Online Anonymity Continues to Challenge Courts, Plaintiffs

In spring and summer of 2010, courts around the country issued rulings on whether websites must reveal the identities of anonymous commenters in response to subpoenas, adding to the growing jurisprudence on an evolving legal problem. Meanwhile, a 9th Circuit Court of Appeals ruling might limit First Amendment protection for anonymous online speech that can be considered "commercial speech."

New Hampshire Supreme Court Favors Right to Speak Anonymously

On May 6, the New Hampshire Supreme Court followed a recent judicial trend toward protecting the identities of anonymous commenters under the First Amendment, ruling that a mortgage industry website did not have to remove a document it had published online or reveal the document's anonymous source or the identity of an anonymous website commenter.

In 2008, mortgage lender The Mortgage Specialists, Inc. sued Implode-Explode Heavy Industries, Inc., which operates the website The Mortgage Lender Implode-O-Meter (Implode-O-Meter), after the website published an article that detailed the New Hampshire Banking Department's administrative actions against The Mortgage Specialists and provided a link to a financial document the company had allegedly submitted to state banking authorities. On March 11, 2009, a New Hampshire state trial court granted The Mortgage Specialists' request that Implode-O-Meter remove the document and several posts by commenter "Brianbattersby" from its website, identify the source of the document, and disclose the identity of the commenter, pursuant to claims that publication of the document violated state laws and that the commenter's posts were false and defamatory.

In an opinion by Justice Carol Ann Conboy, the state Supreme Court vacated and remanded the lower court's order that Implode-O-Meter disclose the identity of "Brianbattersby," "including his full name, address, email address, phone number, and any other personal information [Implode-O-Meter] possesses." Conboy's opinion rejected the lower court's assertion that "the maintenance of a free press does not give a publisher a right to protect the identity of someone who has provided it with unauthorized or defamatory information." Instead, the Supreme Court ruled that New Hampshire trial courts must "strike the balance between a defamation plaintiff's right to protect its reputation and a defendant's right to exercise free speech anonymously." Accordingly, the court adopted a four-part test based on the New Jersey appellate court's ruling in Dendrite International, Inc. v. Doe Number 3, 775 A.2d 756 (N.J. Super. Ct. App. Div. 2001), a case that involved a corporation's motion to compel the disclosure of the identity of an anonymous online critic pursuant to a defamation claim. Under the Dendrite standard, courts must 1) require the plaintiff to attempt to notify anonymous commenters that they are the subject of a subpoena or application for an order of disclosure, 2) require the plaintiff to identify the exact statements that constitute actionable speech, 3) review the plaintiff's complaint to determine whether it has set forth a prima facie cause of action that can also withstand a motion to dismiss and provides sufficient evidence to support each claim, and 4) balance the defendant's First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure of the anonymous defendant's identity to allow the plaintiff to properly proceed. The high court remanded the case back to the trial court for an application of the Dendrite test. The Mortgage Specialists, Inc. v. Implode-Explode Heavy Industries, Inc., 2010 N.H. LEXIS 41 (N.H. May 6, 2010)

The court also vacated and remanded the lower court's order that Implode-O-Meter identify the source of the document, and reversed the lower court's injunction prohibiting republication of the financial document and comments by "Brianbattersby." In ruling that Implode-O-Meter did not have to identify its anonymous source, the court cited New Hampshire's qualified common law journalist's privilege. "Although our cases discussing the newsgathering privilege have involved traditional news media, such as newspapers," Conboy wrote, "we reject Mortgage Specialists' contention that the newsgathering privilege is inapplicable here because Implode is neither an established media entity nor engaged in investigative reporting. ... The fact that Implode operates a website makes it no less a member of the press. ... Implode's website serves an informative function and contributes to the flow of information to the public. Thus, Implode is a reporter for purposes of the newsgathering privilege." The high court remanded the issue of whether the anonymous source should be disclosed, ordering the lower court to balance "the potential harm to the free flow of information that might result [from disclosure] against the asserted need for the requested information."

The court also ruled that the lower court's injunction was an unconstitutional prior restraint. Mortgage Specialists argued that publication of the financial document was illegal because it violated the confidentiality requirements of a state law pertaining to "investigations and reports of examinations by the banking department" and constituted an invasion of privacy, and because the "Brianbattersby" comments did not qualify for First Amendment protection because they were false and defamatory. Conboy cited numerous U.S. Supreme Court decisions that found that prior restraints violated the First Amendment "even when confidential information has allegedly been obtained unlawfully by the publisher," including Near v. Minnesota, 283 U.S. 697 (1931) and New York Times Co. v. United States, 403 U.S. 713 (1971) ("the Pentagon Papers case"). Conboy wrote that "Mortgage Specialists' interests in protecting its privacy and reputation do not justify the extraordinary remedy of prior restraint. While it may be true that Mortgage Specialists' loan information is 'confidential,' such information is certainly not more sensitive than the documents at issue in the Pentagon Papers case. Nor are the [document] and postings more inflammatory than the anti-Semitic publications at issue in Near."

Illinois Court Requires Disclosure

On June 1, a state appellate court in Illinois ordered Ottawa Publishing Co., publisher of the Ottawa, Ill. Times, to disclose the identity of a commenter on its website, Mywebtimes.com.

The decision reversed a trial court's ruling that granted the publisher's motion to dismiss Donald and Janet Maxon's pre-litigation petition for discovery. In fall 2008, the Maxons filed the petitions for discovery under Illinois Supreme Court Rule 224, which allows a would-be plaintiff to engage in discovery before filing a lawsuit to uncover the identity of "one who may be responsible in damages." The Maxons alleged that commenter "FabFive from Ottawa" had defamed them on Mywebtimes.com by claiming they had bribed a city commission, leading it to favor an ordinance that would allow bed and breakfasts to operate in residential areas. "FabFive from Ottawa"'s comments included, "How much is Don and Janet from another Planet paying [the commission] for [its] betrayal????"

In granting the publisher's motion to dismiss, the trial court applied a standard based on Dendrite and Doe v. Cahill, 884 A.2d 451 (Del. 2005), finding that the Maxons failed to state a prima facie cause of action for defamation because the commenter's statements were statements of opinion. The Illinois Appellate Court for the Third District ruled 2 to 1 to reverse the trial court's order.

Rejecting the lower court's finding that "FabFive from Ottawa"'s statements were opinions, Judge William E. Holdridge wrote that the majority found "nothing in the content or the forum to indicate that the allegations that the Maxons bribed a public official could not reasonably be interpreted as stating an actual fact," adding, "the mere fact that a statement of fact is couched in the rhetorical hyperbole of an opinion does not render it nonactionable."
Maxon v. Ottawa Publishing Co., 929 N.E.2d 666 (Ill. App. Ct. June 1, 2010)

Holdridge also wrote that since Rule 224 requires a trial court to ensure that the would-be plaintiff's petition 1) is verified, 2) states particular facts that would establish a cause of action, 3) seeks only the identity of the potential defendant and no other information, and 4) is subjected to a hearing, "trial courts in Illinois possess sufficient tools and discretion to protect any anonymous individual from any improper inquiry into his or her identity." Therefore, Holdridge argued, a separate analysis of the constitutional protections for anonymous speech using Cahill, Dendrite, or any other standard would be redundant and unnecessary.

"Moreover," Holdridge wrote, "given that there is no constitutional right to defame, we find no need for the additional requirements articulated in the Dendrite-Cahill test. ... [O]nce the petitioner has made out a prima facie case for defamation, the potential defendant has no first-amendment right to balance against the petitioner's right to seek redress for damage to his reputation, as it is well settled that there is no first-amendment right to defame."

Judge Daniel L. Schmidt dissented, saying that the majority "misse[d] the point" in its opinion because "the protection of the anonymity of speech is a separate issue from the defamatory nature of the speech. In other words, no one suggests that an anonymous speaker deserves a higher degree of protection from claims of defamation than an individual whose identity is known. Rather, it is the anonymity itself that is equally worthy of protection."

Schmidt wrote that the Dendrite-Cahill test "adds a crucial extra layer of protection to anonymous speech ... . The additional procedural requirements articulated in the Dendrite-Cahill test are not designed to protect defamatory anonymous speech. Rather, they are designed to protect the identity of those participating in nonactionable anonymous speech. Once an anonymous speaker's identity is revealed, it cannot be 'unrevealed.'" Schmidt also disagreed with the majority's decision that a reasonable person would construe the "FabFive from Ottawa" comments to be statements of fact, rather than "the venting of one's spleen by someone disgruntled by the decision of a local body politic."

Ottawa Publishing Co. attorney Michael Schmidt told the Bulletin July 23 that the newspaper chose not to appeal the case to the Illinois Supreme Court.

North Carolina Trial Courts Split on Whether to Unmask Commenters

A North Carolina trial court judge ruled August 16 that the Gaston Gazette did not have to disclose the identity of an anonymous commenter because the state's shield law protected that information.

According to Gaston County Superior Court Judge Calvin Murphy's order, the attorney for a murder suspect subpoenaed the Gazette and publisher Julie Moreno to reveal the identity of commenter "justicen2010." The Associated Press (AP) reported August 2 that, according to the newspaper's attorney, the comment included information related to a lie-detector test the murder suspect took.

In a three-page order, Murphy ruled that the suspect's attorney failed to overcome the qualified journalist's privilege established by N.C. Gen. Stat. § 8-53.11, which states "A journalist has a qualified privilege against disclosure in any legal proceeding of any confidential or nonconfidential information, document, or item obtained or prepared while acting as a journalist."

Murphy wrote that the commenter's identity qualified as "confidential information related to [t]he Gazette's and Moreno's newsgathering and news publishing activities" and "therefore, [t]he Gazette and Moreno have a qualified privilege against compelled disclosure of Internet posters' IP addresses, e-mail addresses, names, physical addresses, and other identifying information" they collect. North Carolina v. Mead, 10-CRS-2160 (Gaston Cty. Sup. Ct. June 28, 2010)

Murphy ruled that the suspect's attorney failed to show, as the statute requires, that the commenter's identity is "relevant and material to the proper administration of the legal proceeding for which the testimony or production is sought; cannot be obtained from alternate sources; and is essential to the maintenance of a claim or defense of the person on whose behalf the testimony or production is sought."

In an earlier case, on June 28, Vance County Superior Court Judge Howard E. Manning ordered the editor of a Henderson, N.C. community news blog to disclose the names and addresses of six commenters who allegedly defamed a candidate for county commissioner.

Jason A. Feingold, editor of the Home in Henderson blog, posted an article on Aug. 14, 2009 titled "Arrest made in elder abuse case" concerning the arrest of a woman who had subleased a house to eight tenants between ages 45 and 88. Feingold reported that living conditions in the house were extremely poor, and tenants were without electricity or running water. Commenters identified Thomas S. Hester, a former county commissioner and candidate for the same office, as the owner of the property, and criticized him for allowing the conditions in the house. The article and comments are available online at http://www.homeinhenderson.com/?p=9317. Hester filed a "John Doe" lawsuit for defamation against 20 of the commenters, and subpoenaed Feingold to disclose their identities.

In his June 28 order, Judge Howard E. Manning observed that under U.S. Supreme Court cases such as Buckley v. American Constitutional Law Foundation, 525 U.S. 182 (1999) and Talley v. California, 362 U.S. 60 (1960), "the right of free speech provided by the First Amendment is protected when the speech is anonymous" but "the right to speak anonymously, on the internet or anywhere, is not absolute and there is no right to freely defame other persons." Hester v. Jane or John Doe, 10-CVS-361 (Vance Cty. Sup. Ct. June 28, 2010)

Manning said the Dendrite standard "provides a reasoned step by step test of the complaint, some of which this Court will use in its determination." Ultimately, however, Manning's analysis eschewed central aspects of the Dendrite test, including a determination of whether the plaintiff presented a prima facie case for defamation, saying that to require a specific evidentiary showing would be "way too stringent and premature, especially where there is no dispute that the blogs were posted and that the blogs [sic] content are [sic] out there for all the world to read." Manning identified six statements that were libelous per se, or defamatory on their face, and ordered that the commenters be identified. The judge determined that the statements of 14 other commenters were not libelous "and despite their unflattering references, if any, to Hester, are protected by the First Amendment."

In his motion to quash the subpoena, Feingold had also argued that the commenters' identities were protected by North Carolina's shield law, but Manning did not address that issue.

9th Circuit Ruling Proposes Lower Standard for Commercial Speech

In a July 12, 2010 ruling on a procedural issue, a three-judge panel of the 9th Circuit U.S. Court of Appeals suggested that the standard for unmasking an anonymous commenter could be lower when the commenter's speech qualifies as commercial speech, as opposed to "political, religious, or literary speech."

The underlying case involves a long-running dispute between Quixtar, Inc., also known as Amway, and Signature Management TEAM, LLC, (TEAM) which sells books, seminars, and motivational speaker appearances to Independent Business Operators (IBOs) selling Quixtar products. Quixtar has sued TEAM for tortious interference with contracts and business relations, alleging that TEAM carried out an online "smear campaign," encouraging IBOs to end their contracts with Quixtar. Quixtar has sought information about the identity of five anonymous online speakers allegedly responsible for criticizing Quixtar management, but a TEAM employee refused to identify them in his deposition. Quixtar claims that the online critics can be linked to TEAM and therefore support its claims of tortious interference.

The Nevada District Court applied the Cahill standard and ordered the TEAM employee to identify three of the five anonymous speakers. The anonymous speakers and Quixtar appealed to the Circuit Court to issue a writ of mandamus requiring the District Court to abandon its order. Quixtar asked that the District Court be compelled to order all five speakers to be identified; the anonymous speakers asked that the District Court be compelled to allow all the speakers to remain anonymous.

Writing for the 9th Circuit, Judge M. Margaret McKeown denied both parties' petitions, calling mandamus an "'extraordinary' remedy limited to 'extraordinary' causes." However, McKeown also wrote that the lower court's application of the Cahill standard for unmasking anonymous online speakers was "understandable," but "in the context of commercial speech balanced against a discretionary discovery order ... Cahill's bar extends too far."
In re: Anonymous Online Speakers, 2010 U.S. App. LEXIS 14166 (9th Cir. July 12, 2010)

McKeown characterized the anonymous online posts, which included allegations that Quixtar had "secretly ... acknowledged that its products are overpriced and not sellable," "refused to pay bonuses to IBOs in good standing" and "currently suffers from systemic dishonesty" as commercial speech, or "expression related solely to the economic interests of the speaker and its audience" as defined by Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). In Central Hudson, the U.S. Supreme Court ruled that truthful, non-misleading commercial speech is entitled to some First Amendment protection, but less than other constitutionally protected expression.

McKeown wrote that "in discovery disputes involving the identity of anonymous speakers, the notion that commercial speech should be afforded less protection than political, religious, or literary speech is hardly a novel principle" and that "we suggest that the nature of the speech should be a driving force in choosing a standard by which to balance the rights of anonymous speakers in discovery disputes." To support these propositions, McKeown cited Lefkoe v. Jos. A. Bank Clothiers, Inc., 577 F.3d 240 (4th Cir. 2009), a federal appeals court decision allowing the deposition of an anonymous speaker in a securities fraud class action, and Doe v. Reed, 103 S. Ct. 2811 (June 24, 2010), in which the U.S. Supreme Court held that individuals who sign referendum petitions generally do not have a constitutional right to keep their identities secret, but that courts should consider on a case-by-case basis whether a particular referendum presents unique circumstances requiring anonymity.

A July 20 Citizen Media Law Project (CMLP) blog post called the ruling "troubling" because "the court's sense of what qualifies as commercial speech seems unduly broad." The post observed that under the 9th Circuit's interpretation, almost any comment on any review website or "gripe site" could be considered "related solely to the economic interests of the speaker and its audience."

In a post on the Consumer Law & Policy Blog, attorney Paul Alan Levy observed that "it is not clear how the Ninth Circuit satisfied itself that the speech at issue was commercial. To be sure, it is commercial on Quixtar's theory of the case (derogatory comments posted by a rival for the purpose of stealing business), but the same could be said in any Cahill-type case--on the plaintiff's legal theory, the Doe's speech is unprotected by the First Amendment because, for example, it is false statements of fact made with actual malice. Yet that has never been enough to overcome the right of anonymous speech. Hopefully there was some basis in the record other than the plaintiff's say-so for finding the speech commercial."

The CMLP post extended Levy's point to argue that "[t]he court's circular reasoning could tilt the scales in favor of disclosure in every defamation case, where plaintiff[s] by definition claim that the speech in question is not entitled to any First Amendment protection at all. ... The whole point of the Dendrite and Cahill tests is to make sure that plaintiffs can support such allegations with at least some minimal factual basis before they get what they want."

- Patrick File
Silha Fellow and Bulletin Editor

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