Highfields Capital v. Doe

Citation: Highfields Capital Management L.P. v. Doe, 385 F.Supp.2d 969 (N.D.Cal.2005).

Factual Background
A hedge fund management firm, which was the controlling shareholder of Silicon Graphics, Inc. (SGI), alleged that the Doe defendant had engaged in defamation, commercial disparagement, and violation of trademark and unfair competition laws through its three postings on a Yahoo! message board devoted to SGI.

District Court Decision
The district court ruled that the magistrate had properly required the plaintiff to present a “real evidentiary basis” for believing the defendant had engaged in wrongful conduct causing harm to the plaintiff's interests. The court adopted the test employed by the magistrate: (1) the plaintiff must adduce competent evidence to support a finding of each fact essential to the cause of action; and (2) if the first requirement is satisfied, the court must compare the magnitude of the harm to each party's interests that would result from a ruling in favor of either. The magistrate found, and the district court agreed, that the plaintiff had not met the first component of the test, and it was therefore unnecessary to reach the second.