No sooner said than done.....This fits;
"Subject: XYBR Lawsuit
Date: 5/3/2005 10:34 A.M. Eastern Daylight Time
From: Putnam6
MsgId: 497434:24108
Dan Whatley has a few words of advice for those inclined to flame the CEO of an unpopular company or individual.
Whatley learned last week he had lost a $450,000 defamation lawsuit for statements he had made about a company called Xybernaut on an Internet message board. He said he didn't even know the suit existed.
"I had no clue about this," Whatley said.
After getting a copy of the judgment, he was even more confused. "What they say I say in the judgment is totally false and without documentation," he said.
Xybernaut (XYBR) is a profitless Virginia company that makes wearable computers.
Stephen Murphy, the Xybernaut lawyer handling the case against Whatley, said Whatley had been served notice of the lawsuit by certified mail. Whatley said the letter never came. With only one side at the hearing, a judge awarded the company a $450,000 default judgment -- a legal term for victory by forfeit.
Lawyers say defamation lawsuits against message board posters by companies wanting to silence their online critics are on the rise.
"It's not unusual," said Lee Tien, a lawyer with the Electronic Frontier Foundation, a cyber-rights group. "We hear about people being sued for online posts -- and getting into crazy situations -- about once a week."
"Typically, it's thin-skinned corporate executives whose companies aren't doing well," said Mark Goldowitz, who heads the California Anti-Slapp Project, a non-profit group that defends posters against frivolous libel suits. "They use this as a way to shut up the critics, and it also sends a message to other posters."
Few of these suits make it to a courtroom. Often, in exchange for dropping a suit, companies demand a retraction and an apology, along with a promise that the defendant never posts about the company again.
That's exactly what happened last year to Nora, a mother of three and full-time day trader from Houston (she requested her last name not be published). She was among several outspoken posters sued last year by Viragen, a small biotech firm in Florida that is trying to genetically engineer chickens to lay cancer-curing eggs.
Although the company has been around for over 15 years, Viragen (VRA) has never turned a profit. The company recorded $718,000 in revenue last year and over $11 million in losses. Viragen CEO Gerald Smith earned $296,000 last year, according to SEC filings.
In response to rumors that some posters had access to inside information, Nora criticized the company, calling the management "crooked." Within weeks, she was hit with a lawsuit.
She called Viragen's lawyer. He demanded she post an apology on the message boards, and agree to stop posting, or the company would pursue the suit. Nora was stunned. "I was very surprised," she said. "I've been a day trader since 1995, and I've always posted my opinion on the boards."
Inclined to fight, Nora consulted with an attorney who told her the case against her wouldn't stand up in court. "I told them to forget it," she said, refusing to sign the apology.
But Viragen's lawyer didn't back down. As the reality of the costs of fighting a lawsuit filed in another state set in, she backed down.
"I got scared," she said. "What if they tried to make an example of me? I wanted it to go away; it was too much of a hassle."
Nora posted the apology, copied word for word from a document drafted by a Viragen attorney.
She said the experience humiliated her. "When I wrote that letter, that was the worst thing I ever had to do," Nora said. "Those weren't my words. They got me."
Nineteen states (Virginia is not one of them) have laws protecting against frivolous litigation intended to suppress free speech. These "anti-SLAPP" laws allow defendants to recover their legal costs in suits deemed "Strategic Lawsuits Against Public Participation."
In Global Telemedia International vs. Does, a SLAPP suit tried in federal court in California last February, the judge ruled that typical message-board flaming does not meet the standard of defamatory speech. Such language must appear to be a statement of fact, not mere opinion.
"The postings (in question) are full of hyperbole, invective, short-hand phrases and language not generally found in fact-based documents, such as corporate press releases or SEC filings," Judge David O. Carter wrote.
That's a pretty good description of the postings Xybernaut sued Dan Whatley over, according to a copy of the suit. The suit lists posts in which Whatley berates Xybernaut chairman and CEO Edward Newman and his brother Steve Newman, who is the vice-chairman.
"I have been dealing with the Newmans and XYBR and they are the most incompetent management I have ever seen," the suit quoted Whatley writing in one post, under his handle, dan7. "If Steve Newman was not a relative his job would consist of ... 'Would you like fries with that?'"
Whatley also called the Newmans "liars" in several different posts.
Not all defamation suits against online posters are frivolous, says Paul Levy, an attorney for Public Citizen who has defended many posters against defamation suits.
The difference between defamation and a critical opinion is the specificity of the statement, Levy said. He cited one case in which the defendant, who lost the case, falsely accused a corporate executive of conducting medical experiments for Nazis.
"If you go overboard, they're going to come after you," Levy said. "At a certain level, libel law plays a role and has value."
To protect themselves from litigation, Goldowitz recommends posters be able to back up their online statements with evidence. He also recommends regular posters sign up for "personal injury" coverage option offered with most homeowner insurance policies. It covers legal costs if the policyholder is sued for defamation. Several more individual cases are making thier way thru the court system and will be seen shortly.
For Whatley, it's too late; he doesn't have that kind of coverage. Now he says he has to use his son's college savings to pay for a lawyer he never thought he would need. "I just want a chance to defend myself," he said.
"
