THERE ARE SOME UNPLEASANT FOLKS OUT THERE in the wild, wild
Westernet..."
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BRIEF OF APPELLEES
"I. STATEMENT OF JURISDICTION
On February 26, 1999, Appellees filed their Complaint in this action in the Superior Court for the State of California in the County of Santa Clara. On March 25, 1999, apellant Michelangelo Delfino filed a notice of removal. The case was removed to the United States District Court for the Northern District of California (the "District Court"). The District Court had removal jurisdiction ...
On June 21, 1999, the District Court entered a preliminary injunction against Delfino. Delfino did not appeal this order. On November 19, 1999, the District Court entered an order (the "November Order") that clarified one provision of the injunction and provided that appellant Mary Day was also subject to its terms. The November Order is not appealable by Delfino, as explained in more detail below, because it merely clarifies the original preliminary injunction. ... The Court therefore lacks jurisdiction over Delfino's appeal. The November Order is appealable by Day pursuant to 28 U.S.C. ... Day timely filed her Notice of Appeal on December 17, 1999 within the 30-day limit ... Delfino also filed his Notice of Appeal on December 17, 1999. [Id.]
II. STATEMENT OF THE ISSUES
1. Did Day waive her right to appeal the November Order by offering no opposition whatsoever to Appellee's motion for preliminary injunction in the District Court, even though she was served notice that Appellees were seeking a preliminary injunction against her?
2. Does this Court lack jurisdiction over Delfino's appeal of the November Order because that order merely clarifies one provision of the original preliminary injunction, which Delfino did not appeal?
3. Did the District Court properly exercise its discretion when it enjoined Delfino and Day, after a full and fair adversary hearing, from continuing their unlawful Internet campaign of impersonating Appellees and making provably false, defamatory, and harassing statements of fact about them on a daily basis over a period of many months?
4. Did the existence of a federal claim in Appellees' complaint give the District Court subject matter jurisdiction over this action?
III. STATEMENT OF THE CASE
Appellees filed this lawsuit to put an end to months of Internet terrorism by appellants Delfino and Day. ... repeatedly posting Internet messages containing false, abusive, and highly personal statements about Appellees. Delfino accused appellees Felch and Zdasiuk of dishonesty, adultery, insanity, incompetence, and more. In some messages, Delfino impersonated Appellees so that it appeared that they had posted the messages themselves.
Appellees filed their complaint in state court on February 26, 1999, after Delfino had been attacking them on the Internet for more than four months. The complaint contained 10 causes of action, including claims for libel, invasion of privacy, unfair competition, conspiracy, violation of the Lanham Act, and others. Appellees amended their complaint twice to substitute parties, add a cause of action for breach of contract, allege new tortious conduct by Delfino and Day that occurred after the filing of the original complaint, and make other changes.
After the state court issued a TRO and held a hearing on Appellees' motion for preliminary injunction, Delfino removed this case to the District Court on March 25, 1999. ...
On November 19, 1999, the District Court issued several orders ... In a second order (the "November Order"), the District Court clarified one of the existing prohibitions against Delfino and provided for the first time that Day was expressly bound by the terms of the preliminary injunction. This appeal concerns the propriety of the November Order.
On April 7, 2000, the District Court dismissed the Appellees' one federal claim. In the exercise of its discretion, the District Court then remanded the case back to state court ...
III. STATEMENT OF FACTS
A. Introduction to the Parties.
Appellants Delfino and Day are former employees of Varian Associates, Inc. ... Appellee Susan Felch interacted with Delfino and Day from time to time during their tenure at Varian. ... Appellee George Zdasiuk, ... served as Delfino's and Day's supervisor for a time. ...
Delfino and Day are almost inseparable. Day is self-described "friend, neighbor, and colleague" of Delfino. ... They live two doors from each other in a condo complex and have filed a lawsuit together against the condo association... They have also filed a second lawsuit together. ... At Varian, Delfino and Day worked closely with each other and spent much of their free time together. ... After leaving Varian, they created a new company together called MoBeta, Inc. ...
B. Varian Fired Delfino for Harassing His Co-Workers, Including Appellee Susan Felch; Day Quit Shortly Thereafter.
... Evidence suggests that Delfino was responsible for this misconduct. ...
... Once again, there was reason to believe Delfino was responsible. ...
C. Immediately After Being Fired, Delfino Began Defaming, Harassing, and Impersonating Appellees on the Internet.
... posting belittling, derogatory, and sometimes scandalous messages about Felch, Zdasiuk, and Varian where their colleagues, peers, and investors were most likely to encounter them. ...
Most of Delfino's early messages appeared on an Internet message board operated by Yahoo! Inc. ... Delfino posted messages almost every day under numerous different pseudonyms to create the appearance that his views were shared by many people ... Indeed, he often had his different Internet persona converse with each other to advance his goal. ... His messages, always critical of Appellees, frequently crossed the line into flagrant defamation. ...
Delfino did not limit himself to defamatory postings on the Yahoo! message board, howevever. He also posted a large number of messages on a board operated by Stock-Talk Partners. ... Delfino impersonated Zdasiuk, Felch and her husband, and others associated with Varian. ... The effect was to make it appear that Appellees were admitting to extramarital affairs, incompetence, and other embarrassing and untrue facts. ...
D. Appellees Originally Filed This Action in State Court.
Appellees allowed the postings to continue for several months, hoping that Delfino would tire of his game and stop. However, four months later, Delfino was still posting defamatory and impersonating messages at a fast pace. Appellees finally decided to bring an action against him in February 1999. ...
E. After Removal, the District Court Issued a Preliminary Injunction.
On June 21, 1999, after having first extended the duration of the TRO, the District Court issued a preliminary injunction against Delfino. ... The preliminary injunction barred Delfino from, inter alia, impersonating Appellees on the Internet, repeating the statements found to be defamatory, and conspiring with others to do these acts. ...
One element of the preliminary injunction merits special mention ... Appellees explained that Delfino had used multiple aliases in an attemp to deceive Internet users into believing that his bizarre views were held by a crowd of people. ...
F. After Delfino and Day Violated the Preliminary Injunction, the District Court Clarified It and Held Delfino in Contempt.
Over the next four months, Appellees documented numerous violations of the preliminary injunction and other orders by Delfino and Day, who Appellees learned had been acting in concert with Delfino. ...
The most blatant and egregious violation was the clandestine posting of additional messages impersonating Felch and Zdasiuk on the Stock-Talk board. ...
G. Subsequent Federal Court Proceedings.
On April 7, 2000, the District Court entered an order granting partial summary judgment in Appellants' favor on Appellees' Lanham Act claim, ...
V. SUMMARY OF THE ARGUMENT
Appellant Mary Day should not be permitted to challenge the November Order on appeal because she offered no opposition whatsoever to Apellees' motion for preliminary injunction in the District Court. As a result, the rule that arguments may not be raised for the first time on appeal is applicable here. Day's claim that she did not receive notice of the motion is false. She was served with a notice of the motion and that same day, her counsel was faxed a letter confirming that Appellees were seeking entry of a preliminary injunction against Day. Day simply chose not to oppose the motion and must bear the consequences of that decision.
This Court lacks jurisdiction over appellant Michelangelo Delfino's appeal of the November Order. The Court's jurisdication is limited to interlocutory orders 'granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.' The November Order did none of the above. It merely clarified one provision of the original preliminary injunction entered against Delfino, an order which Delfino did not appeal. Orders clarifying preliminary injunctions are not appealable.
Even if Appellants' arguments are considered, the November Order should be affirmed. First, the November Order is not an unconstitutional prior restraint. Courts have regularly recognized that speech may be enjoined after a judicial determination that it is defamatory or otherwise unprotected, particularly where the defendant's defamatory conduct has been recurrent and is directed at private individuals like appellees Felch and Zdasiuk. Under authorities, the November Order is valid under both the First Amendment and its counterpart in the California Constitution.
Second, the November Order only prohibits Delfino and Day from making provably false statements of fact about Appellees; they remain free to express their opinions about Appelles. Their Internet messages accusing Felch and Zdasiuk of adultery, mental illness, incompetence, and chronic lying all contain provably false statements if fact. Indeed, they are classic examples of statements held in previous cases to constitute libel per se. In this respect, the statements at issue in this case are very different from the vague epithets held nonactionable in the case cited by Appellants.
Finally, the November Order does not violate Appellants' First Amendment right to post anonymous Internet messages. To the contrary, it expressly permits them to continue using one pseudonym each when posting Internet messages about Appellees. To the extent the order can be construed to limit Appellants' right to anonymity, it is still valid because it is narrowly tailored, is justified by the compelling need to put a stop to Appellants' fraudulent use of multiple aliases when discussing Appellees on the Internet, and has not deterred Appellants from continuing to post daily Internet messages about Appellees.
Appellants' argument that the District Court lacked jurisdiction to enter a preliminary injunction against them is patently frivolous. The District Court clearly had subject matter jurisdiction over this case because Appellees' complaint contained a federal Lanaham Act claim. Dismissing the Lanham Act claim on the merits did not mean that the District Court never had subject matter jurisdiction. Indeed, the District Court still had discretion to retain jurisdiction over Appellees' state law claims pursuant to 28 U.S.C. § 1367. The District Court merely chose to exercise its discretion in favor of remand because it found that the state law issues were more appropriately resolved by the state court. That decision does not render invalid all of the numerous orders, including the November Order, entered by the District Court during the pendency of the federal court proceedings.
VI. STANDARD OF REVIEW
The grant of a preliminary injunction is reviewed for abuse of discretion. ... Abuse of discretion occurs only if the issuance of a preliminary injunction was based on clearly erroneous findings of fact or an erroneous legal standard. ... The abuse of discretion standard applies equally to appeals of preliminary injunctions raising First Amendment questions. ...
VII. ARGUMENT
A. Day Waived Her Right to Challenge the November Order on Appeal by Failing to Present Any Opposition to Appellees' Motion for Preliminary Injunction in the District Court.
Day seeks to appeal the November order despite having offered no opposition whatsoever to appellees' motion for preliminary injunction in the District Court. Her appeal cannot be permitted to proceed because she has waived all of her arguments.
1. Arguments Not Presented to the District Court Are Waived and Cannot Be Raised on Appeal.
As a general rule, issues raised for the first time on appeal are deemed waived and are not considered. ...
2. Day Received Proper Notice of Appellees' Motion for Preliminary Injunction and Therefore Cannot Blame Her Failure to File an Opposition on Inadequate Notice.
Day's excuse for not opposing Appellees' motion for preliminary injunction in the District Court is that she did not receive adequate notice of the motion. ...
On October 6, 1999, Appellees filed a Motion for Order Holding Defendant Michelangelo Delfino in Civil Contempt. ... The notice of motion was addressed to "all parties and their attorneys of record," which obviously included Day and her attorney. ...
Appellees also took an additional step to ensure that Day was not confused by the caption of the motion, which only mentioned Delfino. On the same day Appellees filed their contempt motion, they sent Day's counsel a letter informing him that the motion also requested relief against Day. ...
... When Appellees filed a motion asking for relief against Day, she should have known that she needed to oppose the motion or at least seek clarification from the District Court regarding her obligations. ...
B. This Court Lacks Jurisdiction Over Delfino's Appeal.
1. The November Order Merely Clarifies the Original Preliminary Injunction, Which Delfino Did Not Appeal.
This Court lacks jurisdiction over Delfino's appeal of the November Order. Delfino claims the Court has jurisdiction under 28 U.S.C. ... which confers jurisdiction on the courts of appeals over appeals from orders "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions...." ... the November Order does none of the above; it merely clarifies one provision of the original preliminary injunction entered against Delfino. It therefore is not an appealable order.
a. The District Court Clarified the Original Preliminary Injunction After Delfino Violated It.
The District Court originally entered a preliminary injunction against Delfino on June 21, 1999. ...
One provision of the preliminary injunction that Delfino violated barred him from "sing any pseudonym or e-mail address to discuss, in any way, any aspect of Varian's business, stock price, or employees on the internet, except that a pseudonym may be used after identifying the pseudonym to plaintiff's counsel and court in writing. ... Appellees argued to the District Court that Delfino violated this provision by posting Internet messages about Appellees under at least four different aliases after the preliminary injunction issued. ... As Appellees explained to the District Court, Delfino's purpose in posting messages under multiple aliases was to deceive readers into believing that multiple individuals shared his views. ... The clear intent of the preliminary injunction was to put a stop to this fraudulent activity by limiting Delfino to one alias. ...Delfino argued that the preliminary injunction permitted him to change aliases so long as he only used on ealias at a time.
... However, the District Court believed the preliminary injunction was arguably ambiguous on this point ...
b. The November Order Is Unappealable Because It Merely Clarifies the Original Preliminary Injunction.
Although the District Court entitled the November Order a "Modified Preliminary Injunction," ... a court of appeals "must look beyond the characterization given ... "A true interpretation ...
Because the November Order clarifies the preliminary injunction without modifying it, it is not appealable by Delfino and this Court is without jurisdiction over Delfino's appeal.
2. Delfino Cannot Appeal Aspects of the Original Preliminary Injunction that the District Court Did Not Address in the November Order.
Even if Delfino's appeal is permitted to proceed, it must be limited to the single clarification made by the November Order limiting Delfino to the use of one Internet alias when posting messages about Appellees. Delfino should not be allowed to appeal the totality of the original preliminary injunction.
... Here, Delfino did worse than play procedural games; he danced on the border of contempt. In bad faith, Delfino took advantage of a technical ambiguity in the original preliminary injunction to violate the obvious intent of that order and force the District Court to issue a clarification. ...
C. The District Court Did Not Abuse Its Discretion When It Issued the November Order.
The above discussion establishes that this appeal is procedurally defective. Day waived has waived her arguments on appeal and the Court is entirely without jurisdiction to consider Delfino's appeal. However, even if the appeal is allowed to proceed, the Court should uphold the November Order.
The District Court issued the November Order in an effort to protect Appellees from suffering additional reputational and emotional harm at the hands of Delfino and Day. For months, Delfino and Day had been publishing Internet messages on an almost daily basis that falsely accused appellees Susan Felch and George Zdasiuk of engaging in extramarital affairs, being 'chronic liars,' suffering from mental disease, harassing their co-employees, being incompetent at their jobs, and more. Delfino and Day posted these messages under numerous Internet aliases to make it appear that a large number of people shared their views about Appellees. Delfino and Day even impersonated Appellees in several dozen messages to give the appearance that Appellees were admitting to inappropriate behavior. In short, Delfino and Day were engaging in a repetitive course of intentionally defamatory and harassing conduct directed primarily at two private individuals.
After a full and fair adversary hearing, the District Court found that Appellees were likely to prevail on their claims that Delfino and Day had posted the Internet messages in question and that the messages were defamatory and/or impersonated Felch and Zdasiuk. The District Court further found that Appellees would be irreparably harmed if the messages were to continue and that the balance of harms weighed heavily in Appellees' favor. Under these circumstances, the District Court acted within its discretion in issuing the November Order.
1. The November Order Is Not an Unlawful Prior Restraint.
Appellants argue that the November Order is an unlawful prior restraint. Their argument presumes that every prior restraint is unconstitutional. However, 'the protection [] as to previous restraint is not absolutely unlimited.' ... 'The phrase 'prior restraint' is not a self-wielding sword. Not can it serve as a talismatic test. 'What is needed...is a pragmatic assessment of its operation in the particular circumstances.' '...('not all prior restraints are, ipso facto, unconstitutional').
The doctrine of prior restraint is primarily concerned with preventing the suppression of speech before there has been 'an adequate determination that it is unprotected by the First Amendment.' ... If, before issuing an injunction, a court makes an adequate determination that it will not 'endanger arguably protected speech,' the injunction is not an invalid prior restraint. ... 'Libelous utterances [are not] within the area of constitutionally protected speech....' Beauharnais v. Illinois, 343 U.S. 250, 266, 72 S. Ct. 725, 735 (1952). Therefore, it follows that a person may be constitutionally enjoined from making statements that have been judicially determined to be libelous. As one court stated, in words that could be used to describe the present case:
[Free speech and free press] guarantees should not be so highly regarded as to permit a disgruntled former member of an organization to make daily bombardments of false and damaging statements against the organization from which he was expelled, its officers and members, merely for the purpose of satisfying his personal animosities and gratifying his personal piques.
Murphy v. Daytona Beach Humane Soc'y, 176 So. 2d 922, 927 (Fla. Dist. Ct. App. 1965) (Wigginton concurring).
In many defamation cases, injunctive relief may be the only effective remedy. Money damages 'will not necessarily have the effect of deterring the offending party from continuing his [defamatory] attacks upon the injured party, or prevent continued personal embarrassment, impairment of health, reputation, and ability to carry on one's business in a normal manner...' ...Nor can one expect to remedy the harm caused by defamatory statements simply by responding to them with more speech. '[A]n opportunity for rebuttal seldom suffices to undo harm of defamatory falsehood. Indeed, the law of defamation is rooted in our experience that the truth rarely catches up wit a lie.' Gertz v. Robert Welch, Inc., 418 U.S. 323, 344 n.9, 94 S. Ct. 2997, 3009 n.9 (1974).
In accordance with these principles, many courts around the nation have rejected First Amendment and state constitutional challenges to injunctions prohibiting defamatory speech. See, e.g., Lothschuetz v. Carpenter, 898 F.2d 1200, 1208 (6th Cir. 1990); ... ('Once speech has judicially been found libelous, if all the requirements for injunctive relief are met, an injunction for restraint of continued publication of that same speech may be proper.') Several cases have extended this holding specifically to preliminary injunctions. ... (upholding preliminary injunction that restrained exhibition of obscene film pending further proceedings). Several of these cases, as well as others with similar holdings, were cited with approval in a recent California Supreme Court opinion. See Aguilar v. Avis Rent A Car System, Inc., 21 Cal. 4th 121, 141 n. 8 (1999).
Several cases have held that an injunction against defamatory or other unprotected speech is particularly appropriate where 'the order is based on a continuing course of repetitive conduct.' See, e.g., Pittsburgh press Co., 413 U.S. at 390, 93 S. Ct. at 2561. Among these is Aquilar, 21 Cal. 4th 121 (1999), which contains an extended discussion of the doctrine of prior restraint in the context of a permanent injunction against using racial epithets in the workplace. The Aguilar court held that the injunction in that case did not violate the First Amendment because 'once a court has found that a specific pattern of speech is unlawful, an injunctive order prohibiting the repetition, perpetuation, or continuation of that practice is not a prohibited 'prior restraint' of speech.' Id. at 140. The same rule applies under the California Constitution. Id. at 144-45. Other cases agree that a repetitive course of defamatory speech may be enjoined. ... That rule applies here because Delfino and Day have been carrying out their defamatory Internet campaign on a daily basis for almost two years, and have declared their intent to continue their pattern of defamation and harassment 'until they die.'
Day relies primarily on two cases to support her argument on prior restraint: Gilbert v. National Enquirer, Inc., 43 Cal. App. 4th 1135 (1996), and Wilson v. Superior Court, 13 Cal. 3d 652 (1975). These cases are distinguishable because they involved public issues and public figures. ... A different standard applies in cases where a private individual like Felch and Zdasiuk is defamed regarding matters that do not implicate any public issue. See Bingham, 591 N.Y.S. 2d at 158 (upholding preliminary injunction against defamatory speech and noting that "[d]istinctions are drawn where, as here, the defamatory speech does not advance such societal interests and, indeed, concerns a private individual"); see also Gertz, 418 U.S. at 345-48, 94 S. Ct. at 3010-11. In addition, Gilbert and Wilson must now be read in light of the California Supreme Court's subsequent pronouncement on the scope of the prior restraint doctrine in Aguilar, ... That case makes it clear that speech may be enjoined where a judicial determination has been made that is unprotected.
Finally, Delfino argues that the District Court improperly considered his Internet postings to be commercial speech when it first issued a preliminary injunction against him. ... In its written order, the District Court first noted that Delfino 'is not entitled to First Amendment protections for false statements of fact or defamatory materials.' ... It then stated that, 'to the extent that [Delfino's] speech is deemed commercial, defendant does not enjoy First Amendment privileges over commercial messages that do not accurately inform the public of the nature of a business' activities.' ...By using the phrase 'to the extent that,' the District Court clearly indicated that it was not assuming Delfino's speech was commercial in nature. The District Court was merely explaining that, if Delfino's speech were commercial, that would provide an additional basis for the constitutionality of the preliminary injunction, Thus, the District Court was not relying upon an erroneous factual conclusion. In any case, the above discussion establishes that defamatory speech does not have to be commercial to be enjoined.
For these reasons, the November Order is not an unconstitutional prior restraint.
2. The November Order Enjoins Provably False Statements of Fact, Not Opinion.
Day argues that the defamatory statements on which the November Order is based are "rhetorical hyperbole" rather than provably false statements of fact. ... Notably, Day does not address the statements individually but rather expects the Court to blindly accept her characterization of them as opinion rather than fact. An examination of the statements will establish that they are provably false and clearly defamatory.
Appellants' defamatory statements prior to the preliminary injunction fall primarily into four categories, accusing Appellees of either (1) engaging in extramarital affairs, (2) being "chronic liars," (3) having mental problems, or (4) being incompetent at work. ... Each category is a provably false false statement of fact and thus constitutes actionable defamation. ... (statements alleging infidelity are libelous per se); ... (accusation that person is liar is libelous per se); ... (statement that person is mentally ill is libelous); ... (statements disparaging person's work abilities is libelous per se).
Day bases her argument on Ferlauto v. Hamsher, 74 Cal. App. 4th 1394 (1999), which held that a defamation claim could not be based on generalized name-calling such as "creepazoid" and "little fucker." ... By contrast, Appellants wrote the Internet postings at issue here using a direct, assertive tone intended to make readers believe their statements to be true. If there is any doubt on the fact/opinion question, "the issue should be resolved by a jury" ...
3. To the Extent the November Order Limits Delfino's and Day's Right to Post Anonymously on the Internet, It Is Justified by Their Prior Misconduct.
Several cases have recognized a First Amendment right to speak anonymously. However, the right is not limited. The seminal cases on the right to anonymity explicitly refrained from deciding whether a restriction of that right would be valid if enacted for and tailored to the purpose of identifying persons responsible for fraud or libel. ...
Under these principle, the November Order is valid for several reasons. First, it permits Delfino and Day to continue to use one alias when posting on the Internet. ... Thus, their right to anonymity is not impaired. Second, the November Order is narrowly tailored, applying only to statements on the Internet and only to messages relating to Appellees. Third, if the order is found to implicate the right to anonymity, it is justified by compelling interest. The District Court found that Delfino and Day had been posting Internet messages about Appellees under multiple pseudonyms, including Appellees' names, with the intent to mislead readers into believing that numerous people shared their views. ... The November Order was intended to prevent further fraud of this type. ... This purpose justifies placing a narrow limit on a person's right to remain anonymous. ... thus, any First Amendment concern is minimal. ...
D. The District Court Had Jurisdiction to Issue the November Order Based on the Federal Lanham Act Claim in Appellees' Complaint.
Delfino and Day argue that the District court lacked subject matter jurisdiction because, more than one year after removal, the District Court granted their motion for partial summary judgment with respect to the Lanham Act claim. ...
... Our case is different because Plaintiffs' complaint contained a federal cause of action.
VIII. CONCLUSION
For the foregoing reasons, the District Court's Modified Preliminary Injunction should be affirmed.
Dated: July 31, 2000
Respectfully submitted,
ORRICK, HERRINGTON & SUTCLIFFE LLP
Lynne C. Hermle
Attorneys for Plaintiffs and Appellees
VARIAN MEDICAL SYSTEMS, INC.,
VARIAN SEMICONDUCTOR EQUIPMENT
ASSOCIATES, INC., SUSAN B. FELCH, and
GEORGE ZDASIUK" >>>> |
