Appeals Court Protects Anonymous Internet Critics of NJ Company

July 29, 2004

MORRISTOWN, N.J. — Adopting arguments made by attorneys for Public Citizen and the American Civil Liberties Union Foundation of New Jersey, a New Jersey appeals court rejected a company's attempt to discover the identities of anonymous Internet message posters by going to court. The case is the first time any appeals court in the nation has considered this question.

The company, Dendrite International, failed to meet the stringent legal standards required for it to obtain subpoenas for the disclosure of the identities of people who post Web messages about those companies, Judge Robert Fall ruled today in an opinion for a three judge panel of the New Jersey Superior Court, Appellate Division.

"Several other courts have articulated similar standards for deciding whether to compel the identification of anonymous Internet speakers, but this decision marks the first time that any appeals court has considered such a request for identification," said Paul Levy, who filed a brief for Public Citizen as a friend of the court. "Because it sets forth strict procedural and evidentiary standards for compelled identification, and then shows that these standards can produce real protection for anonymity, this decision is a tremendous victory for free speech."

Levy predicted that for this reason, as well as the court's thorough analysis of constitutional rights involved, the decision is likely to be especially influential in future cases. Yahoo! recently told a judge in another case that it has received "thousands" of subpoenas like Dendrite's.

The court issued the ruling in a case in which Dendrite International, a supplier of sales force software products and support services to the pharmaceutical industry, sued four people who posted messages anonymously about the company on a Yahoo! message board. Dendrite alleged that three of the message posters made false statements, that two of them who identified themselves as employees violated employment agreements, and that three of them published secret information. After Dendrite asked the court to authorize it to pursue discovery to identify the defendants, Superior Court Judge Kenneth MacKenzie ordered Dendrite to post a notice of its request on the Yahoo! message board to alert the potential defendants that their anonymity was at issue. Two of the posters hired lawyers to defend their right to

remain anonymous, and Public Citizen entered the case as a friend of the court to argue for a limited right to anonymity. After Judge MacKenzie ruled in favor of the two posters, Dendrite appealed the denial of its request to identify one of the posters.

The court accepted Public Citizen's argument that court must "strike a balance between the well-established First Amendment right to speak anonymously, and the right of the plaintiff to protect its proprietary interests and reputation [against] actionable conduct of anonymous, fictionally named defendants." To achieve this balance, Judge Fall adopted a four-part test, following the standard proposed in Public Citizen's brief, to ensure that the right to speak anonymously can be lost only if the plaintiff can show that it had a valid case against the speakers that could not be pursued without identifying the speakers.

Under this standard, the court should first require the plaintiff to attempt to notify the anonymous posters that their identities are being sought, and give the defendants an opportunity to oppose the request. The plaintiff must identify the exact statements alleged to be unlawful. The court must then decide both whether the complaint states a valid claim for relief, and whether the plaintiff has enough evidence to support its claim. Finally, if these first three standards is met, "the court must balance the defendant's First Amendment right of anonymous free speech against the strength of the prima facie case and the necessity for the disclosure of the anonymous defendant's identity to allow the plaintiff to proceed."

The court upheld Judge MacKenzie's ruling that Dendrite had not met this standard, because there was no proof that the messages had caused its stock price to fall, or had otherwise caused it harm.

Public Citizen argued in its brief that because the main purpose of such suits is often to unmask the company's critics, the identification of those critics should be treated as a major form of relief that cannot be awarded without proof of wrongdoing. A company should not be able to deny members of the public the right to speak anonymously simply by filing a complaint and making vague allegations of wrongdoing. The Internet, Levy argued, is "the modern equivalent of the Speakers' Corner at Hyde Park. That's where anybody can stand up and voice their opinions -- however silly, profane or brilliant they might seem -- to anyone who chooses to listen. By establishing tough standards that companies must meet before anonymous speakers may be identified, and then actually applying those standards to protect the only two defendants who came to court to defend themselves, while inviting the other two speakers to explain why they, too, should be protected, Judge Fall has set an important precedent protecting the free speech rights of all Internet posters."

In a second case, Immunomedics v. Doe, which was argued in tandem with the Dendrite case, the appellate court applied the same standard set out in Dendrite and affirmed a trial court's denial of a motion to quash. In that case, the court held that there was sufficient evidence to demonstrate that the Jane Doe in question was an employee who had breached a confidentiality agreement and that that evidence supported a bona fide claim of breach of contract.

Public Citizen filed the brief because it champions free speech rights. The organization recently represented a person who posted anonymous messages on a Yahoo! message board about Thomas & Betts Corporation, a Tennessee manufacturer of electrical components. The company dismissed the case with a statement that it did not want to chill free speech on the Internet. Public Citizen is also representing an employee who anonymously posted a message on the Internet about an executive of Ohio-based AK Steel Company. The executive has sued to learn the identity of the employee for this allegedly defamatory posting.

J.C. Salyer of the American Civil Liberties Union of New Jersey Foundation was local counsel in the case. Judges Edwin Stern and Ariel Rodriguez joined Judge Fall's opinion.

Category: Cyber-Liberties

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