X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Officials at Miami-based MasTec Inc. weren’t pleased last year when allegedly false statements about the company began circulating on Internet investor forums and bulletin boards like Raging Bull and Yahoo. The person posting these items used pseudonyms to hide his or her identity. But MasTec figured it was a former employee with an ax to grind. The company sued in Florida’s Broward Circuit Court in December, asking Judge Leroy H. Moe to subpoena former employee Gregory Wayne Jeffries to find out whether he was the culprit. The defamation lawsuit is pending. Jeffries has denied any involvement. The case has thrust MasTec into a fast-growing group of companies that are patrolling the cyberhighways for defamatory material about themselves and, when they find any, slapping the suspected slanderers with lawsuits. Some companies are even hiring specialized firms, like Arlington, Va.-based Cyveillance, to scour the Internet for defamatory comments. For a price starting at $8,500 a month, Cyveillance can alert clients to defamatory comments within hours of an occurrence. Such potentially defamatory material ranges from adolescent boasts that the poster is sleeping with the CEO’s wife, to allegations of nefarious corporate wrongdoing, to release of false data which could drive down a company’s stock price. Corporate leaders are most concerned about people who disseminate information over the Internet with the intention of manipulating stock prices. But companies also fear that malicious rumors and hints of scandal could snuff pending deals. There are major obstacles, however, to successfully suing cyberslanderers, not least of which is that most perpetrators have little money and can’t pay a large judgment. Free speech advocates charge that companies that file such suits often are trying to intimidate legitimate critics and prevent information about their business problems from being disseminated via the Internet. While no statistics on Internet libel are available, everyone interviewed for this article said cybersmearing is increasing. Lyrissa Barnett Lidsky, a professor at the University of Florida law school, says that when she started writing an article, “Silencing John Doe: Defamation and Discourse in Cyberspace,” published in the February 2000 issue of the Duke Law Journal, there were only a handful of defamation lawsuits filed. “In the time it took to write the article, there were at least 50 cases,” she says. “Today, there are 200.” Most Internet libel suits will never reach a jury, she says. Martin Reeder, a partner at Greenberg Traurig in West Palm Beach, says most lawsuits are filed primarily as a means of identifying the online speaker so that the company can retaliate. “If it’s an employee, that means firing them,” he says. FREE-FOR-ALL Of course, online investor forums and bulletin boards are intended to be a free-for-all. They give disgruntled stockholders, employees, and ex-employees a chance to swap information and grouse. Some bulletin-board users do share useful knowledge. And statements of opinion may well come within constitutional protected speech. Many of the statements on sites like Motley Fool and Raging Bull are angry and hostile, if not libelous. One user, “cusackpat,” complained on June 15 that her husband was laid off by Toronto-based Nortel Networks that day and that her and her husband’s stock options were now “worthless.” She added that “most of the current employees fully expect to be laid off by year’s end, anyway.” But bulletin boards also are popular with saboteurs seeking to torpedo deals and investments, as well as pump-and-dump stock scammers, who use false data to inflate stock prices before unloading the shares at a profit. Internet service providers that operate investor bulletin boards are virtually immune from liability, however, thanks to the Communications Decency Act of 1996. The act designates providers as common carriers, not unlike telephone companies. Original content produced by the providers is not protected. NAMING NAMES Reeder says service providers rarely, if ever, voluntarily divulge the identity of an online poster. Thus, the only recourse companies generally have is to file a defamation lawsuit and ask the court to force the service provider to reveal the poster’s identity. In one recent case, J. Erik Hvide, the former CEO of Fort Lauderdale-based Hvide Marine Inc., sued eight anonymous posters in 2000, claiming that their defamatory postings led to his forced resignation in 1999. After a defeat in Miami-Dade Circuit Court, Hvide won an important victory in the 3rd District Court of Appeal, which rejected the arguments of the eight “John Does” that they had the right under the First Amendment to express their opinions anonymously. The anonymous posters are appealing. But the court issued the ruling without any oral or written opinion, leaving the constitutional issues unresolved. “If somebody goes out and hits you with their car, you have a right to know who the driver is,” says Bruce Fischman, a partner at Fischman Harvey & Dutton in Miami who represented Hvide. He says online defamation now comprises more than half his practice. But not every court agrees with the 3rd District Court. Various state courts that have heard cyberlibel cases over the past several years generally have recognized a right to speak anonymously on the Internet. The U.S. Supreme Court has yet to weigh in but has acknowledged a right to anonymity in cases concerning, for example, the distribution of political pamphlets. Lidsky says judges seem most concerned about posters who present information as authoritative fact rather than as opinion. Still, she notes, courts increasingly are requiring companies alleging defamation to make a preliminary showing that the anonymous speaker injured them economically before forcing the Internet service providers to reveal the identity of the speaker. Judges want to see proof of injury, such as a fallen stock price or a scuttled deal. She agrees with that approach in that it protects what she sees as the qualified right to anonymity in Internet speech. “Any time you criticize someone online, they could potentially claim it is libelous,” Lidsky says. And if that’s enough to get the courts to lift your right to anonymity, she says, “then there really isn’t a right to speak anonymously online.” RAPID RESPONSE TEAMS The trick in going after cyberslanderers, says Fischman, is to move fast. That’s because most Internet bulletin boards don’t retain the data needed to identify posters for very long. He says lawmakers have considered requiring Internet service providers to retain such data for a longer period of time to give those claiming defamation a greater opportunity to identify their attackers. Fischman advises companies to consult with an attorney familiar with this area of law and establish a formal set of procedures, enabling them to move quickly after an Internet libel attack. A formal response team may be able to limit the damage to a company’s reputation, he says. The company may choose to respond to the negative comments in the same forum where the comments originally were made. Or the company may issue a news release to allay concerns among investors and business partners. But Fischman urges companies to consider such postings and news releases carefully before issuing them. In countering false stock data, for example, a company response team needs to be careful not to divulge confidential information, a move that could irk stockholders and securities regulators. Even though cyberslander is a growing phenomenon, Reeder cautions that most Internet epithets are inane and not worth the effort to rebut. Companies increasingly shrug them off, he says. Still, Edward Mullins, a shareholder at Astigarraga Davis in Miami, says court rulings in cybersmearing cases are worth watching because they could significantly alter the field of defamation law. Because Internet libel offers subjects of attacks little or no ability to confront their critics or win monetary damages for false statements, libel and slander lawsuits increasingly could become irrelevant, he says.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.