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.
