Dendrite

Dendrite International, Inc., v. John Doe 343 N.J. Super. 134, 775 A2d 756(N.J. Super. Ct., App. Div., 2001) Must an ISP disclose the Identity of Anonymous Users of Message Boards? Dendrite

On July 11, 2001 the Appellate division of the New Jersey Superior court issued standards for evaluating discovery requests which attempt to discover the identity of anonymous users of Internet Service Provider message boards.

Dendrite International, a publicly traded company filed a lawsuit against "John Does," unknown persons who had allegedly made defamatory statements concerning the Plaintiff on an internet message board. The Plaintiff also alleged that these anonymous persons had disclosed trade secrets of the Company. In discovery the Company served subpoenas on Yahoo, Inc, an internet service provider who hosted the message boards in question and had registration information on its users. Yahoo had in place a privacy policy which stated that "personally identifiable information" was generally not disclosed but that Yahoo may disclose such information in the course of a legal action.

The First Amendment protects anonymous speech, but such protection is not absolute. Just as a person is not free to yell "fire" in a crowded theater, lawsuits can proceed against persons who defame others and disclose their trade secrets, despite the existence of the First Amendment. Therefore, the question of whether Yahoo should be forced to disclosure the identity of the anonymous writers involves balancing the First Amendment's protection of free speech with the legitimate need of a Plaintiff to conduct discovery in order to prosecute a lawsuit.

The New Jersey Court adopted a revised version of a test which was first devised in Columbia Ins. Co. v. Seescandy.com 185 F.R.D. 573 (N.D.Cal.1999): 1. First the trial court must insist that the plaintiff undertake efforts to notify the anonymous posters that they are a subject of a subpoena and delay the action giving the anonymously named defendants a reasonable opportunity to oppose the discovery request. 2. Next the court must insist on proof that the plaintiff has set forth a prima fascia case against the defendant and insist on sufficient evidence concerning each element of the cause of action, so that the court could be assured that the claim would survive a motion to dismiss. 3. Finally the Court must balance the strength of the plaintiff's case against the defendant's First Amendment right to speak anonymously.

The decision concerned two of the anonymous Defendants who had appeared in the case and opposed the Plaintiff's motion, other anonymous defendants did not appear, and the motion was granted as to them and presumably their identities were thereafter disclosed.

A posting by John Doe Number 3 referred to Dendtrite's president and read: "John's got his contracts salted away to buy another year of earnings- and note how they're changing revenue recognition accounting to help it." These posts were written after TheStreet.com had questioned Dendrite's accounting practices in an article on its website. The Court determined that the Plaintiff had not met its burden of submitting proof on its prima facia case of defamation, because there was an inadequate showing of harm to the Plaintiff company. Officers from Dendtrite testified to drops in Dendrite's share price, but the Court noted that the price of the stock had fluctuated widely during the period in question and that the Company officers were not experts in the area of stock valuation. The Court also found that the postings did not contain trade secrets. Therefore, because the Plaintiff's prima facia case was not strong enough, the Court refused to allow the Plaintiff to discover the identity of the anonymous Defendants.

This case is new territory, and as the courts struggle to apply traditional legal concepts to the internet the balance between free speech and protection of corporate reputation will certainly be revisited when disgruntled employees or others use the internet to discredit corporations.