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The two defendants who were found to have defamed their former employer with postings on the Internet won’t be going to jail anytime soon. On Tuesday, the California 6th District Court of Appeal in San Jose granted a temporary stay of contempt proceedings and an injunction aimed at Michelangelo Delfino and Mary Day. The court also stayed efforts to collect damages and ordered briefing. In writs filed with the 6th District last week, Jon Eisenberg, the defendants’ appellate lawyer, said the two faced the imminent threat of being taken into custody at a debtor’s hearing that had been scheduled for Wednesday. At a previous hearing, Delfino had invoked his Fifth Amendment rights when questioned about his finances and use of computers. Santa Clara Superior Court Judge Jack Komar had ruled that Delfino could not invoke the Fifth Amendment in the civil proceedings brought by his former employers, Palo Alto, Calif.-based Varian Medical Systems and Varian Semiconductor Associates Inc., and two Varian managers. “It’s good news to the extent it means that all of us — the judge, counsel and litigants — can take a deep breath and pause while the court of appeal decides the petitions,” said Eisenberg, a partner in the Oakland, Calif., office of Encino, Calif.’s Horvitz & Levy. The stay also affects a hearing, set for July, on whether Day and Delfino are in violation of a permanent injunction that requires Day and Delfino to remove libelous postings and refrain from repeating specific libelous statements. “We are certainly not concerned about the court’s scrutiny concerning the injunction,” said Lynne Hermle, the Orrick, Herrington & Sutcliffe partner representing Varian. “I do hope the court will lift the stay quickly with respect to the discovery for the contempt proceeding.” In the writs filed with the 6th District, Eisenberg argued that the injunction, entered after the jury returned its verdict in December, is an unconstitutional prior restraint on speech. He also argued that the damages verdict should be reversed because the case was wrongly tried on the theory of libel versus slander, adding that special damages can’t be recovered under California’s slander statute.

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