Privacy Laws

From Tom Anderson <>
Date Wed, 20 Sep 2000 10:42:53 MDT

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The following is from the Sept. 20th Wall Street Journal.  Deals with a 
Florida case in which people are fighting to keep their annonymity on the 
web.  Apparently Yahoo & AOL are stepping up to say they will protect the 
identities of people in chat rooms and on message boards, even if the 
postings constitute libel or damaging business information.  Of course, the 
FBI and other groups are known to bend the law in the name of national 

  Online Anonymity Gets Day In Appeals Court in Florida

                   By AARON ELSTEIN

An appeals court in Florida will hear a case Wednesday that could set a 
precedent on the thorny issue of whether people have the right to
anonymity when they publish on the Internet.

The case dates back to September 1999 with a lawsuit filed by J. Erik Hvide. 
He alleges that unknown parties published false statements on a Yahoo! 
message board that damaged his reputation and led to his termination as 
chairman and chief executive officer at Hvide Marine Inc., a Fort 
Lauderdale, Fla., shipping company. He further claims he has the right to 
know the identities of eight people who allegedly defamed him.

A lower court in Florida ruled in May that Yahoo! and America Online
should release information identifying Mr. Hvide's critics. Using pseudonyms 
such as "justhefactsjack," the critics posted messages on forums hosted by 
Yahoo! and AOL.

Mr. Hvide's online critics are represented by a team that includes staff 
from the American Civil Liberties Union. They will argue before the Third 
District Court of Appeals in Miami that unmasking the defendants would chill 
debate on the Internet.

"I am certain that the court will throw out thecase based on its merits, so 
why unmask the defendants only to dismiss the case later?" said Christopher 
Leigh, a private attorney working for the defendants.

Although much of what is written on message boards amounts to a shouting 
match between cheerleaders and critics of any given stock,
whistle-blowers have used these online forums to disclose important
information about companies.

Mr. Hvide's critics allege that he encouraged his company to cook the
books and that the Securities and Exchange Commission was investigating him.

Mr. Hvide denies the allegations, and the SEC declined to comment.

The case is among more than 100 lawsuits filed by companies or their
managers that allege online defamation by unknown parties. Most of these 
cases are settled out of court, and Mr. Hvide's case is the first 
"cybersmear" suit to reach an appeals court. It isn't clear when the 
three-judge panel will issue a ruling.

The precedent wouldn't be binding outside southern Florida, but it is being 
widely anticipated by lawyers and public-interest groups across the country. 
"We haven't seen much from judges up to now in how they feel about these 
cases at the trial-court level," says Paul Levy, an attorney with Public 
Citizen, a Washington public-interest group. "An appellate court is likely 
to give some substantial reasoning explaining its decision."

The one cybersmear case in which a judge ruled involved Biomatrix Inc., a 
Ridgefield, N.J., pharmaceuticals company. A New Jersey Superior Court judge 
ruled in July that critics had posted "clearly libelous" messages when they 
said the company's product killed people and its CEO was a Nazi. While this 
case established that online-message posters can be sued for libel, it shed 
no light on the critical issue of defendants' rights to anonymity on the 

Mr. Hvide's attorney, Bruce Fischman, says his client needs to learn the 
identities of the online attackers so that he can proceed with his 
defamation case.

Mr. Hvide's inability to uncover his critics more than a year after he filed 
his suit highlights the growing resolve of defendants to protect their 
anonymity. But in most cases, companies have been able to identify their 
anonymous critics with relative ease.

To unmask them, companies or executives needed only to file a suit and
then subpoena Yahoo or America Online, who both sponsor popular 
message-board communities. They would usually comply with a court order to 
turn over information identifying customers in a matter of weeks.

But both Yahoo and AOL say they have since amended their policies and
now notify their customers in advance before turning over any information.

Even before Yahoo and AOL made that change, some of Mr. Hvide's
critics decided to fight back. After news about the suit appeared in a local 
newspaper, four of the defendants hired a lawyer, Mr. Leigh, who filed a 
motion to quash Mr. Hvide's subpoena of Yahoo. If they succeed, it will set 
a legal precedent that could strengthen people's rights to anonymity on the 

In May, a judge in Dade County Circuit Court in Miami denied Mr.
Leigh's motion to quash Mr. Hvide's subpoena, but granted a stay so the 
message-board writers could appeal.

Mr. Hvide was fired as chairman and CEO of Hvide Marine in June of
1999, three months before the company filed for protection from its
creditors under Chapter 11 of the U.S. Bankruptcy Code. The company
emerged from bankruptcy protection in December under new management.

Some Hvide Marine shareholders don't buy Mr. Hvide's argument that he
was ousted because of message-board postings.

"Undoubtedly his departure was related to the company's financial
performance," says Roger Miller, a portfolio manager at American
Financial Group, a Cincinnati insurance company run by Carl Lindner, the 
chief executive of Chiquita Brands International. American Financial Group 
owns a 5.7% stake in Hvide Marine, according to regulatory filings. "Mr. 
Hvide engineered a major expansion during a downturn in his industry," Mr. 
Miller says. "It was the wrong time and the wrong place."

Mr. Fischman contends that Hvide Marine might not have needed to file
for bankruptcy protection had Mr. Hvide remained at the helm of the
company. He says Mr. Hvide hasn't found another job since he left the
company, which was founded by his father.

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