewitness commentary of Zdasiuk's truthful and complete testimony (some hyperbole)." the site announced. It continued with his alleged confession that he was "sick" and untroubled by the death of his sister.

The same site contains a disclaimer that it has been "censored by order of Superior Court Judge Jack Komar and is now in full compliance with his Honor's chill on Free Speech."

"Unfortunately, it appears from the postings that it is unlikely [Delfino] is going to obey the judge's order," said Hermle, a partner in the Menlo Park office of Orrick Herrington & Sutcliffe.

Nevertheless, she said she was pleased the judgment is in place and "confident Judge Komar will enforce it."

Delfino, interviewed Thursday, said he has posted on the Yahoo message board since receiving a copy of the injunction but would not specify what he has written.

"My intent is to post every day, period," he said. "The injunction is in no way going to stop me from exercising my First Amendment privilege."

Komar's order bars Delfino and Day from making a long list of statements, such as calling 19 Varian employee liars, sexually promiscuous or mentally unstable.

Even material in the public record is covered by the written injunction. For example, Delfino and Day are prohibited from posting information from Securites and Exhcange Commission documents concerning Varian "in the same place or on the same Web site or message board" as information about executives' home addresses or family members.

Komar also ordered the defendants to remove posts containing any statements he has found to be false.

Delfino and Komar never identified a single libelous post and has overstepped his legal bounds. One of the forbidden topics is an allegation that Varian videotaped an employee bathroom. The company acknowleges setting up a camera to capture Delfino making insulting gestures at Felch but says it never taped anyone inside the bathroom. Delfino argued the device did indeed peek inside the facility and says Komar's order prevents him from merely telling the truth.

He sees that as grounds for appeal.

"The injunction is only as good as your weakest link,' he said.

Delfino said he has written Yahoo and other companies that operate message boards asking that all of his and Day's posts be deleted. He said that meets their legal obligation.

The case of Varian Medical Systems v. Delfino, 780187, was the first corporate lawsuit to go to trial against named defendants for posting caustic messages on message boards. Many companies have filed civil complaints against individuals who post messages, alleging the information is defamatory or infringes trade secrets. But such lawsuits are typically dropped after companies, using the discovery process, figure out the identitites of the authors, although some individuals have successfully fought back to protect their names.

The Delfino case, filed in 1999, has always been different. Delfino, who was fied in 1998, and Day, who resigned in 1999, posted numerous messages every day and refused to stop even after they were sued.

A jury found them liable for damages, including for posting messages impersonating Felch and Zdasiuk.

Delfino is represented by Palo Alto attorney Glynn Falcon. Day is represented by Palo Alto attorney Randall Widmann. Neither could be reached for comment Thursday."

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