Consumer Law

Two new cases on Internet Anonymity

By Paul Levy

by Paul Alan Levy

In past posts, we have discussed the importance of the standards for deciding whether to compel the identification of anonymous Internet speakers.  The First Amendment protects the right to speak anonymously, and if the bar to such discovery is set too low, much citizen and consumer discussion about the important issues of our day, including the doings of corporations and politicians, will be chilled and hence lost to the marketplace of ideas.  If it is set too high, valid claims may be lost.  We at Public Citizen have litigated many cases devoted to setting this balance correctly.

Two federal courts on the West Coast have chimed in on the standards to be used to decide whether to identify anonymous Internet speakers.   In the clearest ruling, a federal trial court in Seattle joined the national consensus approach, typified by the New Jersey appellate decision in Dendrite International v. Doe, whereby a plaintiff who wants to identify anonymous defendants to serve them with process must make both a legal and evidentiary showing of the validity of its claims, and must, in at least some circumstances, survive a balancing test that considers the interest on both sides.  In a second ruling, the Ninth Circuit refused to disturb a district court ruling two years ago that applied a similar approach in ordering three Does identified while preserving the anonymity of two others.  That Court?s analysis appears to limit the applicability of Dendrite, but the odd procedural context of the appellate ruling may limit its impact.

In Salehoo v. Doe, a New Zealand company that offers a database of wholesalers and brokers for goods that can be sold on eBay, and sells memberships that give access to that database, filed suit in the United States District Court for the Western District of Washington against the anonymous operator of the web site www.salehoosucks.com.  Salehoo claimed that the use of its name in the domain name and text of the web site infringed the trademark ?Salehoo,? and that certain statements on the web site were defamatory.  The court initially granted leave to take pre-service discovery but has now granted  the Doe?s motion to quash the subpoena (which was filed by Public Citizen attorneys).

Although the Western District of Washington decided one of the earliest Doe discovery cases, Doe v 2theMart.com, in that case it was a securities law defendant that sought to identify anonymous speakers on the theory that they could supply evidence in support of its defenses.  Hence, although the Court?s recognition of the need to protect the right to speak anonymously against needless disclosure was a useful precedent, the standard enunciated in 2theMart could not be controlling in the Salehoo case.  Instead, the Court canvassed the various standards applied in cases such as Dendrite v. Doe, Doe v. Cahill, and elsewhere, and opted for a slightly modified version of the Dendrite standard, under which the plaintiff seeking discovery must (1) notify the Does of the attempt to identify them, (2) allege a facially valid cause of action, and (3) ?produce prima facie evidence to support all of the elements of the cause of action within his or her control.?  In addition, the court invoked the ?necessity? aspect of the 2theMart test, showing that the specific evidence sought is needed to identify the defendant and that the identity is relevant to plaintiff?s case (but when would that test not be met when the Doe is a defendant?).  Finally, the Dendrite balancing stage is not reached unless ?the preceding three factors do not present a clear outcome.?

Finally, the Court found that plaintiff had not met the standard and hence quashed the subpoena.  The Court expressed grave doubt about whether any Internet users would be confused about whether a web site at the domain name salehoosucks.com, and containing strident denunciation of Salehoo, wold confuse Internet users about whether Salehoo was its sponsor.  Moreover, the Court noted that plaintiff had presented no evidence in support of its defamation claims.  Therefore, there was no basis for compelling the identification of the web site?s operator.

The standards for identifying anonymous Internet speakers was also addressed by the United States Court of Appeals for the Ninth Circuit in In re Anonymous Online Speakers, where the court declined to issue a mandamus overturning the discovery ruling in Quixtar Management v. Signature Management Team (an eary ruling in that case is reported at 566 F.Supp.2d 1205.  Quixtar (also known as Amway) brought suit in Michigan against Signature, a competitor, for tortious interference with contract and other torts, and claimed that Signature was conducting a ?smear campaign? through anonymous Internet criticisms.  It sought discovery in Nevada from one of Signature?s senior staff members, who refused during his deposition to identify the authors of statements on several online sources.  The deponent opposed this discovery, arguing for the application of the Cahill  standard; the trial court initially questioned the basis for the deponent?s standing to raise the free speech rights of the Does but required notice to the Does so that they could decide whether to seek to protect their own rights, which they did. The district court then applied the Cahill standard in deciding that the Does from three online sources should be identified, but the Does from two other online sources protected from identification.  The Does and Quixtar filed cross-petitions for mandamus to overturn those aspects of the ruling that were adverse to each of them.

Applying the rule that mandamus will only be granted in cases of clear error, the Ninth Circuit declined to decide exactly what standard should apply in cases such as the one before it, but it focused on the proposition that the speech at issue was commercial ? because it consisted of representatives of one company bashing another ? and that the First Amendment provided less protection for commercial speech.  The key excerpts (from pages 9220-9221 of its opinion):

    Because Cahill involved political speech, that court?s imposition of a heightened standard is understandable. In the context of commercial speech balanced against a discretionary discovery order under Rule 26, however, Cahill?s bar extends too far. . . .

    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. . . .

    Nonetheless, the district court did not clearly err in its order imposing a high hurdle for disclosure.  The district court weighed appropriate considerations and, given the decision to disclose the speakers? identities even under the strictest test outlines in Cahill, there was no clear error. . . .

    We deny the anonymous speakers? petition for writ of mandamus. We leave to the district court the details of fashioning the appropriate scope and procedures for disclosure of the identity of the anonymous speakers.

The language of the first paragraph quoted above is not a holding, but if it followed then Cahill will provide the standard for cases of non-commercial speech, while some unspecified, less standard will prevail in commercial speech cases.

Several things are, however, unclear about the Quixtar case.  First, it is not clear why the Dendrite/Cahill analysis applied at all.  This was a case, after all, in which the Does? identity was sought to strengthen the lawsuit against the identified defendant (Signature), by showing that they were Signature staff, not to serve the Does and then proceed against them as defendants.  In those circumstances, it would seem that the 2theMart standard should have been the one considered ?  (1) was the subpoena seeking the information issued in good faith and not for any improper purpose, (2) does information sought relates to a core claim or defense, (3) is identifying information directly and materially relevant to that claim or defense, and (4) is information sufficient to establish or to disprove that claim or defense is unavailable from any other source?  Perhaps the answer is to be found in the fact that the plaintiff?s theory of relevance was that the anonymous speech in question was itself actionable, and hence a basis for proceeding against Signature.  But it would have been nice to see some explication on this point.

Second, 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.

But this conundrum simply points up the wisdom of the approach taken by the Arizona Court of Appeal of Mobilisa v. Doe, rejecting Mobilisa?s suggestion that the standard for analyzing discovery to identify defendants depend on the nature of the claim made against them.  If the standard is lower for a particular kind of claim, that rule just gives plaintiffs an incentive to allege that claim as a basis for identifying their critics.  In our experience, companies that are criticized online are all too ready to believe that any criticism must be the product of a campaign by a competitor to steal their business; they will often make such allegations in good faith (even if without any objective basis).  A mode of analysis that provides a better chance of outing critics if the speech is claimed to be ?commercial,? by making the standard easier to meet, thus creates an even greater incentive to make such assertions.  But that approach makes no sense as a matter of public policy.  (Wendy Davis makes a related point in discussing the case.)

Full post as published by CL&P Blog on July 14, 2010 (boomark / email).