Minnesota company sues ex-employees over Internet messages
By The Associated Press
02.10.03
MINNETONKA, Minn. — In a case that pits free speech against a company's right to defend its reputation, Metric Companies Inc. has sued two former employees over postings on Internet message boards.
In lawsuits filed in federal court in Tulsa, Okla., Minnetonka-based Metris claims the employees posted defamatory and misleading messages about Metris and its recently ousted CEO, Ronald Zebeck.
The cases allege libel and violations of securities laws.
Metris claims the employees, both of whom worked at the company's Tulsa office, posted the messages under several anonymous user names to give the impression they were privy to inside information.
Jeff Nix, attorney for one of the defendants, calls the lawsuits the equivalent of "going after a couple (of) mosquitoes with an elephant gun."
It's an increasingly popular form of hunting among U.S. companies.
While no one keeps a running total of such suits, one expert said they now number in the hundreds and many have been successful in stopping people from posting messages without ever going to trial.
"Most defense attorneys request $10,000 or higher in initial retainers. Companies have the dollars to prosecute these frivolous lawsuits. The result is that the defendants are in a financial situation where they are forced to cave in," said Les French, executive director of the Anonymous Internet Foundation.
French's group and other civil liberties and privacy groups oppose the so-called SLAPPs — Strategic Lawsuits Against Public Participation — and last summer called on Internet service providers to adopt policies to protect their users' rights to anonymous speech on the Internet.
"Our concern has been that these lawsuits are brought to silence people who are saying things that the company doesn't like," said Cindy Cohn, legal director of the Electronic Frontier Foundation.
The amount of Internet chatter about publicly traded companies has grown along with the use of the Web and general interest in stocks. While most of the messages are harmless, companies are concerned about the spread of what they argue is false or confidential information via the Internet.
Sometimes offered by disgruntled shareholders or employees, the postings also can come from "pump and dump" artists who are seeking to boost or depress stock prices for their own profit.
In the Metris case, the struggling credit card company contends that as a result of the postings it has lost revenue, income, investors, customers and relations with business prospects. The lawsuits ask for a stop to the Internet postings and seek unspecified compensatory and punitive damages.
Metris, which fired Zebeck in December, declined to comment on the lawsuits, both filed late last year.
In court documents the defendants said their messages were simply viewpoints that opposed Metris' company line. They said they didn't profit by posting the messages and deny they were the cause of Metris' problems.
Metris, which issues credit cards to people with short or patchy credit histories, recently reported a $34 million loss for 2002. The company has said its problems stem from the depressed economy, which has left many moderate-income customers hard-pressed to pay their credit card bills.