In re Anonymous Online Speakers

Citation: In re Anonymous Online Speakers, __ F.3d __, 2010 WL 2721490 (9th Cir. July 12, 2010)(full-text)

Factual Background
Plaintiff, Quixtar, is a multilevel marketing business that distributes consumer products such as cosmetics and nutritional supplements through independent business owners. Defendant TEAM, founded by two former Quixtar independent business owners, provides business training and support materials and has sold its products, including motivational literature and educational seminars, to Quixtar independent business owners.

TEAM and Quixtar have been embroiled in several lawsuits across the country. In this suit, Quixtar asserts claims against TEAM for tortious interference with existing contracts and with tortious interference with advantageous business relations, among other claims. The tortious interference claims are premised on Quixtar's contention that TEAM used the Internet to carry out a smear campaign with the objective and effect of inducing Quixtar independent business owners to terminate their contracts with Quixtar and join a competing multilevel marketing company affiliated with TEAM.

Trial Court Proceedings
During discovery, a deposition was taken of Benjamin Dickie, a TEAM employee, regarding the identity of five anonymous online speakers who allegedly made defamatory statements about Quixtar. Dickie refused to identify the anonymous speakers on First Amendment grounds. Quixtar brought a motion to compel to have the five online speakers identified because they believe that the speakers are actually TEAM employees, officers, or agents.

Upon review of the specific statements from each source, the district court ordered Dickie to testify regarding his knowledge of the identity of the anonymous online speakers from three of the five sources.

APPELLATE COURT PROCEEDING

The Anonymous Online Speakers sought a writ of mandamus directing the district court to vacate its order to identify the online speakers. Plaintiff opposes the petition and in a cross-petition, requested that the appellate court direct the trial court to force the disclosure of the two remaining online speakers.

The appellate court held that the anonymous speech at issue was commercial speech, not political speech, finding that “the internet postings and video at issue in the petition and cross petition" are best described as types of “expression related solely to the economic interest of the speaker and its audience” and are thus properly categorized as commercial speech. The court also held that online speech stands on the same footing as other speech. Therefore, the anonymous speech in question will be given limited protection under the First Amendment because commercial speech enjoys “a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values.”

Upon establishing the type of speech that was in question the court went on to discuss if the district court had erred. In doing so, the court recognized that “the writ of mandamus is an ‘extraordinary’ remedy limited to extraordinary causes.” In order to evaluate the mandamus petition the court looked to the Bauman factors and held the third factor &mdash; “whether the district court’s order is clearly erroneous as a matter of law” &mdash; to be dispositive.

The court, in light of the third Bauman factor, had to determine which standard to apply. Finding the structure of the analysis from Perry to be instructive, the court considered whether the opponents of disclosure made a prima facie case of arguable First Amendment infringement and then shifted the burden to plaintiff’s to “demonstrate a sufficient need for the discovery to counterbalance that infringement.” The court however did distinguished this case from Perry because they had not previously considered First amendment claims of an anonymous, non-party speaker on the Internet in a circumstance involving commercial speech.

The court also looked to two analogous cases which presented similar situation but found that even though both courts found the anonymous speech at issue was commercial speech, neither established or followed a particular standard. See e.g., NLRB v Midland Daily News, 151 F.3d 472 (6th Cir. 1998); Lefkoe v Jos. A. Bank Clothiers, Inc., 577 F.3d. The court then looked to the many state and federal courts that have dealt with this matter and found they have also used a variety of standards. The standards are: (1) declining to adopt a new or different standard from anonymous speech, see e.g. Klehr Harrison Harvey Brazburg & Ellers v. JPA Dev., No. 0425, 2006 WL 37020; (2) require plaintiffs make a prima facie showing of the claim for which the plaintiff seeks disclosure of the anonymous speaker, See e.g. Doe I v Individuals, 561 F.Supp.2d 249 (D.Conn.2008); or (3) falls somewhere between the motion to dismiss and prima facie standards, See e.g. Doe v 2TheMart.Com, 140 F.Supp2d 1088 (W.D. Wash.2001). The court reasoned that the variety of standards came from the fact that “discovery disputes are not generally appealable on an interlocutory basis and mandamus review is very limited.” 2010 WL 2721490, 5 Therefore, since there are a variety of standards from which to choose, the court looked to what standard the district court applied and whether it was appropriate.

The District Court applied the Cahill standard which requires the plaintiff to survive a hypothetical motion for summary judgment and give, or attempt to give, notice to the speaker before discovering the anonymous identity. Doe v Cahill, 884 A.2d 451, 461 (Del. 2005). The court held that although this standard was the most the exacting, there was no error. The court reasoned that the district court appropriately considered the important value of anonymous speech balanced against a party’s need for relevant discovery in a civil action. The driving force behind the balancing of rights, as held in Perry and Doe v Reed, is the nature of the speech. See e.g., Perry, 591 F.3d at 1160-61; Doe v Reed, No. 09-559, slip-op at6-7 (June 24, 2010). The court pointed out that the clear error standard is highly deferential and is only met when the “reviewing court is left with ‘definite and firm conviction that a mistake has been committed” and therefore the writ of mandamus has been denied. Cohen v. U.S. District Court, 586 F.3d 703, 708 (9th Cir. 2009). The court left it to the district court the details of fashioning the appropriate scope and procedures for disclosure of the identities of the anonymous speakers.

In denying the cross-petition by Quixtar, the court reasoned that it suffered a fundamental error n failing to present any foundation for mandamus relief. Lacking even a citation to the Bauman factors which are considered to evaluate a writ of mandamus and offering no extraordinary circumstance that merits mandamus power, the petition was denied.