High court rejects subpoena by anonymous corporation

From the Spring 2001 issue of The News Media & The Law, page 22.

The Virginia Supreme Court ruled on March 2 that an Indiana company may not proceed anonymously in seeking to unmask the identities of five anonymous Internet speakers.

The corporation, entitled “Anonymous Publicly Traded Company” for purposes of the case, sought the identity of five America Online users in relation to statements made about the company in Internet chat rooms. The company insisted that it had to proceed anonymously “because disclosure of its true company name will cause it irreparable harm.”

Although an Indiana court was willing to grant the company anonymity, the Virginia Supreme Court refused to go along, citing a lack of evidence why the company should be allowed to proceed anonymously.

Regarding the Indiana proceeding, the Virginia high court said, “it is clear that no hearing was held concerning the question, no evidence was received by the court, no reasons for the decision were given, and the order permitting anonymous maintenance of the action was granted in a non- adversarial, ex parte proceeding.”

Anonymous defendants in defamation suits are nothing new. According to First Amendment attorneys across the nation, there have been hundreds of defamation lawsuits filed against anonymous Internet speakers. (See NM&L, Winter 2001).

Plaintiff companies call them “cybersmear” cases and claim that false and malicious statements on the Internet can send stock prices into an unwarranted free fall. Privacy groups call them “John Doe” cases and contend that many of the lawsuits are filed solely to discover the identity of the speaker and punish him through means other than the court system, such as terminating his employment.

But an attempt to proceed anonymously with a suit to unmask a defendant may be novel.

“If a person is going to use our publicly funded court system, and ask a judge to vindicate his rights, then he must be prepared to do it in an open forum unless there is a compelling reason,” said Megan Gray of Baker & Hostetler in Los Angeles, who has been involved in dozens of John Doe cases. “In this case, the plaintiff was unable to show any compelling reason.”

Here, the company filed an anonymous lawsuit in Indiana, its place of business, in 1999 against “John Does 1-5,” which it believed were current or former employees. The Indiana court permitted the anonymous corporation to seek a subpoena duces tecum from a court in Fairfax County, Virginia, where AOL is located, and allowed it to proceed anonymously until the identities of the speakers could be discovered. AOL moved to quash the subpoenas in Indiana, but the motion was denied.

After a Virginia clerk of court issued the subpoenas, AOL appealed the issue to the Virginia Supreme Court.

The Supreme Court here made its determination under the Uniform Foreign Depositions Act, a provision adopted by many states — including Indiana and Virginia — requiring states to respect each other’s deposition and document production orders.

Although courts typically try to respect each other’s decisions, the court here held that procedural requirements may not have been met by the Indiana court. For example, the Indiana trial court did not make findings that the plaintiffs proved personal jurisdiction over the anonymous defendants. The Indiana court also did not hold a hearing or take evidence on why the company should be allowed to proceed anonymously.

Although the court listed several factors that judges may consider in allowing a party to proceed anonymously, it seemed to signal a preference for open judicial proceedings.

“A trial is a public event,” the court said, quoting an earlier case. “There is no special perquisite of the judiciary which enables it, as distinguished from other institutions of democratic government, to suppress, edit, or censor events which transpire in proceedings before it.”

The court noted that although fear of economic harm may be one factor in considering whether a corporation may proceed anonymously, it was insufficient by itself, and the anonymous company did not meet its burden of showing why anonymity was warranted in this case.

First Amendment attorneys applauded the decision as a victory for anonymous speech.

“The constitution protects the right of an individual to speak anonymously, unless the individual commits a tort or crime,” said Gray. “At the time that a lawsuit is filed, there has been no adjudication that the defendant has done anything wrong, and therefore his right to anonymity should be preserved until there is some showing that he has abused that right.”

AOL attorney Pat Carome noted that after the decision, APTC dropped the Indiana lawsuit.

The New York Times suggested on March 16 that the anonymous company was Brightpoint, an Indiana wireless communications company. The Times cited court documents containing the allegedly defamatory messages that purportedly identified Brightpoint’s ticker symbol and executives. The company did not return calls requesting comment. –DB