Monday, 17 November 2003

H&R Block bats both ways

SiliconValley.com reprints a story from the Kansas City Star, reporting a defamation lawsuit filed by H&R Block (H&R Block sues anonymous online critic). Essentially, the accounting firm believes that an employee is behind a series of postings on a Yahoo! message board that criticize the company. The article is a bit sketchy, but apparently both the complaint and company a spokesman said that the message board posts constituted (1) false and misleading statements and (2) improper disclosures of confidential information.

H&R Block is trying to bat from both sides here. If the anonymous poster's statements were accurate, they would prove highly embarassing to the company, and he would have disclosed confidential information. If they are not accurate, they would be defamatory. Either way, H&R Block maintains plausible deniability for long enough to force Yahoo! to reveal the anonymous poster's identity. Ultimately, H&R Block may have a difficult time proving either claim because damages (an essential element of both claims) would be too speculative. The author writes, "The defendant's comments don't appear to have had a material effect on Block stock," and goes on to detail the fluctuation of H&R Block's share price during the relevant time period and concluding that it was a mere penny off its 52-week high shortly after the statements. Proving a link between these statements and any trend in revenue would be exceedingly difficult, if not impossible.

This is a SLAPP — a strategic lawsuit against public participation. After Yahoo! breaches the poster's anonymity, we have no guarantee that H&R Block will pursue the lawsuit. More likely, it merely needed a subpoena to learn whether the poster was an employee — and will promptly forget about the suit after getting what it wants. Better to make an example by loudly firing a wayward employee than to waste time and money on a lawsuit against someone who will not have millions of dollars to pay in damages, in the unlikely event that you win. The last portion of the article begins, "Lawsuits aimed at forcing Internet service providers to provide the names of anonymous Internet users have become increasingly common in recent years." Little question exists as to the effect this is having on the freedom of speech.

Posted at 9:01:59 AM | Permalink

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Topics: Civil Liberties, Cyberlaw, Privacy, Technology
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